When you look at the widespread unemployment in the country, you will acknowledge the fact that there is an obvious and apparent difference in the bargaining power between employers and employees in the country. You will therefore understand why our Industrial courts have a high concern for employees; and fully accept that in their interpretation of the law, your employment contracts will be held to a very high standard as an employer in Kenya.
As an employer, you are not only expected to comply with the laws of the land, while making your profits and safeguarding your business assets – You are also tasked with promoting fair business practices at all times; to the extent of facilitating an amicable transition for your employees and contractors post – engagement.
This is why employment contracts require descriptive and protective clauses to maintain the sensitive balance between you as an employer and your employees.
Descriptive clauses are used to outline certain components of the contractual relationship including the terms of employment, rights and obligations of both you and your employees, terms of remuneration, hours of work, employee benefits and separation and termination of the contract.
Protective clauses are used to safeguard your interests as an employer because of your investment in time, money and resources into hiring, training and retaining your employees – These clauses include the non-compete clauses, non – solicitation clauses and confidentiality agreements.
Compliance with the descriptive clauses is quite straightforward and most HR departments have streamlined their programs, procedures and employment contracts to the requirements of the Law – Employment particulars are accurately captured in the employment contracts. Current HR programs are made to adhere, strictly, to the principles of substantive fairness, reasonableness and to be in no way injurious to the public interest.
It is therefore very interesting to see that most precedents set by the Industrial Courts in Kenya point to the fact that protective clauses are often declared unreasonable and unenforceable.
This begs the question, are your trade secrets and proprietary business information adequately protected?
As an employer, you should be aware that the validity of your protective clauses is not absolute and that they can easily be rendered null and void in a court of law. To ensure adequate protection for yourself, there are specific metrics that should be established to ensure enforceability of your protective clauses;
- You should, at all times, be able to demonstrate that you have legitimate proprietary interests which can only be protected by the restrictive covenants in your employment contracts – This can be done by having an intellectual property preservation program in place, backed up with policies that clearly outline the need for protection and retention of company sensitive information and data
- Your company processes and programs should be able to back you up in court to prove that your intention for the covenants is not merely to punish the employee or impose a necessary hardship on them – This can be demonstrated by training your employees on the various forms of unfair competition, its impacts and the attendant consequences for violations. Your employees should thereafter, sign an independent statement declaring that they have had sufficient consideration of your protective clauses and that they will not violate the agreement.
- Your client base should not be readily available to the public, if you intend to have your non-solicitation clauses upheld in a court of law.
- The limits set in your employment contracts for non-compete and non –solicitation should be within the time threshold acceptable by the court – These time limits vary from one industry to another.
- You have to be aware of the fact that when an employee violates these provisions the court will require that you present hard evidence that your confidential information is being given to a competitor.
Courts place a very high premium on competition in the open market. An employee cannot directly violate the provisions in your contract;
On the other hand, be prudent. Protective clauses that are purely against the potential competition on the part of the employee are unreasonable and unenforceable.
How we can help
We shall be pleased to assist your company in reviewing your employment contracts and facilitate the implementation of policies and programs that will guarantee enforceability of your protective clauses.