IT IS TIME FOR KENYAN WORKERS TO WITHDRAW FROM NSSF AS NSSF MEMBERS ARE NOT ELIGIBLE TO GET LONG SERVICE PAY AT THE TIME THEIR SERVICES ARE TERMINATED OR WHEN THEY RESIGN FROM THEIR JOBS. Section 35 of the Employment Act, 2007, says an employee who resigns or his services are terminated legally is not entitled to service pay if he is a member of a registered pension scheme, gratuity or service pay or any other scheme operated by the employer. In Kenya, most employees are registered with the NSSF. Does that mean in case of resignation or termination employees will only take home their salaries and leave arrears? Many readers have asked this question. For clarity, I will reproduce Section 35 of the Employment Act, which deals with the issue concerned. It says: 1. A contract of service not being a contract to perform a specific work, without reference to time or to undertake a journey shall if made to be performed in Kenya be deemed to be:- a) Where the contract is to pay wages daily a contract terminable by either party at the close of any day without notice. b) Where the contract is to pay wages periodically at intervals of less than one month a contract terminable by either party at the end of the period next following the giving of notice in writing or c) Where the contract is to pay wages or salary periodically at intervals of or exceeding one month a contract terminable by either party at the end of the period of 28 days next following the giving of notice in writing. Basically this part talks of the period notice and how much either the employee or employer must give when terminating employment. This section is important as it leads us to the next part of the section, which is relevant to your question and part 5 states as follows: Contentious section 5) An employee whose contract of service has been terminated under sub-section 1(C) above shall be entitled to service pay for every year worked the terms of which shall be fixed. This part goes on to clarify who is entitled to service pay and states that only employees who fall under sub-sections C and whose termination requires a notice of one month or more are entitled to service pay. Employees falling under sub-section (a) and (b), whose contracts are short-term and whose payment periods are less than one month, are not entitled to service pay. Part 6 of the contentious section then clarifies who is exempted from receiving service pay. It states as follows:- Read more at: 6) This section shall not apply where an employee is a member of: a) A registered pension or provident fund scheme under the Retirement Benefits Act; b) A gratuity or service pay scheme established under a collective agreement; c) Any other scheme established and operated by an employer whose terms are more favourable than those of the service pay scheme established under this section and; d) The National Social Security Fund. The section distinguishes the different schemes that an employee can belong to. The section clearly excludes members of NSSF from getting service pay. Sadly, almost most employed Kenyans are members of NSSF. My opinion is that we need to seek clarification of this section from our Labour Minister, otherwise most of us will not be entitled to receive service pay. I’m not sure whether this inclusion of NSSF was intentional or was an error on the part of the drafter. because it kills the spirit of the Act in protecting the rights of the employees.
Posted on: Tue, 21 Jan 2014 07:29:27 +0000
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