LSK threatens to sue State over continued NSSF deductions

The Law Society of Kenya (LSK) has threatened to institute contempt of court proceedings against government agencies and employers who continue deducting enhanced National Social Security Fund (NSSF) contributions.

In a statement, LSK President Charles Kanjama argued that the deductions have no legal basis following a recent Court of Appeal ruling.

He said any continued implementation of the enhanced contribution regime amounts to defiance of a binding court judgment and warned that those responsible could face fines, confiscation of assets or imprisonment.

"The Society shall closely monitor compliance and consider all lawful measures available, including instituting contempt of court proceedings against persons found guilty of deliberate disobedience," Kanjama said.

The lawyers' body maintained that the Employment and Labour Relations Court (ELRC) judgment declaring the NSSF Act, 2013, unconstitutional remains in force after the Court of Appeal declined on May 29, 2026, to suspend its implementation pending the hearing of the substantive appeal.

According to the LSK boss, the legal consequence of that ruling is clear.

"There presently exists no stay order suspending the operation and effect of the ELRC judgment that declared the NSSF Act, 2013, unconstitutional. Until the substantive appeal is heard and determined, the ELRC judgment remains operative and binding," the Society said.

This development would set the stage for a fresh legal showdown over a law that has been at the centre of prolonged litigation for more than a decade.

Senior Counsel Kanjama argued that the rule of law demands obedience to court orders, warning that neither government circulars nor administrative directives can override a valid court decision.

"Court orders are not suggestions or advisory opinions but binding mandates that must be obeyed unless lawfully reviewed, varied, or set aside," argued Kanjama. 

Quoting previous court decisions, he underscored that disobeying court orders undermines constitutional governance.

"Court orders are not decorative pieces of paper with court seals and signatures. They must be obeyed unless lawfully set aside," it quoted Justice Nzioki wa Makau in Kenya Private Workers Union v Kenya Methodist University.

Based on its interpretation of the current legal position, the lobby group directed employers to immediately stop deducting enhanced NSSF contributions.

"Pending determination of the substantive appeal, employers must immediately cease all deductions under the NSSF Act, 2013 and revert to the contribution regime that existed before its implementation," the Society stated.

The lawyers further advised employers and employees to consider lawful retirement savings through registered occupational pension schemes and private retirement benefit providers until the dispute is conclusively determined.

LSK warned that employers who continue making deductions under the disputed law risk future legal liability if the ELRC judgment is ultimately upheld.

"Employers who continue making deductions under the NSSF Act, 2013, do so at their own peril and may face legal liability," the statement said.

It added that workers subjected to continued deductions could seek compensation through the courts.

"Employees whose earnings are subjected to unlawful deductions may have recourse in law, including claims for restitution," it said.

The Society noted that the dispute affects millions of Kenyan workers and thousands of employers, making strict adherence to the Constitution and judicial authority imperative.

"Constitutional democracy demands no less," Kanjama said.

The NSSF Act, 2013, has faced constitutional challenges since 2014. While the Court of Appeal in 2023 briefly revived the law after overturning an earlier ELRC judgment on jurisdictional grounds, the Supreme Court later ruled that the labour court had the proper jurisdiction to hear the case and sent it back to the Court of Appeal for determination on the merits.

LSK argues that until that appeal is heard and determined, the ELRC judgment declaring the Act unconstitutional remains the applicable law, leaving no legal basis for continued enforcement of the enhanced NSSF contribution framework.