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ELRCDismissedPetition (amended petition dated 9th February, 2018); related Petition No. 24 of 2018 referenced· [2018] KEELRC 1689 (KLR)

Omtatah v Kenya Revenue Authority Board of Directors & 2 others [2018] KEELRC 1689 (KLR)

Employment and Labour Relations Court of Kenya
29 June 2018
ANABUODHA N.
5,695 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Employment Court upheld the KRA Commissioner General's fixed-term contract, ruling that government policy guidelines like Mwongozo guide but don't legally bind the Government.

What this practically means

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Executive summary

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The petitioner, a public interest litigant, challenged the legality of the second term of John Karimi Njiraini as Commissioner General of the Kenya Revenue Authority, contending that the contract permitting a possible third term and service beyond the mandatory retirement age of 60 years violated Article 10(2) of the Constitution, the Mwongozo Code of Governance for State Corporations, and various Government circulars and manuals. He sought declarations that CEOs of public bodies cannot serve beyond six cumulative years, that the interested party was ineligible for a third term or acting appointment, that he had been in office illegally since turning 60 and should refund earnings, and a prohibitory order against further engagement. The 1st respondent and the interested party countered that the appointment was governed by section 11(1) of the KRA Act and a valid fixed-term contract expiring on 3rd March 2018, that no extension had been sought, and that the circulars and Mwongozo were policy documents inapplicable to statutory contracts; they also challenged the court's jurisdiction under section 12 of the ELRC Act. The court held the petitioner had locus standi under Articles 22, 232 and 258, but found KRA to be a state corporation sui generis whose strategic direction rests with the Cabinet Secretary for Finance. Policy instruments influence but do not bind Government, and the interested party's fixed-term contract was permissible under section 80(2) of the Public Service Commission Act, such employees not being subject to the 60-year retirement rule. The petition was dismissed in its entirety with no order as to costs. The issue of a further one-year extension was left to the related Petition No. 24 of 2018.

Key legal issues

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01

Locus standi of the petitioner

Holding

The petitioner, as a member of the public, has locus standi under Articles 22 and 258 to bring the petition in the public interest.

Reasoning

Article 22 permits any person, including one acting in the public interest, to institute proceedings claiming a right has been violated. Public servants are appointed to discharge duties in the public interest and are remunerated from public resources. The petition concerns appointment and exit from public service, engaging the values and principles of public service under Article 232, which apply to all state corporations.

p. 9
02

Whether the interested party's contract conflicted with the Constitution, Mwongozo and Government circulars on retirement age and term limits

Holding

The contract was valid; it did not contravene the Constitution, Mwongozo or the circulars.

Reasoning

KRA is a state corporation sui generis under the control of the Cabinet Secretary for Finance in key functions. Mwongozo and the circulars are policy documents which influence but do not bind Government. The interested party held a fixed term contract permissible under section 80(2) of the Public Service Commission Act; such employees are not pensionable and are not subject to the 60-year retirement rule, their contracts being governed by their instruments of appointment.

p. 11
03

Challenge to the court's jurisdiction under section 12 of the Employment and Labour Relations Court Act

Holding

The court determined the petition on its merits, implicitly accepting jurisdiction, the petition concerning the public service values in Article 232.

Reasoning

The respondents argued the petitioner was not among the persons listed under section 12 of the ELRC Act who may lodge a claim. The court framed locus standi as its first question and resolved it on constitutional grounds, holding that any citizen may question the operationalization of the values and principles of public service under Article 232.

p. 9

Legal principles established

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  • A member of the public has locus standi under Article 22 to question the operationalization of the values and principles of public service under Article 232.
  • KRA is a state corporation sui generis because proceedings arising from its core functions are deemed to be proceedings against the Government.
  • Government policy instruments such as Mwongozo and circulars influence but do not bind the Government, and cannot be used to bar a strategic decision of Government.
  • Fixed term contract employees who have attained the mandatory retirement age are not subject to the 60-year retirement age rule; their contracts are governed by their instruments of appointment.

Court orders

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  1. 1.The petition is unsuccessful and the orders sought are declined
  2. 2.No order as to costs

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 10(2), 22(1) & (2), 162(2), 232(1) & (2), 258
  • Kenya Revenue Authority Act, Chapter 469 Laws of KenyaPreamble, sections 3(2), 5, 6(2)(a), 11(1), 11(3)
  • State Corporations ActSection 2
  • Public Service Commission ActSection 80(2)
  • Employment and Labour Relations Court ActSection 12
  • Leadership and Integrity ActSection 52
  • Code of Governance for State Corporations (Mwongozo), January 2015Chapter 8, Tenure of Chief Executive Officers
  • Human Resource Policies and Procedures Manual for the Public Service, May 2016D.21 (Mandatory Retirement Age), D18 (Exit from Service), clause B20, clause A.6
  • Government Circular Ref. No. OP.CBA.2/7A dated 20th March 2009Review of the Mandatory Retirement Age for Public Servants from 55 years to 60 years
  • Government Circular No. OP/CAB.9/1A dated 23rd November, 2010Procedure for Reappointment of Service Chief Executive Officers in State Corporations
  • Government Circular Ref. No. OP.CAB.2/7A dated 14th February, 2014Retention in Service of Officers Beyond the Mandatory Retirement Age
  • Gazette Notice No. 663 dated 19th January, 2012Appointment of Commissioner General of KRA

Cases cited (4)

  • Republic Vs Attorney General & 2 Others Exparte Consumers Federation of Kenya (COFEK)
    2012 eKLR
  • Jackson K. Birenge Vs Masai Mara University
  • Henry Mwema Kimanthi Vs Nairobi City Water & Sewarage Company Ltd
  • East African Portland Cement Company Ltd Vs Attorney General
Jurisdiction invoked
Article 22 and 258 of the Constitution (public interest litigation) read with section 12 of the Employment and Labour Relations Court Act and Article 162(2) of the Constitution (jurisdiction challenged by respondents)

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, "Omtatah v Kenya Revenue Authority Board of Directors & 2 others [2018] KEELRC 1689 (KLR)", Case Analysis (2018). Petition (amended petition dated 9th February, 2018); related Petition No. 24 of 2018 referenced. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1689/eng@2018-06-29

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