Ethics and Anti-Corruption Commission & 2 others v Mwithia & another (Civil Appeal 41 of 2019) [2024] KECA 1956 (KLR) (20 December 2024) (Judgment)
Neutral citation:
[2024] KECA 1956 (KLR)
Republic of Kenya
Civil Appeal 41 of 2019
SG Kairu, F Tuiyott & GW Ngenye-Macharia, JJA
December 20, 2024
Between
Ethics and Anti-Corruption Commission
1st Appellant
Halakhe Waqo
2nd Appellant
Michael Mubea
3rd Appellant
and
Henry Murithi Mwithia
1st Respondent
The Attorney General
2nd Respondent
(Being an appeal from the judgment and decree of the Employment and Labour Relations Court of Kenya at Nairobi (Abuodha, J) delivered on 21st September 2021 in ELRC No. 30 of 2016)
Judgment
1.In a document entitled “Internal Vetting Policy, Procedures and Guidelines” published in February 2014, The Ethics and Anti-Corruption Commission (EACC) explained that, in compliance with the Constitution and the law, it would conduct a fair, objective and transparent vetting for all serving staff of its predecessor, The Kenya Anti-Corruption Commission (KACC) to determine suitability for employment at EACC. This appeal arises from the vetting of Henry Murithi Mwithia (the 1st respondent).
2.In a prolix petition set out in a whopping 25-page pleading, Mwithia explained that he was employed by KACC on 7th February 2005 as a senior forensic investigator until his employment was terminated on 28th March 2013 by EACC. He complained that the termination was high handed, illegal, arbitrary and amounted to unfair and unlawful dismissal for many reasons enumerated in the petition. In the end and in a judgment delivered on 21st September 2018, (J.N. Abuodha, J.) upheld Mwithia’s complaint on the basis that as EACC had only two members, its officers had no constitutional and legal capacity to act as it did. Second, EACC did not inform the petitioner of the reasons for termination of his services.
3.Successful on liability, Mwithia was awarded a sum of Kshs.4,716,000 being 12 months’ salary as compensation for unfair termination of service. The sum to be subjected to taxes and statutory deductions but with interest at court rates from the date of judgment until payment in full. He also got costs on the suit.
4.The judgment displeased the three appellants, EACC, Halakhe Waqo and Michael Mubea, the latter two being the then Secretary/Chief Executive Officer and Deputy Secretary/Chief Executive Officer respectively to EACC. The appellants challenge the decision on both liability and quantum on grounds which are conveniently reduced to three; that the learned judge erred in law and fact by:i.Failing to hold that Mwithia’s contract of employment was terminated in accordance with the terms of the contract of employment.ii.Failing to hold that the vetting that was carried out by the appellant was done in accordance with the law and more particularly the provisions of section 34(3) and (4) of EACC Act, 2011.iii.Awarding him 12 months’ salary as compensation, a remedy that was not available to him in the contract of employment.
5.Submitting in line with those grounds Ms. Linyolo learned counsel appearing for EACC, who did not highlight the written submissions filed on 11th November 2021, argued that under the terms of the letter of contract, the contract could be terminated by either party giving three (3) months’ notice or equivalent salary in lieu of notice. It is contended that the 1st respondent’s contract was terminated pursuant to the contract and it is envisaged in section 35 of the Employment Act that a contract can be terminated by either party giving notice. Reference was made to the decisions of this Court; Five Forty Aviation Limited v Erwan Lanoe [2019] eKLR and Krystalline Salt Limited v Kwekwe Mwakele & 67 Others [2017] eKLR.
6.Regarding whether the vetting process was a nullity, the appellants argue that EACC was duly constituted, that at the time of making the decision, three commissioners had been appointed and two had assumed office and the requisite quorum to transact business of the commission generally and specifically in respect to the vetting was achieved. Second, EACC in law is constituted as a body corporate with perpetual succession.
7.The Court is asked to bear in mind that section 15 of the Ethics and Anti-Corruption Act as read with the second schedule to the Act places a quorum for conducting business at two thirds of all members of the Commission.
8.As an alternative, and without prejudice to those arguments, it is submitted by EACC that this Court should find guidance in the decision of the Supreme Court in Mable Muruli v Wycliffe Ambetsa Oparanya & 3 Others [2016] eKLR in which the apex court held:“56.From the foregoing details regarding IEBC’s operations, it is clear to us that the appellant’s perception of its identity is inappositely limited. We take judicial notice that it would be impractical to expect the Commissioners qua “Commissioners”, to conduct all the functions entrusted to the Commission under article 88 (4) of the Constitution. The secretary, hence, can hardly do without employees entrusted with specified duties. Had it been the case that all such tasks devolved only to “Commissioners”, the consequence would be that all actions routinely taken by the IEBC staff, such as continuous registration of voters, regular revision of voters’ roll, and registration of candidates, would be a nullity in law. There is need to avoid such construction of the Constitution as would be contrary to the public interest . The requisite approach in interpreting article 88 (1) of the Constitution, is one that vindicates the constitutional purposes and objectives, and that fosters good governance, in accordance with the terms of article 259. Good governance in this instance entails ensuring that the constitutional functions of the Commission do not come to a standstill, as is destined to happen if the discharge of such functions were left entirely to the nine Commissioners.
57.In short, as we perceive it, the IEBC comprises the Commissioners, as well as its employees who have been duly authorised. Consequently, and in accordance with the Joho precedent, the Returning Officer, an employee of the IEBC, properly acts on its behalf.”
9.Turning to quantum, EACC asserts that an award of the maximum of 12 months’ pay must be based on sound judicial principles and a trial court must justify and explain why a claimant would be entitled to the maximum award. It was further contended that the exercise of discretion in the award of damages must not be capricious and whimsical - ( Kiambaa Dairy Farmers Co-operative Society Limited v Rhoda Njeri & 3 Others [2018] eKLR).
10.The learned trial judge is faulted for considering the lapse of time between when the 1st respondent was dismissed in awarding the 12 months’ salary as compensation without taking into account that Mwithia was paid promptly in accordance with the provisions of the contract of employment. Further, the trial court did not take into account prompt payment of the following dues:a.Kshs. 945,000.00 – Three (3) months salary in lieu of notice.b.Kshs. 174,375 as gratuity payablec.Kshs. 52,500 – leave allowance.We are further asked to find that the quantum was excessive as the claimant voluntarily waived his right of appeal.
11.The Court is urged to take cue from its own decision in Ethics and Anti-Corruption Commission v Nicholas Mwenda Mtwaruchiu & 8 others [2018] eKLR, where, in similar circumstances; the Court held that the employees were only entitled to payment equivalent to the notice period provided in the contract.
12.In response, counsel for the 1st respondent argues that adoption of correct procedure and fairness cannot be overlooked by simply pointing to a termination clause especially where the appellant is equally relying on an impugned vetting process to support the termination. This, it is said, is bolstered by section 45(2) of the Employment Act. Connected, it is contended that the uncertainty posited by EACC in switching from the proposed reason being the termination clause to vetting, in which process, the claimant never met his accusers nor knew their identity and to suggest that reasons for termination would be supplied at the point of the intended appeal was a failure of both procedure and substance.
13.Asserting that because of the long period of employment, a legitimate expectation had been created in favour of the employee, entitling him to complain of unfair termination even where there existed a right of termination on the basis of notice. The decision of this Court in Keen Kleeners Limited v Kenya Plantation and Agricultural workers’ Union (Civil Appeal 101 of 2019) [2021] KECA 352 (KLR) (17 December 2021) (Judgment) was cited in support of the argument;
14.Turning to the validity of the acts of EACC, the claimant states that at trial, EACC asserted that its acts were valid even where commissioners are not appointed into office or are absent contrasted with their current position that there was a quorum by virtue of three commissioners assuming office. EACC is accused of introducing a new fact that was not considered at trial, something not permitted.
15.Reacting to the decision of the Supreme Court in Mable Muruli (supra) it is argued that current jurisprudence is in favour of quorum that includes at least half of the commissioners in a commission.
16.Lastly, on quantum, it is contended for the claimant that no legal reasons have been proffered to warrant an interference with the court’s decision to award 12 months’ pay. Further, that courts are expected to follow the law and make awards in line with statute despite circumstances where contracts did not state the awards, and to suggest otherwise, would be to imply that contracts are superior to statutes and common law. It is submitted, further, that prompt payment of dues at the point of termination did not remedy the unfairness and numerous infractions committed.
17.This is a first appeal which in essence is a retrial. We shall re- evaluate the evidence before the trial court with a view to drawing our own conclusions. On this occasion we are at par with the trial court in regard to evaluating the evidence as the hearing before the trial court proceeded on the basis of the filed affidavits and the trial court did not have the advantage of observing the demeanour of the witnesses. A second observation is that most of the facts surrounding this matter are undisputed and are common ground.
18.The issues that arise for our determination substantially follow the grounds of appeal. They are:i.whether the appellant was properly constituted when the vetting process was undertaken;ii.whether the vetting process was procedurally unfair;iii.whether the damages awarded at trial were excessive.
19.Before the Employment and Labour Relations Court, Mwithia asserted that Article 250(1) of the Constitution required commissions such as EACC to consist of at least three but not more than five members including a chairperson. He further asserted that at the time of vetting and termination of his employment, the commission had only two (2) members namely Irene Keino and Prof. Jane Onsongo and, therefore, not properly constituted as per the constitutional requirement. The membership of the commission at the relevant time was not contested by EACC and it has to be accepted that as a matter of fact, EACC had only two members at the material time. We therefore agree with counsel for Mwithia that the submission by counsel for EACC that Matemu Mumo had been duly appointed but had not assumed office was an impermissible attempt to introduce new evidence at the appeal stage and we ignore that information.
20.Although EACC is not one of the independent commissions named in Chapter 15 of the Constitution, it is clothed with the status and powers of a commission under that Chapter by Article 79 and to that extent, its composition must be in consonance with Article 250(1). Article 79 reads:
21.Fortunately for us, the matter raised here has been previously resolved by this Court when it was confronted with the same circumstances and arguments as those made here. For its importance in resolving this first issue we quote at length the decision of this Court (Nambuye, Makhandia & Otieno-Odek, JJ.A) in Ethics and Anti-Corruption Commission v Nicholas Mwenda Mtwaruchiu & 8 others [2018] eKLR:
22.We are in agreement with the reasoning in this decision. We add, if we should, that in Clause 3.1 of the ‘Internal Vetting Policy, Procedures and Guidelines’ developed by EACC, it is expressly stated that the Commission shall constitute a vetting panel and secretariat. Under Clause 3.1.1 the panel would comprise of the chairperson, two members of the Commission, the CEO, a Deputy Secretary and 2 other co-opted members. While the quorum of the panel would be at least five members, the panel could not be lawfully constituted, in the first place, in the absence of a properly constituted Commission. In addition, the policy, procedures and guidelines for the vetting process could not be developed by persons other than the commissioners sitting in quorate meeting. In this regard, one of the functions of the commissioners is to assist the Commission in policy formulation - (section 11(6)(a) of the EACC Act).
23.Indubitably, we affirm the trial courts finding that:
24.Our holding is dispositive of the issue of liability.
25.Turning to the damages awarded, it is argued for EACC that under Section 49(1) of the Employment Act, an employee is entitled to the wages the employee would have earned had the employee been given the period of notice to which he was entitled under the Act or his contract of employment. We do not hear Mwithia deny the existence of the contract and in fact, it was the basis of his claim before the ELRC. His advocate however, defends the award of the trial court arguing that courtawards need not be limited to provision of a contract and courts are to follow the law.
26.The vetting of Mwithia, as of other employees of KACC, was envisaged under the transitional provisions of section 34 of EACC Act. The provisions read;“34.Transfer of staff of the Kenya Anti-Corruption Commission1.Subject to subsection (4), a person who immediately before the commencement of this Act was serving on contract as a member of staff of the Kenya Anti-Corruption Commission, other than the Director and Deputy Directors, shall, at the commencement of this Act, be deemed to be an employee of the Commission for the unexpired period, if any, of the term.2.Every person who immediately before the commencement of this Act was an employee of the Government attached to the Kenya Anti- Corruption Commission shall, upon the commencement of this Act, be deemed to be an employee of the Commission for the unexpired period, if any, of the term of the contract.3.Notwithstanding subsections (1) and (2), and before appointing or employing any member of staff of the Kenya Anti-Corruption Commission who wishes to work for the Commission, the Commission shall—a.require such a person to make an application for employment or appointment to the Commission; andb.using the criteria determined by the Commission, vet such a person to ensure that he or she is fit and proper to serve in the position applied for as a member of staff of a Commission.4.An applicant who fails to meet the vetting criteria under subsection (3) shall not be employed or appointed by the Commission and the services of such applicant with the Commission shall be terminated in accordance with the terms of the contract of employment.”
27.Had the vetting found Mwithia to be fit and proper to serve, then by virtue of subsection 1, he would be deemed as an employee of the EACC for the unexpired period of the contract of employment. If, on the other hand, he failed a vetting conducted through a lawful and procedurally fair process, then, by dint of subsection 4 of section 34, his services would be terminated in accord ance with the terms of the contract of employment between him and KACC.
28.The question that requires our answer, as was sought of the trial court, is what would be the appropriate damages payable to Mwithia, his contract of service having been terminated through a botched and unlawful vetting process. Section 50 of the Employment Act commands that Courts shall be guided by the provisions of section 49 in determining complaints or suits involving wrongful dismissal or unfair termination of employment. As both sides are in agreement that the appropriate remedy was an award of damages, subsection 1 of section 49 is the relevant law and reads:
29.In terminating Mwithia’s employment on 28th March 2013, the EACC invoked the following termination clause in the contract entered between him and KACC on 23rd December, 2004;
30.By dint of section 34(4) of the EACC Act this clause would have governed the termination of Mwithia’s employment had he failed the vetting process. Had he succeeded, then he would be retained by EACC for the unexpired period under the contract with KACC. Yet, because, within the contract it was contemplated that the unexpired term could be brought to an end by invoking the termination clause, section 34(2) did not bar EACC from calling in aid the provisions of that clause even after deeming him as its employee. So whichever way one looks at it this exit clause was in play. With this in mind we turn to determine the crux of the matter regarding quantum of damages.
31.Caselaw has been consistent that where there is an exit clause, the damages ought to be equivalent to wages that would have been paid during the notice period unless there is justifiable reason, to be stated and explained, for awarding more. See for example this Court’s decision in Kenfreight (E.A.) Limited v Benson K. Nguti [2016] eKLR where it was held:
32.As an award of damages is discretionary and can only be disturbed by an appellate court in circumscribed circumstances (Butt v Khan [1978] eKLR) we are called upon to examine the justification, if any, that was given by the trial court for awarding more than the notice period. The explanation is found in the following passage;
33.We return the following view. The rationale based on the lapse of time between the date of the judgment and the time of termination of the contract flies in the face of the evidence of record which shows that Mwithia was promptly paid his dues in April 2013 which was in the same month as his letter of 3rd April 2013 accepting the termination and just a month after the termination itself. Secondly, while it is true that the vetting process was carried out by a body without authority and the process itself could have been flawed, there is no iota of evidence that the appellants acted in bad faith, maliciously, callously or oppressively or that their conduct was egregious. And while unlawful termination of employment is often a grave matter, an award of damages that leaves the grieving employee in a better monetary position than he would have been had the employment been lawfully brought to an end must be well anchored, logically and clearly explained. So, in this case the award of pay for 12 months’ salary and not the contractual period of 3 months salary. On our short analysis, the trial court manifestly misapprehended the evidence and considerations available to it when it exercised its discretion in the award of damages equivalent to 12 months’ pay and the award is therefore susceptible to interference and setting aside by us. In this, we are not alone as this Court in Ethics and Anti- Corruption Commission v Nicholas Mwenda Mtwaruchiu & 8 others (supra) in not dissimilar circumstances stated:
34.Just as the Court in that matter, Mwithia having been paid three months’ salary in lieu of notice, gratuity and leave allowance, we come to the conclusion that an award equivalent to one month’s salary adequately compensates him for the infraction suffered in the hands of an ill constituted body.
35.The upshot is that we dismiss the appeal on the question of liability but allow it on the limb of quantum with the result that the award of damages by the trial court is hereby set aside and in its place make an award of one months’ salary which shall be subject to statutory deductions. As there has been both success and failure on each side, parties shall bear their own costs of the appeal.
DATED AND DELIVERED AT NAIROBI THIS 20TH DAY OF DECEMBER 2024.S. GATEMBU KAIRU, FCIArb...................................... JUDGE OF APPEALF. TUIYOTT..................................... JUDGE OF APPEALF. W. NGENYE-MACHARIA..................................... JUDGE OF APPEALI certify that this is a true copy of the original.Signed DEPUTY REGISTRAR.