February will mark the start of the third year of implementing the controversial National Social Security Fund Act 2013, with the contributions by employers and employees to the NSSF going up once again.
Maximum NSSF contribution will rise to Sh4,320 per employee from the current Sh2,160, with employers matching this figure.
This marks yet another onslaught on payslips after the State, not so long ago, introduced 2.75 percent and 1.5 percent deductions on gross pay to fund healthcare and housing programmes, respectively. It is not in vain that all these three deductions were challenged in court.
While the court cleared the government on the healthcare and housing deductions, the NSSF matter is not yet over, raising questions over the legality of the continued implementation of the NSSF Act.
The Supreme Court's judgment of February 21, 2024, which confirmed that the Employment and Labour Relations Court (ELRC) had jurisdiction over the petition challenging the constitutionality of the NSSF Act, effectively nullified the Court of Appeal's previous ruling that had upheld the constitutionality of the Act.
The import of the Supreme Court judgment is that the Act’s status reverted to the position of unconstitutionality as held by the ELRC on September 19, 2022 and that the Court of Appeal orders of February 3, 2023 are no longer enforceable.
Despite the Supreme Court's ruling, the NSSF issued a public notice on February 22, 2024, asserting that the NSSF Act, 2013, remains in force and instructing employers to continue remitting contributions at the new rates.
This NSSF position is contentious and a deliberate misinterpretation of judicial decisions to ensure continued contributions. The NSSF's stance not only complicates the legal landscape but also creates uncertainty for employers and employees who are left in limbo regarding their contribution obligations.
The subsequent implementation of the third-year progression rates of contributions effective February 2025, should remain in abeyance until the Court of Appeal sets aside the decision of the ELRC. This will ensure that any enforcement of the Act is legally sound and respects the judicial hierarchy, providing clarity and fairness for all stakeholders involved.
It is imperative that the NSSF adheres to a transparent and consistent application of judicial decisions to uphold the integrity of Kenya's legal framework and safeguard the interests of all parties involved.
Public institutions should lead from the front in defending the constitution and rule of law, which in fact, is the basis of their very existence.
Courts have on several occasions called out the State and its institutions for ignoring public participation when rolling out new policies. Many of these institutions have also gone ahead to ignore court orders.
It is no wonder that the latest Public Service Commission data shows the value of lawsuits against public institutions rose 2.4 times to Sh43.8 billion in the financial year ended June 2024 from Sh18.47 billion a year earlier.
This was from 559 cases, coming in the period the State also lost 769 other cases that were of declaratory orders.
