Blow to workers as Supreme Court declines to stop deduction of new NSSF rates
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Supreme Court declines to stop deduction of new NSSF (National Social Security Fund) monthly rates
Supreme Court declines to stop deduction of new NSSF (National Social Security Fund) monthly rates.
The Supreme Court has declined to issue an order stopping the State from effecting the increased National Social Security Fund (NSSF) Contributions.
The Apex court in dismissing an application filed by the County Pensioners Association said they were not entirely satisfied that they met the threshold to warrant the orders sought.
“None of the applicants demonstrates that in the event the appeal succeeds that the contributions made to NSSF would be lost or inaccessible to the contributors or their beneficiaries,” said the court.
The court noted that the interest of justice will be best served by hearing and determining the consolidated appeal on priority basis so as to settle the main dispute.
The apex court has however said that the appeal is arguable.
On February 17, the county pensioners association moved to the Supreme Court seeking an order restraining the NSSF Board of Trustees, the Attorney General and the Federation of Kenya Employers and their respective agents from implementing some sections of the NSSF act that would result in an increase in monthly contributions.
In the new law, for employees who were parting with Ksh.200 every month as statutory deductions, their contribution to NSSF rose ten-fold, with their employers matching the same.
Those earning less than Ksh.15,000 every month are now parting with Ksh.350; those earning above the said amount are deducted Ksh.900 per month, while those with a monthly income of Ksh.18,000 and above are deducted Ksh.1,080, an amount their employers match.
The association argued implementation of the Act poses a serious threat of monopoly and will impoverish the entire pensions industry.
They want the Apex Court to bar the NSSF Board of Trustees, the Retirement Benefits Authority and the Federation of Kenya Employees (FKE) from increasing workers’ monthly deductions, which the court has declined to issue.
The enactment of the Act triggered a wave of constitutional petitions before the high court and the Employment and Labour Relations Court.
As a result, 5 petitions were filed challenging the constitutionality of the Act.
The petitions filed in different courts in Kenya were consolidated and heard by the ELRC Court in Nairobi.
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The said court in September last year, termed the Act as unconstitutional to the extent that the national assembly excluded the Senate in the enactment.
The ELRC judges in their decision also said a section of the act permitted CS Labour to usurp the constitutional mandate of the Salaries and Remuneration Commission (SRC).
The judges said a provision in the Act violated the right to free choice by forcing persons who were in superior pension schemes to join the NSSF.
Aggrieved with the decision, the NSSF Board of Trustees and the Attorney General appealed.
And on February 3, the appellate court set aside the ELRC decision. The Court of Appeal held that ELRC lacked jurisdiction to determine the consolidated petitions.
The appellate court also found that the Employment and Labour Relations Court had no powers to determine the case and that the High Court should have handled the dispute.
The judges said that the Labour Relations Court can only hear matters where constitutional issues are raised in a context of an employer-employee dispute.
The judges said that the Labour Relations Court can only hear matters where constitutional issues are raised in a context of an employer-employee dispute.
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