'Introduction
1. The Petition dated 18th August 2023 is supported by the 1st Petitioner’s affidavit in support of similar date and a further affidavit dated 20th September 2023. The Petition was consolidated with Petition E026 of 2023 by the order of this Court issued 23rd May, 2024. The other Petition is dated 23rd August 2023 and is substantially based on the same facts and circumstances as the lead Petition and essentially seeks similar orders.
2. The Petition assails the 2nd Respondent’s Advisory letter dated 27th July, 2023 and the subsequent circular issued by the 2nd Respondent’s anchored on the said advisory dated 8th August, 2023. The Petitioner contends that the aforesaid documents violate Article 234 of Constitution as they amount to usurpation of the 1st Interested Party’s constitutional mandate.
3. On this basis, the Petitioners seeks the following relief against the Respondents:
i. A declaration do issue that the advisory letter dated the 27th July 2023 Ref. No. AG/CONF/2/C/31 VOL VI from the office of the Attorney General is unconstitutional, unlawful, and violates Articles 2(2), 3, 10, 149, 232, 234 and 249 of the Constitution.
ii. A declaration that the letter dated 8th August 2023 Ref No. OP/SCAC 9/21/2 II/(31) from the State Corporations Advisory Committee is ultra vires of its function and powers under Section 27 of the State Corporations Act and by its endorsement and promotion of the contents of the advisory letter from the Attorney General dated 27th July 2023 Ref. No. AG/CONF/2/C/31 VOL VI it is contrary to the law and to the provisions of Articles 2(2), 3, 10, 232, 234 and 249 of the Constitution.
iii. An order do issue quashing both the advisory letter dated the 27th July 2023 Ref. No. AG/CONF/2/C/31 VOL VI from the office of the Attorney General and the SCAC letter dated 8th August 2023 Ref No. OP/SCAC 9/21/2 II/(31) and declaring them void and of no legal effect.
iv. This Court do declare that the Public Service Commission has the mandate under Section 234(2)(a), subject to any limiting provisions of the Constitution and legislation, to establish and abolish offices within the public service, which offices include offices in State Corporations and Public Universities.
v. This Court do declare that State Corporations and Public Universities fall under the umbrella of the public service and are subject to the mandate of the Public Service Commission under Article 234 of the Constitution, and under the provisions of the Public Service Commission Act and Public Service Commission Regulations.
vi. This Court do declare that the Public Service Commission has the mandate to monitor, evaluate, report and investigate personnel activities in the public service.
vii. A declaration do issue that the Public Service Commission’s mandate includes approving Human Resource Instruments (organizational structure, staff establishment, Human Resource Manual and Career progression guidelines) for public offices including in State Corporations and Public Universities.
viii. This Court do declare that the Public Service Commission Act, the Public Service Commission Regulations and the mandate of the Public Service Commission under Article 234 of the Constitution binds all State Corporations and Public Universities.
ix. This Court do declare that the Salaries and Remuneration Commission’s constitutional mandate under Article 230(4)(b) of the Constitution to advise on the remuneration and benefits of public officers must be directed to the Public Service Commission.
x. This Court do declare that the Salaries and Remuneration Commission cannot directly advise State Corporations and Public Universities under the provisions of Article 230(4)(b) of the Constitution.
xi. This Court do declare that the role of the State Corporations Advisory Committee is purely advisory and does not extend to the issuance of guidelines on Human Resource management or the issuance of Human Resource instruments to State Corporations.
xii. This Court do declare that in view of the provisions of Article 249(2)(b) of the Constitution advisories given by the Attorney General are not binding upon constitutional commissions and independent offices.
Petitioners’ Case
4. The 1st Petitioner states that by a letter addressed to the Board Chairpersons, and all State Corporations copied to the Prime Cabinet Secretary, the Chief of Staff and Head of Public Service, the AG, all Cabinet Secretaries and all Principal Secretaries, the 1st Interested Party, the 2nd Interested Party, the Auditor General and Chief Executives of all State Corporations titled determination of terms and conditions of service in state corporations dated 8th August 2023, the 1st Respondent stated as follows:
a) ‘The attention of the SCAC was brought to the directions issued and circulated to State Corporations by PSC with regard to determination of terms of service in State Corporations;
b) The Government determined the terms of service for board members and State corporations and issued as Guidelines in 2004 under section 7(1) of the State Corporations Act. Other terms of service for each state corporation are contained in the State Corporation Act specifically the organizational structure and staff establishment, career guidelines and Human resource policy and procedures manual;
c) The Government purported to revise the 2004 guidelines culminating into a technical committee in which the PSC is a member, to generate harmonized guidelines;
d) The committee began sittings however; the PSC took the view that jurisdiction over State corporations was contentious because courts of law have issued varied verdicts. The AG was requested to provide a legal opinion binding all parties. Thus, the AG issued a legal opinion which is guiding the finalization of the guidelines; and
e) The office of the AG as established under Article 156 of the Constitution and the OAG Act, 2012 stipulates that the AG is the principal legal advisor to the government and therefore any other views and directions contrary to the AG’s opinion should not be honoured’.
5. This communication was in reaction to the 1st Interested Party’s letter also dated 8th August 2023 which required its approval for all the Human Resources Instruments. The 1st Interested Party’s letter had also been addressed to all authorised officers, vice Chancellors of Public Universities, Chief Executive Officers of State Corporations. It was titled “Guidelines for Development and Review of Human Resource Management Instruments for State Corporations and Public Universities”.
6. For context, the 1st Petitioner informs that prior to this, the 1st Interested Party had through a circular letter ref No. PSC/GEN/22/II/ (18) dated 12th June 2023, requested for stakeholders’ views on draft guidelines for Development and Review of Human Resource Management Instruments for State Corporations and Public Universities. Upon receipt of these views, the same were considered and incorporated into the Draft Guidelines. It is noted that these Guidelines were issued pursuant to Article 234 of the Constitution and decided cases.
7. Accordingly, it is asserted that the 1st Interested Party’s intention was to ensure that any developed or reviewed Human Resource Management Instruments or proposals for establishment of new offices or abolition of offices, should comply with these Guidelines with effect from 8th August 2023.Moreover the same were to be submitted to the 1st Interested Party for consideration and approval.
8. It is stated that in the process, the 2nd Respondent issued an Advisory letter dated 27th July 2023 titled Guidelines on Management and Terms And Conditions Of Service For Board Members And Staff Of State Corporations. This was made on the request of the Prime Cabinet Secretary on the issue of jurisdiction concerning State Corporations, the constitutional powers of the 1st Interested Party in relation to the human resource function in State Corporations and other contentious issues. In a nutshell, the 2nd Respondent is said to have advised as follows in the letter:
a) The PSC has power to on its own initiative or upon request by an authorized officer make recommendations on the conditions of service relating to public officers to the Cabinet Secretary. There is no express provision conferring power to PSC to make recommendations directly to public bodies.
b) State Corporations are vested with the power to manage their Human Resource under their respective legislation and the State Corporations Act;
c) Both the Constitution and the PSC Act limit the power of PSC to reviewing and making recommendations and do not confer upon the PSC the power to determine and approve the terms and conditions of public service officers, any code of conduct or qualifications;
d) The PSC has the power to investigate, monitor and evaluate the organization, administration and personnel services of public service. This mandate is limited to monitoring, evaluating and reporting and does not extend to approving the relevant Human Resource Instruments;
e) The PSC is vested with the power to develop human resources in the public service under Article 234(2)(f) of the Constitution. The Commission is further empowered by Section 65(1) of the PSC Act to review and issue human resource training and development policy and guidelines and prescribe procedures and instruments governing the development of human resources in public service;
f) There is no obligation for the approval of human resource instruments by the PSC. State Corporations should liaise with the PSC in developing Human Resource development instruments to ensure consistency and harmony within the public service;
g) Section 5(3) of the State Corporations Act empowers State Corporations to employ the chief executive officer and other staff and also to determine their terms and conditions of service. A review of the State Corporations Act shows that State Corporations are vested with the power to manage their human resource under their respective legislation and the State Corporation’s Act;
h) The SRC’s mandate with respect to public officers is to advise the national and county governments on the remuneration and benefits of all other public officers; and
i) The PSC’s power to establish and abolish offices in the public service is subject to Constitution and legislation meaning that the power can be taken away by legislation in some instances.
9. Soon thereafter, it is averred that the 1st Interested Party on 7th August 2023 sent a letter to the 2nd Respondent titled Guidelines on Management And Terms And Conditions Of Service For Board Members And Staff Of State Corporations in reaction to its advisory. In its letter, the 1st Interested Party underscored that the 2nd Respondent had erroneously relied in Section 5(3) of the State Corporations Act without paying regard the decisions in Manyara Muchui Anthony vs Communication Authority & 3 Others [2022]eKLR and Consumer Federation of Kenya (COFEK) vs National Social Security Fund Board of Trustees & 2 Others [2022]eKLR which determined that the same are inconsistent with its mandate. It was stressed that these decisions were binding and had not been appealed against.
10. Equally, the 1st Interested Party stated that the 2nd Interested Party cannot make recommendations directly to State Corporations as State Corporations Boards have no power to determine the terms and conditions of service of public officers serving in State Corporations. While also accentuating its mandate, the 1st Interested Party averred that the role of the 1st Respondent under Sections 5(3) and 27 of the State Corporations Act is purely advisory and thus it has no power to issue guidelines to State Corporations on management of human resource or to approve human resource instruments for State Corporations as this same violates Articles 2(2) and 234 of the Constitution.
11. On the foregoing basis, the Petitioners assert that the 2nd Respondent’s impugned advisory letter violates Articles 156(6), 232 and 249 of the Constitution as it undermined the rule of law. In essence, this is since operation of Sections 5(3) and 27 of the State Corporations Act have been determined to be inconsistent with Article 234 of the Constitution. Consequently, in issuing the said letter, the 2nd Respondent is argued to have created confusion and disharmony within the public service and undermined the 1st Interested Party’s powers and functions to develop human resource management instruments for state corporations.
12. The 1st Petitioner further argued that the 1st Respondent’s letter dated 8th August 2023 is ultra vires of its statutory powers and functions under the State Corporations Act as it purports to issue a directive to the Board chairpersons of all state corporations which usurps the 1st Interested Party’s constitutional mandate and elevates the 2nd Respondent’s advice above the Constitution and the cited Court decisions.
13. The Petitioners as well aver that their annexed documents are adduced by the 1st Interested Party in its Replying Affidavit and thus the same cannot be raised as an issue. Additionally, it is asserted that press reports concerning the affairs of the 1st Interested Party and welfare of the nation are matters of general notoriety that a Court takes judicial notice of. Nonetheless, it was argued that striking out of the documents would not resolve the glaring issues and confusion that has been caused by the 1st Respondent’s usurpation of the 1st Interested Party’s mandate.
1st Respondent’s Case
14. The 1st Respondent filed its Replying affidavit sworn on 18th September 2023 by its Secretary Simon Indimuli.
15. On a preliminary note, he informs that the 1st Respondent was established following the enactment of the State Corporations Act in November 1986 under Section 26(1). He states that the 1st Respondent’s functions are set out under Section 27 and additional functions provided under Sections 5(3), 6, 7, 8 and 10 of the Act. Likewise, other functions are set out under the State Corporations (Performance Contracting Regulations), 2004 and the Mwongozo: The Code of Governance for State Corporations. He emphasizes that the provisions of Article 232(2) of the Constitution distinguish state corporations from state organs.
16. He informs that the terms and conditions of service for Board members and staff of state corporations, were initially formulated by the government and issued in 2004. He informs that these Guidelines provided the terms and conditions of service for the staff in each State Corporation as contained in the Human Resources Instruments.
17. He states that the process of reviewing these Guidelines commenced after a wide consultative process which culminated in the establishment of a Technical Committee to generate draft harmonized guidelines. He depones that the Technical Committee was established vide a circular letter dated 24th May 2023 to generate draft harmonized Guidelines. He informs that the Technical Committee comprised of members from the office Prime Cabinet Secretary, the office of the Chief of Staff and Head of Public Service, the National Treasury, Ministry of State for Public Service, the 1st and 2nd Interested parties, 1st Respondent, Inspectorate of State Corporations and government delivery services.
18. He states that the 1st Interested Party postulated that the meetings of the Technical Committee be first suspended to allow the 2nd Respondent issue an advisory with regard to the Terms and Conditions. This was communicated to the Prime Cabinet Secretary vide a letter dated 8th June 2023. The 2nd Respondent’s advisory was issued on 27th July 2023 and circulated to all the government agencies.
19. He alleges that the 2nd Respondent’s advisory letter affirmed the long-held knowledge of the 1st Respondent’s mandate under Sections 5(3) and 27(1) (c) of the State Corporations Act. Considering this, he maintains that all state corporations are required to operate within the terms and conditions enacted under these two provisions as approved by the Cabinet secretary. Once approved he avers that it is the prerogative of the President in line with Sections 7 (1) and (2) of the State Corporations Act to give effect to those directives.
20. Similarly, he notes that the Court in Okiya Omtatah Okoiti V Attorney-General & 2 Others; Francis K. Muthaura (AMB) & 5 others (interested parties) (2019) eKLR held that the State Corporations Act is the primary Act on the establishment of State Corporations. For this reason, he states that the orders sought by the Petitioners are untenable.
21. Furthermore, he claims that the documentation adduced by the Petitioners including the 2nd Respondent’s advisory opinion were improperly obtained. He notes that the Petitioners did not disclose how the same came into their possession thereof rendering the Petition bad in law.
22. Moreover, he argues that the 1st Interested Party’s Guidelines seek to standardize human resources instruments without appreciating the uniqueness of their various segmentations and diverse business dynamics. This action he claims has caused an uproar and apprehension in State Corporations as seen in the Article by Samson Osero who was a former Chief Executive Officer as published in the Business Daily Newspaper dated 16th August 2023.
23. He contends that the Petitioners herein seek to re-write the Constitution and the law. He argues there is no provision in either the Constitution or the Public Service Act which confers power to the 1st Interested Party to determine or approve the terms and conditions of public officers. Particularly, he argues that Article 234(2) (g) of the Constitution as read with Section 53(2) of the Public Service Commission Act make it clear that the 1st Interested Party may on its own initiative or upon request by any authorized officer, make recommendations on the conditions of service relating to public officers to the Cabinet Secretary. As such, he argues that policy making for government is the purview of the Executive and thus cannot be exercised on its behalf by an independent constitutional commission such as the 1st Interested Party.
24. Equally it is argued that Article 234(2)(f) of the Constitution, contrary to the Petitioners allegation does not define what constitutes the development of human resources and neither is the 1st Interested Party granted the power to do so. Likewise, he states that the 1st Interested Party’s power to abolish offices in the public service and appoint persons is subject to the Constitution and legislation.
25. He as well avers that the constitutionality of the impugned Sections were not pleaded in the cases of Manyara Muthui Anthony(supra) and COFEK case(supra) as alleged by the Petitioners and neither is the Employment and Labour Relations Court competent to determine their constitutionality. He adds that there is a pending appeal in the two matters.
26. To this end, he argues that, the Petition lacks merit as is grounded in hearsay and speculations which should not be considered by this Court.
2nd Respondent’s Case
27. In reaction to the Petitioners’ case, the 2nd Respondent filed Grounds of Opposition dated 11th September 2023 on the basis that:
i. The application is premised on improperly obtained correspondence not addressed to the Petitioners which the Petitioners do not disclose how they came into possession thereof rendering the entire Petition bad in law.
ii. The Petitioners have failed to disclose the source of their information contrary to Order 19 Rule 3 of the Civil Procedure Rules.
iii. The Petition is premised on newspaper reports which is of no probative value.
iv. The allegation of creation of confusion, anxiety and disruption within State Corporations and Public Universities is a bare allegation not supported by any evidence from any person engaged in any of the said state corporations and public universities.
v. Legal advisories by the Attorney-General to client ministries, departments or any other public body is privileged communication that may not be a basis of any action without leave of disclosure.
vi. In any event, it is perfectly within the constitutional remit of the Attorney-General to issue an advisory to any public body as the principal legal adviser to the Government.
vii. Independent constitutional commissions are part of government.
viii. Neither the Petitioners nor the Court may substitute its opinion with that of the Attorney-General exercising his constitutionally and statutorily conferred discretion on the content of his legal advisories.
ix. A legal advisory is substantively a matter of opinion and is not amenable to be quashed; one may either agree or disagree with it but it is not amenable to be quashed.
x. The Employment and Labour Relations Court in the case of Okiya Omtatah Okoiti V Attorney-General & 2 others; Francis K. Muthaura (AMB) & 5 others ( interested parties) (2019) eKLR held that by dint of Article 249 (2) (a) of the Constitution, the 1st Interested Party’s function and power to establish and abolish offices in the public service, appoint persons to hold or act in those offices and to confirm appointment can be limited by statute or all together taken away by statute.
xi. The Court went further to state that Parliament by dint of the provisions of Article 234 (2) (a) of the Constitution is at liberty to legislate on matters auxiliary or supplementary to establishment and abolition of offices, appointments, recruitment and selection procedures, promotional criteria and generally all matters incidental to establishment and abolition of offices.
xii. The Employment and Labour Relations Court in the case of Okiya Omtatah Okoiti V Attorney-General & 2 others; Francis K. Muthaura (AMB) & 5 others (interested parties) (2019) eKLR held that the State Corporations Act is the primary Act on the establishment and governance of state corporations.
xiii. The Employment and Labour Relations Court did not issue any declaration that the provisions of Section 5(3) of the State Corporations Act is unconstitutional in the case of Consumer Federation of Kenya (COFEK) v National Social Security Fund Board of Trustees and others (2002)eKLR.
xiv. The issue of constitutionality or otherwise of the provisions of Section 5(3) of the State Corporations Act was not pleaded as an issue for determination in the case of Consumer Federation of Kenya (COFEK) v National Social Security Fund board of trustees and others (2002)eKLR before the Employment and Labour Relations Court which Court in any event lacked the jurisdiction to determine the constitutionality or otherwise of the said statutory provision; that being an issue falling within the exclusive jurisdiction of the High Court as expressly provided under Article 165 (3)(d) (i) of the Constitution.
xv. Further there is a pending appeal before the Court of Appeal in respect to the ‘COFEK case’ that is Nairobi Civil Appeal No. 566 of 2022; NSSF, Hon. Attorney-General and another; Cabinet Secretary for Labour-vs- COFEK therefore the issues therein are sub-judice.
xvi. Similarly the constitutionality or otherwise of the provisions of Section 5(3) of the State Corporations Act was neither pleaded as an issue for determination nor did the Employment and Labour Relations Court issue a declaration that the said section was unconstitutional in the case of Manyara Muthui Anthony v Communications Authority and 3 others (2022) eKLR.
xvii. Further there is a pending appeal before the Court of Appeal in respect to the ‘Manyara case’ that is Nairobi Civil Appeal No. E549 of 2022; Hon. Attorney-General & another; SCAC-vs-Manyara Mucui Anthony, CAK & another; therefore, the issues therein are sub-judice.
xviii. In the Employment and Labour Relations Court in the case of Okiya Omtatah Okoiti V Attorney-General & 2 others; Francis K. Muthaura (AMB) & 5 others ( interested parties) (2019) eKLR it was held by the very same court that Section 27(c) of the State Corporations Act is not unconstitutional and not invalid.
xix. As was held by the Court of Appeal in the case of National Social Security Fund Board of Trustees v Kenya Tea Growers Association & 14 others (Civil Appeal 656 of 2022) KECA 80 (KLR) the Employment and Labour Relations Court is not competent to determine questions on whether any law is inconsistent with or in contravention of the Constitution that jurisdiction having been specifically conferred upon the High Court under Article 165 (3) (d) (i) of the Constitution.
xx. Independent constitutional commissions cannot be directed by any person or authority including the Court in the exercise of their functions.
xxi. Independent constitutional commissions are subject to the Constitution and statute law as expressly provided in Article 249 (2) (a) of the Constitution.
xxii. The mandate of the 1st Interested party is subject to the Constitution and the law including the State Corporations Act.
xxiii. Parliament in the exercise of its legislative authority under Article 94 (1) of the Constitution has enacted several laws establishing offices with defined appointing authority including the State Corporations Act which is expressly provided to make provision for the establishment of state corporations, for control and regulation of state corporations and for connected purposes.
xxiv. The provisions of Article 232 (2) of the Constitution which specifically singles out state corporations from state organs in both levels of government points to constitutional appreciation of their differentiation.
xxv. The provisions of Article 234 (2) (g) of the Constitution provides that the 1st Interested party shall review and make recommendations to the national government in respect of conditions of service, code of conduct and qualifications of officers in the public service; deliberate choice of the term recommend as opposed to set is instructive.
xxvi. The provisions of Article 234 (2) (g) dovetails with the provisions of Section 5 (3) of the State Corporations Act.
xxvii. Similarly there is no provision in either the Constitution or the Public Service Act which confers power to the 1st Interested Party to determine or approve the terms and conditions of public officers, any code of conduct or qualifications.
xxviii. The Public Service Commission Act does neither negates nor was it enacted to negate the scheme of other Acts providing for the establishment and abolition of public offices and matter incidental thereto.
xxix. It is improper for deponents supporting the Petition to ignore the solemn admonition of the provisions of Order 19 Rule 3 of the Civil Procedure Rules by not confining themselves to matters prescribed therein and instead proceed to depone to matters of hearsay, argumentative matters and copies of extracts from newspapers.
xxx. The Petition is speculative and bad in law.
1st Interested Party’s Case
28. The 1st Interested Party in reply filed its Replying Affidavit through its then Chief Executive Officer, Dr. Simon Totich sworn on 29th August 2023.
29. On the onset, he stresses that despite the findings of the Courts that Section 5(3) and 27 of the State Corporations Act are in conflict with Article 234 of the Constitution, the 1st Respondent has adamantly continued to disregard the pronouncements and violate the Constitution, a case in point being its circular and communication dated 21st August 2023. He argues that this has caused confusion and anxiety in State Corporations and public universities and affected service delivery.
30. He states that the 1st Interested Party established under Article 233 with functions set out under Article 234(2) of the Constitution, guides the development of human resources instruments and approves and issues the developed instruments. These instruments are: organization structure and staff establishment; career progression guidelines and the human resource manual which contains the terms and conditions of service. In addition, the 1st Interested Party issues other policies and guidelines to the public service.
31. By way of background, he avers that following the promulgation of the Constitution, there was doubt as to whether State Corporations and Public Universities form part of the public service. He notes that this position was settled by the Court in Kenya Union of Domestic, Hotels, Education and Allied Workers (Kudhehia Workers) v Salaries and Remuneration Commission (2014) eKLR wherein it was held that State Corporations are part of public service.
32. He states that this issue has also been subsequently affirmed by the Court of Appeal in Nairobi Civil Appeal No. E638 of 2021: Public Service Commission v Katiba Institute & others and recently, Nairobi Civil Appeal No.156 of 2016: Salaries and Remuneration Commission v National Hospital Insurance Fund and 2 others.
33. Following this affirmation, he depones that the 1st Interested Party embarked on enforcing its mandate over State Corporations and Public universities as detailed in the affidavit. In a nutshell, the 1st Interested Party first issued a delegation instrument to the 1st Respondent on 14th December 2015 to undertake its functions in state corporations and public universities.
34. Furthermore, it appointed a Taskforce to review terms and conditions for chairpersons, chief executive officers, chancellors and vice chancellors of public universities, board members, management and unionisable staff of state corporations vide Gazette Notice No.3757 dated 24th April 2019. He notes that the Taskforce comprised of officials from itself and the 1st Respondent, the office of the President, the national economic and social council and the National Treasury. He avers that the Taskforce developed the Guidelines on Terms and Conditions of Service for Chairpersons, Chief Executive Officers, Chancellors and Vice-chancellor of public Universities, Board Members, Management and Unionisable
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1. The Petition dated 18th August 2023 is supported by the 1st Petitioner’s affidavit in support of similar date and a further affidavit dated 20th September 2023. The Petition was consolidated with Petition E026 of 2023 by the order of this Court issued 23rd May, 2024. The other Petition is dated 23rd August 2023 and is substantially based on the same facts and circumstances as the lead Petition and essentially seeks similar orders.
2. The Petition assails the 2nd Respondent’s Advisory letter dated 27th July, 2023 and the subsequent circular issued by the 2nd Respondent’s anchored on the said advisory dated 8th August, 2023. The Petitioner contends that the aforesaid documents violate Article 234 of Constitution as they amount to usurpation of the 1st Interested Party’s constitutional mandate.
3. On this basis, the Petitioners seeks the following relief against the Respondents:
i. A declaration do issue that the advisory letter dated the 27th July 2023 Ref. No. AG/CONF/2/C/31 VOL VI from the office of the Attorney General is unconstitutional, unlawful, and violates Articles 2(2), 3, 10, 149, 232, 234 and 249 of the Constitution.
ii. A declaration that the letter dated 8th August 2023 Ref No. OP/SCAC 9/21/2 II/(31) from the State Corporations Advisory Committee is ultra vires of its function and powers under Section 27 of the State Corporations Act and by its endorsement and promotion of the contents of the advisory letter from the Attorney General dated 27th July 2023 Ref. No. AG/CONF/2/C/31 VOL VI it is contrary to the law and to the provisions of Articles 2(2), 3, 10, 232, 234 and 249 of the Constitution.
iii. An order do issue quashing both the advisory letter dated the 27th July 2023 Ref. No. AG/CONF/2/C/31 VOL VI from the office of the Attorney General and the SCAC letter dated 8th August 2023 Ref No. OP/SCAC 9/21/2 II/(31) and declaring them void and of no legal effect.
iv. This Court do declare that the Public Service Commission has the mandate under Section 234(2)(a), subject to any limiting provisions of the Constitution and legislation, to establish and abolish offices within the public service, which offices include offices in State Corporations and Public Universities.
v. This Court do declare that State Corporations and Public Universities fall under the umbrella of the public service and are subject to the mandate of the Public Service Commission under Article 234 of the Constitution, and under the provisions of the Public Service Commission Act and Public Service Commission Regulations.
vi. This Court do declare that the Public Service Commission has the mandate to monitor, evaluate, report and investigate personnel activities in the public service.
vii. A declaration do issue that the Public Service Commission’s mandate includes approving Human Resource Instruments (organizational structure, staff establishment, Human Resource Manual and Career progression guidelines) for public offices including in State Corporations and Public Universities.
viii. This Court do declare that the Public Service Commission Act, the Public Service Commission Regulations and the mandate of the Public Service Commission under Article 234 of the Constitution binds all State Corporations and Public Universities.
ix. This Court do declare that the Salaries and Remuneration Commission’s constitutional mandate under Article 230(4)(b) of the Constitution to advise on the remuneration and benefits of public officers must be directed to the Public Service Commission.
x. This Court do declare that the Salaries and Remuneration Commission cannot directly advise State Corporations and Public Universities under the provisions of Article 230(4)(b) of the Constitution.
xi. This Court do declare that the role of the State Corporations Advisory Committee is purely advisory and does not extend to the issuance of guidelines on Human Resource management or the issuance of Human Resource instruments to State Corporations.
xii. This Court do declare that in view of the provisions of Article 249(2)(b) of the Constitution advisories given by the Attorney General are not binding upon constitutional commissions and independent offices.
Petitioners’ Case
4. The 1st Petitioner states that by a letter addressed to the Board Chairpersons, and all State Corporations copied to the Prime Cabinet Secretary, the Chief of Staff and Head of Public Service, the AG, all Cabinet Secretaries and all Principal Secretaries, the 1st Interested Party, the 2nd Interested Party, the Auditor General and Chief Executives of all State Corporations titled determination of terms and conditions of service in state corporations dated 8th August 2023, the 1st Respondent stated as follows:
a) ‘The attention of the SCAC was brought to the directions issued and circulated to State Corporations by PSC with regard to determination of terms of service in State Corporations;
b) The Government determined the terms of service for board members and State corporations and issued as Guidelines in 2004 under section 7(1) of the State Corporations Act. Other terms of service for each state corporation are contained in the State Corporation Act specifically the organizational structure and staff establishment, career guidelines and Human resource policy and procedures manual;
c) The Government purported to revise the 2004 guidelines culminating into a technical committee in which the PSC is a member, to generate harmonized guidelines;
d) The committee began sittings however; the PSC took the view that jurisdiction over State corporations was contentious because courts of law have issued varied verdicts. The AG was requested to provide a legal opinion binding all parties. Thus, the AG issued a legal opinion which is guiding the finalization of the guidelines; and
e) The office of the AG as established under Article 156 of the Constitution and the OAG Act, 2012 stipulates that the AG is the principal legal advisor to the government and therefore any other views and directions contrary to the AG’s opinion should not be honoured’.
5. This communication was in reaction to the 1st Interested Party’s letter also dated 8th August 2023 which required its approval for all the Human Resources Instruments. The 1st Interested Party’s letter had also been addressed to all authorised officers, vice Chancellors of Public Universities, Chief Executive Officers of State Corporations. It was titled “Guidelines for Development and Review of Human Resource Management Instruments for State Corporations and Public Universities”.
6. For context, the 1st Petitioner informs that prior to this, the 1st Interested Party had through a circular letter ref No. PSC/GEN/22/II/ (18) dated 12th June 2023, requested for stakeholders’ views on draft guidelines for Development and Review of Human Resource Management Instruments for State Corporations and Public Universities. Upon receipt of these views, the same were considered and incorporated into the Draft Guidelines. It is noted that these Guidelines were issued pursuant to Article 234 of the Constitution and decided cases.
7. Accordingly, it is asserted that the 1st Interested Party’s intention was to ensure that any developed or reviewed Human Resource Management Instruments or proposals for establishment of new offices or abolition of offices, should comply with these Guidelines with effect from 8th August 2023.Moreover the same were to be submitted to the 1st Interested Party for consideration and approval.
8. It is stated that in the process, the 2nd Respondent issued an Advisory letter dated 27th July 2023 titled Guidelines on Management and Terms And Conditions Of Service For Board Members And Staff Of State Corporations. This was made on the request of the Prime Cabinet Secretary on the issue of jurisdiction concerning State Corporations, the constitutional powers of the 1st Interested Party in relation to the human resource function in State Corporations and other contentious issues. In a nutshell, the 2nd Respondent is said to have advised as follows in the letter:
a) The PSC has power to on its own initiative or upon request by an authorized officer make recommendations on the conditions of service relating to public officers to the Cabinet Secretary. There is no express provision conferring power to PSC to make recommendations directly to public bodies.
b) State Corporations are vested with the power to manage their Human Resource under their respective legislation and the State Corporations Act;
c) Both the Constitution and the PSC Act limit the power of PSC to reviewing and making recommendations and do not confer upon the PSC the power to determine and approve the terms and conditions of public service officers, any code of conduct or qualifications;
d) The PSC has the power to investigate, monitor and evaluate the organization, administration and personnel services of public service. This mandate is limited to monitoring, evaluating and reporting and does not extend to approving the relevant Human Resource Instruments;
e) The PSC is vested with the power to develop human resources in the public service under Article 234(2)(f) of the Constitution. The Commission is further empowered by Section 65(1) of the PSC Act to review and issue human resource training and development policy and guidelines and prescribe procedures and instruments governing the development of human resources in public service;
f) There is no obligation for the approval of human resource instruments by the PSC. State Corporations should liaise with the PSC in developing Human Resource development instruments to ensure consistency and harmony within the public service;
g) Section 5(3) of the State Corporations Act empowers State Corporations to employ the chief executive officer and other staff and also to determine their terms and conditions of service. A review of the State Corporations Act shows that State Corporations are vested with the power to manage their human resource under their respective legislation and the State Corporation’s Act;
h) The SRC’s mandate with respect to public officers is to advise the national and county governments on the remuneration and benefits of all other public officers; and
i) The PSC’s power to establish and abolish offices in the public service is subject to Constitution and legislation meaning that the power can be taken away by legislation in some instances.
9. Soon thereafter, it is averred that the 1st Interested Party on 7th August 2023 sent a letter to the 2nd Respondent titled Guidelines on Management And Terms And Conditions Of Service For Board Members And Staff Of State Corporations in reaction to its advisory. In its letter, the 1st Interested Party underscored that the 2nd Respondent had erroneously relied in Section 5(3) of the State Corporations Act without paying regard the decisions in Manyara Muchui Anthony vs Communication Authority & 3 Others [2022]eKLR and Consumer Federation of Kenya (COFEK) vs National Social Security Fund Board of Trustees & 2 Others [2022]eKLR which determined that the same are inconsistent with its mandate. It was stressed that these decisions were binding and had not been appealed against.
10. Equally, the 1st Interested Party stated that the 2nd Interested Party cannot make recommendations directly to State Corporations as State Corporations Boards have no power to determine the terms and conditions of service of public officers serving in State Corporations. While also accentuating its mandate, the 1st Interested Party averred that the role of the 1st Respondent under Sections 5(3) and 27 of the State Corporations Act is purely advisory and thus it has no power to issue guidelines to State Corporations on management of human resource or to approve human resource instruments for State Corporations as this same violates Articles 2(2) and 234 of the Constitution.
11. On the foregoing basis, the Petitioners assert that the 2nd Respondent’s impugned advisory letter violates Articles 156(6), 232 and 249 of the Constitution as it undermined the rule of law. In essence, this is since operation of Sections 5(3) and 27 of the State Corporations Act have been determined to be inconsistent with Article 234 of the Constitution. Consequently, in issuing the said letter, the 2nd Respondent is argued to have created confusion and disharmony within the public service and undermined the 1st Interested Party’s powers and functions to develop human resource management instruments for state corporations.
12. The 1st Petitioner further argued that the 1st Respondent’s letter dated 8th August 2023 is ultra vires of its statutory powers and functions under the State Corporations Act as it purports to issue a directive to the Board chairpersons of all state corporations which usurps the 1st Interested Party’s constitutional mandate and elevates the 2nd Respondent’s advice above the Constitution and the cited Court decisions.
13. The Petitioners as well aver that their annexed documents are adduced by the 1st Interested Party in its Replying Affidavit and thus the same cannot be raised as an issue. Additionally, it is asserted that press reports concerning the affairs of the 1st Interested Party and welfare of the nation are matters of general notoriety that a Court takes judicial notice of. Nonetheless, it was argued that striking out of the documents would not resolve the glaring issues and confusion that has been caused by the 1st Respondent’s usurpation of the 1st Interested Party’s mandate.
1st Respondent’s Case
14. The 1st Respondent filed its Replying affidavit sworn on 18th September 2023 by its Secretary Simon Indimuli.
15. On a preliminary note, he informs that the 1st Respondent was established following the enactment of the State Corporations Act in November 1986 under Section 26(1). He states that the 1st Respondent’s functions are set out under Section 27 and additional functions provided under Sections 5(3), 6, 7, 8 and 10 of the Act. Likewise, other functions are set out under the State Corporations (Performance Contracting Regulations), 2004 and the Mwongozo: The Code of Governance for State Corporations. He emphasizes that the provisions of Article 232(2) of the Constitution distinguish state corporations from state organs.
16. He informs that the terms and conditions of service for Board members and staff of state corporations, were initially formulated by the government and issued in 2004. He informs that these Guidelines provided the terms and conditions of service for the staff in each State Corporation as contained in the Human Resources Instruments.
17. He states that the process of reviewing these Guidelines commenced after a wide consultative process which culminated in the establishment of a Technical Committee to generate draft harmonized guidelines. He depones that the Technical Committee was established vide a circular letter dated 24th May 2023 to generate draft harmonized Guidelines. He informs that the Technical Committee comprised of members from the office Prime Cabinet Secretary, the office of the Chief of Staff and Head of Public Service, the National Treasury, Ministry of State for Public Service, the 1st and 2nd Interested parties, 1st Respondent, Inspectorate of State Corporations and government delivery services.
18. He states that the 1st Interested Party postulated that the meetings of the Technical Committee be first suspended to allow the 2nd Respondent issue an advisory with regard to the Terms and Conditions. This was communicated to the Prime Cabinet Secretary vide a letter dated 8th June 2023. The 2nd Respondent’s advisory was issued on 27th July 2023 and circulated to all the government agencies.
19. He alleges that the 2nd Respondent’s advisory letter affirmed the long-held knowledge of the 1st Respondent’s mandate under Sections 5(3) and 27(1) (c) of the State Corporations Act. Considering this, he maintains that all state corporations are required to operate within the terms and conditions enacted under these two provisions as approved by the Cabinet secretary. Once approved he avers that it is the prerogative of the President in line with Sections 7 (1) and (2) of the State Corporations Act to give effect to those directives.
20. Similarly, he notes that the Court in Okiya Omtatah Okoiti V Attorney-General & 2 Others; Francis K. Muthaura (AMB) & 5 others (interested parties) (2019) eKLR held that the State Corporations Act is the primary Act on the establishment of State Corporations. For this reason, he states that the orders sought by the Petitioners are untenable.
21. Furthermore, he claims that the documentation adduced by the Petitioners including the 2nd Respondent’s advisory opinion were improperly obtained. He notes that the Petitioners did not disclose how the same came into their possession thereof rendering the Petition bad in law.
22. Moreover, he argues that the 1st Interested Party’s Guidelines seek to standardize human resources instruments without appreciating the uniqueness of their various segmentations and diverse business dynamics. This action he claims has caused an uproar and apprehension in State Corporations as seen in the Article by Samson Osero who was a former Chief Executive Officer as published in the Business Daily Newspaper dated 16th August 2023.
23. He contends that the Petitioners herein seek to re-write the Constitution and the law. He argues there is no provision in either the Constitution or the Public Service Act which confers power to the 1st Interested Party to determine or approve the terms and conditions of public officers. Particularly, he argues that Article 234(2) (g) of the Constitution as read with Section 53(2) of the Public Service Commission Act make it clear that the 1st Interested Party may on its own initiative or upon request by any authorized officer, make recommendations on the conditions of service relating to public officers to the Cabinet Secretary. As such, he argues that policy making for government is the purview of the Executive and thus cannot be exercised on its behalf by an independent constitutional commission such as the 1st Interested Party.
24. Equally it is argued that Article 234(2)(f) of the Constitution, contrary to the Petitioners allegation does not define what constitutes the development of human resources and neither is the 1st Interested Party granted the power to do so. Likewise, he states that the 1st Interested Party’s power to abolish offices in the public service and appoint persons is subject to the Constitution and legislation.
25. He as well avers that the constitutionality of the impugned Sections were not pleaded in the cases of Manyara Muthui Anthony(supra) and COFEK case(supra) as alleged by the Petitioners and neither is the Employment and Labour Relations Court competent to determine their constitutionality. He adds that there is a pending appeal in the two matters.
26. To this end, he argues that, the Petition lacks merit as is grounded in hearsay and speculations which should not be considered by this Court.
2nd Respondent’s Case
27. In reaction to the Petitioners’ case, the 2nd Respondent filed Grounds of Opposition dated 11th September 2023 on the basis that:
i. The application is premised on improperly obtained correspondence not addressed to the Petitioners which the Petitioners do not disclose how they came into possession thereof rendering the entire Petition bad in law.
ii. The Petitioners have failed to disclose the source of their information contrary to Order 19 Rule 3 of the Civil Procedure Rules.
iii. The Petition is premised on newspaper reports which is of no probative value.
iv. The allegation of creation of confusion, anxiety and disruption within State Corporations and Public Universities is a bare allegation not supported by any evidence from any person engaged in any of the said state corporations and public universities.
v. Legal advisories by the Attorney-General to client ministries, departments or any other public body is privileged communication that may not be a basis of any action without leave of disclosure.
vi. In any event, it is perfectly within the constitutional remit of the Attorney-General to issue an advisory to any public body as the principal legal adviser to the Government.
vii. Independent constitutional commissions are part of government.
viii. Neither the Petitioners nor the Court may substitute its opinion with that of the Attorney-General exercising his constitutionally and statutorily conferred discretion on the content of his legal advisories.
ix. A legal advisory is substantively a matter of opinion and is not amenable to be quashed; one may either agree or disagree with it but it is not amenable to be quashed.
x. The Employment and Labour Relations Court in the case of Okiya Omtatah Okoiti V Attorney-General & 2 others; Francis K. Muthaura (AMB) & 5 others ( interested parties) (2019) eKLR held that by dint of Article 249 (2) (a) of the Constitution, the 1st Interested Party’s function and power to establish and abolish offices in the public service, appoint persons to hold or act in those offices and to confirm appointment can be limited by statute or all together taken away by statute.
xi. The Court went further to state that Parliament by dint of the provisions of Article 234 (2) (a) of the Constitution is at liberty to legislate on matters auxiliary or supplementary to establishment and abolition of offices, appointments, recruitment and selection procedures, promotional criteria and generally all matters incidental to establishment and abolition of offices.
xii. The Employment and Labour Relations Court in the case of Okiya Omtatah Okoiti V Attorney-General & 2 others; Francis K. Muthaura (AMB) & 5 others (interested parties) (2019) eKLR held that the State Corporations Act is the primary Act on the establishment and governance of state corporations.
xiii. The Employment and Labour Relations Court did not issue any declaration that the provisions of Section 5(3) of the State Corporations Act is unconstitutional in the case of Consumer Federation of Kenya (COFEK) v National Social Security Fund Board of Trustees and others (2002)eKLR.
xiv. The issue of constitutionality or otherwise of the provisions of Section 5(3) of the State Corporations Act was not pleaded as an issue for determination in the case of Consumer Federation of Kenya (COFEK) v National Social Security Fund board of trustees and others (2002)eKLR before the Employment and Labour Relations Court which Court in any event lacked the jurisdiction to determine the constitutionality or otherwise of the said statutory provision; that being an issue falling within the exclusive jurisdiction of the High Court as expressly provided under Article 165 (3)(d) (i) of the Constitution.
xv. Further there is a pending appeal before the Court of Appeal in respect to the ‘COFEK case’ that is Nairobi Civil Appeal No. 566 of 2022; NSSF, Hon. Attorney-General and another; Cabinet Secretary for Labour-vs- COFEK therefore the issues therein are sub-judice.
xvi. Similarly the constitutionality or otherwise of the provisions of Section 5(3) of the State Corporations Act was neither pleaded as an issue for determination nor did the Employment and Labour Relations Court issue a declaration that the said section was unconstitutional in the case of Manyara Muthui Anthony v Communications Authority and 3 others (2022) eKLR.
xvii. Further there is a pending appeal before the Court of Appeal in respect to the ‘Manyara case’ that is Nairobi Civil Appeal No. E549 of 2022; Hon. Attorney-General & another; SCAC-vs-Manyara Mucui Anthony, CAK & another; therefore, the issues therein are sub-judice.
xviii. In the Employment and Labour Relations Court in the case of Okiya Omtatah Okoiti V Attorney-General & 2 others; Francis K. Muthaura (AMB) & 5 others ( interested parties) (2019) eKLR it was held by the very same court that Section 27(c) of the State Corporations Act is not unconstitutional and not invalid.
xix. As was held by the Court of Appeal in the case of National Social Security Fund Board of Trustees v Kenya Tea Growers Association & 14 others (Civil Appeal 656 of 2022) KECA 80 (KLR) the Employment and Labour Relations Court is not competent to determine questions on whether any law is inconsistent with or in contravention of the Constitution that jurisdiction having been specifically conferred upon the High Court under Article 165 (3) (d) (i) of the Constitution.
xx. Independent constitutional commissions cannot be directed by any person or authority including the Court in the exercise of their functions.
xxi. Independent constitutional commissions are subject to the Constitution and statute law as expressly provided in Article 249 (2) (a) of the Constitution.
xxii. The mandate of the 1st Interested party is subject to the Constitution and the law including the State Corporations Act.
xxiii. Parliament in the exercise of its legislative authority under Article 94 (1) of the Constitution has enacted several laws establishing offices with defined appointing authority including the State Corporations Act which is expressly provided to make provision for the establishment of state corporations, for control and regulation of state corporations and for connected purposes.
xxiv. The provisions of Article 232 (2) of the Constitution which specifically singles out state corporations from state organs in both levels of government points to constitutional appreciation of their differentiation.
xxv. The provisions of Article 234 (2) (g) of the Constitution provides that the 1st Interested party shall review and make recommendations to the national government in respect of conditions of service, code of conduct and qualifications of officers in the public service; deliberate choice of the term recommend as opposed to set is instructive.
xxvi. The provisions of Article 234 (2) (g) dovetails with the provisions of Section 5 (3) of the State Corporations Act.
xxvii. Similarly there is no provision in either the Constitution or the Public Service Act which confers power to the 1st Interested Party to determine or approve the terms and conditions of public officers, any code of conduct or qualifications.
xxviii. The Public Service Commission Act does neither negates nor was it enacted to negate the scheme of other Acts providing for the establishment and abolition of public offices and matter incidental thereto.
xxix. It is improper for deponents supporting the Petition to ignore the solemn admonition of the provisions of Order 19 Rule 3 of the Civil Procedure Rules by not confining themselves to matters prescribed therein and instead proceed to depone to matters of hearsay, argumentative matters and copies of extracts from newspapers.
xxx. The Petition is speculative and bad in law.
1st Interested Party’s Case
28. The 1st Interested Party in reply filed its Replying Affidavit through its then Chief Executive Officer, Dr. Simon Totich sworn on 29th August 2023.
29. On the onset, he stresses that despite the findings of the Courts that Section 5(3) and 27 of the State Corporations Act are in conflict with Article 234 of the Constitution, the 1st Respondent has adamantly continued to disregard the pronouncements and violate the Constitution, a case in point being its circular and communication dated 21st August 2023. He argues that this has caused confusion and anxiety in State Corporations and public universities and affected service delivery.
30. He states that the 1st Interested Party established under Article 233 with functions set out under Article 234(2) of the Constitution, guides the development of human resources instruments and approves and issues the developed instruments. These instruments are: organization structure and staff establishment; career progression guidelines and the human resource manual which contains the terms and conditions of service. In addition, the 1st Interested Party issues other policies and guidelines to the public service.
31. By way of background, he avers that following the promulgation of the Constitution, there was doubt as to whether State Corporations and Public Universities form part of the public service. He notes that this position was settled by the Court in Kenya Union of Domestic, Hotels, Education and Allied Workers (Kudhehia Workers) v Salaries and Remuneration Commission (2014) eKLR wherein it was held that State Corporations are part of public service.
32. He states that this issue has also been subsequently affirmed by the Court of Appeal in Nairobi Civil Appeal No. E638 of 2021: Public Service Commission v Katiba Institute & others and recently, Nairobi Civil Appeal No.156 of 2016: Salaries and Remuneration Commission v National Hospital Insurance Fund and 2 others.
33. Following this affirmation, he depones that the 1st Interested Party embarked on enforcing its mandate over State Corporations and Public universities as detailed in the affidavit. In a nutshell, the 1st Interested Party first issued a delegation instrument to the 1st Respondent on 14th December 2015 to undertake its functions in state corporations and public universities.
34. Furthermore, it appointed a Taskforce to review terms and conditions for chairpersons, chief executive officers, chancellors and vice chancellors of public universities, board members, management and unionisable staff of state corporations vide Gazette Notice No.3757 dated 24th April 2019. He notes that the Taskforce comprised of officials from itself and the 1st Respondent, the office of the President, the national economic and social council and the National Treasury. He avers that the Taskforce developed the Guidelines on Terms and Conditions of Service for Chairpersons, Chief Executive Officers, Chancellors and Vice-chancellor of public Universities, Board Members, Management and Unionisable
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