In a landmark ruling that underscores the protection of employee rights during institutional reforms, the Employment and Labour Relations Court has directed that all former National Hospital Insurance Fund (NHIF) staff absorbed into the newly formed Social Health Authority (SHA) or redeployed to other public service roles must retain their last drawn salaries.
Justice Byram Ongaya, while delivering the ruling on July 23, 2025, emphasized that any move to reduce the salaries of the redeployed employees would violate the principles of fair labour practices as enshrined in the Constitution. The court further ordered that all deployment letters already issued be revised to reflect this directive.
The judgment followed a petition filed by ex-NHIF employees seeking to prevent salary cuts during their transition to the SHA or to other government departments. The petitioners argued that they were being unfairly targeted through unilateral salary reductions, despite having served under terms that had been previously approved by the Public Service Commission (PSC).
According to official data, about 1,737 NHIF employees were affected by the transition. Of these, 815 were absorbed into SHA, while the remainder were to be redeployed to other government agencies. In May 2025, PSC had extended their deployment for six months to facilitate SHA’s ongoing recruitment processes, effectively allowing all staff to continue serving temporarily under their original terms.
This decision is the latest twist in the legal controversies surrounding SHA’s formation and recruitment practices. Earlier this year, the court ruled that SHA’s attempt to reserve certain jobs exclusively for former NHIF staff was unconstitutional and discriminatory, stating that it violated the principles of equal opportunity and merit-based recruitment.
Labour rights groups and several public sector unions have lauded the decision as a major victory for transparency and justice in public service reforms. “This judgment reinforces the idea that structural changes must not be used as a backdoor to punish or exploit workers,” said one union official who represented some of the petitioners.
As SHA continues to position itself as a central pillar in the government’s push toward universal healthcare, this ruling is expected to guide future public sector transitions and protect employees from arbitrary changes in employment terms.
