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ELRCDismissedPetition (filed 5th July 2017)· [2019] KEELRC 1046 (KLR)

Daniel Karuru Mwaura v Permanent Secretary, Ministry of Energy and Petroleum & 3 others [2019] KEELRC 1046 (KLR)

Employment and Labour Relations Court
19 July 2019
MOMaureen Onyango
3,111 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~12 min to read original · ~4 min brief

The bottom line

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A former KETRACO board member lost his bid for unpaid director's fees because they were a performance-based incentive, not an automatic entitlement.

What this practically means

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Executive summary

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The Petitioner, a former board member of KETRACO appointed under Section 6(1)(e) of the State Corporations Act for two three-year terms ending 16th March 2015, sued for director's fees for the financial years 2013/2014 and 2014/2015 withheld by the Cabinet Secretary/Principal Secretary, the National Treasury, on grounds of KETRACO's poor performance. He sought declarations that the withholding was unconstitutional, orders for payment with interest, general damages, an apology and costs, invoking Articles 22(1), 23(1), 25(b), 27 and 41 of the Constitution. The Respondents, through the Attorney General, opposed on the basis that fees were governed by the State Corporations (Performance Contracting) Regulations, 2004 (Legal Notice No. 93) and a 2004 Head of Public Service circular tying director's fees to performance, and that KETRACO's profits had collapsed from Kshs.291 million (2012/2013) to Kshs.4.8 million (2013/2014). The court framed two issues: violation of constitutional rights and entitlement to the fees. Applying the Anarita Karimi Njeru threshold, it found the petitioner had merely regurgitated constitutional provisions without pleading the manner of infringement, and had not proved discrimination relative to a former Chairman. On entitlement, the court held that Clause 8 of the appointment letter made director's fees payable only upon approval by the Board in consultation with the Ministry and the Treasury, and that they were an incentive, not an entitlement. The petitioner had not shown the refusal to approve was unreasonable or illegal. The petition was dismissed with each party bearing its own costs.

Key legal issues

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01

Whether the Petitioner's constitutional rights were violated

Holding

No violation was established; the petition failed the Anarita Karimi Njeru precision threshold and the discrimination claim was unsupported by evidence

Reasoning

The petitioner merely regurgitated constitutional provisions without pleading the specific manner of infringement. The claim of discrimination against a former Chairman was not supported by any evidence of who that Chairman was or that his contract provided for director's fees. The court held the petitioner failed to prove his rights under Articles 22(1), 23(1), 25(b), 27 and 41 were violated.

p. 4
02

Whether the Petitioner is entitled to director's fees for 2013/2014 and 2014/2015

Holding

No. Director's fees were payable only upon approval by the Board in consultation with the Ministry and Treasury, based on performance; KETRACO's poor 2013/2014 performance justified non-approval

Reasoning

Clause 8 of the appointment letter made director's fees conditional on approval. The State Corporations (Performance Contracting) Regulations 2004 (Legal Notice 93) and the 2004 circular tie fees to performance. KETRACO's profits fell from Kshs.291 million to Kshs.4.8 million, well below budgeted targets, and the petitioner did not plead that the refusal to approve was unreasonable or illegal.

p. 6

Legal principles established

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  • A constitutional petitioner must set out with a reasonable degree of precision the complaint, the provisions said to be infringed and the manner of infringement (Anarita Karimi Njeru threshold)
  • Director's fees under the appointment letter become due only upon approval and are not an entitlement as of right

Court orders

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  1. 1.The petition is dismissed
  2. 2.Each party shall bear its own costs
Jurisdiction invoked
Constitution of Kenya, 2010 – Articles 22(1) and 23(1) (enforcement of Bill of Rights)

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, "Daniel Karuru Mwaura v Permanent Secretary, Ministry of Energy and Petroleum & 3 others [2019] KEELRC 1046 (KLR)", Case Analysis (2019). Petition (filed 5th July 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2019/1046/eng@2019-07-19

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