Money

Key clauses in employment contracts you should never skip before signing

Dan Kauna 20th July, 2026 03:18 PM

Landing a new job brings a huge sense of relief. In the rush to celebrate, many workers sign the offer letter without reading the fine print.

That quick signature turns an exciting career move into a costly headache. An employment contract is a legally binding document, and skipping the finer details leaves workers stranded when conditions change.

A study published in the Industrial Law Journal highlights that “contracts of employment are unique” because of “questionable consent, subordination and dependency” in workplace relationships.

Knowing what to look for protects both income and professional freedom.

Probation, notice periods, and unused leave

Probation terms set the foundation for how a job starts. Under Section 42 of the Employment Act, probation cannot exceed six months, though it can extend up to twelve months with mutual consent.

During this period, either party can end the contract with just seven days’ notice or seven days’ pay in lieu. Skipping this detail leaves workers surprised when an employer ends their contract abruptly or extends the trial period.

A male employee reviewing a termination notice at his desk.

How a worker exits a job matters just as much. Section 35 of the Act requires a minimum notice period of 28 days for monthly earners. However, some contracts push this to two or three months.

Agreeing to such terms means a worker cannot transition quickly to a new job without forfeiting salary or paying a heavy cash penalty.

Leave encashment is another area where money slips away. While Kenyan law guarantees 21 paid leave days every year, contracts decide whether unused days convert into cash.

Many employers specify that unutilised leave expires annually, depriving exiting staff of payouts in accrued benefits.

Intellectual property and restraint clauses

Intellectual property terms control who owns daily work output. Any software, design, writing, or system created using company time or equipment automatically belongs to the firm.

Staff who build side projects during work hours quickly discover they have zero legal rights to their creations.

A creative professional producing digital work for her employer.

Finally, non-compete clauses restrict future employment choices. Under the Contracts in Restraint of Trade Act (Cap 24), employers try to block former staff from joining competitors or starting similar businesses for specified periods.

While Kenyan courts only enforce fair restrictions, an unread non-compete clause can still delay career progress or lead to legal battles.