What is a Foreign Contract of Service?
A foreign contract of service is a contract that is made in Kenya, but whose services are to be performed either wholly or partly outside Kenya.The employer requiring services under such a contract can be a Kenyan based organization or a foreign company based in Kenya which has offices abroad. Foreign Contracts of Service are governed by the Employment Act 2007 (the “Act”) and the Employment (General) Rules 2014 (the “Rules”).
What is required in a Foreign Contract of Service?
In order for a contract to qualify as a Foreign Contract of Service, the following requirements have to be fulfilled as per the Act:
- The contract must be in the prescribed form (as per the format provided in the Sixth Schedule to the Rules),
- The contracts must be signed by both parties i.e. the employer and employee.
- The contract must also be attested by a Labour Officer, whose function is to ensure that, that the employee has consented the contract, that there is no fraud, coercion or undue influence, and any mistake of fact, or misrepresentation which might have induced the employee to enter into the contract, that the contract is in the prescribed form, that the terms and conditions of employment contained in the contract comply with the provisions of the employment Act and have been understood by the employee, that the employee is medically fit for the performance of his duties under the contract, that the employee is not bound to serve under any other contract of service during the period provided in the foreign contract.
Why we need a Labour Officer to sign a Foreign Contract of Service.
The labour officer is required to attest a Foreign Contract of Service to ensure that the employee indeed clearly understands the terms of the contract and is aware of the impact of the clauses in the said contract of employment. This is required to avoid the potential abuse of foreign contracts of service and the exploitation of the employees.
Prior to the Labour Officer attesting to the Foreign Contract of Service, the Labour Officer has to be satisfied:
- that the consent of the employee to the contract has been obtained;
- of the absence of any fraud, coercion or undue influence, and any mistake of fact, or misrepresentation which might have induced the employee to enter into the contract;
- that the contract is in the prescribed form;
- that the terms and conditions of employment contained in the contract comply with the provisions of the Act and have been understood by the employee;
- that the employee is medically fit for the performance of his duties under the contract; and
- that the employee is not bound to serve under any other contract of service during the period provided in the foreign contract.
Requirements as to an employer who does not reside or carry on business in Kenya
- Under section 85 of the Act, an employer who does not reside or carry on business in Kenya or an employer who resides in Kenya is required to give a surety bond to guarantee the performance of its obligations under the foreign contract of service.
- If the employer has an authorized agent who is resident in Kenya, the Cabinet Secretary in charge of Labour and Social Services may allow the agent to issue the bond and the agent shall be held personally liable for the performance of the bond.
- The requirement for issuance of a bond is to ensure that the rights of the employee are protected and that the employer or the agent can be held liable in case of breach of the contract.
Consequences of Non-Compliance
- Section 86 of the Act also makes it an offence to employ or to aid in the employment of a person with the intention of sending the employee to a foreign country without entering into a foreign contract or to induce or attempt to induce an employee to proceed outside Kenya for work without a foreign contract of service.
- Any person found guilty of the offence shall on conviction be liable to a fine not exceeding Sh200,000 or imprisonment for a term not exceeding six months or to both.
As regards the validity of Foreign Contracts of Service, the High Court of Kenya in the case of George Gitau Wainoga vs Goal South Sudan  eKLR stated that “foreign contracts of service that are not in the format prescribed under the Employment Act are null and void and not enforceable at the instance of the employer. However, since the statutory provisions are enacted for the safeguard and protection of employees, the foreign contracts of service would not be null and void and therefore are enforceable at the instance of the employee and are therefore liable to rectification or other reconsideration in balancing justice for the parties”.
Both the employer and employee should ensure that the foreign contract of service is compliant with the requirements of the Act to ensure that the same will be enforced.
It is also important for an employer to note that it may be subjected to criminal proceedings where the requirements of a foreign contract of service are not complied with.