Court Blocks Automatic Absorption of Ex-NHIF Staff into SHA

Employment Court rules against internal recruitment, mandates open competition for all positions

The dreams of thousands of former National Health Insurance Fund (NHIF) employees for seamless transition into the newly established Social Health Authority (SHA) were crushed yesterday when an Employment and Labour Relations Court refused to lift orders requiring all positions to be externally advertised.

Justice Byrum Ongaya delivered a blow to SHA’s bid to internally absorb ex-NHIF workers, ruling that the authority had failed to demonstrate any service disruption that would warrant bypassing competitive recruitment processes.

The case, filed by Said Omar Abdille, challenged SHA’s recruitment approach as discriminatory and opaque.

Abdille’s lawyer, Mohamed Duwane, argued that limiting opportunities to former NHIF employees would “lock out qualified Kenyans from applying for advertised jobs.”

SHA Chief Executive Mercy Mwangangi had attempted to convince the court that internal recruitment was necessary to maintain service continuity.

However, Justice Ongaya remained unconvinced, noting that former NHIF staff continue working as temporary employees during the transition period.

“The elephant in the room was not that those in NHIF would lose their jobs but rather, whether the process of their recruitment was open and competitive, as required by law,” Justice Ongaya observed.

The court’s reluctance to approve internal absorption appears influenced by NHIF’s troubled history.

Duwane emphasized that effective SHA operations would be compromised given the defunct fund’s “numerous allegations of corruption, mismanagement, and inefficiencies over the years.”

The judge stressed that staff “purportedly recruited pursuant to internal advertisement cannot hold onto the illegal and unconstitutional process to justify the illegitimate purported recruitment and appointments.”

The case revealed conflicting judicial opinions on SHA recruitment.

While Justice Ongaya blocked internal hiring, SHA cited another ruling by Justice Bernard Manani that had approved internal recruitment from NHIF in a separate case filed by the Kenya Union of Commercial Food and Allied Workers.

This legal contradiction has created uncertainty for both SHA management and the hundreds of former NHIF employees whose futures hang in the balance.

Court documents disclosed SHA’s ambitious structure, requiring 485 posts across 12 tiers.

The authority needs 430 technical staff and 55 administrative personnel, with county operations commanding the largest allocation of 330 positions.

Several senior appointments have already been made, including directors for internal audit, funds management, corporate services, and beneficiary management, all on five-year terms beginning April 2024.

The ruling reflects broader concerns about transparency in public sector recruitment.

Justice Ongaya’s initial order mandated that SHA advertise all vacancies through “an open, fair, competitive, and transparent process in accordance with the law devoid of restrictions and limitations.”

Former NHIF employees now face the reality of competing openly for positions they had expected to transition into automatically.

The court’s decision reinforces constitutional principles of equal opportunity while potentially disrupting SHA’s operational timeline.

The authority must now navigate the complex process of conducting transparent recruitment while maintaining health insurance services for millions of Kenyans.

For the ex-NHIF workforce, the path forward requires proving their worth through competitive processes rather than relying on institutional continuity.