KRA ordered to pay DCI officers for wrongful termination of contracts

Times Towers, the Kenya Revenue Authority (KRA) in Nairobi. [File, Standard]

The Kenya Revenue Authority (KRA) has been ordered to pay officers from the Directorate of Criminal Investigations ten-month salary arrears as compensation for the illegal termination of their contracts.

Employment and Labour Relations Court judge Byram Ongaya ruled that it was unlawful for KRA to terminate the contracts of the 41 officers who had been seconded there.

They were to help with tax fraud investigations before their three-year contracts ended.

“It was grossly unfair to terminate the contracts without notice, without due reason, and in the manner that the terminations were done without the officers’ knowledge and who at the material time continued to diligently work with full loyalty,” ruled Ongaya.

Amount to loss

The judge said that although the termination did not amount to loss of job since the seconded officers went back to their work stations at the National Police Service, they had a legitimate expectation to continue working for KRA with higher pay for the entire contract duration.

The court declared that KRA’s unilateral decision to summarily terminate the secondment of the DCI officers which resulted in a sudden reduction of their salaries and other work benefits was un-procedural, unlawful, and unconstitutional.

“KRA should thus pay each of the officers 10 months’ gross monthly salaries at the last monthly rate prior to the termination of the contracts by December 31, 2023, failing to which interest to be payable thereon at court rates from the date of this judgment till full payment,” ruled Justice Ongaya.

The officers, in their suit, claimed that KRA in liaison with NPS invited qualified individuals to apply for vacant positions in its Investigations and Enforcement Department.

They applied and were seconded to fill the positions after competitive recruitment.

Three-year contracts

They were handed three-year contracts with the option of a year's extension.

But before the lapse of their contractual period, KRA issued them with notices of termination of secondment on January 31, 2023.

They argued that termination of their secondment was unlawful, unfair, irregular, unconstitutional, un-procedural and in gross violation of their constitutional rights and fair labour practices.

As a result of the termination, the officers told the court that they had their salaries adversely reduced as they no longer enjoyed the benefits they received upon their secondment to KRA.

Secondment tenure 

Justice Ongaya agreed that the parties were bound by the contract and the officers were entitled to serve for the entirety of the initial three years or the extended two years of secondment tenure unless terminated on disciplinary or other grounds.

“The court finds that there was no disciplinary process that was initiated and continued against the officers as per the terms of the contract. Further, there were no other grounds disclosed in the letter of termination of the secondments to justify KRA’s decision,” he ruled.

He added that KRA did not show any provision of the Public Service Guidelines it invoked in terminating the secondment contracts and that their defence of using the guidelines to terminate the contracts was a mere afterthought since they were not part of the contract.