The Supreme Court has overturned the Court of Appeal decision declaring NSSF Act constitutional, citing wrongful assumption of Employment and Labour Relations Court jurisdiction.
In a judgement rendered by a seven judge-bench led by Chief Justice Martha Koome, the Apex Court set aside the interpretation of the jurisdiction of ELRC by the Appellate Court in the case challenging the mandatory deduction of the new National Social Security Fund (NSSF) monthly fee introduced through NSSF Act No. 45 of 2013, saying that Labour court has express jurisdiction to determine the constitutionality of a statute.
"The consolidated appeal is hereby allowed on the narrow ground that the ELRC had jurisdiction to determine the constitutional validity of the NSSF Act 2013," the Supreme Court judges stated.
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While annulling the Court of Appeal decision that had found ELRC had no jurisdiction to handle the case on the NSSF Act, the Koome-led bench called the interpretation by the Court of Appeal as a restrictive interpretation of labour relations.
"To the specific question of whether the ELRC correctly assumed jurisdiction to determine the constitutional validity of the NSSF Act 2013, we are persuaded by the appellants' argument to the effect that the Court of Appeal adopted a rather restrictive view of the reach of the NSSF Act 2013, in holding that the matter before the ELRC did not emanate from an "employer-employee" dispute," the Supreme court said.
According to the Apex Court judges, the extensive provisions of the Act, requiring employers and employees to contribute specific amounts of money to a Social Security Fund cannot be said to have nothing to do with an employer-employee relationship.
"Even if the matter did not emanate from an employer-employee dispute within the confines of the ELRC Act, to the extent that it introduces enhanced and mandatory contributory amounts of employee earnings, the Act has potential to ignite justiciable grievances from certain cadres of employees.
"No doubt these grievances would end up at the ELRC which would likely be called upon, as it was in this case, to determine the constitutional validity of the same. But even beyond the employer-employee dispute resolution regime, the NSSF Act 2013, seeks to expansively regulate a wide array of labour relations especially the social security of the employed cadre when they finally exit formal employment," the seven judges said.
Koome, her Deputy Philomena Mwilu and Justices Mohamed Ibrahim, Smokin Wanjala, Njoki Ndungu, Isaac Lenaola and William Ouko, however, sent the case back to the Court of Appeal to determine the substantive merits of the ELRC decision that invalidated the 2013 NSSF act for being unconstitutional on an urgent basis.
