Supreme Court refers NSSF Act case back to Court of Appeal

The Supreme Court has returned a petition challenging the National Social Security Fund (NSSF) Act 2013 to the Court of Appeal citing wrongful assumption of the Employment and Labour Relations Court jurisdiction.

In the judgement rendered by a seven judge-bench led by Chief Justice Martha Koome, the apex court stated that the appellate court erred in their finding that the Labour court has no powers to hear the case challenging the hiking of NSSF contributions from Ksh.200 to Ksh.2,000.

In the case that was filed by the Kenya Tea Growers Association, Agricultural Employers Association and the County Pensioners Association, the Supreme Court further overturned the appellate court's interpretation of the jurisdiction of the Employment and Labor Relations Court while further clarifying that the Labour Court holds explicit jurisdiction to adjudicate on the constitutionality of a statute.

According to the appellate court, the issue fell squarely within the jurisdiction of the High Court under Article 165(3) of the Constitution, and in any event, the dispute did not arise from an employer-employee relation as prescribed in Section 12 of the Employment and Labour Relations Court Act.

During the hearing of the petition, the appellants argued that their members had long-standing adequate pension and social security schemes with their employers which were more advantageous than those proposed by the NSSF Act 2013.

The petitioners further asserted that they would be overburdened and lose their years’ contributions to the existing pension schemes.

They likewise challenged the constitutionality of the Act, citing insufficient public participation, the mandatory registration of employees under the fund unlike the previous NSSF Act which exempted members of existing pension schemes from registration, and the failure to involve the Senate in the enactment process despite the obligation for county governments to make payments to the fund.

They similarly decried granting regulatory powers to the NSSF Board of Trustees instead of the Retirement Benefits Authority, enhancing social security benefits exclusively for employed individuals, thus discriminating against the unemployed and allowing the Cabinet Secretary for Labour and Social Security to determine the board's remuneration, a responsibility typically assigned to the Salaries and Remuneration Commission (SRC);

Conferring a monopoly on the NSSF Board for the provision of pension and social security services was also cited by the petitioners.

At the Court of Appeal, Justices Hannah Okwengu, Mohamed Warsame and John Mativo ruled that the NSSF Act 2013 was legal and nothing stops the government from implementing amendments captured in it.

The government's plan was however cut short by Labour Court judges Nduma Nderi, Hellen Wasilwa and Monica Mbaru in September last year when they declared the act illegal and unconstitutional.