The Court of Appeal in Kenya recently overturned a judgement by the Employment and Labour Relations Court (“ELRC”) that declared the National Social Security Fund (“NSSF”) Act unconstitutional. The Court of Appeal found that the ELRC lacked jurisdiction to consider the constitutionality of the Act as the dispute was not between an employer and employee, the sole statutory purview of ELRC’s jurisdiction.
The Kenya Tea Growers Association and other unions had filed several cases in the High Court claiming that the enactment of the NSSF Act violated the Constitution of Kenya 2010.
The High Court ruled in favor of the unions, declaring the NSSF Act unconstitutional in its entirety. However, the NSSF Board of Trustees filed an appeal on the grounds that the ELRC did not have jurisdiction to hear the case, as the main contention was not an employer-employee dispute.
The main issue for determination before the Court of Appeal was whether the ELRC had the power to declare the NSSF Act unconstitutional. The Court of Appeal held that the ELRC does not have the mandate to hear and determine constitutional legal issues unless they arise from an employer-employee dispute. The jurisdiction of the ELRC is limited to disputes arising from Section 12 of the Employment and Labour Relations Act of 2012.
The implications of this judgment going forward are that the provisions of the NSSF Act declared unconstitutional are no longer unconstitutional, and workers’ payslip deductions for retirement benefits will increase tenfold, from KES 200 to KES 2,000. The Kenya Tea Growers Association and the other unions might, if they so choose, lodge an appeal at the Supreme Court of Kenya.
By James Nyiha & Waya Ndegwa