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January 21, 2019

Employers win as court blocks formation of housing fund board

Labour CS Ukur Yatani with FKE executive director Jacqueline Mugo and Kenya Bankers Association CEO Habil Olaka on May 18 last year /ENOS TECHE
Labour CS Ukur Yatani with FKE executive director Jacqueline Mugo and Kenya Bankers Association CEO Habil Olaka on May 18 last year /ENOS TECHE

The Employment and Labour Relations Court has suspended formation of an advisory board to manage the Housing Fund.

The Federation of Kenya Employers had challenged the decision by Transport and Housing CS James Macharia, calling for nominees to the board.

FKE executive director Jacqueline Mugo said the move was against the Housing Act that places the fund under the National Housing Corporation.

“An injunction order is hereby issued restraining the minister from proceeding with any actions and process aimed at appointing members of an advisory board and/or establishing and advisory board,” Justice Nelson Abuodha said on Wednesday.

Macharia had sought to nominate members to the board through an advert in a local daily on December 24 last year.

The ministry invited three nominees from each organisation — the Central Organisation of Trade Unions, Kenya National Union of Teachers, FKE, the Union of Kenya Civil Servants and the Kenya Private Sector Alliance.

The application was certified urgent. An interpares hearing will be held on January 24.

The respondents are Macharia, the National Housing Corporation and the Attorney General.

FKE said there was no public participation on the formation of the board and that the Housing Act does not give the minister the mandate to establish such a board.

Read: Blow to Uhuru’s housing project as court halts tax


“Establishment of the board and the call for nominations of members contravenes the provisions of Housing Act,” Mugo told the court.

Mugo asked why the state was rushing to form the board after the court suspended the 1.5 per cent National Housing Development Fund.

The suspension order was issued on December 19 following an application by Cotu secretary general Francis Atwoli.

Cotu challenged the constitutionality of the 1.5 per cent deduction on workers’ wages towards the fund.

Macharia asked those applying to be board members to send their applications by January 4.

Mugo said the decision to advertise for the nominees a day to the Christmas holiday and on short notice was mischievous and in bad faith.

She said it was unreasonable for the organisations to forward nominees’ names within such a short time.

“The minister did not give the listed institutions the opportunity and reasonable time to invite their members to make applications and thereafter select suitable candidates,” Mugo said.

Read: Government to negotiate Big 4 housing tax with teachers - Ruto

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