REPUBLIC OF KENYA
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT
AT NAIROBI
CAUSE NO. E1045 OF 2023
(Before Hon. Justice Dr. Jacob Gakeri)
GEORGE KHAEMBA MUKOPI AND 9 OTHERS..…….... CLAIMANT
VERSUS
NAIROBI COUNTY GOVERNMENT ..………….….1 ST RESPONDENT
PUBLIC SERVICE COMMISSION…….……………..2 ND RESPONDENT
NAIROBI COUNTY PUBLIC SERVICE BOARD……3 RD RESPONDENT
JUDGMENT
The claimants commence the instant suit on 19 th December 2023 vide a Memorandum of Claim dated 18 th December 2023, alleging wrongful, unfair and unlawful discrimination in the hiring process and violation of their fundamental freedoms and rights, to fair labour practices and fair administrative action.
The claimants pray for:
(i) An order compelling the 1 st , 2 nd and 3 rd Respondents to implement jointly and severally the agreements of the circular.
(ii) In the alternative to (i) above, an equitable order that the claimants be made permanent and pensionable employees of the 2 nd Respondent.
(iii) In the alternative to (i) and (ii) above, an order compelling the Respondent to redeploy the claimants to other government departments.
(iv) A declaration that the act of the 1 st and 2 nd Respondents has violated the provisions of fair labour practices under Article 41 of the Constitution of Kenya.
(v) A declaration that the act of the 1 st and 2 nd Respondent violated the provisions of equality and freedom, from discrimination under Article 27 of the Constitution of Kenya.
(vi) An order be issued for compensation for violation of Article 27, 28 and 41 of the Constitution of Kenya.
(vii) An order be issued for exemplary and general damages.
(viii) The court issues any other direction declaration and orders that service the cause of justice.
(ix) Costs of the suit.
2nd Respondent’s case
That by a Deed of Transfer dated 25 th February 2020, the Nairobi City County Government transferred the Health Services Transport, Planning and Development Services as well as Public Works Utilities and Ancillary services to the National Government and to effectuate the process the National Government established a special purpose vehicle, Nairobi Metropolitan Services (NMS) whose term was tiled to the Deed of Transfer to ensure implementation of the transferred functions and human resource were to be seconded from the County Government. That because the number of seconded officers was not sufficient, the 2 nd Respondent was required to recruit more staff for the NMS which it did and that’s why the claimants were employed on fixed term contracts as per the Deed of Transfer and on lapsing of the contracts the County Public Service Board of the County Government of Nairobi would determine whether to absorb them or not.
That section 2 of the 2 nd Respondent’s Circular dated 3 rd August 2021 was addressed to Authorized Officers as per the Public Service Commission Act i.e authorized officers of the Commission in Ministries, Departments and Agencies (MDAS) as opposed to the County Governments.
That the claimants’ contract of employment was concluded under the umbrage of the Deed of Transfer as opposed to being employees of the County Government and their terms could not be converted to regular establishment of the County Government unless the CPSB of the County Government consented.
That before the tenure of NMS lapsed a framework was executed on 30 th September 2023 by the Cabinet Secretary, Ministry of Devolution, Attorney General and the Governor, Nairobi City County Government in the presence of the County Attorney, on how employees would be dealt with. That the 2 nd respondent was not privy to any engagements between the claimants and the county Government of Nairobi after the transferred functions were handed over back to the County Government and the framework could be the basis of absorption of the claimants by the 2 nd Respondent since they had fixed term contracts and the Circular dated 3 rd August 2021 did not apply to County Governments. The 2 nd Respondent prayed for dismissal of the suit with costs.
By a Replying Affidavit sworn by Nyagara Nyamway on 25 th October 2024, the 1 st and 3 rd Respondents admitted the transfer of functions to the NMS in February 2020, which employed the claimants on 5 th March, 2021 as Supply Chain Management Officers for a period of three (3) years till 5 th March 2024. The 2 nd Respondent advertised, interviewed and deployed the employees and the 3 rd Respondent was not party to the recruitment process nor was the county structure or establishment considered.
The 1 st and 3 rd Respondents admitted that after the direction of transfer of functions lapsed, the 3 rd Respondent retained the claimants under similar terms until expiry of their contracts. That the claimants were employed by the NMS and any allegation of a circular to convert their terms to permanent and pensionable was unsustainable.
Claimant’s evidence
Mr. George Khaemba, CWI confirmed, on cross-examination that he was employed by the Nairobi Metropolitan Services (NMS) and had no contract of employment with the County Government of Nairobi or the County Public Service Board CPSB or the Public Service Commission (PSC) and had only one letter of offer of Osoro Victoria Nyaboke dated 5 th March 2021 for three years effective 10 th April 2021 under a fixed term contract until to 10 th April 2024 and served the entire term. That they had not been paid gratuity and were thus discriminated.
CW confirmed that a copy of payslip on record had no authentication marks such as name, save the ID number and KRA Pin certificate number.
That the PSC letter dated 3 rd August 2021 addressed to all authorized officers on ‘Review of Employment terms at entry level’ was directed at authorized officers of the PSC and was not addressed to persons employed by the Nairobi County Public Service or to him but the terms of the letter referred to him and related to employees of the PSC but admitted that he had no contract of service with CPSB or the City County Government.
The witness confirmed that an internal memo from NMS directed all Directors to absorb the employees of NMS made no reference to the CPSB or the County Government of Nairobi. That the Governor stated that employees of NMS would be absorbed by the County Government and out of over 2000 employees only 10 were not absorbed yet all applied for employment.
On cross-examination by counsel for the Public Service Commission, CWI confirmed that he was engaged by the PSC for the NMS under a three (3) years contract tied to the tenure of NMS due to lapse on 5 th March 2024. The witness admitted that the PSC was not party to the Agreement on page 84, which handed over functions back to the City County Government but confirmed that the County Government continued paying salaries to the employees until their contracts lapsed.
The witness admitted that vide letter dated 27 th January 2022 the CPSB wrote a disclaimer that it would not accommodate or absorb former employees of NMS which was a follow up of another dated 16 th June 2021.
That the County Government of Nairobi employed some of the former employees of NMS excluding the claimants.
On re-examination, CWI stated that the ID number and KRA Pin number on the copy of the payslip on record was his and the County Government paid salaries for all claimants and he had authority to sue on behalf of the other claimants and a few other employees of NMS were also left out.
That the CPSB advertised positions and all employees applied but the court found that the process was vitiated by corruption which lead to the Governor inviting the EACC to investigate the same.
The witness testified that the PSC employed them for the NMS pursuant to the Deed of Transfer of Functions.
According to CWI “All authorized officers” as per the PSC Circular were directors in the civil service. The witness testified that no one from his department was employed by the CPSB.
RWI, Mr. John Kimani testified that the phrase “Authorized Officer” was defined in Section 2 of the Public Service Commission Act and the PSC did not deal with officers in county governments and the letter dated 3 rd August 2021 from the PSC was addressed to “Authorized Officers” under the jurisdiction of the PSC and NMS was not an “Authorized Officer” for purposes of the letter.
The witness confirmed that the claimants and others were employees of the NMS and when it was disbanded the Nairobi County Government took over the employees for the remainder of the term of their contracts.
The witness testified that employee serving on contracts in Ministries and state departments were absorbed pursuant to the letter of 3 rd August 2021.
RWI confirmed that the PSC recommended salaries for those under its jurisdiction and the claimants were hired directly for the NMS were not seconded there and the County Government was paying them.
That under the framework, the County Government could absorb those that it needed for its purposes and no document on record described the claimants as employees of the PSC, NMS or the CPSB and the NMS was not a State Department of the National Government.
On re-examination Mr. John Kimani testified that NMS had no authorized officer appointed by the PSC and all NMS staff were employed under a three (3) years fixed term contracts.
RWII Violet Oyangi confirmed that the claimants were employed by the PSC and worked for the Nairobi County Government pursuant to the Deed of Transfer between the National Government and the Nairobi City County Government.
As regards the handover framework, the witness confirmed that the County Government of Nairobi conducted competitive employment based on the needs and vacancies and many former employees of NMS applied and were considered.
That the NMS was disbanded 3 months before the contractual term lapsed and the claimants continued working for the County Government for another 3 months and were paid for the 3 months.
The witness stated that the governor met medical professionals but was unsure of what transpired and those hired were picked competitively. The witness stated that there was no relationship between the PSC and the CPSB and each was a distinct body with distinct functions and the CPSB had issued a disclaimer to the hiring for NMS and paragraph 3 (b) of the Handover framework was neither mandatory nor obligatory.
That the County Government of Nairobi and the CPSB were not party to the PSC letter dated 3 rd August 2021.
Claimant’s submissions
Counsel submitted that the claimant’s case was anchored on the Handover framework and the 2 nd respondent’s Circular of August 2021, and the 1 st respondent’s paid their salaries after disbandment of NMS and their services were utilized by the 1 st respondent and officers seconded to NMS were absorbed by the 1 st respondent.
Counsel, further submitted that the evidence tendered by violet Oyangi for the 3 rd respondent was vitiated by evidence of corruption and lack of performance appraisal.
On the employment of the claimants by the respondents’ counsel relied on the decision in Lydia Limbe v Akili Dada (2022) KEELRC 951 (KLR) on the control test and Omusamia v Upper Hill Springs Restaurant (2021) KEELRC 3 (KLR) on payment of wages and control.
That despite the existence of the NMS the claimants were controlled supervised and disciplined by the 1 st respondent and were thus integrated within the structures of the 1 st respondent.
That the claimants became employees of the 1 st respondent when it paid their salaries.
On the law on fixed term contracts, reliance was placed on Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho Kariuki (2017) EKLR and Transparency International _ Kenya v Daniel Ndungu (2019) EKLR that the contract ends when the term lapses and non-renewal does not amount to unfair termination but continued engagement of the claimants beyond expiry of the fixed term contract created an indefinite employment relationship citing Lumututu v Kenya Civil Aviation (Authority (2024) KEELRC 13242 (KLR).
Concerning legitimate expectation, reliance was placed on the 2 nd Respondent’s letter dated 3 rd August 2021 on conversion of employment to permanent and pensionable as the letter was Inter-Agency and the framework agreement required retention and integration of operational cadres for service delivery.
Reliance was placed on Communications Commission of Kenya & 5 others (2014) eklr AND Lumutut v Kenya Civil Aviation Authority (2024) (Supra). Reliance was further placed on the provisions of 187 (2) (b) of the Constitution of Kenya on performance of transferred functions. Counsel submitted that doctors were employed by the 1 st respondent on permanent and thus pensionable terms and discriminated against the claimants.
It was submitted that the governor promised to absorb the claimants citing Section 60 of the Evidence Act on judicial notice of parliamentary proceedings to urge the court to take judicial notice of the Governor’s promise.
Counsel submitted that the claimant’s rights to fair administrative action was violated the Human Resource Manual was not complied with and the claimants who served as Supply Chain Management officers were not appraised.
Reliance was placed on Oduor v Umba Technology Ltd (2025) KEELRC 1005 (KLR), Jane Samba Mukala v Ol Tukai Lodge (2013) eKLR, Jane Wairimu Machira v Mugo Waweru & Associates (2012) eKLR and Otiende v Penda Health (K) Ltd (2014) KEELRC 2078 (KR) on performance evaluation.
Finally, counsel submitted that the claimants were discriminated by being singled out in violation of Article 27 of the Constitution of Kenya.
Reliance was placed on the decision in Ndurumo v University of Nairobi. Kenya National Commission on Human Rights (Interested Party) KEELRC 1477 (KLR ). Counsel submitted that the exclusion was actuated by corruption by individuals to enable them sell off job opportunities to the highest bidder.
In conclusion, counsel submitted that the claimants were employees of the 1 st and 3 rd respondents.
2 nd Respondent’s submissions
Counsel submitted that the jurisdiction of the PSC over County Government employees was limited to hearing and determining appeals pursuant to Article 234 (2) (i) of the Constitution Part XV of the Public Service Commission Act and Section 77 of the County Governments Act and attendant Regulations on transfer of functions from one level of government to the other.
Counsel urged that pursuant to the Deed of Transfer of functions persons were employed under fixed term contracts as the functions would revert when the term ended.
On whether Circular PSC/ADM/13 (8) dated 3 rd August 2021 applied to the claimants, counsel submitted that the circular was addressed to “Authorized Officers” of the Commission in Ministries Departments and Agencies (MDAS) as opposed to County Governments as the PSC had not designated any authorized officer in county governments and the claimant’s contracts of employment was subject to the duration of the Deed of Transfer.
Reliance was placed on the sentiment of the court of Kenya National Union of Nutritionists and Dietitians v Nairobi City County government & others on the mandate of the CPSB.
Counsel submitted that after the functions were handed over back to the 1 st Respondent, the 1 st respondent took over all the staff based on their terms and conditions of service at the time and the PSC was not party to the agreement and had no role in the subsequent recruitment of staff by the 3 rd respondent.
Reliance was further placed on the decision in Kenya Medical Practitioners Pharmacists and Dentists Union V Nairobi City County Government & 2 others NMS (Defunct) & 130 others (Interested Parties) (2024) KEELRC 403 (KLR) on the scope of the 2 nd respondent’s Circular of August 2021.
On reliefs counsel submitted that the Handover Framework executed by the Cabinet Secretary, Ministry of Devolution, Attorney General and the Governor, Nairobi City County guided the process after the disbandment of the NMS and the claimant’s contracts expired upon expiry of the Deed of Transfer and the PSC had no other role and could not absorb the claimants as it would amount to re-writing of a contract by the court.
Reliance was further placed on the decision in Kenya Medical Practitioner, Pharmacists and Dentists Union v Nairobi City County Government & 2 others (Supra) to demonstrate that the claimants were not employees of the national government.
Analysis and determination
It is common ground that by a Deed of Transfer dated 25 th February 2020 the Nairobi City County government transferred the following functions to the National government.
(a) County Health Services.
(b) County Transport services.
(c) County planning and Development services.
(d) County public works utilities and Ancillary services.
To ensure that the functions were properly performed, the National Government established the Nairobi Metropolitan Services (NMS) to which employees of the 1 st respondent were seconded and others employed directly for the NMS by the Public Service Commission.
The recruitment of new staff by the NMS through the PSC elicited two disclaimers dated 16 th June 2021 and 27 th January 2022 by the Nairobi City County Public Service Board (CPSB)expressing its concern that the NMS was recruiting staff in contravention of the law and stated
“The Board wishes to register the disclaimer once more that the Nairobi city county government will not be in a position to accommodate/absorb staff being recruited by the Nairobi Metropolitan service (NMS) who are recruited without following the approved county structure and establishment upon expiry of NMS term as it will overstretch the already blotted wage bill.”
While the 1 st letter was addressed to the County Secretary, the second was addressed to the Secretary PSC and copied to the County Secretary, Cabinet Secretaries for Ministry of Devolution and ASALS and Ministry of Public Service, Sports and Gender, Director General (NMS) and the Director Human Resource Management, Nairobi City County.
From the contents of the letters, it is clear that that neither the 1 st nor the 2 nd Respondent was involved in the recruitment of staff for the NMS by the PSC, the fact that the recruited staff would render services offered by the County Government of Nairobi notwithstanding.
Instructively, the Deed of Transfer, Gazette Notice No. 1609 of 20 th February 2020 did not envision recruitment of staff.
Under article 5;
“5.6 The relevant human resource for the implementation of this agreement shall be seconded from the County Government to the National Government; and
5.7 The County Public Service Board shall in consultation with the Public Service Commission, formulate the necessary instruments to facilitate the secondment and/or deployment of the necessary human resource.”
Article 9 of the Deed of Transfer stated:
“9.2 This Deed of Transfer of functions may only be terminated by the mutual written consent of both parties expressed in a common document.”
Under Paragraph 9.1 of the Deed of Transfer the Deed was to remain in force for an initial renewable period of 24 months from the date of execution.
By an undated document entitled
“National Government (through) the Ministry of Devolution & The Nairobi City County Government Framework for the Handover of the transferred functions from the National Government to the City County Government” executed by the Cabinet Secretary Ministry of Devolution in the presence of the Attorney General and the Governor Nairobi City County Government, in the presence of the County Attorney, the functions were transferred back to the County.
Regrettably, the copy of the agreement provided by the 2 nd Respondent had missing pages specifically pages 2, 3 and 6 and was thus incomplete. Strangely, the contents were relied upon by all parties to urge their respective cases.
Clause 33 of the Framework for the Handover stated;
Staff and personnel who have been performing he transferred functions under the Nairobi metropolitan services shall be deployed as follows:
(a) Staff and personnel who had been seconded to the Nairobi Metropolitan services from either level of government shall be redeployed to their respective levels of government.
(b) Staff and personnel who were employed by the Nairobi Metropolitan Services during the subsistence of the Deed shall be absorbed into the Nairobi City County Government’s staff establishment subject to existing vacancies and based of the Nairobi City County needs.
(c) For those who will not be absorbed in line with (b) above the Public Service Commission shall handle their deployment to Government, ministries and/or agencies on their terms of employment.
3.4 The Public Service Commission and the County Public Service Board shall within 14 days from the date hereof prepare the necessary instruments and take appropriate steps to effect the deployments and absorption in Article 3.3 above.
3.6 For the avoidance of doubt, staff and personnel who were employed by the Nairobi Metropolitan Services to discharge supportive roles in relation to the transferred functions shall be retained and remunerated by the Nairobi Metropolitan Services in accordance with their contracts of service.
This clause is important because it incorporated the claimants and other persons performing supportive roles. From the evidence on record, it is unclear as to when the NMS was disbanded but it is not in dispute that after disbandment the County Government of Nairobi paid the salaries of the claimants until their contracts of employment with the NMS lapsed.
Puzzling, the claimants witness, Mr. George Khaemba did not provide a copy of his employment contract with any of the respondents or any other of the claimants except one Osoro Victoria Nyaboke dated 5 th March 2021 but effective 10 th April, 2021, for a period of three (3) years till 9 th April 2024. The letter was signed by the Mr. Dominic Gicheru for the Director General NMS under Reference “offer of Appointment. The letter was explicit that the recipient would have to sign a three-year contract.
It is therefore safe to assume that all the claimants received a similar letter and executed a three (3) year contract of service.
The claimants faulted the respondents for:
(i) Failing to transition them to permanent and pensionable terms pursuant to Circular PSC/ADM/13(8) dated 3 rd March 2021.
(ii) Failing to employ them after employing other employees of the NMS, thus discriminating them.
(iii) Violating their legitimate expectation that they would be employed by the 1 st respondent.
(iv) Failing to honor the terms of Framework for the Handover of transferred functions.
(v) Failing to deploy them in government departments.
(vi) Violating their right to fair labour practice among other rights.
Concerning whose employees, the claimants were, and contrary to the claimant’s counsel's submission, the claimants were employees of the NMS employed for it by the 2 nd respondent on request. CWI admitted on cross-examination that he was employed by the NMS under a three-year contract but added that he was seeking relief from the Nairobi County Government.
It is not in dispute that after disbandment of the NMS, the County Government of Nairobi inherited the employees of NMS and paid them for the reminder of their fixed term contract.
Contrary to the claimant’s averments payment of salary for the reminder of their contract was not sufficient to make them employees of the 1 st respondent, promises by the Governor of the County or any other person notwithstanding. This is because a promise by the Governor does not bind the County or any organ of the County Government.
Recruitment in the public service is regulated by law and the power is vested in the County Public Service Board in the case of counties and the PSC in the case of the National Government. Under Section 57 of the County Governments Act, the County Public Service Board is a body corporate with perpetual succession, with a seal, capacity to shew be sued in its name and one of its core functions is to establish and abolish offices, and appoint persons to hold office or act in offices of the county public service. It is the only body with statutory power to employ public officers at the county level of government. The Governor does not enjoy such powers and his decisions are not binding on the CPSB.
The claimants could only be absorbed into the public service of the 1 st respondent competitively through its own structures as opposed to the Framework for the Handovers of functions on record which was a contract between the Cabinet Secretary and the Governor of the 1 st respondent none of whom is accounting officer or implementing agency of decision.
Most importantly, the absorption was not automatic but was to be based on the vacancies available and needs of the 1 st respondent.
In the courts view, the fact that the 1 st respondent inherited staff of the defunct NMS, supervised, controlled, disciplined and paid them for the remainder of their three (3) year contracts of employment did not transition them to become employees of the 1 st respondent in that their earlier written contracts with the NMS were still running and the 1 st Respondent had to abide by the earlier commitments under Deed of Transfer of functions.
Similarly and as correctly, submitted by the claimants’ counsel, the principles that govern fixed term contracts are well settled in a catena of decisions of the Court of Appeal and the ELRC including, Francis Chire Chachi v Amatisi Water Services Co. Ltd (2012) eKLR, Registered Trustee De La Salle Christian Brothers t/A St. Marys Boys Secondary School v Julius DM Baini (2017) eKLR, Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho (supra), Margaret A. Ochieng v National Water Conservation & Pipeline (2011) eKLR (Rika J) and Transparency International - Kenya v Teresa Carlo Omondi (2023) KECA 174 KLR .
In the latter case, the Court of Appeal stated.
“The court is in agreement with these sentiments. We dare say that an automatically renewable fixed term contract is a contraction, in terms as it would subject the parties to an determinate employment contract. The respondent was under a fixed term contract with a definite commencement date and termination date. There was no ambiguity to create an expectation of contract renewal by the appellants issuance of a fixed term contract. The contract terminated automatically when the termination date arrived…”
These sentiments apply on all forms to the circumstances of the instant case. The claimants provided no evidence to show that they continued working for the 1 st respondent after their contract with the NMS lapsed.
In the Registered Trustees of the Presbyterian Church of EA & another v Ruth -Gathini Ngotho the Court of Appeal held:
“ ...We note that fixed term contract carries no rights obligations or expectation beyond the date of expiry. Accordingly, any claim after the expiry of the respondents contract, ought not to have been maintained…”
As to whether the PSC Circular of 3 rd August 2021 applied to the claimant’s and thus created a legitimate expectation of the claimants transitioning to permanent and pensionable employment, counsel for the claimant’s submitted that it did. According to counsel, the Circular was Inter-Agency and affected all entry level contract personnel appointed from May 2019 and additionally the Framework for Handover of functions created a legitimate expectation.
Counsel for the 2 nd respondent submitted vociferously that the circular applied to authorized officers under the jurisdiction of the PSC exclusively.
During the hearing, RWI Mr. John Kimani, confirmed on cross-examination that the PSC had no authorized officer in the County Governments or the NMS and the circular only applied to authorized officers under the 2 nd respondent’s jurisdiction in Ministries and State Departments and MDAS.
The circular from the PSC was addressed to all Authorized officers under reference “Review of Employment on contract Terms at Entry Level”. The letter was not addressed to any other person and was only copied to the Head of Public Service.
In the Court’s view, if the Circular was Inter-Governmental, it would have been addressed to other officials and copies to among others the Council of Governors and because of its financial implications the decision would have been consultative as consent of the County Governments cannot be assumed.
Similarly, NMS was not a state body or agency but a temporary body formed for a particular purpose for a specified duration. The Internal Memo dated 19 th January 2022 from Director Human Resource Management & Development to Heads of Directorates referred to officers appointed on contract terms and deployed to their Directorates.
The claimants were not deployed to the directors. They were employed in those Directorates. However, County Public Services Officers were deployed to the Directorates under the NMS.
More significantly, and as submitted by counsel for the 2 nd respondent the phrase “Authorized Officer” has a statutory definition under Section 2 of the Public Service Commission Act as;
“any officer, body or authority appointed by the commission to perform its delegated functions in a ministry or state department, or any member of the commission.”
This definition excludes county governments whose public service is under the County Public Service Board, which in a replication of the PSC at the national government The court is in agreement with the sen
[...truncated]
IN THE EMPLOYMENT AND LABOUR RELATIONS COURT
AT NAIROBI
CAUSE NO. E1045 OF 2023
(Before Hon. Justice Dr. Jacob Gakeri)
GEORGE KHAEMBA MUKOPI AND 9 OTHERS..…….... CLAIMANT
VERSUS
NAIROBI COUNTY GOVERNMENT ..………….….1 ST RESPONDENT
PUBLIC SERVICE COMMISSION…….……………..2 ND RESPONDENT
NAIROBI COUNTY PUBLIC SERVICE BOARD……3 RD RESPONDENT
JUDGMENT
The claimants commence the instant suit on 19 th December 2023 vide a Memorandum of Claim dated 18 th December 2023, alleging wrongful, unfair and unlawful discrimination in the hiring process and violation of their fundamental freedoms and rights, to fair labour practices and fair administrative action.
The claimants pray for:
(i) An order compelling the 1 st , 2 nd and 3 rd Respondents to implement jointly and severally the agreements of the circular.
(ii) In the alternative to (i) above, an equitable order that the claimants be made permanent and pensionable employees of the 2 nd Respondent.
(iii) In the alternative to (i) and (ii) above, an order compelling the Respondent to redeploy the claimants to other government departments.
(iv) A declaration that the act of the 1 st and 2 nd Respondents has violated the provisions of fair labour practices under Article 41 of the Constitution of Kenya.
(v) A declaration that the act of the 1 st and 2 nd Respondent violated the provisions of equality and freedom, from discrimination under Article 27 of the Constitution of Kenya.
(vi) An order be issued for compensation for violation of Article 27, 28 and 41 of the Constitution of Kenya.
(vii) An order be issued for exemplary and general damages.
(viii) The court issues any other direction declaration and orders that service the cause of justice.
(ix) Costs of the suit.
2nd Respondent’s case
That by a Deed of Transfer dated 25 th February 2020, the Nairobi City County Government transferred the Health Services Transport, Planning and Development Services as well as Public Works Utilities and Ancillary services to the National Government and to effectuate the process the National Government established a special purpose vehicle, Nairobi Metropolitan Services (NMS) whose term was tiled to the Deed of Transfer to ensure implementation of the transferred functions and human resource were to be seconded from the County Government. That because the number of seconded officers was not sufficient, the 2 nd Respondent was required to recruit more staff for the NMS which it did and that’s why the claimants were employed on fixed term contracts as per the Deed of Transfer and on lapsing of the contracts the County Public Service Board of the County Government of Nairobi would determine whether to absorb them or not.
That section 2 of the 2 nd Respondent’s Circular dated 3 rd August 2021 was addressed to Authorized Officers as per the Public Service Commission Act i.e authorized officers of the Commission in Ministries, Departments and Agencies (MDAS) as opposed to the County Governments.
That the claimants’ contract of employment was concluded under the umbrage of the Deed of Transfer as opposed to being employees of the County Government and their terms could not be converted to regular establishment of the County Government unless the CPSB of the County Government consented.
That before the tenure of NMS lapsed a framework was executed on 30 th September 2023 by the Cabinet Secretary, Ministry of Devolution, Attorney General and the Governor, Nairobi City County Government in the presence of the County Attorney, on how employees would be dealt with. That the 2 nd respondent was not privy to any engagements between the claimants and the county Government of Nairobi after the transferred functions were handed over back to the County Government and the framework could be the basis of absorption of the claimants by the 2 nd Respondent since they had fixed term contracts and the Circular dated 3 rd August 2021 did not apply to County Governments. The 2 nd Respondent prayed for dismissal of the suit with costs.
By a Replying Affidavit sworn by Nyagara Nyamway on 25 th October 2024, the 1 st and 3 rd Respondents admitted the transfer of functions to the NMS in February 2020, which employed the claimants on 5 th March, 2021 as Supply Chain Management Officers for a period of three (3) years till 5 th March 2024. The 2 nd Respondent advertised, interviewed and deployed the employees and the 3 rd Respondent was not party to the recruitment process nor was the county structure or establishment considered.
The 1 st and 3 rd Respondents admitted that after the direction of transfer of functions lapsed, the 3 rd Respondent retained the claimants under similar terms until expiry of their contracts. That the claimants were employed by the NMS and any allegation of a circular to convert their terms to permanent and pensionable was unsustainable.
Claimant’s evidence
Mr. George Khaemba, CWI confirmed, on cross-examination that he was employed by the Nairobi Metropolitan Services (NMS) and had no contract of employment with the County Government of Nairobi or the County Public Service Board CPSB or the Public Service Commission (PSC) and had only one letter of offer of Osoro Victoria Nyaboke dated 5 th March 2021 for three years effective 10 th April 2021 under a fixed term contract until to 10 th April 2024 and served the entire term. That they had not been paid gratuity and were thus discriminated.
CW confirmed that a copy of payslip on record had no authentication marks such as name, save the ID number and KRA Pin certificate number.
That the PSC letter dated 3 rd August 2021 addressed to all authorized officers on ‘Review of Employment terms at entry level’ was directed at authorized officers of the PSC and was not addressed to persons employed by the Nairobi County Public Service or to him but the terms of the letter referred to him and related to employees of the PSC but admitted that he had no contract of service with CPSB or the City County Government.
The witness confirmed that an internal memo from NMS directed all Directors to absorb the employees of NMS made no reference to the CPSB or the County Government of Nairobi. That the Governor stated that employees of NMS would be absorbed by the County Government and out of over 2000 employees only 10 were not absorbed yet all applied for employment.
On cross-examination by counsel for the Public Service Commission, CWI confirmed that he was engaged by the PSC for the NMS under a three (3) years contract tied to the tenure of NMS due to lapse on 5 th March 2024. The witness admitted that the PSC was not party to the Agreement on page 84, which handed over functions back to the City County Government but confirmed that the County Government continued paying salaries to the employees until their contracts lapsed.
The witness admitted that vide letter dated 27 th January 2022 the CPSB wrote a disclaimer that it would not accommodate or absorb former employees of NMS which was a follow up of another dated 16 th June 2021.
That the County Government of Nairobi employed some of the former employees of NMS excluding the claimants.
On re-examination, CWI stated that the ID number and KRA Pin number on the copy of the payslip on record was his and the County Government paid salaries for all claimants and he had authority to sue on behalf of the other claimants and a few other employees of NMS were also left out.
That the CPSB advertised positions and all employees applied but the court found that the process was vitiated by corruption which lead to the Governor inviting the EACC to investigate the same.
The witness testified that the PSC employed them for the NMS pursuant to the Deed of Transfer of Functions.
According to CWI “All authorized officers” as per the PSC Circular were directors in the civil service. The witness testified that no one from his department was employed by the CPSB.
RWI, Mr. John Kimani testified that the phrase “Authorized Officer” was defined in Section 2 of the Public Service Commission Act and the PSC did not deal with officers in county governments and the letter dated 3 rd August 2021 from the PSC was addressed to “Authorized Officers” under the jurisdiction of the PSC and NMS was not an “Authorized Officer” for purposes of the letter.
The witness confirmed that the claimants and others were employees of the NMS and when it was disbanded the Nairobi County Government took over the employees for the remainder of the term of their contracts.
The witness testified that employee serving on contracts in Ministries and state departments were absorbed pursuant to the letter of 3 rd August 2021.
RWI confirmed that the PSC recommended salaries for those under its jurisdiction and the claimants were hired directly for the NMS were not seconded there and the County Government was paying them.
That under the framework, the County Government could absorb those that it needed for its purposes and no document on record described the claimants as employees of the PSC, NMS or the CPSB and the NMS was not a State Department of the National Government.
On re-examination Mr. John Kimani testified that NMS had no authorized officer appointed by the PSC and all NMS staff were employed under a three (3) years fixed term contracts.
RWII Violet Oyangi confirmed that the claimants were employed by the PSC and worked for the Nairobi County Government pursuant to the Deed of Transfer between the National Government and the Nairobi City County Government.
As regards the handover framework, the witness confirmed that the County Government of Nairobi conducted competitive employment based on the needs and vacancies and many former employees of NMS applied and were considered.
That the NMS was disbanded 3 months before the contractual term lapsed and the claimants continued working for the County Government for another 3 months and were paid for the 3 months.
The witness stated that the governor met medical professionals but was unsure of what transpired and those hired were picked competitively. The witness stated that there was no relationship between the PSC and the CPSB and each was a distinct body with distinct functions and the CPSB had issued a disclaimer to the hiring for NMS and paragraph 3 (b) of the Handover framework was neither mandatory nor obligatory.
That the County Government of Nairobi and the CPSB were not party to the PSC letter dated 3 rd August 2021.
Claimant’s submissions
Counsel submitted that the claimant’s case was anchored on the Handover framework and the 2 nd respondent’s Circular of August 2021, and the 1 st respondent’s paid their salaries after disbandment of NMS and their services were utilized by the 1 st respondent and officers seconded to NMS were absorbed by the 1 st respondent.
Counsel, further submitted that the evidence tendered by violet Oyangi for the 3 rd respondent was vitiated by evidence of corruption and lack of performance appraisal.
On the employment of the claimants by the respondents’ counsel relied on the decision in Lydia Limbe v Akili Dada (2022) KEELRC 951 (KLR) on the control test and Omusamia v Upper Hill Springs Restaurant (2021) KEELRC 3 (KLR) on payment of wages and control.
That despite the existence of the NMS the claimants were controlled supervised and disciplined by the 1 st respondent and were thus integrated within the structures of the 1 st respondent.
That the claimants became employees of the 1 st respondent when it paid their salaries.
On the law on fixed term contracts, reliance was placed on Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho Kariuki (2017) EKLR and Transparency International _ Kenya v Daniel Ndungu (2019) EKLR that the contract ends when the term lapses and non-renewal does not amount to unfair termination but continued engagement of the claimants beyond expiry of the fixed term contract created an indefinite employment relationship citing Lumututu v Kenya Civil Aviation (Authority (2024) KEELRC 13242 (KLR).
Concerning legitimate expectation, reliance was placed on the 2 nd Respondent’s letter dated 3 rd August 2021 on conversion of employment to permanent and pensionable as the letter was Inter-Agency and the framework agreement required retention and integration of operational cadres for service delivery.
Reliance was placed on Communications Commission of Kenya & 5 others (2014) eklr AND Lumutut v Kenya Civil Aviation Authority (2024) (Supra). Reliance was further placed on the provisions of 187 (2) (b) of the Constitution of Kenya on performance of transferred functions. Counsel submitted that doctors were employed by the 1 st respondent on permanent and thus pensionable terms and discriminated against the claimants.
It was submitted that the governor promised to absorb the claimants citing Section 60 of the Evidence Act on judicial notice of parliamentary proceedings to urge the court to take judicial notice of the Governor’s promise.
Counsel submitted that the claimant’s rights to fair administrative action was violated the Human Resource Manual was not complied with and the claimants who served as Supply Chain Management officers were not appraised.
Reliance was placed on Oduor v Umba Technology Ltd (2025) KEELRC 1005 (KLR), Jane Samba Mukala v Ol Tukai Lodge (2013) eKLR, Jane Wairimu Machira v Mugo Waweru & Associates (2012) eKLR and Otiende v Penda Health (K) Ltd (2014) KEELRC 2078 (KR) on performance evaluation.
Finally, counsel submitted that the claimants were discriminated by being singled out in violation of Article 27 of the Constitution of Kenya.
Reliance was placed on the decision in Ndurumo v University of Nairobi. Kenya National Commission on Human Rights (Interested Party) KEELRC 1477 (KLR ). Counsel submitted that the exclusion was actuated by corruption by individuals to enable them sell off job opportunities to the highest bidder.
In conclusion, counsel submitted that the claimants were employees of the 1 st and 3 rd respondents.
2 nd Respondent’s submissions
Counsel submitted that the jurisdiction of the PSC over County Government employees was limited to hearing and determining appeals pursuant to Article 234 (2) (i) of the Constitution Part XV of the Public Service Commission Act and Section 77 of the County Governments Act and attendant Regulations on transfer of functions from one level of government to the other.
Counsel urged that pursuant to the Deed of Transfer of functions persons were employed under fixed term contracts as the functions would revert when the term ended.
On whether Circular PSC/ADM/13 (8) dated 3 rd August 2021 applied to the claimants, counsel submitted that the circular was addressed to “Authorized Officers” of the Commission in Ministries Departments and Agencies (MDAS) as opposed to County Governments as the PSC had not designated any authorized officer in county governments and the claimant’s contracts of employment was subject to the duration of the Deed of Transfer.
Reliance was placed on the sentiment of the court of Kenya National Union of Nutritionists and Dietitians v Nairobi City County government & others on the mandate of the CPSB.
Counsel submitted that after the functions were handed over back to the 1 st Respondent, the 1 st respondent took over all the staff based on their terms and conditions of service at the time and the PSC was not party to the agreement and had no role in the subsequent recruitment of staff by the 3 rd respondent.
Reliance was further placed on the decision in Kenya Medical Practitioners Pharmacists and Dentists Union V Nairobi City County Government & 2 others NMS (Defunct) & 130 others (Interested Parties) (2024) KEELRC 403 (KLR) on the scope of the 2 nd respondent’s Circular of August 2021.
On reliefs counsel submitted that the Handover Framework executed by the Cabinet Secretary, Ministry of Devolution, Attorney General and the Governor, Nairobi City County guided the process after the disbandment of the NMS and the claimant’s contracts expired upon expiry of the Deed of Transfer and the PSC had no other role and could not absorb the claimants as it would amount to re-writing of a contract by the court.
Reliance was further placed on the decision in Kenya Medical Practitioner, Pharmacists and Dentists Union v Nairobi City County Government & 2 others (Supra) to demonstrate that the claimants were not employees of the national government.
Analysis and determination
It is common ground that by a Deed of Transfer dated 25 th February 2020 the Nairobi City County government transferred the following functions to the National government.
(a) County Health Services.
(b) County Transport services.
(c) County planning and Development services.
(d) County public works utilities and Ancillary services.
To ensure that the functions were properly performed, the National Government established the Nairobi Metropolitan Services (NMS) to which employees of the 1 st respondent were seconded and others employed directly for the NMS by the Public Service Commission.
The recruitment of new staff by the NMS through the PSC elicited two disclaimers dated 16 th June 2021 and 27 th January 2022 by the Nairobi City County Public Service Board (CPSB)expressing its concern that the NMS was recruiting staff in contravention of the law and stated
“The Board wishes to register the disclaimer once more that the Nairobi city county government will not be in a position to accommodate/absorb staff being recruited by the Nairobi Metropolitan service (NMS) who are recruited without following the approved county structure and establishment upon expiry of NMS term as it will overstretch the already blotted wage bill.”
While the 1 st letter was addressed to the County Secretary, the second was addressed to the Secretary PSC and copied to the County Secretary, Cabinet Secretaries for Ministry of Devolution and ASALS and Ministry of Public Service, Sports and Gender, Director General (NMS) and the Director Human Resource Management, Nairobi City County.
From the contents of the letters, it is clear that that neither the 1 st nor the 2 nd Respondent was involved in the recruitment of staff for the NMS by the PSC, the fact that the recruited staff would render services offered by the County Government of Nairobi notwithstanding.
Instructively, the Deed of Transfer, Gazette Notice No. 1609 of 20 th February 2020 did not envision recruitment of staff.
Under article 5;
“5.6 The relevant human resource for the implementation of this agreement shall be seconded from the County Government to the National Government; and
5.7 The County Public Service Board shall in consultation with the Public Service Commission, formulate the necessary instruments to facilitate the secondment and/or deployment of the necessary human resource.”
Article 9 of the Deed of Transfer stated:
“9.2 This Deed of Transfer of functions may only be terminated by the mutual written consent of both parties expressed in a common document.”
Under Paragraph 9.1 of the Deed of Transfer the Deed was to remain in force for an initial renewable period of 24 months from the date of execution.
By an undated document entitled
“National Government (through) the Ministry of Devolution & The Nairobi City County Government Framework for the Handover of the transferred functions from the National Government to the City County Government” executed by the Cabinet Secretary Ministry of Devolution in the presence of the Attorney General and the Governor Nairobi City County Government, in the presence of the County Attorney, the functions were transferred back to the County.
Regrettably, the copy of the agreement provided by the 2 nd Respondent had missing pages specifically pages 2, 3 and 6 and was thus incomplete. Strangely, the contents were relied upon by all parties to urge their respective cases.
Clause 33 of the Framework for the Handover stated;
Staff and personnel who have been performing he transferred functions under the Nairobi metropolitan services shall be deployed as follows:
(a) Staff and personnel who had been seconded to the Nairobi Metropolitan services from either level of government shall be redeployed to their respective levels of government.
(b) Staff and personnel who were employed by the Nairobi Metropolitan Services during the subsistence of the Deed shall be absorbed into the Nairobi City County Government’s staff establishment subject to existing vacancies and based of the Nairobi City County needs.
(c) For those who will not be absorbed in line with (b) above the Public Service Commission shall handle their deployment to Government, ministries and/or agencies on their terms of employment.
3.4 The Public Service Commission and the County Public Service Board shall within 14 days from the date hereof prepare the necessary instruments and take appropriate steps to effect the deployments and absorption in Article 3.3 above.
3.6 For the avoidance of doubt, staff and personnel who were employed by the Nairobi Metropolitan Services to discharge supportive roles in relation to the transferred functions shall be retained and remunerated by the Nairobi Metropolitan Services in accordance with their contracts of service.
This clause is important because it incorporated the claimants and other persons performing supportive roles. From the evidence on record, it is unclear as to when the NMS was disbanded but it is not in dispute that after disbandment the County Government of Nairobi paid the salaries of the claimants until their contracts of employment with the NMS lapsed.
Puzzling, the claimants witness, Mr. George Khaemba did not provide a copy of his employment contract with any of the respondents or any other of the claimants except one Osoro Victoria Nyaboke dated 5 th March 2021 but effective 10 th April, 2021, for a period of three (3) years till 9 th April 2024. The letter was signed by the Mr. Dominic Gicheru for the Director General NMS under Reference “offer of Appointment. The letter was explicit that the recipient would have to sign a three-year contract.
It is therefore safe to assume that all the claimants received a similar letter and executed a three (3) year contract of service.
The claimants faulted the respondents for:
(i) Failing to transition them to permanent and pensionable terms pursuant to Circular PSC/ADM/13(8) dated 3 rd March 2021.
(ii) Failing to employ them after employing other employees of the NMS, thus discriminating them.
(iii) Violating their legitimate expectation that they would be employed by the 1 st respondent.
(iv) Failing to honor the terms of Framework for the Handover of transferred functions.
(v) Failing to deploy them in government departments.
(vi) Violating their right to fair labour practice among other rights.
Concerning whose employees, the claimants were, and contrary to the claimant’s counsel's submission, the claimants were employees of the NMS employed for it by the 2 nd respondent on request. CWI admitted on cross-examination that he was employed by the NMS under a three-year contract but added that he was seeking relief from the Nairobi County Government.
It is not in dispute that after disbandment of the NMS, the County Government of Nairobi inherited the employees of NMS and paid them for the reminder of their fixed term contract.
Contrary to the claimant’s averments payment of salary for the reminder of their contract was not sufficient to make them employees of the 1 st respondent, promises by the Governor of the County or any other person notwithstanding. This is because a promise by the Governor does not bind the County or any organ of the County Government.
Recruitment in the public service is regulated by law and the power is vested in the County Public Service Board in the case of counties and the PSC in the case of the National Government. Under Section 57 of the County Governments Act, the County Public Service Board is a body corporate with perpetual succession, with a seal, capacity to shew be sued in its name and one of its core functions is to establish and abolish offices, and appoint persons to hold office or act in offices of the county public service. It is the only body with statutory power to employ public officers at the county level of government. The Governor does not enjoy such powers and his decisions are not binding on the CPSB.
The claimants could only be absorbed into the public service of the 1 st respondent competitively through its own structures as opposed to the Framework for the Handovers of functions on record which was a contract between the Cabinet Secretary and the Governor of the 1 st respondent none of whom is accounting officer or implementing agency of decision.
Most importantly, the absorption was not automatic but was to be based on the vacancies available and needs of the 1 st respondent.
In the courts view, the fact that the 1 st respondent inherited staff of the defunct NMS, supervised, controlled, disciplined and paid them for the remainder of their three (3) year contracts of employment did not transition them to become employees of the 1 st respondent in that their earlier written contracts with the NMS were still running and the 1 st Respondent had to abide by the earlier commitments under Deed of Transfer of functions.
Similarly and as correctly, submitted by the claimants’ counsel, the principles that govern fixed term contracts are well settled in a catena of decisions of the Court of Appeal and the ELRC including, Francis Chire Chachi v Amatisi Water Services Co. Ltd (2012) eKLR, Registered Trustee De La Salle Christian Brothers t/A St. Marys Boys Secondary School v Julius DM Baini (2017) eKLR, Registered Trustees of the Presbyterian Church of East Africa & another v Ruth Gathoni Ngotho (supra), Margaret A. Ochieng v National Water Conservation & Pipeline (2011) eKLR (Rika J) and Transparency International - Kenya v Teresa Carlo Omondi (2023) KECA 174 KLR .
In the latter case, the Court of Appeal stated.
“The court is in agreement with these sentiments. We dare say that an automatically renewable fixed term contract is a contraction, in terms as it would subject the parties to an determinate employment contract. The respondent was under a fixed term contract with a definite commencement date and termination date. There was no ambiguity to create an expectation of contract renewal by the appellants issuance of a fixed term contract. The contract terminated automatically when the termination date arrived…”
These sentiments apply on all forms to the circumstances of the instant case. The claimants provided no evidence to show that they continued working for the 1 st respondent after their contract with the NMS lapsed.
In the Registered Trustees of the Presbyterian Church of EA & another v Ruth -Gathini Ngotho the Court of Appeal held:
“ ...We note that fixed term contract carries no rights obligations or expectation beyond the date of expiry. Accordingly, any claim after the expiry of the respondents contract, ought not to have been maintained…”
As to whether the PSC Circular of 3 rd August 2021 applied to the claimant’s and thus created a legitimate expectation of the claimants transitioning to permanent and pensionable employment, counsel for the claimant’s submitted that it did. According to counsel, the Circular was Inter-Agency and affected all entry level contract personnel appointed from May 2019 and additionally the Framework for Handover of functions created a legitimate expectation.
Counsel for the 2 nd respondent submitted vociferously that the circular applied to authorized officers under the jurisdiction of the PSC exclusively.
During the hearing, RWI Mr. John Kimani, confirmed on cross-examination that the PSC had no authorized officer in the County Governments or the NMS and the circular only applied to authorized officers under the 2 nd respondent’s jurisdiction in Ministries and State Departments and MDAS.
The circular from the PSC was addressed to all Authorized officers under reference “Review of Employment on contract Terms at Entry Level”. The letter was not addressed to any other person and was only copied to the Head of Public Service.
In the Court’s view, if the Circular was Inter-Governmental, it would have been addressed to other officials and copies to among others the Council of Governors and because of its financial implications the decision would have been consultative as consent of the County Governments cannot be assumed.
Similarly, NMS was not a state body or agency but a temporary body formed for a particular purpose for a specified duration. The Internal Memo dated 19 th January 2022 from Director Human Resource Management & Development to Heads of Directorates referred to officers appointed on contract terms and deployed to their Directorates.
The claimants were not deployed to the directors. They were employed in those Directorates. However, County Public Services Officers were deployed to the Directorates under the NMS.
More significantly, and as submitted by counsel for the 2 nd respondent the phrase “Authorized Officer” has a statutory definition under Section 2 of the Public Service Commission Act as;
“any officer, body or authority appointed by the commission to perform its delegated functions in a ministry or state department, or any member of the commission.”
This definition excludes county governments whose public service is under the County Public Service Board, which in a replication of the PSC at the national government The court is in agreement with the sen
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