Workers to pay more to the NSSF pension as new law allowed

Employees are set to feel the pinch of increased pension deductions after the Court of Appeal allowed the government to implement a new law that raised the contribution ten-fold.

Appeal Court judges Hannah Okwengu, Mohamed Warsame and John Mativo ruled that the National Social Security Fund (NSSF) Act of 2013, which sought to increase monthly contributions from Sh200 to Sh2,000, is legal and nothing stops the government from implementing it.

"We find that the Employment and Labour Relations Court (ELRC) made a mistake in declaring the Act unconstitutional when it had no jurisdiction to question validity of the law as that was a preserve of the High Court," ruled the judges.

The decision is a major boost to President William Ruto who has been advocating higher contributions to the national social security plan.

The government's plan to implement the NSSF Act 2013 for higher monthly contributions was 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.

The case challenging the law was filed by Kenya Tea Growers Association and 14 other employer and employee associations.

The Employment and Labour court agreed with their submissions and declared that the NSSF Act 2013 was unconstitutional since it was enacted by the National Assembly without public participation and involvement of the Senate.

But the NSSF Board of Trustees through Senior Counsel Fred Ngatia appealed the decision, arguing that the court lacked jurisdiction to determine the dispute and wrongly found that National Assembly failed to involve the Senate when the law did not concern county governments.

The Appeal Court judges agreed that enactment of the NSSF Act, 2013 did not require participation of the Senate and that the employment and labour court judges made a grave error by failing to establish that the Act did not interfere with functions of county governments.

"The decision declaring the NSSF Act, 2013 unconstitutional for failure to involve the Senate in its enactment was not supported by the law. On this ground, we hold that the judgment cannot be allowed to stand," ruled the judges.

They added that the ELRC bench failed to appreciate that the legislation had no provisions affecting the functional areas of the county governments since it relates to a function which exclusively falls under the national government.

According to the Appellate Court, the ELRC judges went for an over kill by declaring some sections of the Act as illegal even after finding that whole Act was unconstitutional.

The judges further ruled that the ELRC lacked jurisdiction to handle the case since it did not involve employer-employee disputes but the constitutionality of an Act passed by parliament which is a reserve of the High Court.

"In the determination of the issue of jurisdiction, the court should not be influenced by sympathy for the case of one of the parties but must base its decision on the law. The bench failed to appreciate that a claim questioning constitutional validity of a statutory provision is not within their realm," ruled the judges.

The judges also declined to refer the matter back to the High Court for determination of the constitutionality of the NSSF Act, stating that the parties were given an opportunity to address the court on the question of jurisdiction but they failed to do so.

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