https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1013

National Social Security Fund Board of Trustees v Kenya Tea Growers' Association & 14 others & 14 others (Civil Application E656 of 2022) [2026] KECA 1013 (KLR) (29 May 2026) (Ruling) Neutral citation: [2026] KECA 1013 (KLR) Republic of Kenya In the Court of Appeal at Nairobi Civil Application E656 of 2022 W Karanja, K M'Inoti & P Nyamweya, JJA May 29, 2026 Between National Social Security Fund Board Of Trustees Applicant and Kenya Tea Growers' Association & 14 others & 14 others & 14 others Respondent (Being an application for conservatory orders staying the Judgment and Decree of the Employment and Labour Relations Court of Kenya, at Nairobi (Nduma,Wasilwa & Mbaru JJ.) dated 19th September 2022inELRC Petition No 38 of 2014 consolidated withPetitions Nos. 35 of 2014, 34 of 2014,49 of 2014 and 50 of 2014 Petition 38, 34, 35, 49 & 50 of 2014 (Consolidated) ) Ruling 1.Before us is an application dated 14th October 2022, brought under Rule 5(2)(b) of the Court of Appeal Rules, 2022. The applicant, National Social Security Fund Board of Trustees, seeks an order of stay of execution and/or implementation of the judgment and decree delivered on 19th September 2022 by the ELRC in ELRC Petition No. 38 of 2014 consolidated with Petitions Nos. 35 of 2014, 34 of 2014, 49 of 2014 and 50 of 2014. 2.The subject matter of the consolidated petitions was a collective constitutional challenge against the restructuring, mandatory nature, and statutory monopoly introduced by the National Social Security Fund (NSSF) Act No. 45 of 2013. The core grievances raised across the consolidated petitions revolved around: infringement on freedom of choice and existing property; market monopoly and anti-competitiveness; procedural and legislative illegality; punitive overreach on public services and institutional usurpation and social exclusion. 3.The impugned judgment partially allowed the consolidated petitions as follows: the court ruled that the NSSF Act applies to county finances and planning because county governments, like the National Government, are employers bound to match worker contributions from local revenue funds. The court found that the Senate was not involved in the legislative track, consequently, the Act was declared unconstitutional, null, and void. 4.The trial court also found that the Act heavily favoured the NSSF over third-party insurance providers, violating the Competition Act and threatening to stifle existing pension frameworks. 5.On the usurpation of the SRC’s Mandate, the trial court found that under Article 230(4), the SRC retains the sole authority to set and review remuneration drawn from public funds. Section 13, of the Act, which granted this power to the Cabinet Secretary for Labour, was declared null and void. 6.On the overreaching restraints on public services, the Court found no legitimate purpose for section 19(2), which barred unregistered citizens from accessing public services. This section was struck out for violating fair administrative action and equal protection laws. 7.With regards to violation of choice, the court found that the mandatory requirement to enroll in the NSSF despite having superior private arrangements was an unjustifiable limitation on free choice. 8.Aggrieved, the applicants lodged a notice of appeal dated 26th September 2022 against the said decision and followed it with this application seeking to stay execution of the judgment. 9.In this application, which is supported by the grounds appearing on the face thereof and the depositions contained in the affidavit in support sworn by Gen. (Rtd) Dr. Julius W. Karangi, the chairman of the applicant’s board of trustees, it is contended that the Employment and Labour Relations Court (ELRC) lacked the jurisdiction to determine the constitutionality of the NSSF Act because the petition did not stem from an active employer- employee relationship and that the ELRC wrongly confused the contribution-based NSSF pension model with the state-funded social assistance programs envisioned under Article 43(3) of the Constitution. 10.Further the applicant contended that there is an imminent governance quagmire because the managing trustee and the entire board of trustees were appointed under the now-nullified 2013 Act and that the judgment creates an immediate legal vacuum in the leadership and running of the multi-billion pension fund. 11.It was contended that the judgment completely paralyzes the “Haba na Haba” scheme, leaving 580,480 informal sector members vulnerable and jeopardizing Kshs.975,986,328.55 in accumulated pension funds, and that the judgment will result in reduction in national savings as reverting to the former Cap. 258 law cuts monthly individual contributions back to a meager Kshs. 200 dismantling the progressive 6% matched model which had successfully accrued Kshs. 7,282,604,569.74 in enhanced contributions. 12.Further, it was contended that there would be a loss of returns as in 2021 members earned a compounded 10% interest from authorized investments and that the judgement stops future deployment of funds, causing irreversible loss of investment value. It was also argued that if employers demand refunds for historical contributions paid above the Kshs. 200 threshold, it will trigger catastrophic financial hardship, crippling the Fund’s capacity to pay current retirees and finally, that critical statutory allocations established under section 41 of the Act such as immediate emigration and burial grants are instantly frozen, meaning grieving families cannot be compensated retroactively. 13.The application is opposed by the 1st respondent, through a replying affidavit sworn by Apollo Kiarii, the Executive officer of the 1st respondent on 28th October 2022. He deposes that on 25th June 2014, B. Ongaya, J. (as he then was) issued interim orders staying the implementation of core sections18, 19, 20, and 71 of the NSSF Act, 2013 which orders were extended on 14th July 2014 to last until the final determination of the petition. He contends that due to the 2014 stay orders, employers and employees continuously made contributions under the old statute, NSSF Act, Cap. 258 via a tripartite understanding between employers, employees, and the government. 14.He contends that nullifying the 2014 Act does not create a crisis or impair constitutional social security obligations and that the applicant has safely received contributions under Cap. 258 for nine years without complaints. He asserts that the unconstitutional 2013 statute should not be preserved and concludes that the applicant will suffer no irreparable damage if the stay is denied. 15.The application was further opposed by the 2nd interested party, through a replying affidavit sworn by Jacqueline Mugo, the CEO of the Federation of Kenya Employers (FKE) dated 10th November 2022. It is contended that no legal vacuum or crisis exists to justify a stay order as employers and employees have smoothly continued making statutory contributions using the rates from the older repealed NSSF Act, Cap 258. Further, that no employers or employees have threatened to stop remittances or demand immediate refunds. 16.When the matter came up for hearing before us on 23rd January 2025, learned counsel Mr. S. Makori appeared holding brief for Mr.Ngatia, senior counsel, for the applicant while learned counsel Mr. Obura appeared for the 1st and 2nd respondents, Ms. Mbilo appeared for the 4th, 5th, 6th and 7th respondents, Mr. Katana appeared holding brief for Mr. Kithi for 3rd respondent, Mr. Mbarak and Mr. Omulama appeared for the interested parties while Mr. Wanyenji Njoroge appeared holding brief for Dr. Thiankolu, senior counsel, for the County Pensioners Association (the 4th interested party). They both highlighted, albeit briefly, their submissions which are quite detailed and which, in our view cover every aspect of the application before us. We have read and noted the contents of the said submissions. 17.The applicant’s submissions are dated 28th October 2022. As to whether there is an arguable appeal, it is submitted that no Senate concurrence was needed as the Act does not touch on county functions, elections, or finances under Article 110(1) of the Constitution. 18.Further, it was submitted that the applicant enjoys no monopoly as numerous employers run independent pension programs alongside NSSF. 19.On the nugatory aspect, it was submitted that if the 2013 Act remains void, operations revert to the old Cap. 258 law which has various limitations which cannot register informal sector workers, as it caps monthly contributions at Kshs. 200, and excludes vital emigration and burial benefits. It was contended that it is vital to safeguard the substratum of the appeal by making preservation orders suspending the invalidation of the Act so as to allow operations to continue pending hearing and determination of the appeal. Reliance was placed on Teachers Service Commission - vs- Kenya National Union of Teachers & 3 others, SUP. Court Civil Application No 16 of 2015. 20.We are urged to allow the appeal. 21.The 1st and 2nd respondents’ submissions are dated 2nd November 2022. As to whether the appeal is arguable, it was submitted that the ELRC had proper jurisdiction under Article 162(2) of the Constitution to hear and determine the matter because NSSF contributions constitute an employment dispute. 22.On the nugatory aspect, it was submitted that through a consent order dated 14th July 2014 entered by the parties at the ELRC, there is a stay of the core provisions of the 2013 Act until final hearing and determination of the petition which includes determination of the appeal the applicant has filed and any further appeal in the Supreme Court. 23.Further, it was submitted that there is no lacuna as the public remains protected because the previous law, Cap 258 automatically fills the legislative void. It was contended that the applicant has not provided any documentary proof for its claimed financial collections from contributors. 24.We are urged to dismiss the application with costs. 25.The submissions by the Federation of Kenya Employers, 2nd interested party (F.K.E.) are dated 10th November 2022. It is submitted that there is an existing legal framework and FKE dismisses the applicants claim that nullifying the NSSF Act, 2013 causes structural turmoil. 26.It is submitted that the prior statutory frameworks which was Cap 258 remains active. F.K.E. submitted that employers currently remit deductions under the previous NSSF Act ,Cap. 258 following earlier judicial directives. 27.It is thus submitted that there is no arguable appeal as the applicant’s memorandum of appeal fails to raise any prima facie arguable grounds with high chances of success. 28.As to whether the appeal will be rendered nugatory, it is submitted that there is no risk of the appeal being rendered nugatory as the NSSF Act, 2013 was never fully implemented and that denying the stay will not cause loss or render the final appeal nugatory and that granting a stay would force an unconstitutional law onto employers and employees, risking severe legal prejudice. 29.We are urged to dismiss the application with costs and order the main appeal to proceed to hearing on its merits. 30.The jurisdiction of this Court in applications under Rule 5(2)(b) is original, discretionary, and unfettered, though it must be exercised judicially and in the interests of justice. In Stanley Kangethe Kinyanjui -vs- Tony Ketter & 5 Others [2013] eKLR, the Court stated:“The applicant must satisfy both limbs: first, that the appeal is arguable, and second, that the appeal will be rendered nugatory if stay is not granted. An arguable appeal is not one that must necessarily succeed, but one that raises a bona fide point worthy of consideration. The nugatory aspect considers whether, if stay is not granted, the appeal will be rendered worthless, futile, or incapable of being reversed, or whether damages would reasonably compensate the aggrieved party.” 31.The twin principles accordingly guide our determination as to whether the intended appeal is arguable, and whether the intended appeal will be rendered nugatory if stay of execution is not granted. 32.On the limb on arguability, we have come to the conclusion that, the issue of jurisdiction of the ELRC to have heard and determined the petitions before it, is no longer a live issue the same having been determined by the Supreme Court through the judgment dated 21st February 2024 in Kenya Tea Growers Association & 2 others -vs- The National Social Security Fund Board of Trustees & 13 others (Petition E004 & E002 of 2023 (Consolidated)) [2024] KESC 3 (KLR). 33.However, and without prejudice to the foregoing, the broader context of this dispute cannot be ignored. Our cursory perusal of the memorandum of appeal reveals that the appeal is not frivolous. As variously stated by this Court, an applicant only needs to establish one arguable ground of appeal to pass the test on arguability. Some of the issues raised include whether there was misconception of social security. The applicant contends that the learned Judges wrongly erred by assuming that the NSSF Act, 2013 was social assistance legislation under Article 43(3) for people unable to support themselves, rather than a contribution- based pension fund for employed and self-employed persons and also that the court erred by ruling that the Bill required tabling before the Senate under Articles 110 and 205, even though social security and professional pension plans are not functions devolved to county governments. These issues, on their face, are not entirely idle. We are, therefore, satisfied that the intended appeal is arguable. 34.As to the second issue, whether a successful appeal would be rendered nugatory if there is no stay, the applicant suggests that there is a lacuna in the law as the impugned judgment nullified the National Social Security Fund (NSSF) Act No. 45 of 2013. The 2nd interested party and 1st and 2nd respondents submit that there is no lacuna as the public remains protected because the previous law the National Social Security Fund Act, Chapter 258 of the Laws of Kenya (Cap. 258) automatically fills the legislative void as it was the operational law. Apart from frequently repeating the assertion of likely destabilisation and the inability of the applicant to perform its functions due to the legal lacuna, the applicant provided no evidence or submissions as to how and to what extent the applicant would be destabilised. No accounts were produced by the applicant to support the destabilisation theory. 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. 35.In the end, and since the applicant has only satisfied one of the two limbs necessary for grant of the orders sought under Rule 5(2)(b) of this Court’s Rules, we find no merit in the Notice of Motion dated 14th October 2022 which is hereby dismissed with costs to the 1st and 2nd respondents and 2nd interested party. 36.Finally, we tender our unreserved apology for the delay in delivery of this ruling. The application escaped the attention of the drafting Judge until a few days ago. Any anxiety or inconvenience occasioned by the delay is regretted. DATED AND DELIVERED AT NAIROBI THIS 29TH DAY OF MAY 2026.W. KARANJA............................JUDGE OF APPEALK. M’INOTI............................JUDGE OF APPEALP. NYAMWEYA............................JUDGE OF APPEALI certify that this is a true copy of the original.SignedDEPUTY REGISTRAR.