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ELRCDismissedPetition dated 22nd February, 2023

Mwarania v Cabinet Secretary, National Treasury & Planning & 2 others; Corporation Limited (Interested Party) (Employment and Labour Relations Petition E034 of 2023) [2023] KEELRC 2541 (KLR)

Employment and Labour Relations Court
19 October 2023
4,722 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~19 min to read original · ~4 min brief

The bottom line

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A state corporation CEO lost his bid for a third five-year term because signing two one-year extensions bound him to those shorter terms.

What this practically means

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Executive summary

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The Petitioner, formerly Managing Director/CEO of the Interested Party, a state corporation, petitioned challenging the 1st Respondent's directives limiting his contract extensions to one year and sending him on terminal leave. He sought declarations that the 1st Respondent lacked mandate over the Interested Party's employment matters, that the impugned letters were null and void, an order restraining his replacement, general damages for constitutional violations, and costs. The parties disposed of the petition by written submissions. The court framed three issues: entitlement to a third five-year term and legitimate expectation; entitlement to general damages for constitutional breach; and entitlement to the reliefs sought. On the first issue, the court held that while section 5(3) of the State Corporations Act confined the Minister to approving terms and conditions of service and not appointment or renewal, the Petitioner had already served two five-year terms contrary to the Mwongozo Code's three-year renewable-once tenure. The two one-year extensions were transition measures, and having voluntarily signed them without alleging duress or fraud, the Petitioner was estopped from claiming a five-year term; no legitimate expectation arose. On constitutional damages, the court held the complaints were adequately covered by the Employment Act and the breaches were not pleaded with the particularity required by Anarita Karimi Njeru as restated in the Gladys Shollei case. The petition was found without merit and dismissed with costs on 19th October, 2023.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the Petitioner is entitled to extension of his contract for a third term of five years and if he had legitimate expectation over the same
  2. 2.Whether the Petitioner is entitled to general damages for breach of constitutional rights
  3. 3.Whether the Petitioner is entitled to the reliefs sought

Key legal issues

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01

Whether the Petitioner was entitled to a third term of five years and had a legitimate expectation of it

Holding

No. He had served two terms under the Mwongozo Code, the committee recommending the third term lacked mandate, and he voluntarily signed two one-year transition extensions, estopping him from claiming a five-year term; no legitimate expectation arose.

Reasoning

The Petitioner served two five-year terms, so under the Mwongozo Code no further term was automatic. The Board committee lacked mandate to recommend a third term, and the two one-year extensions were only for transition. He signed both extensions voluntarily without alleging duress, fraud or misrepresentation, so he was estopped from claiming a five-year term. His expectation of a third term was not objectively legitimate.

p. 8
02

Whether the Petitioner is entitled to general damages for breach of constitutional rights

Holding

No. The complaints were adequately covered by employment law and the breaches were not pleaded with the requisite particularity.

Reasoning

The court held that the prayers sought could be handled as employment claims under the Employment Act and section 12(3) of the ELRC Act without being framed as a constitutional petition. The Petitioner did not show the statutory remedies were inadequate. Applying the Anarita Karimi standard via the Gladys Shollei case, he failed to plead with reasonable precision the provisions breached and the manner of breach, so general damages could not issue.

p. 9
03

Whether the 1st Respondent had legal mandate to direct the Interested Party on the Petitioner's employment

Holding

Partially in the Petitioner's favour on mandate: section 5(3) limited the Minister to approving terms and conditions, not appointment or renewal, but the claim still failed overall.

Reasoning

The court agreed with the Petitioner that the contract gave the Board power to terminate or extend and that section 5(3) confined the Minister to approving terms and conditions of service, following Paul Kipsang Kosgei. However, this finding did not save the petition because the Petitioner had no subsisting entitlement to a third term and had voluntarily accepted the one-year transition extensions.

p. 7

Legal principles established

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  • Under section 5(3) of the State Corporations Act, the Minister's role is limited to approving terms and conditions of service and does not extend to appointment, reappointment or veto of the Board's decisions.
  • The Mwongozo Code governs state corporations but remains a policy document that can be deviated from where circumstances justify.
  • A constitutional petitioner must plead with particularity the provisions breached and the manner of breach before general damages can be awarded.

Court orders

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  1. 1.The Petition is dismissed with costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Wrote the judgment

Jurisdiction invoked
Employment and Labour Relations Court Act, section 12(3) (as invoked by the parties)

Relief refused

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Declaration that the 1st Respondent lacks legal mandate to direct the Interested Party on employment matters

Petition dismissed as without merit

p. 9

Declaration that the 1st Respondent's decisions and directions are unlawful, null and void

Petition dismissed

Declaration prohibiting interference with the Petitioner's renewed five-year term

Petition dismissed

Order restraining recruitment of a replacement Managing Director

Prayer overtaken by events; petition dismissed

p. 7

General damages for constitutional violations

Petitioner failed to plead with particularity the infringed rights; claims could be handled as ordinary employment claims

p. 9

Costs

Costs of the Petition awarded to the Respondents

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In Conclusion the Court finds the Petition without merit and the same is hereby dismissed with costs.
p. 9Disposition
He is therefore estopped from seeking a five year contract when he voluntarily signed twice, one year contracts with the knowledge that his original two contracts that expired were for five years each.
p. 8Estoppel and contract extensions
there cannot be a legitimate expectation against a clear provision of the law.
p. 9Legitimate expectation
whereas Mwongozo remain the governing instrument in the running of State Corporations generally, it remains a policy document which whenever circumstances demand and are justifiable, can be deviated from.
p. 8Mwongozo Code status

Issues in the judgment

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minor

Date of the 1st Respondent's letter reducing the extension appears inconsistently as 9th May, 2022 in the petition summary but is listed in the prayers as '9th May,2021'

minor

Circular reference inconsistency: OP/CAB.9/1A is dated 27th February, 2018 in one passage and 23rd November, 2010 in another

minor

Typographical errors in the framing of issues, e.g. 'Whether Whether the Petitioner is entitled to general damages' and 'Whether WhrherWhether the Petitioner is entitled to reliefs sought'

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Mwarania v Cabinet Secretary, National Treasury & Planning & 2 others; Corporation Limited (Interested Party) (Employment and Labour Relations Petition E034 of 2023) [2023] KEELRC 2541 (KLR)", Case Analysis (2023). Petition dated 22nd February, 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/2541/eng@2023-10-19

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.