NAIROBI, Kenya – Former employees of the defunct National Hospital Insurance Fund (NHIF) will retain their previous salaries even after redeployment or absorption into the newly established Social Health Authority (SHA), following a court ruling aimed at protecting their earnings during the ongoing transition.
In a judgment delivered on July 23, 2025, Employment and Labour Relations Court Judge Byram Ongaya ordered that all former NHIF staff—whether absorbed by SHA or redeployed within the wider public service—must continue earning their last drawn salaries.
“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 follows a legal petition by a group of former NHIF staff who opposed salary reductions after being redeployed outside the SHA.
Transition and Court-Ordered Safeguards
Out of 1,737 former NHIF staff, only 815 were absorbed into the SHA. The rest are expected to be redeployed across other government agencies.
In May, the Public Service Commission (PSC) extended the tenure of all former NHIF employees under SHA for six more months, pending full implementation of SHA’s staffing structure.
PSC Chair Anthony Muchiri said the extension was to “ensure uninterrupted service delivery and maintain operational stability during the transition.”
Earlier in April, the court had also ordered SHA to disclose its staffing structure and pay grades to enable transparency in the recruitment process, and directed the PSC to develop exit packages for staff who may opt for early retirement instead of redeployment.
However, following a mediation involving the PSC, SHA, and former NHIF staff, a consent agreement was reached: staff would be redeployed without salary cuts, and the petitioners agreed to withdraw a contempt of court case against SHA CEO Mercy Mwangangi.
“The application for contempt of court dated June 17, 2025, be and is hereby marked withdrawn,” the judge noted.
The court also lifted earlier orders that had temporarily suspended SHA’s recruitment to key roles such as county coordinators, directors, deputy directors, quality assurance officers, and finance officers.
The Social Health Authority officially took over from NHIF earlier this year as part of the government’s plan to implement the Universal Health Coverage (UHC) programme under new legislation.
SHA is mandated to manage three new public health funds under the Social Health Insurance Act, including the Primary Healthcare Fund, Emergency, Chronic and Critical Illness Fund, and the Social Health Insurance Fund (SHIF).
