The Supreme Court of Kenya has dismissed an Appeal by the defunct National Health Insurance Fund (NHIF) Management Board and upheld the Court of Appeal’s decision, affirming that the Salaries and Remuneration Commission (SRC) has jurisdiction over remuneration.
The move marks a significant win for SRC in its role as regulatory oversight in public service compensations, including remunerations and benefits for employees of State corporations, such as NHIF.
The highest court on the land declared that SRC’s advice is binding on public institutions in line with Article 230(4)(b) of the Constitution of Kenya, 2010.
The case arose from a dispute over a Collective Bargaining Agreement (CBA) between NHIF and the Kenya Union of Commercial Food and Allied Workers where the former had negotiated and sought to implement a CBA without prior advice from SRC.
It follows that the SRC rejected the proposal, citing non-adherence to remuneration guidelines and fiscal sustainability and as a result, the matter escalated through the Employment and Labour Relations Court (ELRC) and the Court of Appeal before being adjudicated by the Supreme Court.
In a press statement sent to newsrooms, the Supreme Court judgement clarified that NHIF is a public body, and its employees are public officers, as their functions are public and their funding is from public contributions; hence, SRC has constitutional authority to advise national and county governments, including State corporations, on the remuneration and benefits for all public officers.
Further, the Apex Court clarified that SRC’s advice is not merely consultative but binding, in accordance with Articles 230(4)(b) and 259(11) of the Constitution, stating that upholding SRC’s constitutional mandate supports fiscal sustainability and ensures harmonisation and equity across the public service compensation framework.
In the previous judgement by the Court of Appeal, Judges Asike Makhandia, Agnes Kalekye Murgor, and Sankale ole Kantai also reinforced that SRC has the constitutional mandate to regulate the remuneration of public officers in State corporations.
They affirmed that for as long as salaries in State corporations are drawn from Parliament through the annual national budget or funds retained by the State corporation for purposes of defraying expenses as empowered by an Act of Parliament, all remuneration and benefits must be determined by the SRC.
“The Supreme Court judgement clarifies with finality the supremacy and binding nature of SRC’s constitutional mandate over remuneration and benefits at the national and county government levels, cementing SRC’s oversight, as provided for in the Constitution and SRC Act, 2011,” read the statement.
By Michael Omondi
