Labour court stops mandatory NSSF deductions, annuls anchor law » Capital News

NAIROBI, Kenya, Sep 22 — A three-judge bench of the Employment and Labour Relations Court has declared the National Social Security Fund (NSSF) Act null and void ordering a prohibition of mandatory deductions from employee earnings.

In a judgement following a consolidated petition filed by the Kenya County Government Workers’ Union, Kenya Tea Growers Association, the Agricultural Employment Association and six others, the court cited monopoly and violation of workers’ freedom of choice.

The court ordered NSSF to refrain from compelling or requiring mandatory listing of employers or employees whether registered as a member of any retirement benefit scheme or not to register.

Justices Nduma Nderi, Hellen Wasilwa and Monica Mbaru also cited violation of key provisions of the constitution during the enactment of the law, including failure by the National Assembly to refer the legislation to the Senate for concurrence.

“A declaration that the NSSF Act No.45 of 2014 has implications on County Finances and therefore the Bill ought to have been tabled before the Senate prior to its enactment in terms of Articles 205(1) and 110 of the Constitution and to this extent the Act is null and void,” the bench ruled in a decision relayed by the court on Thursday.

The judges also found the NSSF Act to have been inconsistent with the provisions of Article 10 (1) (b) and (c) of the Constitution “as read with Section 3 of the Competition Act.”

They noted that to the extent the law fives the NSSF a monopoly in the provision of pension and social security services in the country, the legal basis for the Fund is unconstitutional, null and void.

The court also noted provisions under the NSSF Act conferring a mandate on approval of allowances and fees to the Cabinet Secretary for Labour, a task that should otherwise have been assigned to the Salaries and Remuneration Commission violates the Constitution.

“The said section [Section 13] is in conflict with Article 230(4) of the Constitution and is therefore null and void,” the trio declared.

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“Further, Section 19(2) of the NSSF Act No.45 of 2013 requires access to public services upon membership of NSSF, the said subsection is in conflict with Articles 21(1), 47(1) and 232(1) of the Constitution and to that extent unconstitutional, null and void,” the judges went on to state.

Also impugned is Sections 20 of the NSSF Act No.45 of 2013 providing for mandators registration of employees to the Fund.

“Sections 20 of the NSSF Act No.45 of 2013 which makes it mandatory to register and contribute to the Fund and oblige the Petitioner’s members (and other employees who have adequate alternative pension or social security schemes) to join the pension or social security schemes operated by the 1st Respondent violates rights of employees and employers’ free choice contrary to Article 49 of the Constitution and is hereby declared null and void.”

The court refrained NSSF from applying the provisions of the impugned law on the petitioners, and other employees who have adequate alternative pension or social security schemes, unless they opt in.

Other petitioners in the consolidated suit are: Kenya Quarry and Mine Workers Union, the Kenya Building, Construction, Timber, Furniture and Allied Trades Employees Union, Kenya Union of Entertainment and Music Industry Employees and Union of National Research Institutes Staff of Kenya and Kenya Glass Workers Union.

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