Top Mistakes in Employment Practices That Lead to Litigation

By admin
May 10, 2025

Top Mistakes in Employment Practices That Lead to Litigation – WKA Advocates’ Legal Perspective

Employment law in Kenya is governed by a complex legal framework, including the Employment Act, 2007, the Constitution of Kenya, judicial precedents, and international labour standards. Employers, HR professionals, and business owners must ensure compliance with labour laws in Kenya to avoid pitfalls that can lead to employment litigation, regulatory penalties, and reputational damage.

At WKA Advocates, our labour lawyers in Kenya have represented both employers and employees before the Employment and Labour Relations Court (ELRC). Drawing from extensive courtroom experience, we highlight the most common — yet avoidable — mistakes in employment practices in Kenya that often lead to costly disputes. This guide offers practical legal advice for HR compliance, risk mitigation, and staying litigation-free.

1. Failure to Issue Written Employment Contracts

Legal Risk:
The Employment Act, 2007 requires that all employees engaged for over three months must receive a written contract. Yet, many employers rely on verbal agreements, outdated contract templates, or informal arrangements.

Litigation Trigger:
In the absence of a valid contract, disputes over job descriptions, salary terms, probation, and termination become hard to defend in court, increasing exposure to employment disputes.

WKA’s Advice:
Draft clear, up-to-date, and legally vetted employment contracts in Kenya for all staff — including part-time, casual, and temporary employees. Contracts should outline job duties, salary, leave entitlements, disciplinary processes, and termination procedures to ensure legal compliance.

2. Unlawful Termination and Redundancies

Legal Risk:
Improper dismissal, especially without procedural fairness during disciplinary cases or organisational restructuring, violates Kenyan labour laws.

Litigation Trigger:
Unfair termination in Kenya is the most litigated employment issue. Employees often sue for compensation, reinstatement, or damages for emotional distress.

WKA’s Advice:
Follow Sections 41, 43, and 45 of the Employment Act. Ensure:

Written termination notice
Valid and fair reasons
A disciplinary hearing
Proper documentation

In redundancy cases, provide prior notice to the Labour Office in Kenya, follow fair selection criteria, and consult affected employees.

3. Discriminatory Practices and Workplace Bias

Legal Risk:
Discrimination based on gender, age, race, disability, or religion violates Article 27 of the Constitution of Kenya and other labour statutes.

Litigation Trigger:
Victims may file constitutional petitions or claims under the Persons with Disabilities Act, citing bias in hiring, promotions, or termination.

WKA’s Advice:
Adopt inclusive and fair HR practices in Kenya. Conduct regular anti-discrimination training, and document all hiring, appraisal, and promotion decisions to reduce legal risk.

4. Poor Record-Keeping and Documentation

Legal Risk:
Under Kenyan labour compliance regulations, employers must maintain HR records, contracts, and payroll information for at least five years.

Litigation Trigger:
In the absence of proper records, courts may presume the employee’s account is correct — especially in pay, leave, or dismissal disputes.

WKA’s Advice:
Maintain both digital and physical HR documentation. Keep accurate records of employee contracts, disciplinary warnings, appraisals, payroll, and leave.

5. Ignoring Sexual Harassment Complaints

Legal Risk:
Employers with more than 20 staff must implement a sexual harassment policy, as outlined in Section 6 of the Employment Act.

Litigation Trigger:
Failure to address harassment complaints may lead to lawsuits, criminal charges, or sanctions from regulatory authorities.

WKA’s Advice:
Create and enforce a clear policy on sexual harassment in the workplace. Establish a complaints committee and train staff to report and address incidents promptly.

6. Misclassification of Workers

Legal Risk:
Classifying employees as independent contractors or consultants to avoid PAYE, NHIF, NSSF, and leave obligations breaches tax and labour laws.

Litigation Trigger:
Misclassified workers may demand employment recognition, backdated benefits, or initiate claims at the Employment and Labour Relations Court.

WKA’s Advice:
Clearly define employment relationships. If the business controls working hours, tools, and processes, the individual is likely an employee, not a contractor. Misclassification could lead to labour law violations and tax evasion claims.

7. Non-Compliance with Health and Safety Requirements

Legal Risk:
Under the Occupational Safety and Health Act (OSHA), 2007, employers must ensure a safe work environment, risk assessments, and PPE provision.

Litigation Trigger:
Injuries at work can lead to claims under OSHA, Work Injury Benefits Act (WIBA), and tort law.

WKA’s Advice:
Implement and routinely update occupational health and safety procedures. Keep incident logs and conduct regular employee safety training.

8. Non-Payment of Statutory Benefits

Legal Risk:
Employers must remit PAYE, NSSF, NHIF, and HELB deductions on time. Non-compliance invites KRA audits and penalties.

Litigation Trigger:
Employees may lodge complaints with labour officers in Kenya or pursue ELRC claims for delayed or unpaid benefits.

WKA’s Advice:
Automate statutory deductions and reconcile remittances with the relevant bodies. Maintain payroll records to avoid disputes and regulatory action.

9. Denying Leave and Overtime Compensation

Legal Risk:
Employees are legally entitled to annual leave, sick leave, public holidays, maternity/paternity leave, and overtime pay in Kenya.

Litigation Trigger:
Failure to pay overtime or approve leave can result in grievances and labour court claims.

WKA’s Advice:
Ensure accurate time tracking and communicate your leave and overtime policies in employment contracts and staff handbooks.

10. Absence of Disciplinary and Grievance Procedures

Legal Risk:
Failure to handle disciplinary issues or grievances through a clear policy framework creates exposure to employment disputes in Kenya.

Litigation Trigger:
Even with valid reasons for dismissal, failure to follow procedure can result in findings of procedural unfairness.

WKA’s Advice:
Adopt a transparent disciplinary and grievance procedure, including:

Verbal/written warnings
Opportunity to respond
Right to representation
Documentation and escalation

11. Poor Communication During Termination

Legal Risk:
Poorly handled dismissal meetings create confusion and perceived injustice among staff.

Litigation Trigger:
Employees may allege constructive dismissal, coercion to resign, or unfair treatment, prompting legal action.

WKA’s Advice:
Ensure termination is handled by HR or legal professionals. Provide clear, written reasons for dismissal and details on final dues and exit procedures.

Prevent Litigation by Strengthening HR Compliance

Employment-related lawsuits in Kenya are costly and time-consuming, but mostly preventable. At WKA Advocates, we help businesses achieve labour law compliance in Kenya through:

Drafting compliant employment contracts
Conducting HR legal audits
Developing disciplinary and grievance procedures
Creating workplace policies
Legal representation in employment disputes
Labour law training for HR teams

Let us help you reduce legal risk and strengthen your employment practices before a lawsuit arises.

Frequently Asked Questions (FAQs)

1. What is the most common reason for employment litigation in Kenya?
Unfair termination, especially where due process is not followed or documentation is lacking.

2. Are verbal contracts legal in Kenya?
They may be recognised, but the law requires a written contract after 3 months. Written contracts offer better legal protection.

3. Can an employer terminate without a warning?
No. Due process, including warnings and a fair hearing, must be followed unless gross misconduct applies.

4. What qualifies as unfair termination?
Lack of valid reasons, failure to follow disciplinary procedure, or dismissal due to discrimination.

5. How can employers avoid litigation?

Use clear contracts
Follow due process in termination
Maintain proper records
Address grievances fairly
Work with experienced labour lawyers in Kenya

6. What are the penalties for violating labour laws?
Penalties include employee compensation, fines, regulatory sanctions, and reputational harm.

7. Does an employee need a lawyer to sue in the ELRC?
Not mandatory, but legal representation or union assistance improves outcomes.

8. Can WKA Advocates represent both employers and employees?
Yes. We maintain strict professional ethics, avoiding conflicts of interest. Our mission is to ensure fairness and justice for all.