'Introduction
1. The Petition dated 3rd June 2024 is supported by the Petitioner’s Chief Executive Officer, Florence Muturi’s affidavit in support of even date.
2. The Petition assails Executive Order No. 3 of 2024 that promulgated ‘Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations’ pursuant to Gazette Notice No. 6265 Vol. CXXVI- No. 70 dated 24th May, 2024. The Petitioner alleges that these guidelines contravene Article 234 of the Constitution and the provisions of the Statutory Instruments Act. Further, the Petition impugns the constitutionality of Section 5(3) and 27 of the State Corporations Act on which the Guidelines are founded.
3. On this premise the Petitioner seeks the following relief against the Respondents:
a) A declaration be made that the Executive Order No 3 of 2024 promulgating the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 contravene and violate Articles 1, 2, 10, 129 (1) and (2), 130 (1), 131 (1) (a) and (2) (a), 232 (1) and (2) and 234(2) of the Constitution and the decision and action thereto contained in Gazette Notice No. 6265 Vol. CXXVI- No. 70 dated 24th May, 2024 is invalid, null and void ab initio.
b) A declaration be issued that the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 are unconstitutional for violating the powers and functions of the Public Service Commission under Article 234(2) of the Constitution.
c) A declaration be issued that by issuing Executive Order No. 3 of 2024 dated 24th May, 2024 and promulgating the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024, the President and the Chief of Staff and Head of the Public Service have encroached on the constitutional, statutory and Regulatory mandate of the Public Service Commission as outlined in Article 234 of the Constitution, the PSC Act and the PSC Regulations.
d) A declaration be issued that by issuing Executive Order No. 3 of 2024 dated 24th May, 2024 and promulgating the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024, the President and the Chief of Staff and Head of the Public Service have infringed on the constitutional independence of the Public Service Commission contrary to Article 249 of the Constitution.
e) A declaration be issued that the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 are unconstitutional and unlawful for having been promulgated in contravention of the Statutory Instruments Act.
f) A declaration be issued that the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 are ultra vires the Powers and Functions of the Public Service Commission under Parts vii, viii, ix, x and xi of the Public Service Commission Act, 2017 and Parts iv, v, vi, vii and viii of the Public Service Commission Regulations, 2020 and are therefore illegal, null and void.
g) A declaration be issued that under the current constitutional dispensation, the President, the Chief of Staff and Head of the Public Service , the State Corporations Advisory Committee or any other person or authority do not have the authority to develop, promulgate and/or issue any guidelines on management of terms and conditions of service in the public service without the authority and/or approval of the Public Service Commission pursuant to Article 234(2) of the Constitution, the PSC Act and PSC Regulations.
h) A declaration be issued that Sections 5(3) and 27 of the State Corporations Act are unconstitutional for being in contravention of Article 234(2) of the Constitution.
i) A declaration be issued that State Corporations and Public Universities, being part of the public service, are subject to the constitutional and statutory mandate and control of the Public Service Commission as outlined in Article 234 of the Constitution, the PSC Act and the PSC Regulations.
j) A declaration be issued that the State Corporations Advisory Committee (SCAC) being a public entity in the public service is subject to the constitutional and statutory mandate and control of the Public Service Commission as outlined in Article 234 of the Constitution, the PSC Act and the PSC Regulations.
k) A declaration be issued that the mandate of the State Corporations Advisory Committee only extends to enforcement of governance issues within State Corporations and not the regulation of human resources within State Corporations and Public Universities.
l) A declaration be issued that the National Treasury lacks the legal competence and authority to exercise the powers and functions bestowed upon SRC by Article 230 of the Constitution and the SRC Act.
m) A declaration be issued that by keeping quite when their mandate is being encroached the PSC and SRC have abdicated their constitutional mandate and obligation.
n) An order of judicial review by way of certiorari be issued calling into this Court and quashing Executive Order No. 3 of 2024 dated 24th May, 2024 in so far as the same relates to the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024.
o) An order of judicial review by way of certiorari be issued calling into this Court and quashing the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024.
p) An order of prohibition be issued restraining the Respondents either by themselves, agents or officers/persons acting under their instructions from implementing the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024.
q) A permanent injunction be issued barring the Respondents either by themselves, agents or officers/persons acting under their instructions from encroaching on the constitutional and statutory mandate of the Public Service Commission.
r) A permanent injunction be issued barring the Respondents either by themselves, agents or officers/persons acting under their instructions from encroaching on the constitutional and statutory mandates of the Salaries and Remuneration Commission.
s) A permanent injunction be issued barring the President, the Chief of Staff and Head of the Public Service, the State Corporations Advisory Committee or any other person or authority from developing, promulgating and/or issuing any guidelines on management of terms and conditions of service in the public service without the authority and/or approval of the Public Service Commission pursuant to Article 234(2) of the Constitution, the PSC Act and PSC Regulations.
t) Any other relief and/or order(s) the Court deems appropriate, just and/or fit to grant pursuant to Article 23(3) of the Constitution.
u) The costs of this Petition be provided for.
Petitioner’s Case
4. On 24th May 2024 through Gazette Notice No.6265 Vol. CXXVI –No.70, the Guidelines on Management and Terms and Conditions of Service for Board Members and Staff of State Corporations were notified to the Public. These guidelines were expressed to have been formulated under Section 5(3) of the State Corporations Act.
5. The President of Kenya, H.E. Dr. William Samoei Ruto directed that the terms and Conditions of Service for Board Members and Staff of State Corporation be as set out in the impugned Guidelines and required all boards of state corporations and Cabinet Secretaries to ensure full implementation of the said Executive Order No. 3 of 2024.
6. As a consequence, the 2nd Respondent convened a forum for all 330 State Corporations, Universities and Boards on 4th June, 2024 with a view to launch the impugned guidelines.
7. The Petitioner asserts that Section 5(3) of State Corporations Act relied upon by the Respondents had by then been declared unconstitutional for being inconsistent with Article 234 of the Constitution as read with Article 260 of the Constitution, on regulation of the public service and definition of who a person in the public service is, in Manyara Muchui Anthony -vs-Communications Authority of Kenya & 3 Others, [2022]eKLR. On this basis, the Petitioner avers that the impugned Regulations are null and void.
8. Furthermore, the Petitioner contends that the impugned Guidelines being Statutory Instrument were made in breach of the requirements of the Statutory Instruments Act, 2013 as there was no public participation conducted and no Parliamentary approval was sought as required by the said Act.
9. Equally, the Petitioner avers that the impugned Guidelines are a direct affront on the constitutional independence and autonomy of constitutional Commissions, contrary to Article 249 of the Constitution. In this case, the Petitioner asserts that the impugned Guidelines contravene Articles 230 and 234 of the Constitution as they usurp the constitutional functions and powers of the 3rd and 4th Respondent and give them to the 7th Respondent and the National Treasury.
10. The Petitioner adds that the functions of the 7th Respondent under Section 27 of the State Corporations Act as outlined in the impugned Guidelines are in direct conflict with the constitutional and statutory mandate of the 3rd Respondent in view of Article 234(2) of the Constitution, the PSC Act and PSC Regulations as well as the cases of Manyara Muchui Anthony (supra) and Consumer Federation of Kenya (COFEK) -vs- National Social Security Fund Board of Trustees & 2 Others [2022]eKLR.
11. The Petitioner stresses that determination of terms and conditions of service for public officers is exclusively vested in the 3rd Respondent by dint of Article 234(2) (g) of the Constitution since State Corporations form part of Public service. Equally, the proposed establishment of State Corporations Coordination Units in Ministries under the impugned Guidelines are said to violate the 3rd Respondent’s constitutional mandate.
12. In light of the foregoing, the Petitioner argues that the impugned Guidelines are a direct usurpation by the Executive of the functions of the 3rd Respondent and establishment of a parallel public service which is an affront to the Constitution.
13. The Petitioner postulates that the consequence of the Executive Order and impugned Guidelines is that all state Corporations and public universities will be moved to the office of the President and their terms and conditions of service determined and reviewed contrary to the Articles 1, 2, 10, 19 (1) And (3), 21 (1), 27 (1), 41, 47, 73(2) (b), 129 (1) and (2), 130 (1),131 (2) and (e), 156(2), 230(4)(b), 232 (1), (2), 234(2) and 249 of the Constitution as read together with Section 3 of the Public Service Commission Act No 10 of 2017 and Regulation 3 (a) of The Public Service Commission Regulations, 2020. To this end, the Petitioner maintains that the impugned Guidelines should be declared unconstitutional.
1st, 2nd, 5th, 6th and 7th Respondents’ Case
14. In reaction to the Petitioner’s case, these Respondents’ filed their Grounds of Opposition dated 20th September 2024 on the basis that:
i. The powers of the 3rd Respondent under Article 234(2) of the Constitution are subject to the Constitution and the law. The State Corporations Act being lex specialis legislation grants mandate and function to various institutions and governance structures including the Office of the President and the 7th Respondent.
ii. Article 234(2)(g) of the Constitution confers upon the 3rd Respondent the power to review and make recommendations to the national government regarding conditions of service, code of conduct and qualifications of officers in the public service.
iii. The Public Service Commission Act, in particular, Section 53(2) unpacks Article 234(2)(g) of the Constitution by clarifying the import of the provision to the effect that the 3rd Respondent 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 (responsible for public service).
iv. Article 234(2)(g) of the Constitution as read with Section 53(2) of the Public Service Commission Act and Section 5(3) of the State Corporations Act are premised on the constitutional architecture that matters of policy promulgation are reposed on offices exercising ministerial responsibilities.
v. The Petitioner has not demonstrated that the 3rd Respondent undertook a review of the terms and conditions of service of board members and staff of state corporations, which the 1st, 5th and 7th Respondents failed to consider. The 1st, 5th and 7th Respondents is legally bound under Article 234(2)(g) of the Constitution to take into account any such general or specific reviews and recommendation with regard to terms and conditions of service of board members and staff of state corporations, as it reviews and set the terms and conditions of service.
vi. As detailed in the text of the impugned Guidelines, due process was followed in its development and approval, in light of the overriding governance need to cause the revision of the management, and terms and conditions of service for board members and staff of state corporations.
vii. The Petitioner has miscomprehended the obtaining ratio decidendi in Manyara Muchui Anthony –vs- Communications Authority of Kenya & 3 others [2022] eKLR in light of the binding decision of the Supreme Court in Republic v Karisa Chengo & 2 others [2017] eKLR.
viii. In view of (7) above, Section 5(3) of the State Corporations Act have full force of the law and therefore the impugned Guidelines issued pursuant to the Section were lawfully issued.
ix. The object and purpose of the impugned Guidelines is in sync with the provisions of Articles 10, 232 and 259 of the Constitution.
15. In addition, the 7th Respondent filed its Replying affidavit sworn on 7th October 2024 by its Secretary Simon Indimuli.
16. On a preliminary note, he argues that the Petition is anchored on the wrong interpretation of Article 234(2) (g) of the Constitution and the cited Court cases adding that the Employment and Labour Relations Court does not have jurisdiction to declare a provision or Statute, unconstitutional.
17. Giving a historical background, he depones that the 7th Respondent was established following the enactment of the State Corporations Act in November 1986 under Section 26(1). He states that the 7th Respondent’s functions are set out under Section 27 and additional functions provided for 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.
18. With reference to the impugned Regulations, he avers that these Guidelines had initially been 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.
19. He states that the process of reviewing these Guidelines commenced in 2017. He avers that this process underwent a wide consultative process which culminated in the establishment of an Inter-Agency Taskforce. The Taskforce submitted its recommendations to the President in May 2018. He states that the same was further reviewed by the 3rd Respondent, the 7th Respondent and also placed before the Cabinet for consideration.
20. In addition, he depones that public participation and consultations were conducted amongst different government agencies. He avers that vide a letter dated 28th September 2020, the 7th Respondent invited the Solicitor General to review the 2004 Guidelines and invited the latter for a consultative meeting. A similar communication was made to the Inspector –General (Corporations) on 8th October 2020. The recommendations were also shared by the 2nd Respondent to the 4th Respondent vide a letter dated 28th May 2021.
21. He depones that thereafter the 2nd Respondent vide a letter dated 26th October 2021, transmitted a Cabinet Memorandum on the revised Guidelines to the Cabinet Secretary and the National Treasury. In addition, vide a letter dated 9th December 2021, the 7th Respondent invited several State Corporations to a consultative meeting over the same.
22. He informs that vide a letter dated 17th June 2022, the 2nd Respondent forwarded to the 1st Respondent the revised Guidelines for signature to enable its placement before the Cabinet for consideration. The revised Guidelines were then forwarded to the Prime Cabinet Secretary on 30th January 2023.
23. He avers that, the Prime Cabinet Secretary sought further comments from all government ministries on the same. He claims that all the issued comments and views were all considered. Considering this, he argues that the impugned Guidelines have undergone rigorous public participation.
24. He depones that thereafter a Technical Committee was established vide a circular letter dated 24th May 2023 to generate draft harmonized Guidelines. Its Report was afterwards transmitted to the Office of the President on 2nd November 2023. Subsequently, the impugned Guidelines were approved by the Cabinet and issued by the President as Executive Order No. 3 of 2024. Bearing this in mind, he argues that the impugned Guidelines were enacted in accordance with the law.
25. He informs that the 3rd Respondent was involved in the process as part of the Technical Committee. He states that the 3rd Respondent postulated that the meetings of the Technical Committee be first suspended to allow the 1st 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 1st Respondent’s advisory was issued on 27th July 2023.Upon receipt of this advisory, it is stated that the 3rd Respondent raised a number of issues in a letter dated 7th August 2023.
26. He maintains that as per the advisory letter and the terms of Section 5(3) and 27(1) (c) of the State Corporations Act, all state corporations are required to be operate within the terms and conditions for staff as set out in these provisions and approved by the 7th Respondent.
27. He asserts that allowing the Petition as pleaded being a function not provided under the Constitution or Statute, will create confusion, anarchy and usurpation of the functions and powers of cabinet secretaries in consultation with the 7th Respondent. He adds that the Petitioner herein seeks to re-write the Constitution and the law. Particularly, he argues that the import of Article 234(2) (g) of the Constitution as read with Section 53(2) of the PSC Act is that policy making for government is the purview of the Executive and thus cannot be exercised on its behalf by an independent constitutional commission. As such, the orders sought are argued to be untenable. It was urged that the Petition lacks merit as the impugned Guidelines were properly approved as required by the Constitution.
3rd Respondent’s Case
28. The 3rd Respondent in reply filed its Replying Affidavit through its Chief Executive Officer, Paul Famba, sworn on 22nd October 2024.
29. On the onset, he states that the 3rd Respondent did not approve the impugned Guidelines and in fact raised objections against it during the draft stage. He notes that the 3rd Respondent’s concerns were ignored and not given consideration in the final Guidelines which are now being challenged. In addition, he notes that the 3rd Respondent advised on the unconstitutionality of Section 5(3) and 27 of the State Corporations Act to no avail.
30. He states that the 3rd Respondent became aware of the impugned Guidelines through Gazette Notice No.6265 dated 24th May 2024.
31. He depones that in reaction to the impugned Guidelines, the 3rd Respondent sent an advisory to the 2nd Respondent alerting that the same were in conflict with the Constitution, the PSC Act and its Regulations and also the decided court cases.
32. Equally, being statutory instruments, the same ought to have been subjected to public participation and required the National Assembly’s approval.
33. He depones that on 3rd June 2023, the 2nd Respondent convened a meeting which was attended by the 1st Respondent, the Chair and vice person and one commissioner and the then acting CEO of the 3rd Respondent, the Chairperson, secretary and two members of the 7th Respondent, the Deputy Presidents and Prime Cabinet Secretary’s Chief of Staff and senior officers from the represented State Organs.
34. He depones that at the meeting it was established that the 7th Respondent can only perform the human resource management functions contained in the impugned Guidelines if delegated to it by the 3rd Respondent.
35. Considering this, a committee was formed to consider the impugned Guidelines and to identify the functions the 3rd Respondent can delegate to the 7th Respondent. This was done with the view of amending the impugned Guidelines. Considering this the 3rd Respondent’s genuine expected that the launch of the impugned Guidelines set for 4th June 2024 would not take place.
36. However, contrary to what had been agreed in the said meeting, the impugned Guidelines were launched by the 2nd and 7th Respondent at a ceremony attended by all chairpersons of Boards of all State Corporations and Public Universities together with their CEOs’ and senior officers.
37. He depones that, the 2nd and 7th Respondent’s actions in proceeding to launch the impugned Guidelines, raised concerns about the role of the 3rd Respondent in management of human resource in State Corporations as the same was not addressed in the said Guidelines.
38. According to the 3rd Respondent therefore, it is not in public interest to allow the impugned Guidelines to be implemented, while there are grave constitutional issues that have been raised on their validity and also bearing in mind the financial implication.
39. The 3rd Respondent reiterated that the Court found Section 5(3) and 27 of the State Corporations Act to be in conflict with Article 234 of the Constitution and declared them unconstitutional yet the impugned Guidelines are formulated on the strength of the said provisions.
40. On whether State Corporations and Public Universities form part of the public service the 3rd Respondent averred that this position was clarified 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 the public service.
41. 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. This is in addition to the cases cited by the Petitioner among others. The 3rd Respondent thus stated that these authorities affirm the 3rd Respondent’s mandate over State Corporations.
42. As such, the 3rd Respondent has been enforcing its mandate over State Corporations and Public universities in various ways as detailed in the affidavit. In a nutshell, the 3rd Respondent appointed a Taskforce to review terms and conditions for chairpersons, chief executive officers, chancellors and vice chancellors of public universities, board members, management and unionizable staff of state corporations vide Gazette Notice No.3757 dated 24th April 2019. He notes that the Taskforce comprised of officials from the 3rd and 7th 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 Staff of State Corporations dated August 2019 which aligned with the dictates of the Constitution and reflected the 3rd Respondent’s constitutional mandate.
43. He depones that these Guidelines were not published to the 2nd Respondent and neither did the 3rd Respondent receive a response on the same.
44. The 3rd Respondent maintained that it did not delegate its mandate to the 7th Respondent. The 3rd Respondent discovered that the 7th Respondent had been without its authority, been unlawfully establishing and abolishing offices in State Corporations by approving organizational structures and staff establishments. Likewise, the 7th Respondent did not issue it quarterly reports as required.
45. In light of this, the 3rd Respondent revoked the delegation vide a letter dated 30th September 2019 yet despite the revocation, the 7th Respondent continued to exercise the 3rd Respondent’s mandate.
46. In view of the Manyara Muchui case (supra), he depones that the 3rd Respondent went ahead to make recommendations for amendments to the State Corporations Act and forwarded the same to the 1st Respondent vide a letter dated 25th April 2023. He informs that no reply was received concerning this letter. Instead, the 7th Respondent in a response dated 4th May 2023 declined to have the Act amended and refused to participate in any discussions on the same.
47. He points out that this displays the 7th Respondent’s plain disregard for the Constitution, the rule of law and contempt for the Court decisions. Additionally, he asserts that the 3rd Respondent has been clear and consistent on its constitutional and statutory mandate and has continued to clarify the same.
48. The 3rd Respondent depones that on 11th January 2023, the Prime Cabinet Secretary wrote a letter to the 3rd Respondent requiring it to revive the Multi-Agency Consultative Committee which had been set up to resolve the issue on oversight of the human resource function within State Corporations. He states that the 3rd Respondent in reply informed that the issue of oversight had been settled by the Court as belonging to it.
49. The 3rd Respondent averred that this answer did not elicit a reaction; instead, the Prime Cabinet Secretary in a letter dated 16th May 2023 forwarded a document titled Guidelines on management and Terms and Conditions on Service for Board Members and Staff of State Corporation. In this document, the functions of the 3rd Respondent had been conferred on the 7th Respondent. This was protested to by the 3rd Respondent in its letter dated 22nd May 2023. In light of this, the Prime Cabinet Secretary directed that those Guidelines be reviewed by participation of all relevant stakeholders.
50. In the process, the 3rd Respondent learnt of the 1st Respondent’s advisory letter dated 28th July 2023 to the Prime Cabinet Secretary which relied on Section 5(3) of the State Corporations Act which had already been declared unconstitutional. He avers that the advisory letter did not offer clarity with regards to the human resource instruments applicable in public service yet the same are contained in the PSC Act and PSC Regulations which are applicable to State Corporations. In particular, the advisory letter directed State Corporations to ensure that their human resource instruments are approved by the responsible cabinet secretary in consultation with the 7th Respondent yet there was no legal provision that granted them that power. He informs that this Advisory letter was stayed by this Court in Petition No. E303 of 2023, John Githongo and Katiba Institute vs State Corporations Advisory Committee & Attorney General, which is still pending determination.
51. He depones that the 3rd Respondent, considering this, communicated to the 1st Respondent vide a letter dated 7th August 2023 and concurrently issued a Circular dated 8th August 2023 containing Guidelines for Development and Review of Human Resource Management Instruments for State Corporations and Public Universities. He avers that its communication was counteracted by the 7th Respondent’s letter also dated 8th August 2023, informing all the Chairpersons of Boards of State Corporations to instead comply with the 1st Respondent’s advisory letter and ignore the 3rd Respondent’s communication. With a view to understand the issues, he avers that the Deputy President met the 3rd Respondent on 11th August 2023. In the end, the Deputy President informed that he would call a stakeholders meeting which he states has never been done.
52. Furthermore, 3rd Respondent avers that in response to its letter, the 1st Respondent in its letter dated 16th August 2023 maintained its position as communicated in its initial advisory letter. The 3rd Respondent maintained that the 1st Respondent’s position is legally flawed as outlined therein. It added that this was not the first time the 1st Respondent had issued an advisory contrary to the 3rd Respondent’s mandate. In fact, he contends that the Court in Manyara Muchui (supra) and COFEK (supra) found these advisories were contrary to the Constitution. The 3rd Respondent urged this Court to find that the 7th Respondent’s circulars were unlawful and unconstitutional.
53. In view of the foregoing, the 3rd Respondent asserts that the Constitution created independent commissions and offices to guard against abuse of power. The 3rd Respondent described the actions of the 1st, 2nd and 7th Respondent as laced with bad faith with the intention of subverting the 3rd Respondent’s constitutional mandate in disregard of numerous Court decisions.
54. The 3rd Respond
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1. The Petition dated 3rd June 2024 is supported by the Petitioner’s Chief Executive Officer, Florence Muturi’s affidavit in support of even date.
2. The Petition assails Executive Order No. 3 of 2024 that promulgated ‘Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations’ pursuant to Gazette Notice No. 6265 Vol. CXXVI- No. 70 dated 24th May, 2024. The Petitioner alleges that these guidelines contravene Article 234 of the Constitution and the provisions of the Statutory Instruments Act. Further, the Petition impugns the constitutionality of Section 5(3) and 27 of the State Corporations Act on which the Guidelines are founded.
3. On this premise the Petitioner seeks the following relief against the Respondents:
a) A declaration be made that the Executive Order No 3 of 2024 promulgating the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 contravene and violate Articles 1, 2, 10, 129 (1) and (2), 130 (1), 131 (1) (a) and (2) (a), 232 (1) and (2) and 234(2) of the Constitution and the decision and action thereto contained in Gazette Notice No. 6265 Vol. CXXVI- No. 70 dated 24th May, 2024 is invalid, null and void ab initio.
b) A declaration be issued that the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 are unconstitutional for violating the powers and functions of the Public Service Commission under Article 234(2) of the Constitution.
c) A declaration be issued that by issuing Executive Order No. 3 of 2024 dated 24th May, 2024 and promulgating the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024, the President and the Chief of Staff and Head of the Public Service have encroached on the constitutional, statutory and Regulatory mandate of the Public Service Commission as outlined in Article 234 of the Constitution, the PSC Act and the PSC Regulations.
d) A declaration be issued that by issuing Executive Order No. 3 of 2024 dated 24th May, 2024 and promulgating the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024, the President and the Chief of Staff and Head of the Public Service have infringed on the constitutional independence of the Public Service Commission contrary to Article 249 of the Constitution.
e) A declaration be issued that the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 are unconstitutional and unlawful for having been promulgated in contravention of the Statutory Instruments Act.
f) A declaration be issued that the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024 are ultra vires the Powers and Functions of the Public Service Commission under Parts vii, viii, ix, x and xi of the Public Service Commission Act, 2017 and Parts iv, v, vi, vii and viii of the Public Service Commission Regulations, 2020 and are therefore illegal, null and void.
g) A declaration be issued that under the current constitutional dispensation, the President, the Chief of Staff and Head of the Public Service , the State Corporations Advisory Committee or any other person or authority do not have the authority to develop, promulgate and/or issue any guidelines on management of terms and conditions of service in the public service without the authority and/or approval of the Public Service Commission pursuant to Article 234(2) of the Constitution, the PSC Act and PSC Regulations.
h) A declaration be issued that Sections 5(3) and 27 of the State Corporations Act are unconstitutional for being in contravention of Article 234(2) of the Constitution.
i) A declaration be issued that State Corporations and Public Universities, being part of the public service, are subject to the constitutional and statutory mandate and control of the Public Service Commission as outlined in Article 234 of the Constitution, the PSC Act and the PSC Regulations.
j) A declaration be issued that the State Corporations Advisory Committee (SCAC) being a public entity in the public service is subject to the constitutional and statutory mandate and control of the Public Service Commission as outlined in Article 234 of the Constitution, the PSC Act and the PSC Regulations.
k) A declaration be issued that the mandate of the State Corporations Advisory Committee only extends to enforcement of governance issues within State Corporations and not the regulation of human resources within State Corporations and Public Universities.
l) A declaration be issued that the National Treasury lacks the legal competence and authority to exercise the powers and functions bestowed upon SRC by Article 230 of the Constitution and the SRC Act.
m) A declaration be issued that by keeping quite when their mandate is being encroached the PSC and SRC have abdicated their constitutional mandate and obligation.
n) An order of judicial review by way of certiorari be issued calling into this Court and quashing Executive Order No. 3 of 2024 dated 24th May, 2024 in so far as the same relates to the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024.
o) An order of judicial review by way of certiorari be issued calling into this Court and quashing the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024.
p) An order of prohibition be issued restraining the Respondents either by themselves, agents or officers/persons acting under their instructions from implementing the Guidelines on management and Terms and Conditions of Service for Board Members and Staff of State Corporations, May 2024.
q) A permanent injunction be issued barring the Respondents either by themselves, agents or officers/persons acting under their instructions from encroaching on the constitutional and statutory mandate of the Public Service Commission.
r) A permanent injunction be issued barring the Respondents either by themselves, agents or officers/persons acting under their instructions from encroaching on the constitutional and statutory mandates of the Salaries and Remuneration Commission.
s) A permanent injunction be issued barring the President, the Chief of Staff and Head of the Public Service, the State Corporations Advisory Committee or any other person or authority from developing, promulgating and/or issuing any guidelines on management of terms and conditions of service in the public service without the authority and/or approval of the Public Service Commission pursuant to Article 234(2) of the Constitution, the PSC Act and PSC Regulations.
t) Any other relief and/or order(s) the Court deems appropriate, just and/or fit to grant pursuant to Article 23(3) of the Constitution.
u) The costs of this Petition be provided for.
Petitioner’s Case
4. On 24th May 2024 through Gazette Notice No.6265 Vol. CXXVI –No.70, the Guidelines on Management and Terms and Conditions of Service for Board Members and Staff of State Corporations were notified to the Public. These guidelines were expressed to have been formulated under Section 5(3) of the State Corporations Act.
5. The President of Kenya, H.E. Dr. William Samoei Ruto directed that the terms and Conditions of Service for Board Members and Staff of State Corporation be as set out in the impugned Guidelines and required all boards of state corporations and Cabinet Secretaries to ensure full implementation of the said Executive Order No. 3 of 2024.
6. As a consequence, the 2nd Respondent convened a forum for all 330 State Corporations, Universities and Boards on 4th June, 2024 with a view to launch the impugned guidelines.
7. The Petitioner asserts that Section 5(3) of State Corporations Act relied upon by the Respondents had by then been declared unconstitutional for being inconsistent with Article 234 of the Constitution as read with Article 260 of the Constitution, on regulation of the public service and definition of who a person in the public service is, in Manyara Muchui Anthony -vs-Communications Authority of Kenya & 3 Others, [2022]eKLR. On this basis, the Petitioner avers that the impugned Regulations are null and void.
8. Furthermore, the Petitioner contends that the impugned Guidelines being Statutory Instrument were made in breach of the requirements of the Statutory Instruments Act, 2013 as there was no public participation conducted and no Parliamentary approval was sought as required by the said Act.
9. Equally, the Petitioner avers that the impugned Guidelines are a direct affront on the constitutional independence and autonomy of constitutional Commissions, contrary to Article 249 of the Constitution. In this case, the Petitioner asserts that the impugned Guidelines contravene Articles 230 and 234 of the Constitution as they usurp the constitutional functions and powers of the 3rd and 4th Respondent and give them to the 7th Respondent and the National Treasury.
10. The Petitioner adds that the functions of the 7th Respondent under Section 27 of the State Corporations Act as outlined in the impugned Guidelines are in direct conflict with the constitutional and statutory mandate of the 3rd Respondent in view of Article 234(2) of the Constitution, the PSC Act and PSC Regulations as well as the cases of Manyara Muchui Anthony (supra) and Consumer Federation of Kenya (COFEK) -vs- National Social Security Fund Board of Trustees & 2 Others [2022]eKLR.
11. The Petitioner stresses that determination of terms and conditions of service for public officers is exclusively vested in the 3rd Respondent by dint of Article 234(2) (g) of the Constitution since State Corporations form part of Public service. Equally, the proposed establishment of State Corporations Coordination Units in Ministries under the impugned Guidelines are said to violate the 3rd Respondent’s constitutional mandate.
12. In light of the foregoing, the Petitioner argues that the impugned Guidelines are a direct usurpation by the Executive of the functions of the 3rd Respondent and establishment of a parallel public service which is an affront to the Constitution.
13. The Petitioner postulates that the consequence of the Executive Order and impugned Guidelines is that all state Corporations and public universities will be moved to the office of the President and their terms and conditions of service determined and reviewed contrary to the Articles 1, 2, 10, 19 (1) And (3), 21 (1), 27 (1), 41, 47, 73(2) (b), 129 (1) and (2), 130 (1),131 (2) and (e), 156(2), 230(4)(b), 232 (1), (2), 234(2) and 249 of the Constitution as read together with Section 3 of the Public Service Commission Act No 10 of 2017 and Regulation 3 (a) of The Public Service Commission Regulations, 2020. To this end, the Petitioner maintains that the impugned Guidelines should be declared unconstitutional.
1st, 2nd, 5th, 6th and 7th Respondents’ Case
14. In reaction to the Petitioner’s case, these Respondents’ filed their Grounds of Opposition dated 20th September 2024 on the basis that:
i. The powers of the 3rd Respondent under Article 234(2) of the Constitution are subject to the Constitution and the law. The State Corporations Act being lex specialis legislation grants mandate and function to various institutions and governance structures including the Office of the President and the 7th Respondent.
ii. Article 234(2)(g) of the Constitution confers upon the 3rd Respondent the power to review and make recommendations to the national government regarding conditions of service, code of conduct and qualifications of officers in the public service.
iii. The Public Service Commission Act, in particular, Section 53(2) unpacks Article 234(2)(g) of the Constitution by clarifying the import of the provision to the effect that the 3rd Respondent 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 (responsible for public service).
iv. Article 234(2)(g) of the Constitution as read with Section 53(2) of the Public Service Commission Act and Section 5(3) of the State Corporations Act are premised on the constitutional architecture that matters of policy promulgation are reposed on offices exercising ministerial responsibilities.
v. The Petitioner has not demonstrated that the 3rd Respondent undertook a review of the terms and conditions of service of board members and staff of state corporations, which the 1st, 5th and 7th Respondents failed to consider. The 1st, 5th and 7th Respondents is legally bound under Article 234(2)(g) of the Constitution to take into account any such general or specific reviews and recommendation with regard to terms and conditions of service of board members and staff of state corporations, as it reviews and set the terms and conditions of service.
vi. As detailed in the text of the impugned Guidelines, due process was followed in its development and approval, in light of the overriding governance need to cause the revision of the management, and terms and conditions of service for board members and staff of state corporations.
vii. The Petitioner has miscomprehended the obtaining ratio decidendi in Manyara Muchui Anthony –vs- Communications Authority of Kenya & 3 others [2022] eKLR in light of the binding decision of the Supreme Court in Republic v Karisa Chengo & 2 others [2017] eKLR.
viii. In view of (7) above, Section 5(3) of the State Corporations Act have full force of the law and therefore the impugned Guidelines issued pursuant to the Section were lawfully issued.
ix. The object and purpose of the impugned Guidelines is in sync with the provisions of Articles 10, 232 and 259 of the Constitution.
15. In addition, the 7th Respondent filed its Replying affidavit sworn on 7th October 2024 by its Secretary Simon Indimuli.
16. On a preliminary note, he argues that the Petition is anchored on the wrong interpretation of Article 234(2) (g) of the Constitution and the cited Court cases adding that the Employment and Labour Relations Court does not have jurisdiction to declare a provision or Statute, unconstitutional.
17. Giving a historical background, he depones that the 7th Respondent was established following the enactment of the State Corporations Act in November 1986 under Section 26(1). He states that the 7th Respondent’s functions are set out under Section 27 and additional functions provided for 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.
18. With reference to the impugned Regulations, he avers that these Guidelines had initially been 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.
19. He states that the process of reviewing these Guidelines commenced in 2017. He avers that this process underwent a wide consultative process which culminated in the establishment of an Inter-Agency Taskforce. The Taskforce submitted its recommendations to the President in May 2018. He states that the same was further reviewed by the 3rd Respondent, the 7th Respondent and also placed before the Cabinet for consideration.
20. In addition, he depones that public participation and consultations were conducted amongst different government agencies. He avers that vide a letter dated 28th September 2020, the 7th Respondent invited the Solicitor General to review the 2004 Guidelines and invited the latter for a consultative meeting. A similar communication was made to the Inspector –General (Corporations) on 8th October 2020. The recommendations were also shared by the 2nd Respondent to the 4th Respondent vide a letter dated 28th May 2021.
21. He depones that thereafter the 2nd Respondent vide a letter dated 26th October 2021, transmitted a Cabinet Memorandum on the revised Guidelines to the Cabinet Secretary and the National Treasury. In addition, vide a letter dated 9th December 2021, the 7th Respondent invited several State Corporations to a consultative meeting over the same.
22. He informs that vide a letter dated 17th June 2022, the 2nd Respondent forwarded to the 1st Respondent the revised Guidelines for signature to enable its placement before the Cabinet for consideration. The revised Guidelines were then forwarded to the Prime Cabinet Secretary on 30th January 2023.
23. He avers that, the Prime Cabinet Secretary sought further comments from all government ministries on the same. He claims that all the issued comments and views were all considered. Considering this, he argues that the impugned Guidelines have undergone rigorous public participation.
24. He depones that thereafter a Technical Committee was established vide a circular letter dated 24th May 2023 to generate draft harmonized Guidelines. Its Report was afterwards transmitted to the Office of the President on 2nd November 2023. Subsequently, the impugned Guidelines were approved by the Cabinet and issued by the President as Executive Order No. 3 of 2024. Bearing this in mind, he argues that the impugned Guidelines were enacted in accordance with the law.
25. He informs that the 3rd Respondent was involved in the process as part of the Technical Committee. He states that the 3rd Respondent postulated that the meetings of the Technical Committee be first suspended to allow the 1st 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 1st Respondent’s advisory was issued on 27th July 2023.Upon receipt of this advisory, it is stated that the 3rd Respondent raised a number of issues in a letter dated 7th August 2023.
26. He maintains that as per the advisory letter and the terms of Section 5(3) and 27(1) (c) of the State Corporations Act, all state corporations are required to be operate within the terms and conditions for staff as set out in these provisions and approved by the 7th Respondent.
27. He asserts that allowing the Petition as pleaded being a function not provided under the Constitution or Statute, will create confusion, anarchy and usurpation of the functions and powers of cabinet secretaries in consultation with the 7th Respondent. He adds that the Petitioner herein seeks to re-write the Constitution and the law. Particularly, he argues that the import of Article 234(2) (g) of the Constitution as read with Section 53(2) of the PSC Act is that policy making for government is the purview of the Executive and thus cannot be exercised on its behalf by an independent constitutional commission. As such, the orders sought are argued to be untenable. It was urged that the Petition lacks merit as the impugned Guidelines were properly approved as required by the Constitution.
3rd Respondent’s Case
28. The 3rd Respondent in reply filed its Replying Affidavit through its Chief Executive Officer, Paul Famba, sworn on 22nd October 2024.
29. On the onset, he states that the 3rd Respondent did not approve the impugned Guidelines and in fact raised objections against it during the draft stage. He notes that the 3rd Respondent’s concerns were ignored and not given consideration in the final Guidelines which are now being challenged. In addition, he notes that the 3rd Respondent advised on the unconstitutionality of Section 5(3) and 27 of the State Corporations Act to no avail.
30. He states that the 3rd Respondent became aware of the impugned Guidelines through Gazette Notice No.6265 dated 24th May 2024.
31. He depones that in reaction to the impugned Guidelines, the 3rd Respondent sent an advisory to the 2nd Respondent alerting that the same were in conflict with the Constitution, the PSC Act and its Regulations and also the decided court cases.
32. Equally, being statutory instruments, the same ought to have been subjected to public participation and required the National Assembly’s approval.
33. He depones that on 3rd June 2023, the 2nd Respondent convened a meeting which was attended by the 1st Respondent, the Chair and vice person and one commissioner and the then acting CEO of the 3rd Respondent, the Chairperson, secretary and two members of the 7th Respondent, the Deputy Presidents and Prime Cabinet Secretary’s Chief of Staff and senior officers from the represented State Organs.
34. He depones that at the meeting it was established that the 7th Respondent can only perform the human resource management functions contained in the impugned Guidelines if delegated to it by the 3rd Respondent.
35. Considering this, a committee was formed to consider the impugned Guidelines and to identify the functions the 3rd Respondent can delegate to the 7th Respondent. This was done with the view of amending the impugned Guidelines. Considering this the 3rd Respondent’s genuine expected that the launch of the impugned Guidelines set for 4th June 2024 would not take place.
36. However, contrary to what had been agreed in the said meeting, the impugned Guidelines were launched by the 2nd and 7th Respondent at a ceremony attended by all chairpersons of Boards of all State Corporations and Public Universities together with their CEOs’ and senior officers.
37. He depones that, the 2nd and 7th Respondent’s actions in proceeding to launch the impugned Guidelines, raised concerns about the role of the 3rd Respondent in management of human resource in State Corporations as the same was not addressed in the said Guidelines.
38. According to the 3rd Respondent therefore, it is not in public interest to allow the impugned Guidelines to be implemented, while there are grave constitutional issues that have been raised on their validity and also bearing in mind the financial implication.
39. The 3rd Respondent reiterated that the Court found Section 5(3) and 27 of the State Corporations Act to be in conflict with Article 234 of the Constitution and declared them unconstitutional yet the impugned Guidelines are formulated on the strength of the said provisions.
40. On whether State Corporations and Public Universities form part of the public service the 3rd Respondent averred that this position was clarified 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 the public service.
41. 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. This is in addition to the cases cited by the Petitioner among others. The 3rd Respondent thus stated that these authorities affirm the 3rd Respondent’s mandate over State Corporations.
42. As such, the 3rd Respondent has been enforcing its mandate over State Corporations and Public universities in various ways as detailed in the affidavit. In a nutshell, the 3rd Respondent appointed a Taskforce to review terms and conditions for chairpersons, chief executive officers, chancellors and vice chancellors of public universities, board members, management and unionizable staff of state corporations vide Gazette Notice No.3757 dated 24th April 2019. He notes that the Taskforce comprised of officials from the 3rd and 7th 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 Staff of State Corporations dated August 2019 which aligned with the dictates of the Constitution and reflected the 3rd Respondent’s constitutional mandate.
43. He depones that these Guidelines were not published to the 2nd Respondent and neither did the 3rd Respondent receive a response on the same.
44. The 3rd Respondent maintained that it did not delegate its mandate to the 7th Respondent. The 3rd Respondent discovered that the 7th Respondent had been without its authority, been unlawfully establishing and abolishing offices in State Corporations by approving organizational structures and staff establishments. Likewise, the 7th Respondent did not issue it quarterly reports as required.
45. In light of this, the 3rd Respondent revoked the delegation vide a letter dated 30th September 2019 yet despite the revocation, the 7th Respondent continued to exercise the 3rd Respondent’s mandate.
46. In view of the Manyara Muchui case (supra), he depones that the 3rd Respondent went ahead to make recommendations for amendments to the State Corporations Act and forwarded the same to the 1st Respondent vide a letter dated 25th April 2023. He informs that no reply was received concerning this letter. Instead, the 7th Respondent in a response dated 4th May 2023 declined to have the Act amended and refused to participate in any discussions on the same.
47. He points out that this displays the 7th Respondent’s plain disregard for the Constitution, the rule of law and contempt for the Court decisions. Additionally, he asserts that the 3rd Respondent has been clear and consistent on its constitutional and statutory mandate and has continued to clarify the same.
48. The 3rd Respondent depones that on 11th January 2023, the Prime Cabinet Secretary wrote a letter to the 3rd Respondent requiring it to revive the Multi-Agency Consultative Committee which had been set up to resolve the issue on oversight of the human resource function within State Corporations. He states that the 3rd Respondent in reply informed that the issue of oversight had been settled by the Court as belonging to it.
49. The 3rd Respondent averred that this answer did not elicit a reaction; instead, the Prime Cabinet Secretary in a letter dated 16th May 2023 forwarded a document titled Guidelines on management and Terms and Conditions on Service for Board Members and Staff of State Corporation. In this document, the functions of the 3rd Respondent had been conferred on the 7th Respondent. This was protested to by the 3rd Respondent in its letter dated 22nd May 2023. In light of this, the Prime Cabinet Secretary directed that those Guidelines be reviewed by participation of all relevant stakeholders.
50. In the process, the 3rd Respondent learnt of the 1st Respondent’s advisory letter dated 28th July 2023 to the Prime Cabinet Secretary which relied on Section 5(3) of the State Corporations Act which had already been declared unconstitutional. He avers that the advisory letter did not offer clarity with regards to the human resource instruments applicable in public service yet the same are contained in the PSC Act and PSC Regulations which are applicable to State Corporations. In particular, the advisory letter directed State Corporations to ensure that their human resource instruments are approved by the responsible cabinet secretary in consultation with the 7th Respondent yet there was no legal provision that granted them that power. He informs that this Advisory letter was stayed by this Court in Petition No. E303 of 2023, John Githongo and Katiba Institute vs State Corporations Advisory Committee & Attorney General, which is still pending determination.
51. He depones that the 3rd Respondent, considering this, communicated to the 1st Respondent vide a letter dated 7th August 2023 and concurrently issued a Circular dated 8th August 2023 containing Guidelines for Development and Review of Human Resource Management Instruments for State Corporations and Public Universities. He avers that its communication was counteracted by the 7th Respondent’s letter also dated 8th August 2023, informing all the Chairpersons of Boards of State Corporations to instead comply with the 1st Respondent’s advisory letter and ignore the 3rd Respondent’s communication. With a view to understand the issues, he avers that the Deputy President met the 3rd Respondent on 11th August 2023. In the end, the Deputy President informed that he would call a stakeholders meeting which he states has never been done.
52. Furthermore, 3rd Respondent avers that in response to its letter, the 1st Respondent in its letter dated 16th August 2023 maintained its position as communicated in its initial advisory letter. The 3rd Respondent maintained that the 1st Respondent’s position is legally flawed as outlined therein. It added that this was not the first time the 1st Respondent had issued an advisory contrary to the 3rd Respondent’s mandate. In fact, he contends that the Court in Manyara Muchui (supra) and COFEK (supra) found these advisories were contrary to the Constitution. The 3rd Respondent urged this Court to find that the 7th Respondent’s circulars were unlawful and unconstitutional.
53. In view of the foregoing, the 3rd Respondent asserts that the Constitution created independent commissions and offices to guard against abuse of power. The 3rd Respondent described the actions of the 1st, 2nd and 7th Respondent as laced with bad faith with the intention of subverting the 3rd Respondent’s constitutional mandate in disregard of numerous Court decisions.
54. The 3rd Respond
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