Supreme Court Lifts Appellate Court Orders Allowing Gov’t to Hike NSSF Deductions

The Supreme Court has lifted orders by the Court of Appeal allowing the government to increase the mandatory pension contributions under the National Social Security Fund (NSSF) scheme.

Chief Justice Martha Koome stated in a decision rendered by a seven-judge bench that the Court of Appeal erred in its decision to reverse an Employment and Labour Relations Court (ELRC) verdict because the court lacked authority to make the judgment.

The Court of Appeal granted the NSSF Act 2013 in its initial finding, stating that the High Court, not the ELRC, should have made the decision.

“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.

Justice Koome directed the Court of Appeal to hear the matter afresh in order to decide whether the case has enough legal standing.

This means that the legitimacy of the NSSF Act 2013 will be an issue in the ongoing legal battle that has been raging in court for over nine years.

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: first, it did not undergo public participation; second, it 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. 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 labor relations sector and hence fell within the court’s purview.