These guidelines, the Cabinet said, were in line with the recent directives given by President William Ruto on fiscal consolidation and management of State Corporations.

The new policy also aligns the determination of the terms and conditions of service in the agencies with the provisions of the Constitution and the relevant laws.

Consequently, the revised guidelines will provide salary bands and allowances for CEOs, board members, Vice-Chancellors, Chancellors and members of university councils.

President Ruto chaired the Cabinet meeting on Tuesday at State House Nairobi.

Additionally, the Salaries and Remunerations Commission and the State Corporations Advisory Committee will be key players in determining the terms and conditions for State corporations.

The guidelines also provide a new standard for the governance and ethical behaviour of board members and staff of State corporations.

The Cabinet was briefed on the ongoing industrial action by healthcare workers. The members were informed that 19 issues were in contention, but only four concerned the National Government - basic salary arrears, scholarships for postgraduate studies, medical insurance and stipends for medical interns.

All the issues have been resolved save for the stipend of interns. The Cabinet was adamant that it is unsustainable to continue paying KSh206,000 a month to the interns.

The Cabinet endorsed the government directive to set the internship stipend at KSh70,000, saying other interns in public service are paid KSh25,000.