Key Labour Laws for Outsourced Staff in Kenya

1. Employment Act, 2007 (Primary Legislation)

The Employment Act governs all employment contracts and applies to outsourced workers as employees of the outsourcing company. Key provisions include:

Written contracts: Employment contracts lasting more than three months must be in writing
Probation period: Capped at 6 months maximum
Leave entitlements: Annual leave (14 days after one year), sick leave, public holidays, and rest days
Termination: Must be substantively justified (valid reason) and procedurally fair (notice, disciplinary hearing, opportunity to respond)

2. Outsourcing-Specific Legal Requirements

A 2026 court ruling established critical requirements for lawful outsourcing:

Requirement	Description
Employee consent	Workers must consent to the outsourcing arrangement
Consultation	Mandatory consultation with affected employees and unions
Accredited rights protection	All accrued rights must be preserved during transition
Redundancy process	Outsourcing-driven termination must follow redundancy framework

Failure to meet these requirements results in unfair termination findings.

3. Labour Relations Act, 2007

This Act governs industrial relations and collective bargaining:

Collective agreements: Must be included in employment contracts where applicable
Dispute resolution: Disputes must be resolved within 30 days
Strike notice: 7 days’ notice required before calling a strike

4. Statutory Contributions

Outsourcing companies must register and contribute to:

NSSF (National Social Security Fund) – pension scheme
NHIF/NHFC (National Hospital Insurance Fund/Health Financing Corporation) – healthcare
PAYE (Pay As You Earn) – tax deductions
EOBI (Employment Old Age Benefits Insurance) – mandatory for all employees
WCF (Workmen’s Compensation Fund) – workplace injury coverage

5. Triangular Employment Relationship Challenges

Research reveals outsourced workers face unique challenges in Kenya’s current legal framework:

Challenge	Current Legal Gap
Dual authority	Workers relate to two authority figures (outsourcing company + client enterprise)
Limited integration	Inadequate workplace integration compared to directly employed workers
Differential treatment	May receive different wages/conditions despite similar duties
Employer attribution	Law classifies workers as outsourcing company employees but doesn’t define client enterprise relationship

6. Protected Rights Under Constitution

Article 41: Fundamental rights of employees, including fair labour practices
Prohibition against forced labour
Non-discrimination: No discrimination in employment
Sexual harassment protection: Required for employers with 20+ employees
Right to fair remuneration

7. 2021 Employment (Amendment) Act

New protections introduced:

Parental leave: Enhanced maternity and paternity leave provisions
Remote work: Protections for remote work arrangements

8. Key Compliance Requirements for Outsourcing Companies

Outsourcing agencies must ensure:

Contract terms explained in language understood by employee
Employee signs contract with witness present
No “at-will” employment clauses (not recognised in Kenya)
Proper employee classification (avoid misclassifying as contractors)
Workplace health and safety compliance

Practical Implications

For businesses in Mombasa using labour outsourcing (like Bestcare Manpower Services or other agencies), the outsourcing company remains the legal employer responsible for all statutory obligations, while the client enterprise benefits from flexible workforce solutions without direct employment liability.

The current framework is insufficient for protecting outsourced workers’ rights comprehensively, and researchers recommend adopting joint and several liability and equality of treatment measures through regulation.