Kenya: Blow to NSSF As Court Upholds Refusal to Pause Controversial Labour Court Decision

NAIROBI — The Court of Appeal has dismissed an application by the National Social Security Fund Board of Trustees seeking to suspend the implementation of the Employment and Labour Relations Court (ELRC) judgment that invalidated key provisions of the National Social Security Fund (NSSF) Act, 2013.

A three-judge bench comprising Justices W. Karanja, M'Inoti, and Nyamweya ruled that the Fund failed to meet the threshold required for the grant of conservatory orders under Rule 5(2)(b) of the Court of Appeal Rules, which requires an applicant to demonstrate both an arguable appeal and that the appeal would be rendered nugatory if stay is not granted.

The dispute stems from the ELRC's September 2022 judgment which declared several provisions of the NSSF Act unconstitutional, citing, among other issues, lack of Senate involvement in its enactment, violation of competition laws, and overreach into employment and pension regulation frameworks.

In its application, the NSSF Board warned that the judgment had created a governance vacuum and risked destabilizing the pension system, potentially affecting contributions, investment returns, and statutory benefits for millions of members.

However, the respondents, including the Kenya Tea Growers' Association and other interested parties, maintained that no legal vacuum exists, arguing that the previous NSSF Act (Cap. 258) remains operational and has continued to guide contributions without disruption.

In its determination, the Court of Appeal held that while the appeal raised arguable points, the applicant had not demonstrated sufficient grounds to show that the appeal would be rendered nugatory in the absence of a stay order.

"We are, therefore, not satisfied that the applicant has shown that a successful appeal on judgment and decree will be rendered nugatory if no stay is granted."

"We are, therefore, satisfied that the intended appeal is arguable."

The ruling effectively clears the way for continued implementation of the ELRC judgment, even as the substantive appeal over the constitutionality of the NSSF Act proceeds.

The court also noted that issues of jurisdiction raised by the applicant had already been addressed by the Supreme Court in a related matter, narrowing the scope of the appeal.

Read the original article on Capital FM.