' REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT KAKAMEGA
IN THE CONSTITUTIONAL AND HUMAN RIGHTS DIVISION
CONSTITUTIONAL PETITION NO 1 OF 2023
IN THE MATTER OF:
ARTICLES 10,22,23,73 (1) & (2) (c) (ii) & (d),75 (1) (a) & (b),165 (3) (d), 185, 230 (4) (a), 258 AND THE FOURTH SCHEDULE OF THE CONSTITUTION OF THE CONSTITUTION OF KENYA, 2010
AND
IN THE MATTER OF:
VIOLATION OF ARTICLE 10, 73 (1) & (2) (c) (ii) & (d), 75 (1) (a) & (b), 185, 230(4) (a) AND THE FOURTH SCHEDULE OF THE CONSTITUTION OF THE CONSTITUTION OF KENYA, 2010
AND
IN THE MATTER OF:
THE KAKAMEGA COUNTY (STATE OFFICERS)
PENSION SCHEME ACT, 2022
AND
IN THE MATTER OF:
THE SALARIES AND REMUNERATION COMMISSION ACT, 2011
AND
IN THE MATTER OF:
THE COUNTY GOVERNMENTS ACT, 2012
BETWEEN
SALARIES AND REMUNERATION COMMISSION……..………….PETITIONER
AND
COUNTY ASSEMBLY OF KAKAMEGA……………………….….1 ST RESPONDENT
COUNTY GOVERNMENT OF KAKAMEGA……...………….…2 ND RESPONDENT
AND
THE HONOURABLE ATTORNEY GENERAL…..…….…..1 ST INTERESTED PARTY
COMMISSION ON REVENUE ALLOCATION…………….2 ND INTERESTED PARTY
OFFICE OF THE CONTROLLER OF BUDGET..………...3 RD INTERESTED PARTY
COUNCIL OF GOVERNORS…………………………...……4 TH INTERESTED PARTY
JUDGMENT
Introduction
In its Petition dated 14 th April 2023 and filed on 24 th April 2023, the Petitioner describes itself as an independent commission duly established under Article 230 of the Constitution of Kenya, 2010 and whose functions are to, inter alia; set and regularly review the remuneration and benefits of all State Officers and to advise the National and County Governments on the remuneration and benefits of all other public officers.
It brings the Petition on grounds that Article 230 of the Constitution mandates it to address the principles of public finance and fiscal responsibility, the budgetary process and the complexity of salaries and benefits for state and public officers and ensure fairness, transparency and harmonised remuneration and benefits in the public sector.
Subsequently, the Petitioner contends that on 17 th June 2022, in exercise of the authority conferred under Article 185 of the Constitution as read with Section 8 of the County Governments Act, the County Assembly of Kakamega, the 1 st Respondent herein, enacted into law the Kakamega County (State Officers) Pension Scheme, Act, 2022 (hereinafter referred to as “the impugned Act”) contrary to Article 230 (4) (a) of the Constitution and in excess of the retirement benefits it had set out in the published Gazette Notice No 2888 of 1 st March 2013 and subsequently reviewed and published in Gazette Notices No 8794 and 8795 of 27 th July 2022.
It further contends that the entire legislative process by the Respondents did not engage it and that they did not carry out public participation as required by law.
It asserts that the annual cost implication of the retirement benefits under the impugned Act for State Officers who serve for one (1) term is Kshs120,609,594/= while for those that serve for two (2) terms is approximately Kshs 285,062,036/=.
The Petitioner seeks the following prayers:-
A declaration be and is hereby granted that the setting and regular review of remuneration and benefits, including retirement benefits, for State Officers in the County Government is a function that is exclusively vested in the Salaries and Remuneration Commission by dint of Article 230(4) of the Constitution.
A declaration be and is hereby granted that the setting and regular review of remuneration and benefits, including retirement benefits, for State Officers in the County Government of Kakamega is a function that is exclusively vested in the Salaries and Remuneration Commission by dint of Article 230(4) of the Constitution.
A declaration be and is hereby granted that the applicable retirement benefits, for State Officers in the County Government of Kakamega is as set by the Salaries and Remuneration Commission and published in Gazette Notice No 2888 of 1 st March 2013 and subsequently reviewed and published in Gazette Notices Nos 8794 and 8795 of 27 th July 2022.
A declaration be and is hereby granted that the Respondents in enacting the Kakamega County (State Officers) Pension Scheme Act, 2022 acted in excess of legislative authority conferred on County Assemblies under Article 185 of the Constitution as read together with the Fourth Schedule of the Constitution to the Constitution.
A declaration be and is hereby granted that the Respondents in enacting the Kakamega County (State Officers) Pension Scheme Act, 2022 violated and contravened the provisions of Article 230(4)(a) of the Constitution.
A declaration be and is hereby granted that the Respondents in failing to conduct stakeholder engagement and public participation before conferring retirements benefits to persons who hold the Office of Governor, Deputy Governor, Speaker and Members of County Assembly from 8 th August 2017, violated and contravened the provisions of Article 10 of the Constitution.
A declaration be and is hereby granted that the Kakamega County (State Officers) Pension Scheme Act, 2022 is unconstitutional, null and void ab initio .
An order of Mandamus be and is hereby issued directing the clerk of the Kakamega County Assembly, the 1 st Respondent’s Authorized Officer and the Chief Officer responsible for matters relating to finance in the County Government of Kakamega, to within a period of six months from the date of this order, recover in full the entirety of any amount of monies and other benefits paid or conferred as retirement benefits, pursuant to the Kakamega County (State Officers) Pension Scheme Act, 2022; and
Any further relief or orders that this honorable court may deem just and fit to grant.
The Petitioner’s case
The Petition is accompanied by the Supporting and Supplementary Affidavits sworn on 14 th April 2023 and 18 th December 2023 respectively.
The Supporting Affidavit is sworn by Anne R. Gitau in her capacity as the Chief Executive Officer and the Secretary of the Petitioner in which she avers that the Petitioner is mandated under Article 230 (4) of the Constitution to set and regularly review the remuneration of all State Officers; and to advice the National and County Governments on the remuneration and benefits of all other public officers.
The Petitioner states that pursuant to the provisions of Article 230 (4) (a) and (5) of the Constitution and Section 12 of the Salaries and Remuneration Commission Act (hereinafter referred to as “SRC Act”), it reviewed the remuneration and benefits for the State Officers serving in County Governments and set new remuneration and benefits vide Gazette Notices No 8794 and No 8795 of 27 th July 2022.
It contends that notwithstanding the existence of the retirement benefits for State Officers serving in County Government set by itself, the 1 st Respondent brought to its attention that it had passed the impugned Act, whose objects it explained, was to provide for pension and other retirement benefits to persons who held offices of the Governor, Deputy Governor, Speaker and Member of County Assembly (hereinafter referred to as “subject State Officers”) effective the 8 th August 2017.
It posits that the impugned Act contravenes the principles set out in Section 12 (1) of the SRC Act, as the subject State Officers shall earn retirement benefits different from other such State Officers in the other forty-six (46) County Governments. It adds that if the impugned Act is implemented, the hefty retirement benefits as set out in the impugned Act are fiscally unaffordable, unsustainable and pose a significant burden on public coffers.
It further posits that the legislative authority conferred on County Assemblies under Article 185 (2) and the Fourth Schedule of the Constitution of the Constitution does not confer the 2 nd Respondent the function of setting remuneration and benefits for State Officers in the County.
In the Supplementary Affidavit Sworn by Dr Hilary Patroba, Director of Remuneration Services, the Petitioner contends that the functions and authorities of the County Assemblies do not extend to legislating on matters concerning setting or reviewing the remuneration and benefits, including retirement benefits for State Officers.
It faults the 1 st Respondent for not undertaking public participation or consulting it on the impugned Act before the 2 nd Respondent assented it into law. It points out that the import of the 2 nd Respondent’s letter dated 28 th September 2022 was to seek its clarification on the way forward to enable the County operationalise the impugned Act.
In its Written Submissions dated 14 th April 2023, the Petitioner has identified the following three (3) issues for determination:-
Whether the legislative authority conferred by the 1 st Respondent under Article 185 of the Constitution extends to enactment of legislation touching on the remuneration and benefits for State Officers;
Whether the Respondents have breached the provisions of Article 230 (4) of the Constitution by enacting a law that confers retirement benefits on State Officers;
Whether the Respondents have violated the provisions of Article 10 of the Constitution in failing to undertake public participation.
On the first issue, the Petitioner submits that by dint of Article 185 (2) of the Constitution, the legislative authority vested in County Assemblies is strictly limited to the making of laws that are necessary for, or incidental to the functions of the County Government under the Fourth Schedule of the Constitution of the Constitution. In support thereof, it cites the case of Raiply Woods (K) Ltd & Another vs Baringo County & 3 Others [2017]eKLR where it was held that the County Assembly cannot overlook the Constitution when carrying out its legislative mandate.
It further submits that the Fourth Schedule of the Constitution of the Constitution is clear on the powers and functions conferred on County Governments and does not extend to setting and regularly reviewing the remuneration and benefits for State Officers in the County Government. It adds that the impugned Act is not necessary for or incidental to the effective performance of the 2 nd Respondent’s functions and powers under the Fourth Schedule of the Constitution of the Constitution.
On the second issue, it restates the assertions in the Petition and adds that Article 260 of the Constitution defines the offices of Governor, Deputy Governor, Member of County Assembly or other member of the Executive Committee of a County Government as State offices.
It is emphatic that the said office holders are all State Officers and, therefore, their remuneration and benefits can only be set and regularly reviewed by it. It thus argues that the enactment of the impugned Act constitutes usurping its exclusive mandate to set and regularly review the remuneration and benefits for such officers as was held in the case of Kenya National Commission on Human Rights vs Attorney General & Another [2015]eKLR .
The Petitioner urges the courtto hold that in granting retirement benefits to State Officers, the impugned Act is unconstitutional as it violates the explicit provisions of Article 230 (4) of the Constitution.
On the last of its issues, the Petitioner submits that public participation is one of the core national values and principles of governance as set out under Article 10 of the Constitution. In view of the significant impact on public finances arising under the impugned Act, it was, therefore, imperative and constitutional obligation under Articles 10 and 201 of the Constitution for the Respondents to undertake public participation.
It further submits that the Respondents did not controvert its assertion that they failed to undertake public participation prior to the enactment of the impugned Act or consult it. It thus urges the court to render the impugned Act unconstitutional, null and void.
In its Supplementary Submissions dated 26 th February 2024, filed pursuant to leave of court granted on 26 th September 2023, it reiterates its submissions respecting; the extent of legislative authority conferred on County Assemblies,the objects and purpose of the impugned Act and public participation as undertaken by the 1 st Respondent which issues were raised by the Respondents and 4 th Interested Party in their respective submissions.
It stresses that the Respondents have not demonstrated how the impugned Act is incidental to the performance of the functions and exercise of the powers of the County Government as set out under the Fourth Schedule of the Constitution of the Constitution.
On the 2 nd issue, it submits that the objects and purpose of the impugned Act is to confer pension benefits on the aforementioned office holder contrary to Article 230 (4) (a) of the Constitution. It further invites the court to apply the Pith and Substance Doctrine which holds that constitutional validity of legislation should be determined by its true nature and purpose, rather than its incidental or peripheral effects as was held in the case of Pevans East Africa Limited & Another vs Chairman Betting Control and Licensing Board & 7 others [2017] eKLR.
For this case, the Petitioner points out that in applying the Pith and Substance Doctrine, the impugned Act will confer retirement benefits to the office holder and not establish a pension scheme. It asserts that establishing the County Pension Scheme is only peripheral as the substantive sections elaborate benefits for officers which squarely falls under its constitutional mandate.
On the last issue of public participation, it points out that following the promulgation of the Constitution, the participation of the general public in public affairs including direct and indirect participation in the enactment of legislation is a constitutional imperative. It argues that failure by the 1 st Respondent to undertake meaningful public participation or at all renders the impugned Act unconstitutional.
The 1 st Respondent’s case
Esther Ariko, the Acting Clerk of the County Assembly of Kakamega, swore a Replying Affidavit on 17 th July 2023 in opposition to the Petitioner’s Petition and on behalf of the 1 st Respondent.
It is the 1 st Respondent’s case that the enactment of the impugned Act was done in accordance with its legislative mandate and that it did not usurp the Petitioner’s mandate.
It states that under Article 185 of the Constitution, it is vested with the legislative authority of the County and as such it has the authority to make laws. It asserts that its legislative authority is extensive and can make laws necessary for, or incidental to the effective performance of the functions and exercise of the powers of the County Government.
It invokes Articles 176, 178 and 179 of the Constitution and points out that the roles of the office holders of the subject State Officers are prescribed under the Constitution, the County Governments Act and the County Assemblies Service Act and as such they are part and parcel of the County Government Public Service within their specific counties.
It further states that on the other hand, under Article 230(4)(a) of the Constitution, the Petitioner has the power to set and regularly review the remuneration and benefits of the State Officers and accordingly, has met its mandate through various gazette notices.
It contends that the impugned Act fundamentally establishes a pension scheme for the subject State Officers. It adds that the listed beneficiaries in the aforesaid pension scheme are part and parcel of the County Government Public Service within the meaning of Article 176 of the Constitution.
It is categorical that there is nothing unconstitutional with the County Government establishing a pension scheme for the State Officers serving under its service upon their exit from employment having served their full terms as contemplated under the Constitution. It asserts that according to Gazette Notice Nos 8794 and 8795 of 27 th July 2023, the Petitioner acknowledged the authority and liberty of employers in the public service, save for itself, to establish pension schemes for State Officers appointed for a fixed term of office with its mandate being to set and review the financial retirement benefits.
It further contends that under Section 11 of the SRC Act, the Petitioner’s mandate is to inter alia make recommendations on matters relating to the salary and remuneration of state or public officers.
It points out that the Petitioner has distinct and clear functions from its own, with the Petitioner’s functions being that of oversight with the prerogative to make recommendations, review and set the rate of the employer’s contribution to the scheme, which function it can still perform through periodic reviews of the rates as provided for in law.
It further avers that in the foregoing, it has not encroached on the jurisdiction of the Petitioner as it has only set up the pension scheme within its prerogative as the legislative arm on matters concerning the County Government and that the Petitioner has all the machinery to review the said pension scheme in accordance with its constitutional and statutory functions. It thus terms the present Petition as misconceived and an abuse of the court process.
It points out that it followed due procedure in enacting the impugned Act including public participation that was composed of taking into consideration the various reviews and recommendations by the citizens and other stakeholders. It asserts that it is trite law that the presumption is that any law promulgated by the legislature including the County Assembly, is constitutionally sound and as such the burden to prove otherwise rests with the Petitioner.
It calls upon the court to consider the purpose and the effect of implementing the impugned Act and whether the same infringed a constitutional right. It is categorical that the impugned Act was enacted for the purpose of granting pension and other retirement benefits to the State Officers in the County Government and as such does not infringe on any rights but seeks to promote the economic and social right to social security and fair labour relations. It adds that the existence of a pension scheme for the State Officers speaks to their retirement benefits and essential remuneration benefits which are incidental to their ardent discharge of the duties to the public service. In the circumstances, it urges the court to dismiss the Petitioner’s Petition.
In its Written Submissions dated 8 th December 2023, it invokes Articles 185 and 259 of the Constitution and submits that the Constitution has unequivocally given it the lee way to make laws as long as these laws are necessary for, or incidental to the effective performance of the functions and exercise of powers under the Fourth Schedule of the Constitution. To buttress its point, it places reliance on the case of County Government of Kiambu & Another vs Senate & Others [2017]eKLR where it was held that the County Assembly makes any laws that are necessary for the effective performance of the functions and exercise of the powers of the County Government.
It reiterates that establishing a pension scheme for the subject State Officers only seeks to promote their economic and social right to social security and fair labour relations as provided for under Articles 41 and 43 of the Constitution. In this regard, it places reliance on the case of Coalition for Reforms and Democracy (CORD) vs Attorney General International Institute for Legislative Affairs & Another (Interested Parties)[2019]eKLR where it was held that Article 43(1)(e) of the Constitution provides that every person has the right to social security. It is emphatic that as long as the said subject State Officers had been elected and served the people in their terms, they were entitled to the said benefits.
It asserts that the Petitioner was established under Article 230 of the Constitution which expressly provides for its mandate under Article 230(4). It adds that Section 11 of the SRC Act further sets out the Petitioner’s mandate.
It reiterates that the said mandate was exercised through gazette notices such as Gazette Notices No 8794 and 8795 in which it recognised the existence of pension schemes set by other authorities. It makes reference to the Petitioner’s correspondence to the Council of Governors in the 2 nd Respondent’s Replying Affidavit sworn on 20 th April 2022 (sic) where the Petitioner had expressly recommended the establishment of a pension scheme by the County Governments and for the same to adhere to its guidelines issued through letter Reference Number SRS/TS/COG/3/61/48 Vol II dated 10 th February 2020.
It adds that through a letter dated 21 st August 2020, the Petitioner expressed the need to have the pension scheme cover all State Officers in County Governments in the spirit of equity and fairness. It is emphatic that the Petitioner and itself were two (2) distinct bodies and were under an obligation to work interdependently to promote the achievement of their roles under the Constitution.
It is categorical that it has exercised its legislative mandate to establish a pension scheme for the distinct subject State Officers and the Petitioner is obligated to make recommendations and advise the 2 nd Respondent on the intricacies of such a pension scheme, which recommendations and reviews can still be done in the progressive realisation of the impugned Act.
It further submits that pursuant to Article 196 of the Constitution, it is obligated to facilitate public participation in policy formulation, legislative process and any other decision affecting the residents of the County. It relies on the case of Republic vs County Government of Kiambu Ex parte Robert Gakuru & Another[2016]eKLR where it was held that the yardstick for public participation was that a reasonable opportunity has been given to the members of the public and all interested parties to know about the issue, and to have an adequate say, and that it could not be expected of the legislature, that a personal hearing would be given to every individual who claimed to be affected by the laws or regulations that were being made.
It then cites the case of Commission for the Implementation of Constitution vs Parliament of Kenya & Another & 2 Others[2013]eKLR where it was held that what amounts to a reasonable opportunity would depend on the circumstances of each case.
It asserts that the impugned Act was born and advised by the draft Bill prepared by the Council of Governors, the 4 th Interested Party herein, which proposed a similar pension scheme as the impugned Act. It contends that the said Bill was submitted to the Petitioner and the proposals set out in the various correspondences between the Petitioner and the 4 th Interested Party, to which the 2 nd Respondent was privy. It adds that through the letter dated 21 st August 2020, the Petitioner expressly contributed to the said Bill and issued its recommendations and reviews on the various facets and issues on the Bill.
It further points out that through a letter dated 28 th September 2022, the Petitioner was invited to offer its advisory opinion on the County Government’s contribution to the scheme, which letter elicited no response. It asserts that it also invited views and memoranda to be hand delivered and emailed to it. It is emphatic, therefore, that it had fully met the threshold of public participation as set out in Article 10 of the Constitution and that the Petitioner’s allegation is untenable.
It also relies on the case of Council of County Governors vs Attorney General & Another[2017]eKLR where it was held that there was the general presumption that every Act of Parliament was constitutional and the burden of proof lies on every person who alleges otherwise. It urges the court to uphold the constitutionality of the impugned Act and dismiss the Petition herein.
The 2 nd Respondent’s case
Vivianne Mmbaka Komwonyo, the County Attorney of the 2 nd Respondent, swore a Replying Affidavit on 22 nd May 2023 in opposition to the Petition and on behalf of the 2 nd Respondent.
It is the 2 nd Respondent’s case that it operated as the County Executive Committee of Kakamega County Government as established under Article 179 of the Constitution. It asserts that its functions were outlined under Article 183 of the Constitution and that the 1 st Respondent’s functions were outlined under Article 185 of the Constitution.
It states that it is not disputed that pursuant to Article 185 of the Constitution, the 1 st Respondent enacted the impugned Act which was procedurally assented to on 17 th June 2022 and published in the Kenya Gazette on 30 th June 2022. It explains that it was, therefore, mandated pursuant to Article 183(1) of the Constitution to ensure the implementation of all enacted legislation including the impugned Act.
It further avers that whereas the Petitioner is mandated under Article 230(4) of the Constitution to set and review the remuneration benefits of all State Officers, it does not have the legislative authority either at the National or County level of Government as the same is reserved for the National and County Assemblies respectively.
It is categorical that in the performance and execution of their powers and functions, State organs such as the 1 st Respondent and the Petitioner ought to work interdependently and in harmony so as to achieve the ultimate vision of the people of Kenya as outlined in the Constitution.
It is emphatic that the enactment of the impugned Act was well within the mandate of the 1 st Respondent and was outside the constitutional mandate of the Petitioner. It is categorical that the Petitioner is not vested with the authority to establish a pension scheme for any State Officer either at National or County level and that the pension scheme established by the impugned Act was well aligned with the provisions of the Constitution and the Retirement Benefits Act, Cap 197 (Laws of Kenya).
It contends that in Paragraph 2(c) of Gazette Notice No 8794, the Petitioner acknowledged that a County Government may establish a pension scheme for its State Officers and only stated that it would set the rate of the employer’s contribution to the scheme. It adds that through the letter dated 28 th September 2022, the 2 nd Respondent invited the Petitioner to offer its advisory opinion on the County Government’s contribution to the scheme so as to operationalise the same, which letter elicited no response.
It points out that the mere allegation that the retirement benefits under the impugned Act were higher than the gratuity set by the Petitioner is not sufficient reason to declare it unconstitutional. It asserts that whereas the Petitioner states that the retirement benefits set in the impugned Act are fiscally unsustainable, it has not clearly demonstrated that allegation as it is trite that he who alleges must prove.
It is categorical that the Petitioner had made a generalised conclusion that the impugned Act was unconstitutional in its entirety without stating the specific provisions that have allegedly violated the Constitution. It adds that it was apparent that the Petitioner has only considered part of the impugned Act and has failed to conceive the intention of the County legislators in totality.
It further states that the impugned Act was advised by the draft Bill prepared by the 4 th Interested Party and shared with the Petitioner for comments and input and was, therefore, constitutional. It asserts that the principle of proportionality and utilitarianism militates against the grant of the orders sought on account of its potentially constitutionally undesirable ripple effect of undermining County Assemblies’ legislative mandate.
In its Written Submissions dated 8 th December 2023, it places reliance on the cases of US vs Butler 297 US 1 (1936) and Were Samwel & 14 Others vs Attorney General & 2 Others[2017]eKLR where the common thread was that while examining the constitutionality of a statute, the duty of a court was to set out the impugned provisions and juxtapose them against the constitutional provisions alleged to be violated and determine whether or not they were unconstitutional.
It further cites the case of Olum & Another vs Attorney General of Uganda[2002] 2 EA 508 where it was held that to determine the constitutionality of a section of a statute or Act of Parliament, the court had to consider the purpose and effect of the impugned statute or section thereof and that if its purpose did not infringe a right guaranteed by the constitution, the court had to go further and examine the effect of its implementation.
It is its contention that the impugned Act does not confer retirement benefits but establishes a pension scheme and that the Petitioner lacks the authority to establish retirement schemes for State Officers. It invokes Articles 185 and 230(4) of the Constitution and argues that at no point does the functions or powers of the Petitioner and the 1 st Respondent intersect. It further cites the cases of Attorney General vs LSK & Another [2017]eKLR and R vs Big M. Drugmart Ltd [1986]LRC where the common thread was that both purpose and effect were relevant in determining constitutionality of a legislation.
It argues that there is nothing in the impugned Act that offends Article 230(4) of the Constitution or infringes upon the powers and constitutional mandate of the Petitioner. It asserts that a clear and conclusive reading of the impugned Act will demonstrate that it establishes a scheme as an irrevocable statutory trust to provide pension for its members upon their retirement or to their dependents upon death. It adds that Section 26(1) of the impugned Act provides for a deduction of twelve percent (12%)
[...truncated]
IN THE HIGH COURT OF KENYA AT KAKAMEGA
IN THE CONSTITUTIONAL AND HUMAN RIGHTS DIVISION
CONSTITUTIONAL PETITION NO 1 OF 2023
IN THE MATTER OF:
ARTICLES 10,22,23,73 (1) & (2) (c) (ii) & (d),75 (1) (a) & (b),165 (3) (d), 185, 230 (4) (a), 258 AND THE FOURTH SCHEDULE OF THE CONSTITUTION OF THE CONSTITUTION OF KENYA, 2010
AND
IN THE MATTER OF:
VIOLATION OF ARTICLE 10, 73 (1) & (2) (c) (ii) & (d), 75 (1) (a) & (b), 185, 230(4) (a) AND THE FOURTH SCHEDULE OF THE CONSTITUTION OF THE CONSTITUTION OF KENYA, 2010
AND
IN THE MATTER OF:
THE KAKAMEGA COUNTY (STATE OFFICERS)
PENSION SCHEME ACT, 2022
AND
IN THE MATTER OF:
THE SALARIES AND REMUNERATION COMMISSION ACT, 2011
AND
IN THE MATTER OF:
THE COUNTY GOVERNMENTS ACT, 2012
BETWEEN
SALARIES AND REMUNERATION COMMISSION……..………….PETITIONER
AND
COUNTY ASSEMBLY OF KAKAMEGA……………………….….1 ST RESPONDENT
COUNTY GOVERNMENT OF KAKAMEGA……...………….…2 ND RESPONDENT
AND
THE HONOURABLE ATTORNEY GENERAL…..…….…..1 ST INTERESTED PARTY
COMMISSION ON REVENUE ALLOCATION…………….2 ND INTERESTED PARTY
OFFICE OF THE CONTROLLER OF BUDGET..………...3 RD INTERESTED PARTY
COUNCIL OF GOVERNORS…………………………...……4 TH INTERESTED PARTY
JUDGMENT
Introduction
In its Petition dated 14 th April 2023 and filed on 24 th April 2023, the Petitioner describes itself as an independent commission duly established under Article 230 of the Constitution of Kenya, 2010 and whose functions are to, inter alia; set and regularly review the remuneration and benefits of all State Officers and to advise the National and County Governments on the remuneration and benefits of all other public officers.
It brings the Petition on grounds that Article 230 of the Constitution mandates it to address the principles of public finance and fiscal responsibility, the budgetary process and the complexity of salaries and benefits for state and public officers and ensure fairness, transparency and harmonised remuneration and benefits in the public sector.
Subsequently, the Petitioner contends that on 17 th June 2022, in exercise of the authority conferred under Article 185 of the Constitution as read with Section 8 of the County Governments Act, the County Assembly of Kakamega, the 1 st Respondent herein, enacted into law the Kakamega County (State Officers) Pension Scheme, Act, 2022 (hereinafter referred to as “the impugned Act”) contrary to Article 230 (4) (a) of the Constitution and in excess of the retirement benefits it had set out in the published Gazette Notice No 2888 of 1 st March 2013 and subsequently reviewed and published in Gazette Notices No 8794 and 8795 of 27 th July 2022.
It further contends that the entire legislative process by the Respondents did not engage it and that they did not carry out public participation as required by law.
It asserts that the annual cost implication of the retirement benefits under the impugned Act for State Officers who serve for one (1) term is Kshs120,609,594/= while for those that serve for two (2) terms is approximately Kshs 285,062,036/=.
The Petitioner seeks the following prayers:-
A declaration be and is hereby granted that the setting and regular review of remuneration and benefits, including retirement benefits, for State Officers in the County Government is a function that is exclusively vested in the Salaries and Remuneration Commission by dint of Article 230(4) of the Constitution.
A declaration be and is hereby granted that the setting and regular review of remuneration and benefits, including retirement benefits, for State Officers in the County Government of Kakamega is a function that is exclusively vested in the Salaries and Remuneration Commission by dint of Article 230(4) of the Constitution.
A declaration be and is hereby granted that the applicable retirement benefits, for State Officers in the County Government of Kakamega is as set by the Salaries and Remuneration Commission and published in Gazette Notice No 2888 of 1 st March 2013 and subsequently reviewed and published in Gazette Notices Nos 8794 and 8795 of 27 th July 2022.
A declaration be and is hereby granted that the Respondents in enacting the Kakamega County (State Officers) Pension Scheme Act, 2022 acted in excess of legislative authority conferred on County Assemblies under Article 185 of the Constitution as read together with the Fourth Schedule of the Constitution to the Constitution.
A declaration be and is hereby granted that the Respondents in enacting the Kakamega County (State Officers) Pension Scheme Act, 2022 violated and contravened the provisions of Article 230(4)(a) of the Constitution.
A declaration be and is hereby granted that the Respondents in failing to conduct stakeholder engagement and public participation before conferring retirements benefits to persons who hold the Office of Governor, Deputy Governor, Speaker and Members of County Assembly from 8 th August 2017, violated and contravened the provisions of Article 10 of the Constitution.
A declaration be and is hereby granted that the Kakamega County (State Officers) Pension Scheme Act, 2022 is unconstitutional, null and void ab initio .
An order of Mandamus be and is hereby issued directing the clerk of the Kakamega County Assembly, the 1 st Respondent’s Authorized Officer and the Chief Officer responsible for matters relating to finance in the County Government of Kakamega, to within a period of six months from the date of this order, recover in full the entirety of any amount of monies and other benefits paid or conferred as retirement benefits, pursuant to the Kakamega County (State Officers) Pension Scheme Act, 2022; and
Any further relief or orders that this honorable court may deem just and fit to grant.
The Petitioner’s case
The Petition is accompanied by the Supporting and Supplementary Affidavits sworn on 14 th April 2023 and 18 th December 2023 respectively.
The Supporting Affidavit is sworn by Anne R. Gitau in her capacity as the Chief Executive Officer and the Secretary of the Petitioner in which she avers that the Petitioner is mandated under Article 230 (4) of the Constitution to set and regularly review the remuneration of all State Officers; and to advice the National and County Governments on the remuneration and benefits of all other public officers.
The Petitioner states that pursuant to the provisions of Article 230 (4) (a) and (5) of the Constitution and Section 12 of the Salaries and Remuneration Commission Act (hereinafter referred to as “SRC Act”), it reviewed the remuneration and benefits for the State Officers serving in County Governments and set new remuneration and benefits vide Gazette Notices No 8794 and No 8795 of 27 th July 2022.
It contends that notwithstanding the existence of the retirement benefits for State Officers serving in County Government set by itself, the 1 st Respondent brought to its attention that it had passed the impugned Act, whose objects it explained, was to provide for pension and other retirement benefits to persons who held offices of the Governor, Deputy Governor, Speaker and Member of County Assembly (hereinafter referred to as “subject State Officers”) effective the 8 th August 2017.
It posits that the impugned Act contravenes the principles set out in Section 12 (1) of the SRC Act, as the subject State Officers shall earn retirement benefits different from other such State Officers in the other forty-six (46) County Governments. It adds that if the impugned Act is implemented, the hefty retirement benefits as set out in the impugned Act are fiscally unaffordable, unsustainable and pose a significant burden on public coffers.
It further posits that the legislative authority conferred on County Assemblies under Article 185 (2) and the Fourth Schedule of the Constitution of the Constitution does not confer the 2 nd Respondent the function of setting remuneration and benefits for State Officers in the County.
In the Supplementary Affidavit Sworn by Dr Hilary Patroba, Director of Remuneration Services, the Petitioner contends that the functions and authorities of the County Assemblies do not extend to legislating on matters concerning setting or reviewing the remuneration and benefits, including retirement benefits for State Officers.
It faults the 1 st Respondent for not undertaking public participation or consulting it on the impugned Act before the 2 nd Respondent assented it into law. It points out that the import of the 2 nd Respondent’s letter dated 28 th September 2022 was to seek its clarification on the way forward to enable the County operationalise the impugned Act.
In its Written Submissions dated 14 th April 2023, the Petitioner has identified the following three (3) issues for determination:-
Whether the legislative authority conferred by the 1 st Respondent under Article 185 of the Constitution extends to enactment of legislation touching on the remuneration and benefits for State Officers;
Whether the Respondents have breached the provisions of Article 230 (4) of the Constitution by enacting a law that confers retirement benefits on State Officers;
Whether the Respondents have violated the provisions of Article 10 of the Constitution in failing to undertake public participation.
On the first issue, the Petitioner submits that by dint of Article 185 (2) of the Constitution, the legislative authority vested in County Assemblies is strictly limited to the making of laws that are necessary for, or incidental to the functions of the County Government under the Fourth Schedule of the Constitution of the Constitution. In support thereof, it cites the case of Raiply Woods (K) Ltd & Another vs Baringo County & 3 Others [2017]eKLR where it was held that the County Assembly cannot overlook the Constitution when carrying out its legislative mandate.
It further submits that the Fourth Schedule of the Constitution of the Constitution is clear on the powers and functions conferred on County Governments and does not extend to setting and regularly reviewing the remuneration and benefits for State Officers in the County Government. It adds that the impugned Act is not necessary for or incidental to the effective performance of the 2 nd Respondent’s functions and powers under the Fourth Schedule of the Constitution of the Constitution.
On the second issue, it restates the assertions in the Petition and adds that Article 260 of the Constitution defines the offices of Governor, Deputy Governor, Member of County Assembly or other member of the Executive Committee of a County Government as State offices.
It is emphatic that the said office holders are all State Officers and, therefore, their remuneration and benefits can only be set and regularly reviewed by it. It thus argues that the enactment of the impugned Act constitutes usurping its exclusive mandate to set and regularly review the remuneration and benefits for such officers as was held in the case of Kenya National Commission on Human Rights vs Attorney General & Another [2015]eKLR .
The Petitioner urges the courtto hold that in granting retirement benefits to State Officers, the impugned Act is unconstitutional as it violates the explicit provisions of Article 230 (4) of the Constitution.
On the last of its issues, the Petitioner submits that public participation is one of the core national values and principles of governance as set out under Article 10 of the Constitution. In view of the significant impact on public finances arising under the impugned Act, it was, therefore, imperative and constitutional obligation under Articles 10 and 201 of the Constitution for the Respondents to undertake public participation.
It further submits that the Respondents did not controvert its assertion that they failed to undertake public participation prior to the enactment of the impugned Act or consult it. It thus urges the court to render the impugned Act unconstitutional, null and void.
In its Supplementary Submissions dated 26 th February 2024, filed pursuant to leave of court granted on 26 th September 2023, it reiterates its submissions respecting; the extent of legislative authority conferred on County Assemblies,the objects and purpose of the impugned Act and public participation as undertaken by the 1 st Respondent which issues were raised by the Respondents and 4 th Interested Party in their respective submissions.
It stresses that the Respondents have not demonstrated how the impugned Act is incidental to the performance of the functions and exercise of the powers of the County Government as set out under the Fourth Schedule of the Constitution of the Constitution.
On the 2 nd issue, it submits that the objects and purpose of the impugned Act is to confer pension benefits on the aforementioned office holder contrary to Article 230 (4) (a) of the Constitution. It further invites the court to apply the Pith and Substance Doctrine which holds that constitutional validity of legislation should be determined by its true nature and purpose, rather than its incidental or peripheral effects as was held in the case of Pevans East Africa Limited & Another vs Chairman Betting Control and Licensing Board & 7 others [2017] eKLR.
For this case, the Petitioner points out that in applying the Pith and Substance Doctrine, the impugned Act will confer retirement benefits to the office holder and not establish a pension scheme. It asserts that establishing the County Pension Scheme is only peripheral as the substantive sections elaborate benefits for officers which squarely falls under its constitutional mandate.
On the last issue of public participation, it points out that following the promulgation of the Constitution, the participation of the general public in public affairs including direct and indirect participation in the enactment of legislation is a constitutional imperative. It argues that failure by the 1 st Respondent to undertake meaningful public participation or at all renders the impugned Act unconstitutional.
The 1 st Respondent’s case
Esther Ariko, the Acting Clerk of the County Assembly of Kakamega, swore a Replying Affidavit on 17 th July 2023 in opposition to the Petitioner’s Petition and on behalf of the 1 st Respondent.
It is the 1 st Respondent’s case that the enactment of the impugned Act was done in accordance with its legislative mandate and that it did not usurp the Petitioner’s mandate.
It states that under Article 185 of the Constitution, it is vested with the legislative authority of the County and as such it has the authority to make laws. It asserts that its legislative authority is extensive and can make laws necessary for, or incidental to the effective performance of the functions and exercise of the powers of the County Government.
It invokes Articles 176, 178 and 179 of the Constitution and points out that the roles of the office holders of the subject State Officers are prescribed under the Constitution, the County Governments Act and the County Assemblies Service Act and as such they are part and parcel of the County Government Public Service within their specific counties.
It further states that on the other hand, under Article 230(4)(a) of the Constitution, the Petitioner has the power to set and regularly review the remuneration and benefits of the State Officers and accordingly, has met its mandate through various gazette notices.
It contends that the impugned Act fundamentally establishes a pension scheme for the subject State Officers. It adds that the listed beneficiaries in the aforesaid pension scheme are part and parcel of the County Government Public Service within the meaning of Article 176 of the Constitution.
It is categorical that there is nothing unconstitutional with the County Government establishing a pension scheme for the State Officers serving under its service upon their exit from employment having served their full terms as contemplated under the Constitution. It asserts that according to Gazette Notice Nos 8794 and 8795 of 27 th July 2023, the Petitioner acknowledged the authority and liberty of employers in the public service, save for itself, to establish pension schemes for State Officers appointed for a fixed term of office with its mandate being to set and review the financial retirement benefits.
It further contends that under Section 11 of the SRC Act, the Petitioner’s mandate is to inter alia make recommendations on matters relating to the salary and remuneration of state or public officers.
It points out that the Petitioner has distinct and clear functions from its own, with the Petitioner’s functions being that of oversight with the prerogative to make recommendations, review and set the rate of the employer’s contribution to the scheme, which function it can still perform through periodic reviews of the rates as provided for in law.
It further avers that in the foregoing, it has not encroached on the jurisdiction of the Petitioner as it has only set up the pension scheme within its prerogative as the legislative arm on matters concerning the County Government and that the Petitioner has all the machinery to review the said pension scheme in accordance with its constitutional and statutory functions. It thus terms the present Petition as misconceived and an abuse of the court process.
It points out that it followed due procedure in enacting the impugned Act including public participation that was composed of taking into consideration the various reviews and recommendations by the citizens and other stakeholders. It asserts that it is trite law that the presumption is that any law promulgated by the legislature including the County Assembly, is constitutionally sound and as such the burden to prove otherwise rests with the Petitioner.
It calls upon the court to consider the purpose and the effect of implementing the impugned Act and whether the same infringed a constitutional right. It is categorical that the impugned Act was enacted for the purpose of granting pension and other retirement benefits to the State Officers in the County Government and as such does not infringe on any rights but seeks to promote the economic and social right to social security and fair labour relations. It adds that the existence of a pension scheme for the State Officers speaks to their retirement benefits and essential remuneration benefits which are incidental to their ardent discharge of the duties to the public service. In the circumstances, it urges the court to dismiss the Petitioner’s Petition.
In its Written Submissions dated 8 th December 2023, it invokes Articles 185 and 259 of the Constitution and submits that the Constitution has unequivocally given it the lee way to make laws as long as these laws are necessary for, or incidental to the effective performance of the functions and exercise of powers under the Fourth Schedule of the Constitution. To buttress its point, it places reliance on the case of County Government of Kiambu & Another vs Senate & Others [2017]eKLR where it was held that the County Assembly makes any laws that are necessary for the effective performance of the functions and exercise of the powers of the County Government.
It reiterates that establishing a pension scheme for the subject State Officers only seeks to promote their economic and social right to social security and fair labour relations as provided for under Articles 41 and 43 of the Constitution. In this regard, it places reliance on the case of Coalition for Reforms and Democracy (CORD) vs Attorney General International Institute for Legislative Affairs & Another (Interested Parties)[2019]eKLR where it was held that Article 43(1)(e) of the Constitution provides that every person has the right to social security. It is emphatic that as long as the said subject State Officers had been elected and served the people in their terms, they were entitled to the said benefits.
It asserts that the Petitioner was established under Article 230 of the Constitution which expressly provides for its mandate under Article 230(4). It adds that Section 11 of the SRC Act further sets out the Petitioner’s mandate.
It reiterates that the said mandate was exercised through gazette notices such as Gazette Notices No 8794 and 8795 in which it recognised the existence of pension schemes set by other authorities. It makes reference to the Petitioner’s correspondence to the Council of Governors in the 2 nd Respondent’s Replying Affidavit sworn on 20 th April 2022 (sic) where the Petitioner had expressly recommended the establishment of a pension scheme by the County Governments and for the same to adhere to its guidelines issued through letter Reference Number SRS/TS/COG/3/61/48 Vol II dated 10 th February 2020.
It adds that through a letter dated 21 st August 2020, the Petitioner expressed the need to have the pension scheme cover all State Officers in County Governments in the spirit of equity and fairness. It is emphatic that the Petitioner and itself were two (2) distinct bodies and were under an obligation to work interdependently to promote the achievement of their roles under the Constitution.
It is categorical that it has exercised its legislative mandate to establish a pension scheme for the distinct subject State Officers and the Petitioner is obligated to make recommendations and advise the 2 nd Respondent on the intricacies of such a pension scheme, which recommendations and reviews can still be done in the progressive realisation of the impugned Act.
It further submits that pursuant to Article 196 of the Constitution, it is obligated to facilitate public participation in policy formulation, legislative process and any other decision affecting the residents of the County. It relies on the case of Republic vs County Government of Kiambu Ex parte Robert Gakuru & Another[2016]eKLR where it was held that the yardstick for public participation was that a reasonable opportunity has been given to the members of the public and all interested parties to know about the issue, and to have an adequate say, and that it could not be expected of the legislature, that a personal hearing would be given to every individual who claimed to be affected by the laws or regulations that were being made.
It then cites the case of Commission for the Implementation of Constitution vs Parliament of Kenya & Another & 2 Others[2013]eKLR where it was held that what amounts to a reasonable opportunity would depend on the circumstances of each case.
It asserts that the impugned Act was born and advised by the draft Bill prepared by the Council of Governors, the 4 th Interested Party herein, which proposed a similar pension scheme as the impugned Act. It contends that the said Bill was submitted to the Petitioner and the proposals set out in the various correspondences between the Petitioner and the 4 th Interested Party, to which the 2 nd Respondent was privy. It adds that through the letter dated 21 st August 2020, the Petitioner expressly contributed to the said Bill and issued its recommendations and reviews on the various facets and issues on the Bill.
It further points out that through a letter dated 28 th September 2022, the Petitioner was invited to offer its advisory opinion on the County Government’s contribution to the scheme, which letter elicited no response. It asserts that it also invited views and memoranda to be hand delivered and emailed to it. It is emphatic, therefore, that it had fully met the threshold of public participation as set out in Article 10 of the Constitution and that the Petitioner’s allegation is untenable.
It also relies on the case of Council of County Governors vs Attorney General & Another[2017]eKLR where it was held that there was the general presumption that every Act of Parliament was constitutional and the burden of proof lies on every person who alleges otherwise. It urges the court to uphold the constitutionality of the impugned Act and dismiss the Petition herein.
The 2 nd Respondent’s case
Vivianne Mmbaka Komwonyo, the County Attorney of the 2 nd Respondent, swore a Replying Affidavit on 22 nd May 2023 in opposition to the Petition and on behalf of the 2 nd Respondent.
It is the 2 nd Respondent’s case that it operated as the County Executive Committee of Kakamega County Government as established under Article 179 of the Constitution. It asserts that its functions were outlined under Article 183 of the Constitution and that the 1 st Respondent’s functions were outlined under Article 185 of the Constitution.
It states that it is not disputed that pursuant to Article 185 of the Constitution, the 1 st Respondent enacted the impugned Act which was procedurally assented to on 17 th June 2022 and published in the Kenya Gazette on 30 th June 2022. It explains that it was, therefore, mandated pursuant to Article 183(1) of the Constitution to ensure the implementation of all enacted legislation including the impugned Act.
It further avers that whereas the Petitioner is mandated under Article 230(4) of the Constitution to set and review the remuneration benefits of all State Officers, it does not have the legislative authority either at the National or County level of Government as the same is reserved for the National and County Assemblies respectively.
It is categorical that in the performance and execution of their powers and functions, State organs such as the 1 st Respondent and the Petitioner ought to work interdependently and in harmony so as to achieve the ultimate vision of the people of Kenya as outlined in the Constitution.
It is emphatic that the enactment of the impugned Act was well within the mandate of the 1 st Respondent and was outside the constitutional mandate of the Petitioner. It is categorical that the Petitioner is not vested with the authority to establish a pension scheme for any State Officer either at National or County level and that the pension scheme established by the impugned Act was well aligned with the provisions of the Constitution and the Retirement Benefits Act, Cap 197 (Laws of Kenya).
It contends that in Paragraph 2(c) of Gazette Notice No 8794, the Petitioner acknowledged that a County Government may establish a pension scheme for its State Officers and only stated that it would set the rate of the employer’s contribution to the scheme. It adds that through the letter dated 28 th September 2022, the 2 nd Respondent invited the Petitioner to offer its advisory opinion on the County Government’s contribution to the scheme so as to operationalise the same, which letter elicited no response.
It points out that the mere allegation that the retirement benefits under the impugned Act were higher than the gratuity set by the Petitioner is not sufficient reason to declare it unconstitutional. It asserts that whereas the Petitioner states that the retirement benefits set in the impugned Act are fiscally unsustainable, it has not clearly demonstrated that allegation as it is trite that he who alleges must prove.
It is categorical that the Petitioner had made a generalised conclusion that the impugned Act was unconstitutional in its entirety without stating the specific provisions that have allegedly violated the Constitution. It adds that it was apparent that the Petitioner has only considered part of the impugned Act and has failed to conceive the intention of the County legislators in totality.
It further states that the impugned Act was advised by the draft Bill prepared by the 4 th Interested Party and shared with the Petitioner for comments and input and was, therefore, constitutional. It asserts that the principle of proportionality and utilitarianism militates against the grant of the orders sought on account of its potentially constitutionally undesirable ripple effect of undermining County Assemblies’ legislative mandate.
In its Written Submissions dated 8 th December 2023, it places reliance on the cases of US vs Butler 297 US 1 (1936) and Were Samwel & 14 Others vs Attorney General & 2 Others[2017]eKLR where the common thread was that while examining the constitutionality of a statute, the duty of a court was to set out the impugned provisions and juxtapose them against the constitutional provisions alleged to be violated and determine whether or not they were unconstitutional.
It further cites the case of Olum & Another vs Attorney General of Uganda[2002] 2 EA 508 where it was held that to determine the constitutionality of a section of a statute or Act of Parliament, the court had to consider the purpose and effect of the impugned statute or section thereof and that if its purpose did not infringe a right guaranteed by the constitution, the court had to go further and examine the effect of its implementation.
It is its contention that the impugned Act does not confer retirement benefits but establishes a pension scheme and that the Petitioner lacks the authority to establish retirement schemes for State Officers. It invokes Articles 185 and 230(4) of the Constitution and argues that at no point does the functions or powers of the Petitioner and the 1 st Respondent intersect. It further cites the cases of Attorney General vs LSK & Another [2017]eKLR and R vs Big M. Drugmart Ltd [1986]LRC where the common thread was that both purpose and effect were relevant in determining constitutionality of a legislation.
It argues that there is nothing in the impugned Act that offends Article 230(4) of the Constitution or infringes upon the powers and constitutional mandate of the Petitioner. It asserts that a clear and conclusive reading of the impugned Act will demonstrate that it establishes a scheme as an irrevocable statutory trust to provide pension for its members upon their retirement or to their dependents upon death. It adds that Section 26(1) of the impugned Act provides for a deduction of twelve percent (12%)
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