NAIROBI, Kenya, June 2 – The Court of Appeal has dismissed an urgent application by the National Social Security Fund (NSSF) Board of Trustees seeking to suspend the implementation of a landmark Employment and Labour Relations Court (ELRC) judgment that invalidated key provisions of the NSSF Act, 2013, dealing a setback to the Fund’s attempt to preserve the current pension framework pending appeal.
A bench comprising Justices W. Karanja, M’Inoti, and Nyamweya ruled that while the appeal raises arguable issues, the Fund failed to demonstrate that the case would be rendered nugatory if a stay was not granted, thereby clearing the way for continued effect of the lower court’s decision.
The dispute arises from the ELRC’s September 2022 judgment which struck down several provisions of the NSSF Act, 2013, on grounds including lack of Senate involvement, competition concerns, and alleged overreach into the regulation of pensions and employment benefits.
The NSSF Act, 2013 had introduced sweeping reforms to Kenya’s social security system, replacing the old provident fund model under Cap. 258 with a structured pension scheme.
It required mandatory income-based contributions of up to about 12 per cent of gross earnings shared between employer and employee, expanded coverage to both formal and informal sector workers, and introduced a tiered system allowing part of contributions to be channeled into private pension schemes.
The law also expanded benefits to include retirement pensions, survivor benefits, and disability cover.
However, in its ruling, the ELRC found that aspects of the Act infringed on constitutional and statutory safeguards, including competition rules and legislative procedures, leading to the nullification of critical sections of the law.
In opposing the stay application, respondents argued that no legal vacuum exists, noting that the previous NSSF framework under Cap. 258 continues to apply and that contributions have remained operational under earlier judicial directions.
The Court of Appeal, in declining to grant interim relief, emphasized that the applicant had not sufficiently demonstrated imminent irreparable harm or systemic collapse of the pension system if the stay was denied.
“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 means the ELRC judgment remains in force as the substantive appeal proceeds, keeping Kenya’s long-running pension reform dispute firmly within the courts.
