Former Kirinyaga deputy governor Peter Ndambiri.
Deputy governors are entitled to be paid a housing allowance where they are not provided with an official residence or a leased house by their respective county governments, the Employment and Labour Relations Court has ruled in a landmark verdict with far-reaching financial implications.
Justice Onesmus Makau upheld a magistrate court's decision awarding former Kirinyaga Deputy Governor Peter Ndambiri Sh5.7 million in housing benefits, declaring that the Salaries and Remuneration Commission (SRC) circulars on the matter were legally binding.
The judgment, which could see counties facing millions in payment claims, stems from a longstanding tussle between Mr Ndambiri and the Kirinyaga County government.
The case also sheds light on the challenges faced by deputy governors, particularly when they have political differences with their bosses.
Justice Makau said the circulars issued by the SRC in 2017 and 2019 requiring counties to provide Deputy Governors with a housing benefit were binding.
He emphasised that the deputy governors are entitled to housing benefits like any other state officer, referring to a previous decision of the Constitutional court that the denial of these benefits was discriminatory and unconstitutional.
The gist of the legal tussle was whether Mr Ndambiri was supposed to receive the housing benefit directly as the county government claimed that he did not provide evidence he lived in a rented residence during his tenure (2017-2022).
However, the court said failure by the county government to provide him with an official residence or a leased house as advised by the SRC entitled him to payment of Sh90,000 per month for his whole term of office.
Former Kirinyaga deputy governor Peter Ndambiri with Kirinyaga Governor Anne Waiguru.
Mr Ndambiri held the position from 2017 to 2022 under Governor Anne Waiguru.
“I find that circulars by the SRC on the housing benefits for state officers in counties and deputy governors, dated August 25, 2017 and May 20, 2019, were not mere suggestions or recommendations to the appellant, but they were legally binding on it,” said Justice Makau dismissing an appeal filed by the county government against a magistrate court ruling.
“The award of Sh5.7 million to the respondent (Ndambiri) by the trial court was supported by the evidence on record and it must stand.”
Other former deputy governors who pursued similar claims include Caroline Karugu (Nyeri) and Hillary Chongwony (Bungoma).
The SRC circular advised counties to provide official residences or a house leased by the county government for a rent not exceeding Sh185,000 in Nairobi, Mombasa and Kisumu and Sh90,000 in other counties.
The circular advised the counties to prioritise funds for the construction of the official residences.
Mr Ndambiri served his whole term without being provided with a housing benefit or a leased or official residence. Upon demand for the rent in lieu, the county administration declined payment, arguing that the gross salary already included the housing allowance.
He then filed suit in the magistrate’s court, arguing that housing allowance was not included in his Sh621,000 monthly salary.
The magistrate ruled in his favour, finding that the provision for housing was a statutory obligation and Mr Ndambiri was entitled to housing allowance for the entire five-year period. Using a monthly rate of Sh90,000 the court assessed the amount due as Sh5.7 million.
The county government challenged the verdict, arguing that the magistrate’s court erred because paying the housing allowance as directed would in effect go over and above the gazette notices for salaries of deputy governors and the legal salary payable to Mr Ndambiri.
It added that the trial magistrate erred in finding that the former deputy governor was entitled to a housing allowance over and above his consolidated salary of Sh621,250. “The respondent's salary was gross meaning that it was inclusive of housing allowance,” it argued.
The genesis of the dispute surrounding housing allowance for deputy governors was a constitutional petition filed in court in 2016 by the Council of Governors against the SRC.
In that case the High Court held that deputy governors were state officers and therefore entitled to housing allowance like other state officers.
The SRC issued a circular about housing allowance for deputy governors but never published any gazette notice as promised to enable the county governments act on the circular.
Admitting that indeed the SRC advised counties to provide official or leased houses for deputy governors, the county government stated that no money was supposed to be paid to the deputy governor directly.
The court heard that the county had set aside land and started the construction of the deputy governor’s official residence but there was no legal underpinning for the same. Finally, it was submitted that Mr Ndambiri opted to live in his own residence and did not provide any evidence before the court that he lived in a rented house.
However, Justice Makau said the advice by the SRC to both the national and county governments, on remuneration and benefits of state or public officers, is binding and must be complied with.
“It follows that the appellant’s allegation that the respondent’s salary of Sh621,250 included housing allowance was contrary to the said binding SRC’s advice and therefore null and void,” said Justice Makau.
He added that the county government had the option of allocating an official residence or leasing a house for monthly rent capped at Sh90,000.
“It failed to do so for 60 months. The failure to exercise the above two options entitled the respondent to compensation equal to the monthly rent of Sh90,000 advised by the SRC,” he ruled.
