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The Supreme Court has dismissed an appeal by the defunct National Health Social Fund (NHIF) Management Board and upheld the Court of Appeal’s decision, affirming that the Salaries and Remuneration Commission (SRC) has total jurisdiction over remuneration and benefits for employees of state corporations, including NHIF.
The apex court declared that SRC’s advice is binding on public institutions in line with Articles 230 and 259 of the Constitution.
In its ruling, the Supreme Court 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.
It maintained that SRC has constitutional authority to advise national and county governments, including state corporations, on the remuneration and benefits for all public officers.
The case arose from a dispute over a Collective Bargaining Agreement (CBA) between NHIF and the Kenya Union of Commercial Food and Allied Workers.
NHIF had negotiated and sought to implement a CBA without prior advice from SRC; however, the commission rejected the proposal, citing non-adherence to remuneration guidelines and fiscal sustainability.
The matter escalated through the Employment and Labour Relations Court (ELRC) and the Court of Appeal before being adjudicated by the Supreme Court.
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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 SRC.
