National Hospital Insurance Fund, Management Board v Kenya Union of Commercial, Food and Allied Workers & 2 others [2016] KEELRC 388 (KLR)
The bottom line
#Kenya's employment court ruled that NHIF staff are not 'public officers', so the Salaries and Remuneration Commission cannot dictate their pay.
What this practically means
#Executive summary
#Key legal issues
#Whether NHIF and its employees fall under the SRC's mandate
They do not; the petitioner's funds are members' contributions, not public funds, and its staff are not public officers remunerated by Parliament
The court examined Article 230(4) and Article 260 definitions of public office and public officer, requiring remuneration payable directly from the Consolidated Fund or money provided by Parliament. NHIF's income derives from mandatory member contributions and investments under sections 15, 34 and 35 of the NHIF Act, with no parliamentary appropriation. Members' contributions are private property, not public funds, so the Fund's staff fall outside the SRC's constitutional mandate.
Whether the SRC Regulations 2012 offend the spirit of collective bargaining
Yes, to the extent they purport to confer jurisdiction on the SRC to set or restrict remuneration for public officers other than state officers
ILO Convention No. 98 requires voluntary negotiation; the ILO Committee of Experts report warns against intervention cancelling or modifying freely concluded collective agreements. The correspondence showed the petitioner was strait-jacketed, merely communicating the SRC's decisions, which was not negotiation. Since the SRC's role over non-state officers is advisory, it cannot insist its advice be adopted without modification; the regulations, deriving validity from the Constitution, cannot enlarge the SRC's jurisdiction without constitutional anchoring.
Whether the petitioner may conclude the July 2013 CBA
Yes, the petitioner is at liberty to conclude the CBA reached in July 2013 with the 1st respondent
Having found that the SRC lacks jurisdiction over the petitioner and that its binding insistence was unconstitutional, the court declared the petitioner free to conclude the CBA negotiated in July 2013 with the 1st respondent.
Legal principles established
#- Public officers are those whose remuneration is payable directly out of the Consolidated Fund or money provided by Parliament; state corporations funded from member contributions are outside the SRC's mandate
- The SRC may set remuneration only for state officers; its role over other public officers is advisory only
- Insisting that advisory recommendations on remuneration bind collective bargaining parties is unconstitutional under Article 2(6) read with ILO Convention No. 98
Court orders
#- 1.A declaration that the petitioner as constituted under the Act does not fall under the mandate of the 2nd respondent
- 2.A declaration that the Salaries and Remuneration Commission Act and Salaries Remuneration Commission regulations 2012, in so far as they purport to confer on the 2nd respondent jurisdiction to set or restrict remuneration and benefits for public officers other than state officers, are inconsistent with the Constitution hence null and void to that extent
- 3.A declaration that the insistence by the 2nd respondent that its advice to the petitioner is binding is counter to ILO Convention No. 98 and, by virtue of article 2(6) of the Constitution, unconstitutional
- 4.A declaration that the Petitioner be at liberty to conclude the Collective Bargaining Agreement reached in July 2013 with the 1st respondent
- 5.No order as to costs
- Jurisdiction invoked
- Article 162(2) of the Constitution (employment and labour relations court jurisdiction); petition under the Constitution and Labour Relations Act, 2007
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "National Hospital Insurance Fund, Management Board v Kenya Union of Commercial, Food and Allied Workers & 2 others [2016] KEELRC 388 (KLR)", Case Analysis (). Petition dated 18th May, 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2016/388/eng@2016-03-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.