Supreme Court Orders NSSF Act Case to be Heard Again

NSSF building in Nairobi's Upper Hill.
NSSF building in Nairobi's Upper Hill.

The Supreme Court on Tuesday, February 21, lifted the orders by the Court of Appeal which allowed President William Ruto's administration to increase the mandatory pension contributions under the National Social Security Fund (NSSF) scheme.

In a ruling delivered by a seven-judge bench, Chief Justice Martha Koome noted that the Court of Appeal erred in its decision by overturning a ruling issued by the Employment and Labour Relations Court (ELRC) on the basis that the court lacked jurisdiction to issue the judgment.

In the initial ruling, the Court of Appeal granted the NSSF Act 2013, arguing that the matter ought to have been determined by the High Court and not the ELRC.

"In the circumstances, this case is to be remitted to the Court of Appeal to determine the substantive merits of the Judgment of the ELRC. Due to the nature of the matter, the surrounding public interest and the time taken by the case in the corridors of justice, it is prudent that the matter be heard on a priority basis," the CJ ruled. 

President William Ruto speaking during a joint National Executive Retreat and Parliamentary Group consultative meeting in Naivasha, Nakuru County on February 19, 2023.

Justice Koome ordered that the case be heard afresh by the Court of Appeal to determine if it has sufficient legal grounds to either be approved or dismissed.

As a result, the NSSF Act 2013 case, which has been dragged in court for more than nine years regarding its legality, will continue.

Following the enactment of the Act, five petitions challenging the case were filed; two at the High Court and three at the ELRC.

Thereafter, the High Court transferred the two petitions to the ELRC because the issues related to employment matters and hence fell under its jurisdiction.

Following a review, ELRC declared the NSSF Act 2013 unconstitutional on four grounds: firstly, that it did not undergo public participation; secondly, that the Act should have been tabled before the Senate before its enactment.

Furthermore, the Court of Appeal ruled that the Act sought to grant NSSF a monopoly in providing retirement benefits and that the mandatory registration and contribution violated employees' rights to choose their pension arrangements.

The judgment delivered by ELRC was appealed at the appellate court which overturned the ruling on grounds that constitutional matters regarding the validity of the NSSF Act were reserved for the High Court.

"According to the Appellate Court, the issue fell squarely within the jurisdiction of the High Court under Article 165(3)(d)(i) of the Constitution, and in any event, the dispute did not arise from an employer-employee relation as prescribed in Section 12 of the ELRC Act," the ruling read in part.

Supreme Court, in its ruling, determined that the ruling delivered by the Employment Court concerned the major players in the employment and labour relations sector and hence fell within the court's purview.

An image of  a legal scale and a gavel.
An image of a legal scale and a gavel.