Companies
Ex-Kenya Re boss Jadiah Mwarania loses lawsuit for Sh109m pay
Tuesday October 24 2023
Former Kenya Reinsurance Corporation chief executive Jadiah Mwarania. FILE PHOTO | NMG
Former Kenya Reinsurance Corporation chief executive Jadiah Mwarania has failed in his bid to get Sh109 million as compensation after accusing the State corporation of cutting short his term by three years.
Employment and Labour Relations Court judge Jorum Abuodha dismissed the case by the former CEO, saying he failed to show how the former employer breached his rights, following the decision not to extend his tenure as had earlier been agreed.
Mr Mwarania was replaced by Hillary Maina Wachinga by the board of directors in a coup that his lawyer complained was done in two minutes on March 28.
Read: Kenya Re picks insider to replace Jadiah Mwarania as MD
The court noted that Mr Mwarania had served for two terms of five years each and was seeking for a third term, which he had served for two years.
He complained that he was entitled to full extension of his contract for a third term of five years.
“In this case, it has been illustrated and observed above that the petitioner (Mr Mwarania) voluntarily signed the two one-year extension contracts for a smooth transition. He was aware or presumed to be aware that they would lapse through effluxion of time hence the issue of legitimate expectation for a five-year contract did not arise,” said the judge.
Further, the court said it can safely be assumed that Mr Mwarania signed the two annual extensions voluntarily and was therefore prevented from seeking a five-year contract when he voluntarily signed twice, one-year contracts with the knowledge that his original two contracts that expired were for five years each.
Mr Mwarania started working with Kenya Re on April 9, 2010, as an acting managing director and was confirmed to the position on April 3, 2012. His term was renewed for another five years in April 2016 until April 2021.
Before the lapse of his contract, the board’s human resource and nominations committee resolved to renew his contract for another five years because of his good performance.
The extension was also to ensure stability and smooth transition in the corporation, noting the sensitivity of its business.
However, in May last year, acting on instructions of the former Head of Public Service Joseph Kinyua, the board limited the extension of the contract to one year and directed the board to initiate the process of recruitment of a new managing director.
Mr Mwarania rushed to court and temporarily stopped his replacement until the ouster in March in a boardroom coup.
His lawyer Judith Guserwa argued that he was answerable to the Board and which reserved the right to terminate or extend the contract depending on his performance.
He argued that CS Treasury lacked the legal mandate to direct the corporation on matters relating to the employment of its staff.
Read: How Kenya Re board ousted and replaced CEO in ‘two minutes’
Mr Mwarania said he was entitled to general damages for constitutional violations after his replacement.
Kenya RE opposed the petition and submitted that Mr Mwarania was entitled to the remedies sought or reinstatement, as he had been replaced as the managing director.
