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ELRCDismissedPetition dated 22nd February, 2023· [2023] KEELRC 2541 (KLR)

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.

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

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 2, 19, 20, 21, 41, 47, 50
  • State Corporations Act, Cap 446section 2(c), section 5(3), section 7
  • Employment Actsection 49
  • Employment and Labour Relations Court Act, 2011section 12(3)
  • Access to Information Act, 2016section 8
  • Kenya Reinsurance Corporation Actnot specified
  • Mwongozo Code of Governance for State CorporationsCEO tenure provisions
  • Head of Public Service Circular OP/CAB.9/1A dated 27th February, 2018term limits for state corporations CEOs

Cases cited (19)

  • Peter Macithi Mungai v The Cabinet Secretary for Environment, Natural Resources & Regional Development Authorities and others
    Petition No. 75 of 2016
  • Mary Munyuli Luseka v Brand Kenya Board; Cabinet Secretary, Ministry of Industry, Trade and Cooperatives (Interested Party)
  • Paul Kipsang Kosgei v National Industrial Training Authority & Another; Cabinet Secretary, Ministry of Labour & Social Services (Interested Party)
    (2020) eKLR
  • Teresa Carlo Omondi v Transparency International-Kenya
    (2017) eKLR
  • Serah Njeri Mwobi v John Kimani Njoroge
    (2013) eKLR
  • Peter Ndegwa Kiai t/a Pema Wines & Spirits v Attorney General & 2 others
    Civil Appeal 243 of 2017 (2021) KECA 328 (KLR)
  • Ben Chikamai & Another v Peter Macithi Muigai & 2 others
  • Jacob Kimutai Torutt v Coast Water Works Development Agency & Another; Commission for Human Rights and Justice (Interested Party)
    (2021) eKLR
  • Communication Commission of Kenya & 5 Others v Royal Media Services Ltd & 5 others
    (2014) eKLR; [2015] eKLR
  • KKB v SCM & 5 Others
    Constitutional Petition 014 of 2020 (2022) KEHC 289 (KLR)
  • Josphat Ndirangu v Henkel Chemicals (EA) Limited
    ELRC Petition 1 of 2013 (2013) eKLR
  • Peter Ndegwa Nderitu v Teachers Service Commission
    Petition No. 11 of 2018 (2019) eKLR
  • Judicial Service Commission v Gladys Boss Shollei & Another
    (2014) eKLR
  • Francis James Ndegwa v Tetu Dairy Co-operative Society Limited
    (2016) eKLR
  • James Mukuha Gichane v National Hospital Insurance Fund & 3 others
    (2017) eKLR
  • Anarita Karimi Njeru v Republic (No 1)
    (1979) K.L.R 154
  • Katiba Institute v President Delivery Unit & 3 others
    (2017) eKLR
  • David Kipchumba Kimosop v Kerio Valley Development Authority
    [2022] eKLR
  • Kenya Revenue Authority v Export Trading Company Limited
    [2022] KESC 31
Jurisdiction invoked
Employment and Labour Relations Court Act, section 12(3) (as invoked by the parties)

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.