Civil servants in some 44 state corporations and semi-autonomous government agencies (Sagas) won Sh5.2 billion against the State, as 29 cases instituted against public institutions were concluded in the year that ended June 2023.
The awards to an undisclosed number of workers in the entities piled up a net burden for the government as a result of judgements delivered against its institutions during the year to Sh8.2 billion, a report by the Public Service Commission (PSC) shows.
The PSC’s report on the state of compliance with values and principles in the financial year 2022/23 shows that of the 102 judgements that courts delivered against state corporations and Sagas, awarding parties that sued them Sh13.9 billion, 37.4 percent of the awards (Sh5.2 billion) were in favour of individual civil servants.
“It was established that awards totalling Sh18.5 billion were made against public organisations and awards totalling Sh10.3 billion were made in favour of public organisations. The awards against individual officers were Sh170 million while awards in favour of officers were Sh5.2 billion,” PSC reported.
During the year ending June 2023, courts delivered a total of 1,341 judgements on civil proceedings against public organisations, out of which 302 judgements had monetary implications.
Of the 302 judgements that had an implication of Sh18.47 billion on 71 public organisations, 29 were related to cases filed by individual civil servants who won Sh5.2 billion against 44 state corporations and Sagas. In some 11 judgements, State corporations and Sagas were awarded Sh170 million against individual civil servants, the report noted.
The PSC reported that overall, the public service lost Sh8.2 billion to judgements delivered against public institutions in the year ending June 2023.
During the FY2022/23 courts delivered 181 judgements against public institutions, awarding parties that sued them a collective Sh18.47 billion. 74 judgements with a monetary value of Sh10.26 billion were delivered in favour of public institutions during the year.
This left 73 institutions that were the subject of litigation with the Sh8.2 billion dent, which added to the Sh9.9 billion net loss based on judgements delivered against public institutions during the previous year, the PSC report shows.
While the number of judgements with monetary implications for the government reduced by 32 percent from 442 in 2021/22, the financial burden of the judgements rose from Sh12.6 billion to Sh18.47 billion in 2022/23, the report notes. Meaning that in 2021/22 and 2022/23, the public service lost a cumulative Sh18 billion as the net value of judgements delivered in the two years, touching public institutions.
Most of the litigation cases against government institutions are on account of failure to follow the law while making administrative decisions, breaching of contracts and failure to utilize alternative dispute resolutions to address potential litigations.
“Whereas litigation cannot be avoided, it can be minimized or better defended if organizations uphold high standards of professionalism in the discharge of their mandates, conduct due diligence before signing of contracts, and follow due process in any action they undertake,” the PSC observed.
The number of suits filed against public institutions in the year ending June increased by 5.6 percent to 4,185 suits, the PSC warning that the growing number of litigations against public institutions points to poor governance.
“Among the notable indicators of poor governance is the enhanced number of litigations against a state agency. Proper governance structures anchored in law and procedures will culminate in minimal incidents of litigation,” the PSC stated.
A total of 206 public organizations (39.4 percent of the organizations in public service) were involved in civil proceedings, which was more than double the 69 organizations involved in 2021/22.
Of the Sh18.5 billion awards against public organizations, the highest proportion of 75 percent (Sh13.9 billion) was against state corporations and Sagas, followed by ministries and state departments which were hit with Sh3.7 billion (20 percent).
Equally, state corporations topped in the list of awards in favour of public organizations, winning 97 percent of the cases and being awarded Sh10 billion. This means that at net value, state corporations lost Sh3.9 billion.
Ministries and state departments, on the other hand, lost Sh3.5 billion since awards in their favour were valued at Sh106 million.
The PSC report has not disclosed details of the cases that resulted in the awards.
“The leading causes of litigation were labour disputes with 976 (23.3 percent) of the cases, administrative acts with 829 (19.8 percent), and land and environment with 838 (20 percent), (together) constituting 63.2 percent of the cases,” the report states.
The PSC observes that the “orders issued and awards made against the government could have been minimized by following due process and conducting due diligence.”
The commission recommended that public organizations should utilize alternative dispute resolution in labour-related matters to avoid litigation.
