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ELRCDismissedPetition No 8 of 2018· [2023] KEELRC 656 (KLR)

Ng’ang’a v Energy Regulatory Commission (Petition 8 of 2018) [2023] KEELRC 656 (KLR)

Employment and Labour Relations Court
10 March 2023
2,821 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~11 min to read original · ~4 min brief

The bottom line

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Kenya's Employment Court ruled that a fixed-term contract that simply expires is not 'termination', so the former Director-General received no compensation.

What this practically means

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Executive summary

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The Petitioner, formerly Director of Electricity and later Director-General of the Respondent State Corporation, was appointed Director-General on a 3-year fixed-term contract from September 1, 2014 to August 31, 2017. By a letter dated January 26, 2017, the Board Chairman advised him that his contract would not be renewed upon expiry because he had attained the mandatory retirement age of 60 years, and placed him on 8 months' terminal leave. The Petitioner petitioned, contending that only the Cabinet Secretary could terminate his contract under Section 11 of the Energy Act and Section 51 of the Interpretation and General Provisions Act, that age was a diversionary issue, that nonrenewal was actuated by malice, and that his rights under Articles 27, 28, 41 and 47 were violated. He sought declarations, Kshs 10 million compensation, 36 months' salary as damages, and various dues. The Respondent maintained that the Director-General is not a Commissioner under Section 11, that the retirement age applied under its HR Manual and public service policy, and that all dues were paid. The Court found that the contract was never terminated but expired on its agreed date without renewal; the Chairman merely communicated nonrenewal within the Commission's mandate; the Petitioner never expressed interest in renewal and had no legitimate expectation of it, being past the mandatory retirement age; and an employer need not give reasons for nonrenewal of a fixed-term contract. All remedies sought were refused. The Petition was declined with no order on costs.

Key legal issues

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01

Whether the fixed-term contract was terminated unfairly or at all

Holding

The contract expired by effluxion of time on August 31, 2017 and was not renewed; there was no termination

Reasoning

Clause 4 of the contract set a fixed term from September 1, 2014 to August 31, 2017. The letter of January 26, 2017 merely advised nonrenewal upon expiry. The Chairman did not terminate the contract. A fixed-term contract that is not renewed simply expires; the underlying reasons for nonrenewal are irrelevant unless the contract obliges the employer to give reasons.

p. 4
02

Whether Section 11 of the Energy Act and Section 51 of the Interpretation and General Provisions Act were violated by the Chairman communicating nonrenewal

Holding

No violation: the Director-General is not a Commissioner for purposes of Section 11, and the Chairman did not terminate but advised nonrenewal, which was within the Commission's mandate

Reasoning

Section 12(4) of the Energy Act makes the Director-General an ex officio member without voting rights, serving on contract; his removal is not regulated by Section 11, which applies to Commissioners. The expiry of a fixed-term contract is not among the Section 11 grounds. The State Corporations Act and Mwongozo empower the Commission through its chair to communicate on hiring of the CEO.

p. 6
03

Whether placement on 8 months' terminal leave breached the right to apply for renewal 6 months before expiry

Holding

Not well-founded; the Petitioner could have expressed interest earlier or even while on leave, and did not

Reasoning

The clause required the Petitioner to express interest at least 6 months before expiry; he was free to express interest even a year before. He never did. Being past the mandatory retirement age of 60, he had no reasonable or legitimate expectation of renewal, and renewal would have blocked younger deserving Kenyans, which is not conducive to good governance.

p. 6
04

Whether the Petitioner's constitutional rights under Articles 27, 28, 41 and 47 were violated

Holding

No violation; the Petitioner served his full fixed term, was paid all dues, and accepted the notice of nonrenewal

Reasoning

The Petitioner completed the 3-year contract beyond the retirement age under applicable laws and policies, received salary and benefits to the last shilling, did not dispute the notice of nonrenewal when issued, and proceeded on terminal leave without objection to any authority. The decision to retire him on attaining mandatory age was lawful.

p. 6

Legal principles established

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  • Nonrenewal of a fixed-term contract is not termination; the contract simply expires on the agreed date
  • An employer has no obligation to give reasons for nonrenewal of a fixed-term contract unless the contract so requires
  • Without expression of interest in renewal, there is no legitimate expectation of renewal, particularly where the officer is past the mandatory retirement age
  • Retired officers seeking re-engagement beyond retirement age must meet the necessity/indispensability test

Court orders

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  1. 1.The Petition is declined
  2. 2.No order on the costs

Authorities

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Legislation

  • Energy ActSections 11, 12(4)
  • Interpretation and General Provisions ActSection 51
  • Public Service Commission ActSection 80 and 80(2)
  • State Corporations ActSection 5(3)
  • Constitution of KenyaArticles 27, 28, 41, 47
  • Mwongozo, The Code of Governance for State CorporationsClauses 1.2(k), 1.3(k)
  • Public Service Human Resources ManualClause D21
  • Human Resources Policy Procedure Manual (Respondent)Clause 9(2)
Jurisdiction invoked
Constitutional petition under Articles 27, 28, 41 and 47 of the Constitution

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, "Ng’ang’a v Energy Regulatory Commission (Petition 8 of 2018) [2023] KEELRC 656 (KLR)", Case Analysis (2023). Petition No 8 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2023/656/eng@2023-03-10

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