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Supreme CourtPartially AllowedPetition E004 & E002 of 2023 (Consolidated)

Kenya Tea Growers Association & 2 others v The National Social Security Fund Board of Trustees & 13 others

Supreme Court of Kenya
21 February 2024
Martha Karambu KoomeMartha K KoomePhilomena Mbete MwiluPhilomena M MwiluMohammed Khadhar IbrahimMohammed K IbrahimSmokin Charles WanjalaSmokin C WanjalaNjoki Susanna NdunguNjoki NdunguIsaac LenaolaIsaac LenaolaWilliam OukoWilliam Ouko
14,697 words in judgment
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AI-assisted case brief
·~59 min to read original · ~4 min brief

The bottom line

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Supreme Court rules ELRC can decide NSSF Act 2013 constitutionality, sends case back.

What this practically means

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The Supreme Court said the Employment and Labour Relations Court (ELRC) was right to hear the challenge to the NSSF Act 2013 because the law directly affects workers and employers. The Court of Appeal wrongly decided the case itself after saying the ELRC had no power. It should have sent the case back to the right court. Now the Court of Appeal must quickly rule on the actual issues. Each side pays its own costs.

Executive summary

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This consolidated appeal arose from a challenge to the constitutionality of the National Social Security Fund Act, 2013. The Employment and Labour Relations Court (ELRC) had declared the Act unconstitutional, but the Court of Appeal set aside that judgment, holding that the ELRC lacked jurisdiction to determine the constitutional validity of a statute. The Supreme Court allowed the appeal on the narrow ground that the ELRC had jurisdiction. The Court held that the ELRC, as a court of the status of the High Court, is not precluded from determining the constitutional validity of a statute where that statute lies at the centre of a dispute relating to employment and labour relations. It distinguished its earlier decision in Albert Chaurembo, which concerned pensioners, not current employees. The Court further held that the Court of Appeal erred by proceeding to determine the merits of the Senate concurrence issue after finding the ELRC proceedings a nullity; having found a lack of jurisdiction, the appellate court should have remitted the matter without addressing the merits. The Supreme Court remitted the case to the Court of Appeal for substantive determination of the ELRC judgment on an urgent basis. Each party was ordered to bear its own costs. The Court also confirmed the 3rd appellant's locus standi, finding that its case was identical to the primary parties and that it had not been served with the Court of Appeal proceedings.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the 3rd appellant is a proper party to participate in the appeal as of right under article 163(4)(a) of the Constitution
  2. 2.Whether the Employment and Labour Relations Court lacked jurisdiction to determine the constitutional validity of the NSSF Act 2013
  3. 3.Whether the Court of Appeal exercised original jurisdiction in partially determining the constitutionality of the NSSF Act 2013
  4. 4.Whether the case should be remitted to the High Court for determination
  5. 5.Reliefs, if any, available to the parties

Key legal issues

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01

Whether the ELRC had jurisdiction to determine the constitutional validity of the NSSF Act 2013

Holding

The ELRC had jurisdiction because the NSSF Act 2013 lies at the centre of a dispute relating to employment and labour relations.

Reasoning

The Supreme Court distinguished between the ELRC's limited jurisdiction over employment and labour disputes and the High Court's residual jurisdiction under Article 165. It held that where a statute is central to a dispute falling within the ELRC's sphere, the ELRC may determine its constitutional validity. The Court rejected the Court of Appeal's restrictive view that the dispute did not arise from an employer-employee relationship, noting that the Act imposes obligations on employers and employees and affects collective bargaining agreements. The Court also clarified that its earlier decision in Albert Chaurembo did not oust ELRC jurisdiction over disputes involving current employees, only over pensioners.

p. 25
02

Whether the Court of Appeal exercised original jurisdiction in partially determining the constitutionality of the NSSF Act 2013

Holding

The Court of Appeal erred by determining the merits of the Senate concurrence issue after finding the ELRC proceedings a nullity.

Reasoning

The Supreme Court held that once the Court of Appeal determined that the ELRC lacked jurisdiction, it should have remitted the matter to the appropriate court without addressing the merits. By deciding the Senate concurrence issue, the Court of Appeal assumed original jurisdiction, which it does not possess under Article 164(3) of the Constitution. This prejudiced the fair determination of the case by the court with jurisdiction.

p. 29
03

Whether the 3rd appellant had locus standi to appeal to the Supreme Court

Holding

The 3rd appellant had standing because its case and prayers were identical to those of the 1st and 2nd appellants, and it was not served with the Court of Appeal proceedings.

Reasoning

The Supreme Court found that the 3rd appellant, though an interested party at the ELRC, had a demonstrable interest and was not served with the notice of appeal at the Court of Appeal. Its case was identical to the primary parties, so it could properly appeal. The Court distinguished its earlier decision in Law Society of Kenya v Communications Authority, where the intending appellant had never been a party below.

p. 22

Legal principles established

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  • ELRC can decide if a law is constitutional when that law is central to an employment or labour dispute.
  • If the Court of Appeal finds a lower court had no jurisdiction, it cannot then decide the case itself.
  • A person who was a party in the lower court and has the same case as others can appeal to the Supreme Court.
  • The ELRC's jurisdiction over current employees is different from its jurisdiction over pensioners.
  • The Court of Appeal must remit a case to the proper court after finding a jurisdictional error, not rule on the merits.

Court orders

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  1. 1.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
  2. 2.The case is hereby remitted to the Court of Appeal to determine the substantive merits of the ELRC Judgment on an urgent basis
  3. 3.Each party shall bear its own costs
  4. 4.We hereby direct that the sum of Kshs 6000/- deposited as security for costs in each appeal herein be refunded to the appellants

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Martha Karambu Koome
Martha K KoomeCJ
Currently serving
majority

Wrote the judgment

Philomena Mbete Mwilu
Philomena M MwiluDCJ
Currently serving
majority
Mohammed Khadhar Ibrahim
majority
Smokin Charles Wanjala
Smokin C WanjalaSCJ
Currently serving
majority
Njoki Susanna Ndungu
Njoki NdunguSCJ
Currently serving
majority
Isaac Lenaola
Isaac LenaolaSCJ
Currently serving
majority
William Ouko
William OukoSCJ
Currently serving
majority
On appeal from
Court of Appeal at Nairobi
Civil Appeal No 656 of 2022
Jurisdiction invoked
Article 163(4)(a) of the Constitution; Rules 38 and 39 of the Supreme Court Rules, 2020
Consolidated with
Petition No E004 of 2023

Relief refused

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Restoration and affirmation of the ELRC Judgment

The Supreme Court did not restore the ELRC judgment; it remitted the matter to the Court of Appeal for substantive determination.

p. 30

Remittal to the High Court

The Supreme Court held that the ELRC had jurisdiction, so remittal to the High Court was unnecessary.

p. 29

Costs

Each party shall bear its own costs

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In our view, there is nothing in the Constitution, the ELRC Act, or indeed in our decision in the Karisa Chengo Case to suggest that in exercising its jurisdiction over disputes emanating from employment and labour relations, the ELRC court is precluded from determining the constitutional validity of a statute.
p. 25 Jurisdiction of the ELRC to determine constitutional validity of statutes
it is our holding that where the Court of Appeal determines that a trial court has acted without jurisdiction in determining a matter, it cannot assume original jurisdiction over the same.
p. 29 Limits of appellate jurisdiction
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;
p. 30 Final orders - outcome of the appeal
The case is hereby remitted to the Court of Appeal to determine the substantive merits of the ELRC Judgment on an urgent basis;
p. 30 Final orders - remittal
Each party shall bear its own costs;
p. 30 Costs order

Key timeline

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Before 2024
ELRC declares NSSF Act 2013 unconstitutional.
Before 2024
Court of Appeal sets aside ELRC judgment, says ELRC lacked jurisdiction.
2024
Supreme Court allows appeal, holds ELRC had jurisdiction, remits case to Court of Appeal.

Practical implications

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For lawyers

Jurisdiction strategy for employment cases

When challenging a statute that affects employment, file in the ELRC, not the High Court. The Supreme Court confirmed the ELRC can decide constitutional validity if the law is central to the dispute. If the Court of Appeal finds a jurisdictional error, insist it remits the case rather than deciding the merits itself.

For businesses

NSSF Act 2013 uncertainty continues

The Supreme Court did not decide whether the NSSF Act 2013 is constitutional. That issue now goes back to the Court of Appeal for a final ruling. Businesses should continue complying with the current NSSF Act until the Court of Appeal decides. Monitor the case for changes to contribution obligations.

For individuals

Workers can challenge NSSF law in ELRC

If you are a worker or union member and believe the NSSF Act 2013 violates your rights, you can bring your case in the Employment and Labour Relations Court. The Supreme Court confirmed that court has power to hear such challenges. This gives workers a direct path to question the law without going to the High Court first.

Frequently asked questions

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Does the Employment and Labour Relations Court have power to declare laws unconstitutional in Kenya?+

Yes, but only if the law is central to an employment or labour dispute. The Supreme Court in this case confirmed that the ELRC can decide constitutional validity of a statute like the NSSF Act 2013 when it directly affects workers and employers.

What happened to the NSSF Act 2013 after the Supreme Court ruling in Kenya?+

The Supreme Court did not decide if the Act is constitutional. It sent the case back to the Court of Appeal to rule on the merits urgently. Until the Court of Appeal decides, the NSSF Act 2013 remains in force.

Can the Court of Appeal decide a case after saying the lower court had no jurisdiction in Kenya?+

No. The Supreme Court ruled that once the Court of Appeal finds a lower court lacked jurisdiction, it cannot then decide the case itself. It must send the case to the correct court for a fresh hearing.

Who can appeal to the Supreme Court in Kenya?+

A person who was a party in the lower courts and has a direct interest can appeal. Even an interested party can appeal if their case is identical to the main parties and they were not properly served with earlier proceedings.

Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Tea Growers Association & 2 others v The National Social Security Fund Board of Trustees & 13 others", Case Analysis (2024). Petition E004 & E002 of 2023 (Consolidated). Source: https://new.kenyalaw.orghttps://new.kenyalaw.org/akn/ke/judgment/kesc/2024/3/eng@2024-02-21

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.