Supreme Court Refers NSSF Act Case Back To Court Of Appeal
The Supreme Court has sent back a petition contesting the National Social Security Fund (NSSF) Act of 2013 to the Court of Appeal, claiming that there was an incorrect assumption of jurisdiction by the Employment and Labour Relations Court.
In the ruling delivered by a panel of seven judges headed by Chief Justice Martha Koome, the highest court clarified that the appellate court made a mistake in its determination that the Labor court lacked authority to adjudicate the case contesting the increase of NSSF contributions from Ksh.200 to Ksh.2,000.
In the lawsuit brought forth by the Kenya Tea Growers Association, Agricultural Employers Association, and the County Pensioners Association, the Supreme Court not only reversed the appellate court’s understanding of the Employment and Labor Relations Court’s jurisdiction but also emphasized that the Labor Court has the clear authority to rule on the constitutionality of a law.
The appellate court determined that the matter clearly fell under the jurisdiction of the High Court as outlined in Article 165(3) of the Constitution. Moreover, the disagreement did not originate from an employer-employee relationship as defined 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 of contributions to the existing pension schemes.
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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.
Supreme Court Refers NSSF Act Case Back To Court Of Appeal