FKE slams PSRA for unilateral actions impacting jobs and contracts

  • 9 Mar 2024
  • 2 Mins Read
  • 〜 by Naisiae Simiren

The Private Security Regulatory Authority (PSRA) in February 2024 released a Legal Notice notifying the general public of a list of 726 registered and licensed corporate private security service providers in Kenya as of 5th February 2024. Nine private security companies not on the list were deemed to be unregistered in accordance with the provisions of the Private Security Regulation Act, 2016 (“the Act”). The Act makes it an offence for a person who operates as a private security service provider without holding a valid licence under the Act or engages in the services of any unlicensed private security firm. The Act makes the offence punishable by a fine or both such fine and imprisonment in the case of a natural person and a monetary penalty of Sh 2 million in the case of a corporate person.

The legal notice issued by Director-General Fazul Mahamed had quite numerous implications. The most obvious is that which rendered unlisted private security companies unlicenced, this meant that these companies could no longer continue to operate and neither could they be engaged to offer security services. Any business being unable to operate in the market will immediately, as a cost-saving resort, lay off or suspend its employees. The Government of Kenya has put in place measures to improve the level of employment opportunities among the youths. The government, in its BETA agenda, appreciates the role that MSMEs play in the improvement of employment opportunities.

Federation of Kenya Employers (FKE) recently issued a press release calling out the PSRA for its actions that led to severe job losses and business disruptions in the sector. The directions in the Legal Notice not only led to business disruptions and job losses but also interfered with legal obligations involving contracts between businesses or individuals who had engaged private security services from the deregistered companies. Legal suits are likely to ensue as parties seek to protect themselves against indemnification of contract liabilities while at the same time avoiding penalties under the Act.

Additionally, the directions under the legal notice do not state the reasons for the deregistration of the nine private security companies. The Act provides for provisions of ineligibility for registration, which the legal notice, either by design or utter ignorance, was silent on. FKE, calling for the reinstatement of the nine private security companies, called out the unprocedural and illegal manner of deregistration, which did not follow the fair administrative process under the Fair Administrative Action Act, 2015, that applies to all state organs exercising administrative authority. This Act provides that every person has the right to be given written reasons for any administrative action that is taken against him and adequate reasons for the proposed administrative action.

Rules of justice dictate that an affected person must be given an opportunity to be heard and to make representations or legal representations where applicable. Actions by the PSRA completely ignored legal procedures set out in the Fair Administrative Action Act, 2015, which calls for legal action that the PSRA has recently been accustomed to issuing illegal directives.