What Occurred on 26th June 2026

Kenya's Court of Appeal took an unusual step on 26th June 2026 — one that is rarely seen in any jurisdiction. The three-judge bench sitting in Nairobi vacated its own judgment, which had been delivered on 29th May 2026, in the long-running constitutional dispute surrounding the National Social Security Fund (NSSF) Act, 2013. The bench conceded that it had disposed of an application that was no longer properly before it, and that it had done so without affording the parties an opportunity to address the court.

The bench was candid about the gravity of the situation, noting that the integrity of the judicial process and public trust in the courts were at stake. On the strength of an application by the Attorney General, the court agreed that the 29th May decision had been rendered on a stale application — one that had been effectively overtaken by the progression of the matter — and proceeded to nullify it in the interests of justice.

It bears emphasis that this development does not touch on the substantive merits of the NSSF dispute. What the court corrected was a procedural misstep — but the ripple effects of that correction are significant for millions of Kenyan employees, thousands of employers, and the broader social security ecosystem.

The Litigation History: Over a Decade of Legal Uncertainty

The significance of the 26th June 2026 development can only be fully appreciated against the backdrop of a legal battle that has been winding through Kenya's courts for more than ten years.

1
2013–2014
Parliament passes the NSSF Act 2013 — petitions filed immediately
The NSSF Act No. 45 of 2013 overhauled Kenya's social security framework by replacing the long-standing flat monthly contribution of Sh200 per party (Sh400 combined) with an income-linked model requiring both employees and employers to each remit 6% of gross salary — capped at Sh3,240 per party, or Sh6,480 in total per month. The Act drew immediate legal challenges. Five constitutional petitions, spearheaded by the Kenya Tea Growers Association among others, were lodged in the High Court and the Employment and Labour Relations Court (ELRC), contesting the statute's validity.
2
19th September 2022
ELRC strikes down the NSSF Act 2013 as unconstitutional
A bench of three judges of the ELRC (Nduma, Wasilwa, and Mbaru JJ), sitting in consolidated Petition No. 38 of 2014 (together with Petitions 34, 35, 49 and 50 of 2014), delivered a comprehensive judgment declaring the NSSF Act 2013 void and of no legal effect. The court's principal grounds included the legislature's failure to accord the Senate its constitutionally required role in the enactment process given the Act's implications for county governments; insufficient public participation; an irreconcilable conflict with the Competition Act; and the statute's compulsory override of existing superior pension arrangements.
3
3rd February 2023
Court of Appeal reverses the ELRC — but solely on jurisdictional grounds
In Civil Appeal 656 of 2022, the Court of Appeal set aside the ELRC's declaration — not on the substance of the constitutional arguments, but on the narrower ground that the ELRC lacked competence to pronounce on the constitutional validity of an Act of Parliament in circumstances where the dispute did not originate from a recognisable employer-employee relationship. As a consequence, the NSSF Act 2013 was restored to operation, and deductions at the enhanced rates recommenced.
4
21st February 2024
Supreme Court restores ELRC jurisdiction and remits the matter
The Supreme Court, in consolidated SC Petitions E004 and E002 of 2023, disagreed with the Court of Appeal's jurisdictional analysis. The apex court held that the NSSF Act was quintessentially a labour relations instrument and that the ELRC was precisely the forum envisaged by the Constitution for such disputes. The Court of Appeal's February 2023 judgment was set aside, and the matter was remitted to that court for a fresh determination — this time on the substantive constitutional questions: was the NSSF Act 2013 validly enacted, or not?
5
29th May 2026
Court of Appeal issues a ruling — sowing widespread confusion
A differently constituted bench of the Court of Appeal handed down a ruling rejecting NSSF's application for conservatory orders — specifically, a stay of the ELRC's September 2022 judgment pending the hearing of the substantive appeal. The ruling was broadly understood as having revived the ELRC's declaration of unconstitutionality, thereby stripping the enhanced contribution framework of any judicial support. This interpretation triggered contradictory public communications: NSSF, the Central Organisation of Trade Unions (COTU), and the Federation of Kenya Employers (FKE) maintained that enhanced deductions should continue; the Law Society of Kenya (LSK) took the opposing position that there was no longer any judicial foundation for those deductions. The resulting uncertainty rippled across payroll departments nationwide.
6
2nd June 2026
Senior Counsel raises the alarm over a "monumental error"
Senior Counsel Fred Ngatia, appearing for NSSF, formally wrote to the Registrar of the Court of Appeal drawing attention to what he characterised as a "monumental error." His submission was that the bench had inadvertently disposed of a stay application filed back in October 2022 — a motion that had long since been overtaken by subsequent court events — rather than the live application then pending: a September 2024 application by the Kenya Export Floriculture, Horticulture and Allied Workers Union seeking to be joined as a party to the appeal.
7
26th June 2026
Court of Appeal vacates the 29th May ruling
The Attorney General moved the court formally, and the bench reconvened. After hearing submissions, the court acknowledged the procedural error, accepted that the 29th May ruling had been delivered on an application that was no longer alive before it, and vacated the decision in its entirety. The sole outstanding application — the joinder motion of September 2024 — remains pending. Once that application is resolved, the court will proceed to schedule the substantive hearing of the appeal.

A Closer Look at the 29th May Ruling That Was Set Aside

To appreciate the full import of the court's decision to vacate its own ruling, it is worth understanding precisely what that ruling said — and why it caused such disruption before being withdrawn.

The 29th May 2026 ruling — vacated on 26th June 2026

The Court of Appeal declined to grant NSSF conservatory orders staying the ELRC's September 2022 judgment. Applying the established two-limb Rule 5(2)(b) test, the court accepted that the appeal raised arguable points of law — satisfying the first limb. However, it found that NSSF had not established that the appeal stood to be rendered nugatory in the absence of a stay — the second, equally essential, limb. Failing to satisfy both conditions, the stay application was dismissed.

→ The practical effect of that ruling was to leave the ELRC's 2022 declaration of unconstitutionality technically operative — meaning the statutory basis for enhanced contributions appeared to have fallen away. This is precisely what gave rise to the contradictory guidance from NSSF, COTU, FKE, and LSK, and the payroll confusion that followed.

The court has now confirmed what Senior Counsel Ngatia flagged: the application that was determined on 29th May had already been superseded by subsequent proceedings and should never have been ruled upon. No party had addressed the court on it. The decision was therefore a nullity — and the court acted correctly in setting it aside before its consequences hardened further.

The Contribution Rates at the Centre of the Dispute

For the benefit of those who have been following this matter from a payroll or HR standpoint, the table below sets out the two competing contribution frameworks whose legal status remains unresolved:

Regime Employee Contribution Employer Contribution Total Monthly
NSSF Act Cap. 258 (old regime) Sh200 flat rate Sh200 flat rate Sh400
NSSF Act 2013 (enhanced regime) 6% of gross salary (ceiling: Sh3,240) 6% of gross salary (ceiling: Sh3,240) Up to Sh6,480

Whether the 2013 Act was constitutionally enacted — and whether the enhanced rates it introduced have ever had lawful force — is the question the Court of Appeal must now answer on the merits. That determination is yet to come.

Implications for Each Category of Stakeholder

👷
Employees & Workers
The position remains unresolved. Whether your employer deducts at the old flat rate or the enhanced percentage continues to depend on whatever guidance the employer has elected to follow in the absence of a definitive court pronouncement. The substantive appeal — when it is eventually heard and determined — will settle the question of whether years of enhanced deductions were lawfully made, and whether any entitlement to restitution or adjustment arises.
🏢
Employers
The vacation of the 29th May ruling removes the specific trigger for the conflicting guidance that has plagued HR and payroll departments since June. That said, the underlying legal question is no closer to resolution. Employers remain in a position of legal uncertainty and should seek qualified advice on their current remittance obligations. Meticulous documentation of the basis for compliance decisions is advisable given the potential for retrospective penalty exposure.
👴
Pensioners & Retirees
Retirement benefits already crystallised under the old NSSF regime are unaffected by the current dispute. The outstanding question — how contributions remitted at the enhanced rates under the 2013 Act are to be treated, whether they will be preserved, and how eventual pension calculations will be structured — remains contingent on the outcome of the substantive appeal. NSSF manages a fund in excess of Sh715 billion; the governance framework that applies to that fund has direct consequences for retirement security across the board.
🤝
COTU, FKE, LSK & Unions
The vacation of the 29th May ruling lends some support to LSK's contention that that ruling had not established a reliable legal foundation for the continuation of enhanced contributions. It does not, however, vindicate LSK's substantive position — the merits of the constitutional challenge have not yet been determined. Both COTU and FKE, which had communicated to their constituencies that enhanced deductions should proceed, will need to revisit and update their guidance in light of the court's decision to vacate the ruling on which that position rested.

What Happens Next

The road ahead
  1. The Court of Appeal will first hear and determine the September 2024 joinder application by the Kenya Export Floriculture, Horticulture and Allied Workers Union before any further steps are taken in the substantive appeal
  2. Once the joinder question is settled, the court will fix a date for the substantive hearing — the central question being whether the NSSF Act 2013 was constitutionally enacted
  3. The Court of Appeal will deliver a binding judgment on the merits, pursuant to the Supreme Court's directive that the matter be dealt with on an urgent footing
  4. Either party may, at the appropriate stage, renew an application for conservatory orders — though any such application will this time be heard with full submissions from all parties
  5. A further appeal to the Supreme Court remains a possibility, meaning the litigation may extend beyond the Court of Appeal's eventual determination
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A word of caution for employers and HR practitioners: The legal position on NSSF contributions remains genuinely unsettled. Organisational compliance decisions should not be anchored to social media commentary, institutional press statements from NSSF, COTU, or FKE, or unofficial WhatsApp group guidance — however authoritative their source may appear. The only reliable basis for your compliance position is qualified legal advice, supported by clear documentation of the reasoning behind each decision taken.
Need clarity on your NSSF obligations?
Whether you are an employer navigating contribution uncertainty, an employee with concerns about deductions, or an institution seeking compliance advice — Nephine Law Advocates provides clear, authoritative employment law counsel to employers, employees, and institutions.
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⚖️
Nephine Minyiri
Lead Counsel & Founder, Nephine Law Advocates | LSK No. P.105/12067/16
Nephine is an Advocate of the High Court of Kenya with over ten years of experience in employment and labour law. She holds an LLM in Public International Law from the University of Nairobi and sits on the LSK Nairobi Branch ELRC Bar Bench Committee. She advises employers, employees, government institutions, and NGOs on employment law compliance.
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🚨 BREAKING: Court of Appeal withdraws its NSSF ruling — and admits it decided the wrong application. On 26th June 2026, Kenya's Court of Appeal set aside its May 29 ruling on the NSSF Act 2013 dispute — in a rare and frank acknowledgment that it had determined an application that was no longer before the court, and without hearing the parties. Here is the full picture — because the confusion this saga has caused for millions of workers and thousands of employers deserves a clear explanation. 📌 THE JOURNEY SO FAR: ✦ 2022: ELRC declares the NSSF Act 2013 unconstitutional (enhanced contributions from Sh400 to up to Sh6,480/month had no legal basis) ✦ Feb 2023: Court of Appeal overturns — says ELRC had no jurisdiction. Enhanced contributions resume. ✦ Feb 2024: Supreme Court reinstates ELRC's jurisdiction. Remits matter back to Court of Appeal for decision on the merits. ✦ May 29, 2026: Court of Appeal declines NSSF's stay application — triggering chaos. NSSF, COTU & FKE say "keep deducting." LSK says there is "no judicial basis" for enhanced rates. ✦ June 26, 2026: Court recalls its own ruling. The wrong application was decided. Parties were not heard. The ruling is set aside. 📌 WHAT THIS MEANS FOR YOU: For employees: No final ruling either way. The substantive question — is the 2013 Act constitutional? — is still pending. For employers: The legal position remains unsettled. Document your compliance decisions carefully. Do not rely on press releases from any organisation as your legal authority. For pensioners: Your existing NSSF entitlements are not affected. But the question of how enhanced contributions are treated is still live. For COTU, FKE, NSSF & LSK: Reassess your public guidance. The ruling you were relying on has been withdrawn. 📌 THE DEEPER LESSON: The court's willingness to recall its own ruling — publicly acknowledging the error — is a demonstration of judicial integrity. Article 50 (fair hearing) and Article 47 (fair administrative action) are not optional, even for courts. The substantive hearing is pending. We will be watching — and reporting. 📞 Need NSSF compliance advice? Contact Nephine Law Advocates. +254 716 346 706 | nephinelaw.com #NSSF #KenyaLaw #EmploymentLaw #LabourLaw #ELRC #CourtOfAppeal #NMLawAdvocates #WorkersRights #HRCompliance