Court rules ex-NHIF staff to retain salaries after SHA transition

The Employment and Labour Relations Court has ruled that all former employees of the now-defunct National Hospital Insurance Fund (NHIF), whether absorbed by the Social Health Authority (SHA) or redeployed elsewhere in the public service, will retain their last drawn salaries.

In a judgement delivered on July 23, 2025, Justice Byram Ongaya ordered that staff previously working at NHIF who have been redeployed within government institutions must keep their pay unchanged until they exit public service. The same applies to those absorbed by SHA, with all existing deployment letters to be revised accordingly to reflect this decision.

“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 ruled.

The decision came after a petition filed by some former NHIF workers who wanted the court to intervene and stop a reduction of their salaries following redeployment or absorption into SHA. The concern was that the restructuring of NHIF and the formation of SHA would negatively affect their earnings.

NHIF had 1,737 employees at the time of its dissolution, and only 815 were absorbed by SHA. The rest were scheduled for redeployment to other government offices. The ruling ensures all staff, regardless of their current placement, are protected from any form of pay cut.

In May, Public Service Commission (PSC) chairperson Anthony Muchiri announced that the former NHIF staff would remain under SHA for six more months to allow time for the Authority to complete its hiring process.

“The move is intended to ensure uninterrupted service delivery and maintain operational stability during the transition period,” Muchiri said.

Earlier, in April, the court had ordered SHA to disclose its organisational structure, job grades, available positions, and corresponding pay for former NHIF employees interested in joining the Authority. At the same time, PSC was directed to put in place an exit package for any staff who would not be absorbed and chose to retire.

Following a mediation process involving PSC, SHA, and the petitioners, it was agreed that those not absorbed by SHA would be redeployed without changes to their pay. As part of this agreement, the petitioners also withdrew their application for contempt against SHA CEO Mercy Mwangangi.

“The application for contempt of court dated June 17, 2025, be and is hereby marked withdrawn,” Justice Ongaya said.

With the mediation concluded, the court lifted a previous order that had suspended SHA’s recruitment process for key roles, including directors, deputy directors, county coordinators, finance officers, accountants, and quality assurance officers.

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