Gikenye & 2 others v Mwaura & 9 others (Petition E001 of 2025) [2025] KEELRC 592 (KLR)

Labour Law – employment – employer-employee relationship – whether an employer-employee relationship existed only where the provisions of the Employment Act applied – whether members appointed to State Corporations Boards were employees and thus subject to the jurisdiction of the Employment and Labour Relations Court – Constitution of Kenya, article 260. Brief facts The petitioners challenged the appointment of the 1st, 3rd, 5th and 7th respondents into 2nd, 4th, 6th, and 8th respondent State Corporations. The 2nd, 6th, 8th, and 9th respondents filed a preliminary objection on the ground that the court lacked jurisdiction to hear and grant the orders sought. They claimed that the court lacked jurisdiction to hear and determine matters on the appointment of State Corporations Board Chairpersons and members done under the State Corporations Act because the petitioners were not employees of the respondents and did not fall in the category of employees; hence, the court had no jurisdiction to hear and determine the issues raised therein. Issues i. Whether members appointed to State Corporations Boards were employees and thus subject to the jurisdiction of the Employment and Labour Relations Court. ii. Whether an employer-employee relationship existed only where the provisions of the Employment Act applied. Held 1. The preliminary objection was based upon a disputed fact about the existence of an employer – employee relationship. For example, it was submitted for the respondents that they, as appointed to the Boards of State Corporations, were not employees, as they did not earn a wage or a salary. Whether they earned a wage or a salary was a matter to be determined after a full hearing, and it invariably was not an issue contested as based upon pleadings before the court. 2. The case was about appointment to boards of state corporations. Such board members were public oficers in public employment within the definition of a public oficer in article 260 of the Constitution. The board members were regulated by the public service employment laws, including the values and principles of public service in article 232 and Chapter 6 of the Constitution on leadership and integrity. They were bound under the Public Oficer Ethics Act, the Oficial Secrets Act and other laws, codes, policies and practices that applied to public oficers and public service. How then could they not be public oficers and servants of the people employed as such as provided for in Chapter 6 of the Constitution and all applicable laws? 3. The submission that employment existed only where the provisions of the Employment Act (Cap 226) applied was a pure misdirection unknown to the world of work. Parties in employment relationships could find their relationships upon several formal provisions, such as provisions of the Constitution, relevant legislation, private contracts and others. For public and State oficers, the applicable provisions would be found in the Constitution, relevant statutes, public and State service regulations, policies and applicable practices or usages. 4. The Employment Act (Cap 226) applied as the fioor of terms and conditions in an employment or work relationship, and the Act did not operate to oust employment or work relationships founded upon such other provisions binding upon parties as may be lawful. Preliminary objection dismissed. Orders Costs in the cause; parties to take directions towards the expeditious hearing and determination of the main petition. Citations Cases Kenya https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/592/eng@2025-02-27 2

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Benjamin v Ministry of Labour & 5 others; Senate (Interested Party) Petition E001 of 2022; [2023] KEELRC 1439 (KLR) - (Followed) 2. Havi v Judicial Service Commission & another Petition E039 of 2024; [2024] KEELRC 798 (KLR) (Followed) 3. In the Matter of Interim Independent Electoral Commission Constitutional Application 2 of 2011; [2011] KESC 3 (KLR) - (Explained) 4. Mugendi v Kenyatta University & 3 others Civil Appeal 6 of 2012; [2013] KECA 41 (KLR) (Followed) 5. Orogo v Chairman, Board of Directors Kenya Revenue Authority & 2 others Petition E004 of 2023; [2023] KEHC 27054 (KLR) 6. Owners of the Motor Vessel “Lillian S" v Caltex Oil (Kenya) Ltd Civil Appeal 50 of 1989; [1989] KECA 48 (KLR); (1989) KLR 1 - (Explained) 7. Public Service Commission & 4 others v Cheruiyot & 20 others Civil Appeal 119 & 139 of 2017 (Consolidated); [2022] KECA 15 (KLR) - (Explained) 8. Rift Valley Water Services Board & 3 others v Asanyo & 2 others Civil Appeal 60 & 61 of 2015; [2022] KECA 778 (KLR) (Consolidated) - (Followed) 9. Rukaria v Attorney General; Debasso & another (Interested Parties) Petition 2 of 2023; [2023] KEELRC 1339 (KLR) - (Explained) Regional Court Mukisa Biscuits Manufacturing Company Limited v West End Distributors Limited [1969] EA 696) — (Followed) Statutes Kenya 1. Constitution of Kenya articles 162(2); 232; 260; Chapter 6 — (Interpreted) 2. Employment Act (Cap 226) In general— (Cited) 3. Employment and Labour Relations Court Act (Cap 8E) section 12(1) — (Interpreted) 4. State Corporations Act (Cap 446) In general— (Cited) 1. RULING 1. The petitioners filed the petition and application dated January 1, 2025 in person. The petitioiners challenged the appointment of the 1st, 3rd, 5th and 7th respondents into 2nd, 4th, 6th, and 8th respondent state corporations. 2. The 2nd , 6th, 8th, and 9th respondents filed a preliminary objection through Schola Mbilo, Deputy Chief State Counsel, for Attorney General. It was stated that the the honourable court lacks jurisdiction to hear and grant the orders sought both in the application and petition under section 12(1) of the Employment and Labour Relations Court Act. Further, court lacks jurisdiction to hear and determine matters on the appointment of State Corporations Board Chairpersons and members done under the State Corporations Act because the petitioners are not employees of the respondents herein and do not fall in the category of employees hence the honorable court has no Jurisdiction to hear and determine the issues raised herein. It was urged that the position was set out in the Court of Appeal Civil Appeal No 61 of 2015, Rift Valley Water Services Board & 3 others v Geoffrey Asanyo & 2 others [2022] eKLR. 3. The 10th respondent filed grounds of opposition dated February 10, 2025 through Odukenya Wyclifie, Principal Legal Oficer but filed no submissions to oppose opr support the preliminary objection. https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/592/eng@2025-02-27 3

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4. Parties were directed to file submissions on the preliminary objection. The court has considered the material on record. The court observes as follows: a. The 1st respondent filed submissions through Mutua Nyongesa Muthoka Advocates. It was submitted that the 1st respondent supported the preliminary objection. That as held in In the matter of Interim Independent Electoral Commission [2011] eKLR and citing Nyarangi J in Owners of Motor Vessel Lillian v Caltex Oil (Kenya) Limited (1989) KLR 1 at 14, assumption of jurisdiction by courts in Kenya is a subject regulated by the Constitution, by statute law, and by principles laid out in judicial precedent. Further a jurisdictional question must be raised very early in the proceedings and without jurisdiction, a court has no power to make one more step. Further, a court may not arrogate to itself jurisdiction through the craft of interpretation or by way of endeavors to discern or interpret the intentions of Parliament, where the wording of legislation is clear and there is no ambiguity. It was urged that the jurisdiction of the court fiows from article 162(2)(a) of the Constitution and section 12(1) and (2) of the Employment and Labour Relations Court (ELRC) Act, and as interpreted by various precedents. It was submitted that the 1st, 3rd, 5th, and 7th respondents are not employees of the 2nd, 4th, 6th, and 8th respondents so that a challenge of their appointments to the state corporations’ boards is not an employment dispute. b. For 2nd , 6th, 8th, and 9th respondents submissions were made as urged for the 1st respondent that a court can only exercise jurisdiction if it is conferred by the Constitution or by legislation. It was submitted that the 2nd, 6th and 8th respondents did not employ the 3rd, 5th, and 7th respondents for wages or salary. The employment Act did not apply to them. c. The 3rd and 4th respondents filed submissions dated February 13, 2025 through Carol Mburugu Advocate. They essentially supported the preliminary objection. d. The 7th respondent filed submissions dated January 24, 2025 through Mbugua Ng’ang’a & Company Advocates. Public Service Commission & 4 others v Cheruiyot & 20 others [2022] Chairman Board of Directors Kenya Revenue Authority & 2 others [2-23] KEHC 24847 KLR were cited for the holding that the Employment and Labour Relations Court enjoys jurisdiction as conferred by article 162(2) of the Constitution and section 12 of the Employment and Labour Relations Court Act in matters of employment and labour relations. It was urged that the matter did not fall within disputes contemplated under section 12(2) of the Act for want of the enumerated parties or employment relationship. 5. The petitioners submitted that the preliminary objection does not qualify the test because it does not raise a point of law based upon facts or issues not contested between parties and as was held by Sir Newbold, P in Mukisa Biscuits Manufacturing Company Limited v West End Distributors Limited (1969) EA 696. The petitioners submitted that in the circumstances the preliminary objection be dismissed as it was calculated increase costs and introduce unnecessary costs. The petitioners cited the holding by Stella Rutto J in Dr Magare Gikenyi j Benjamini v Ministry of Labour and others, ELRC Petition E001 of 2022 at Nairobi citing Daniel N Mugendi v Kenyatta University & 3 others [2013] eKLR that a preliminary objection must satisfy three elements namely it should raise a pure point of law; it is argued on the assumption that all facts pleaded by other side are correct, and, it cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. 6. The court has considered the rival submissions. As urged for the petitioners, it appears to the court that the preliminary objection is based upon disputed fact of existence of employer –employee relationship. For example it is submitted for the respondents that the respondents as appointed to the Boards of State https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/592/eng@2025-02-27 4

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Corporations are not employees as they do not earn a wage or a salary. The Court finds that whether they earn a wage or a salary is a matter to be determined after full hearing and it invariably not an issue not contested as based upon pleadings before the court. 7. It is however not disputed that the case is about appointment to boards of state corporations. In that refiection the court considers that such board members are indeed public oficers in public employment within the definition of a public oficer in article 260 of the Constitution. The board members are regulated by the public service employment laws including the values and principles of public service in article 232 and chapter 6 of the Constitution on leadership and integrity. They are bound with the Public Oficer Ethics Act, the Oficial Secrets Act, and other laws, codes, policies and practices that apply to public oficers and public service. How then could they not be public oficers and servants of the people employed as such as provided for in chapter 6 of the Constitution and all applicable laws? 8. In Havi v Judicial Service Commission & another (Petition E039 of 2024) [2024] KEELRC 798 (KLR) (8 April 2024) (Ruling) Neutral citation: [2024] KEELRC 798 (KLR) the court held and found as follows: “ 10. While making the finding, the court has considered that in Narok County Government and Another v Richard Bwogo Birir & another (2015) 5JELR 104466 (CA) the Court of Appeal has found that state and public oficers are all servants of the people when the court upheld the trial court’s findings thus, “39. It is upon consideration of those and other provisions that the trial court reached the following compelling conclusion:“…all persons holding public or state ofice in Kenya in the executive, the legislature, the judiciary or any other public body and in national or county government are servants of the people of Kenya. The court holds that despite the level of rank of state or public ofice as may be held, no public or state oficer is a servant of the other but all are servants of the people. Thus, the court holds that the idea of servants of the crown is substituted with the doctrine of servants of the people under the new Republic as nurtured in the Constitution of Kenya, 2010. The hierarchy of state and public oficers can be complex, detailed and conceivably very long vertically and horizontally but despite the rank or position held, the court holds that they are each a servant of the people and not of each other as state or public oficers. They are all servants of the people. The court holds that there are no masters and servants within the hierarchies of the ranks of state and public oficers in our new Republic. The court further finds that the string that fiows through the constitutional provisions is that removal from public or state ofice is constitutionally chained with due process of law. In the opinion of the court, at the heart of due process are the rules of natural justice. Thus, the court finds that the pleasure doctrine for removal from a state or public ofice has been replaced with the doctrine of due process of law. Article 236 is particularly clear on the demise of the pleasure doctrine in Kenya's public or state service… In the new Republic, the court holds that public service by public and state oficers is guided by the doctrine of servants of the people and the doctrine of due process and not by the doctrines of the servants of the crown and the pleasure doctrine. In the opinion of the court, the demise of the pleasure doctrine and the demise of the doctrine of servants of the crown in the new Republic's constitutional framework constitute the very foundation of the Republic, namely, Kenya is a sovereign Republic and all sovereign power belongs to the people of Kenya and shall be exercised only in accordance with the Constitution.” https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/592/eng@2025-02-27 5

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Further, in the same case the court held as follows: “ 15. The court considers that it should be obvious that the jurisdiction of the court extents to disputes relating to employment and labour relations. Article 41 as the constitutional anchoring provides for the right of every person to fair labour practices and the wording is about a worker and an employer. The court has already found that it has jurisdiction in the subject matter of discharge of human resource functions. That a given person performing work is not expressly put under the Employment Act or is expressly excluded from application of the Act does not by itself eliminate the court’s jurisdiction. The court is alert that the world of work is replete with many diverse work arrangements. Thus, that the 2nd respondent holds a constitutional ofice as member of the commission and that his appointment and exercise of removal or disciplinary control is provided in the Constitution does not by itself eliminate the court’s jurisdiction in the ensuing service as a servant of the people contemplated in chapter 6 of the Constitution. Employment relationships or work engagements can take diverse arrangements. It can be temporary and time bound like in fixed term contracts, casual service, or piece rate work arrangements. It can be parttime as alleged for the 2nd respondent. It may also be triangular where the owner of the work does not directly employ the worker as it happens in outsourcing. It can also be disguised employment where the owner of the work treats the worker not as one to escape the legal implications and protections of undisguised and regular employment. In Kenya’s constitutional and statutory design, all public and state oficers are servants of the people, the sovereign power of the people having been vested in the people per article 1 of the Constitution. The court is alert that some state oficers or public oficers may want to disguise themselves as not being servants of the people in an emergent strange scheme to escape the constitutional, statutory or regulatory exercise of the ultimate employer prerogatives vested in the people collectively, as groups or individuals in the exercise of the legitimate sovereign power over the state or public oficers. The court returns that arguments such as part timing, piece rate work, designation and naming of a public or state ofice held shall not disguise the true status of the oficers, they are all servants of the people, employed by the people, to serve the people.” 9. In Rukaria v Attorney General; Debasso & another (Interested Parties) (Petition 2 of 2023) [2023] KEELRC 2824 (KLR) (10 November 2023) (Judgment) Neutral citation: [2023] KEELRC 2824 (KLR) in a similar preliminary objection the court held as follows: “ 11. The court further returns that the petitioner was a public oficer and a servant of the people and not merely a director in a company registered under the Companies Act as was the case in Nakuru Civil Appeal No 61 of 2015 Rift Valley Water Services Board & 2 others v Geoffrey Asanyo & 2 others Civil Appeal No 61 of 2015. The Court of Appeal held thus, “…His functions as a director of the 2nd respondent’s governance body, and the terms on which he was appointed to represent the interests of the business community on the board, were governed by the Companies Act and 2nd respondent’s Memorandum and Articles of Association. The Employment Act did not apply to that relationship so as to confer on the Industrial Court jurisdiction to determine any claim relating to appointment to the board. 20. We hasten to draw a clear distinction between and employee and a member of a board of directors of a corporate entity, such as the 1st appellant. That distinction lies in our answer to the question as to whether directors are employees of the company to whose board they are appointed. They are not. In McMillan v Guest [1942] AC p 561 it was held that a company https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/592/eng@2025-02-27 6

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director is an ofice-holder who is not, without more, an employee of the company. That is the position here. In the absence of a contract of service in terms of which a director is engaged as a full-time employee of the company (see Parsons v Albert J Parsons and Sons Ltd [1979] ICR p 271)” The court has considered that binding holding. However, the holding related to a director being a member of a company registered under the Companies Act without more to it.” 10. It appears to the court that the submission that employment exists only where the provisions of the Employment Act, 2007 apply is a pure misdirection unknown to the world of work. The court considers that parties in employment relationships may found their relationships upon several formal provisions such as provisions of the Constitution, relevant legislation, private contracts and others. For public and state oficers, the applicable provisions will be found in the Constitution, relevant statutes, public and state service regulations, policies and applicable practices or usages. The Employment Act, 2007 applies as the fioor of terms and conditions in an employment or work relationship and the Act does not operate to oust employment or work relationships founded upon such other provisions binding upon parties as may be lawful. In view of the forgoing findings the court determines the preliminary objection dated January 15, 2025 with orders as follows: a) The preliminary objection is dismissed with costs in the cause. b) Parties to take directions towards the expeditious hearing and determination of the main petition. SIGNED, DATED AND DELIVERED BY VIDEO-LINK AND IN COURT AT NAIROBI THIS THURSDAY 27TH FEBRUARY, 2025. BYRAM ONGAYA PRINCIPAL JUDGE https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/592/eng@2025-02-27 7

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