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ELRCDismissedNot stated in the judgment as provided· [2025] KEELRC 2676 (KLR)

Ojode v Kenya National Shipping Line Limited & another (Cause E009 of 2024) [2025] KEELRC 2676 (KLR)

Employment and Labour Relations Court
2 October 2025
7,314 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~29 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The claimant, employed by the 1st respondent, a state corporation, since 1999 and serving as Chief Accountant, was appointed Acting Managing Director in January 2012 and remained in that role for over ten years. Following an Auditor-General audit citing irregular remuneration, the 2nd respondent's Board resolved to surcharge the claimant for payments above SRC rates and to rework his salary and allowances downwards, without hearing him. The claimant sued for a permanent injunction against the surcharge, Kshs. 22,578,765.95 as salary difference, acting allowance arrears, and general damages for unfair labour practices. The respondents contended the claim was premature, that the PSC had exclusive appellate jurisdiction over disciplinary matters, and that the claimant was overpaid contrary to SRC circulars. The court held it had jurisdiction because the claim involved interpretation of constitutional and statutory employment rights, making the court the primary forum. It found the acting appointment unlawful under section 34 of the PSC Act since the claimant lacked the requisite qualifications, being two job groups below the position. However, no payments could be claimed under the invalid appointment. The court held that the Board members who approved remuneration outside SRC rates bear personal liability under article 226(5) of the Constitution and cannot surcharge an employee who acted in accordance with their resolutions; a surcharge without due process was an unjustified sanction. The claim was dismissed in its entirety, with each party bearing its own costs, and the PSC and Auditor-General left at liberty to address the matters as appropriate.

Key legal issues

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01

Whether the court has jurisdiction where the claimant alleges violation of constitutional rights despite PSC appellate mechanisms

Holding

The court has jurisdiction; the claim is filed before the correct forum because it involves interpretation of constitutional and statutory employment rights

Reasoning

The respondents argued that disputes arising from disciplinary control over a state corporation employee fall under PSC appellate jurisdiction under sections 74 and 75 of the PSC Act and section 12(5) of the ELRC Act. The court accepted that the PSC has disciplinary mandate over public officers under section 65(2)(a), but held that where constitutional rights such as fair labour practices and the right to property are invoked, the court is the primary forum and the claim was properly filed.

p. 13
02

Whether the claimant's prolonged acting appointment as Managing Director was lawful

Holding

The appointment was unlawful and invalid because the claimant lacked the requisite qualifications, being two job groups below the position

Reasoning

Section 34(2) and (5) of the PSC Act requires that a person appointed in an acting capacity satisfy all prescribed qualifications and that the appointment not undermine expeditious appointment of a competent person. The respondents admitted the claimant was two levels below the required job group. Relying on Malaya v Masinde Muliro University, Nyaga v KCAA, Gikenyi v Nakhumicha and Ondo v EACC, the court held the appointment unlawful, and expediency of an ongoing restructuring could not justify it.

p. 14
03

Whether the claimant is entitled to Kshs. 22,578,765.95 and acting allowance arrears

Holding

No; the claimant cannot claim under an invalid appointment, but the respondents and their board members are personally liable under article 226(5) for payments made contrary to SRC rates

Reasoning

The court held that although the appointment was unlawful, the salaries and allowances were sanctioned by Board resolutions. The board members who approved payments outside SRC guidelines bear personal liability under article 226(5) of the Constitution, relying on EACC v Okungu, Republic v EACC ex parte Ringera, Muthui v Kerra and the Bidco Africa case. The claimant, having acted per Board resolutions, cannot be surcharged without due process; the respondents are accountable for the overpayments.

p. 16
04

Whether the surcharge against the claimant without a hearing was lawful

Holding

A surcharge is a disciplinary measure; imposing it without due process is an unjustified sanction where the claimant acted in accordance with Board resolutions

Reasoning

Under the 1st respondent's policies a surcharge is a disciplinary measure against an employee who unlawfully appropriated funds or personally caused loss. The court found the claimant received salaries sanctioned by Board resolutions and that the respondents, as initiators of the illegality, cannot turn around and sanction him. The court also held due process under sections 66 and 68 of the PSC Act must precede PSC disciplinary mandate.

p. 16

Legal principles established

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  • Where an employee's constitutional rights are invoked, the ELRC is the primary forum notwithstanding PSC appeal mechanisms
  • An acting appointment of an unqualified person is unlawful and cannot found claims for payment under it
  • Board members who approve remuneration contrary to SRC guidelines are personally liable under article 226(5) of the Constitution and cannot surcharge an employee who acted in accordance with their resolutions

Court orders

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  1. 1.The claim is dismissed in its entirety
  2. 2.The Public Service Commission and the office of the Auditor General are at liberty to address the matters as appropriate
  3. 3.Each party to bear its costs
Jurisdiction invoked
Article 162(2) of the Constitution and section 12 of the Employment and Labour Relations Court Act (court found it had jurisdiction notwithstanding the PSC appeal mechanisms)

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, "Ojode v Kenya National Shipping Line Limited & another (Cause E009 of 2024) [2025] KEELRC 2676 (KLR)", Case Analysis (2025). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2025/2676/eng@2025-10-02

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