The Employment and Labour Relations Court has ruled that all former employees of the defunct National Hospital Insurance Fund (NHIF) will retain their last drawn salaries, regardless of whether they have been absorbed by the Social Health Authority (SHA) or redeployed to other public institutions.
Delivering the judgment on July 23, 2025, Justice Byram Ongaya directed that all deployment letters issued to the staff be revised to reflect the ruling.
“Any letters already communicated to the staff of the defunct NHIF who have already been deployed within the wider public service be varied to reflect the retention of salary personal to self,” Justice Ongaya said.
The ruling followed a petition by former NHIF employees seeking to stop pay cuts after the restructuring that saw NHIF dissolved and replaced by SHA. The petitioners argued that the reorganisation would adversely affect their earnings.
At the time of NHIF’s dissolution, the agency had 1,737 employees, of whom 815 were absorbed into SHA. The rest were redeployed to other government offices. The court’s decision guarantees that all staff will maintain their previous pay until they exit public service.
In May, the Public Service Commission (PSC) announced that former NHIF workers would remain under SHA for six months to ensure continuity during the transition.
Earlier in April, the court had ordered SHA to disclose its organisational structure, job grades, and available positions, while also directing PSC to prepare an exit package for staff opting for early retirement.
Following mediation between PSC, SHA, and the petitioners, it was agreed that those not absorbed by SHA would be redeployed without pay cuts. The petitioners also withdrew an application for contempt against SHA CEO Mercy Mwangangi.
With the mediation concluded, the court lifted a previous order that had halted SHA’s recruitment for key positions such as directors, county coordinators, and finance officers.
