Workers, pensioners lose bid to block NSSF move to raise contributions to Sh2,160
Workers erecting a sign at NSSF's Social Security House offices in Nairobi.
Workers and pensioners have lost their bid to block the National Social Security Fund's (NSSF) move to increase monthly deductions to Sh2,160 pending the determination of their appeal at the Supreme Court.
A five-judge bench of the apex court on Friday dismissed applications by the Kenya Tea Growers Association, the Agricultural Employers Association and the County Pensioners Association to stop enforcement of a Court of Appeal ruling that allowed the deductions.
The bench led by Chief Justice Martha Koome noted that the new NSSF Act has since been implemented and members of the lobby groups challenging the deductions in court have already complied.
"The Kenya Tea Growers Association and the Agricultural Employers Association did not dispute the NSSF Board Trustees' contention that their members had since complied with the Act. In particular, that they had registered and started contributing to NSSF as required by the Act," the High Court said.
In addition, the judges said it had not been demonstrated to the court that the contributions made to the NSSF would be lost or inaccessible to the contributors or their beneficiaries if the appeal were successful.
"Similarly, none of the plaintiffs disputed the NSSF board's assertion that the law has been implemented since the contested judgment. Moreover, none of the applicants has shown that, if the consolidated appeal is successful, the contributions made to the NSSF would be lost or inaccessible to the contributors or their beneficiaries," the court ruled.
The other judges on the bench were Deputy Chief Justice Philomena Mwilu and Justices Mohammed Ibrahim, Smokin Wanjala and Isaac Lenaola.
The board, through senior counsel Fred Ngatia, told the court that members of the union and associations had since complied with the law by registering and paying contributions to the NSSF.
"Contributions made to the NSSF are refundable at the option of the employer and employee. Government, by virtue of Section 70 of the NSSF Act, 2013, acts as a guarantor of the public interest in NSSF and would intervene if necessary to protect the interests of members. The public interest lies in the implementation of the Act which gives effect to the right to social security as enshrined in Article 43 (1) (e) of the Constitution," said Mr Ngatia.
He told the court that the real reason for the Kenya Tea Growers Association and the Agricultural Employers Association to oppose the implementation of the Act "is to enable their members to avoid registering and paying contributions for seasonal/casual workers who constitute the largest percentage of their workforce".
In asking the court to issue an order restraining the NSSF and the Federation of Kenya Employers from making the deductions, the groups said implementation of the law would cause "unimaginable and irreversible havoc in the pension industry, especially due to the mass transfer of workers from superior private pension schemes to the NSSF".
The lobby groups are challenging a Court of Appeal judgment of 3 February 2023, which overturned the decision to nullify the 2013 Act, on the grounds that the matter was being handled by the wrong court.
The three-judge panel ruled that the Employment Tribunal had wrongly assumed jurisdiction over a matter that should have been dealt with by the High Court, as the ELRC can only hear matters where constitutional issues are raised in the context of an employer-employee dispute.
The decision paved the way for the NSSF to demand increased contributions in accordance with the Act.
Employers are expected to pay Sh2,160 for all earners with a gross income of Sh18,000 and above, half of which is to be matched by the employer with the employee's contribution.
