Hous­ing Fund board stopped

Business Daily (Kenya) - - FRONT PAGE - Sam Kiplagat skipla­[email protected]­tion­media.com FKE boss Jacque­line Mugo.

The Fed­er­a­tion of Kenya Em­ploy­ers has ob­tained orders bar­ring the State from form­ing a board that will run and man­age the Hous­ing Fund, built by a 1.5 per­cent levy charged on work­ers’ monthly pay.

Fed­er­a­tion of Kenya Em­ploy­ers (FKE) yes­ter­day ob­tained orders bar­ring the gov­ern­ment from es­tab­lish­ing an ad­vi­sory board that will run and man­age the Hous­ing Fund built by a 1.5 per cent levy charged on work­ers’ monthly pay.

The court also stopped the gov­ern­ment from ap­point­ing mem­bers of the Ad­vi­sory Board for the multi-bil­lion shilling fund.

In an ap­pli­ca­tion cer­ti­fied ur­gent by Jus­tice Jo­rum Abuodha, FKE ac­cused the Min­istry of In­fra­struc­ture, Hous­ing and Ur­ban De­vel­op­ment of uni­lat­er­ally call­ing for nom­i­nees to the Ad­vi­sory Board with­out pub­lic con­sul­ta­tion. FKE fur­ther said the Hous­ing Act does not give the CS the man­date to es­tab­lish an ad­vi­sory board.

In an ad­ver­tise­ment through the me­dia on De­cem­ber 24, the min­istry called for nom­i­na­tions of ad­vi­sory board from among mem­bers of Cen­tral Or­gan­i­sa­tions of Trade Unions, Kenya Na­tional Union of Teacher (Knut), Fed­er­a­tion of Kenya Em­ploy­ers (FKE), Union of Kenya Civil Ser­vants and the Kenya Pri­vate Sec­tor Al­liance.

Each was asked to nom­i­nate three mem­bers and were to be of monthly pay that will be de­ducted monthly to­wards the Fund re­ceived by the Trans­port and Hous­ing min­istry on or be­fore Jan­uary 4.

But FKE through its ex­ec­u­tive di­rec­tor Jacque­line Mugo said the move con­tra­venes the pro­vi­sions of sec­tion 6 of the Hous­ing Act, which pro­vides that the Hous­ing Fund is un­der the con­trol of the Na­tional Hous­ing Cor­po­ra­tion.

In De­cem­ber, Cotu ob­tained orders stop­ping the gov­ern­ment from de­duct­ing 1.5 per cent from work­ers’ wages, after chal­leng­ing the con­sti­tu­tion­al­ity of Sec­tion 31 (a) of the Em­ploy­ment Act, which calls for the de­duc­tions to­wards the Hous­ing Fund. Fi­nance Act de­mands a cut of 1.5 per cent of the gross pay per month to be matched by em­ploy­ers and capped at Sh5,000.

Em­ploy­ees are ex­pected to re­claim con­trib­uted funds to pur­chase af­ford­able homes if they don’t qual­ify for homes built by the fund.

If not the funds may be trans­ferred to a pen­sion scheme, an­other ben­e­fi­ciary or cashed out after 15 years of con­tri­bu­tion or re­tire­ment, which­ever is ear­lier.

Ms Mugo said it was fair that the con­sti­tu­tion­al­ity of the Hous­ing Fund as well as the con­sti­tu­tion­al­ity of es­tab­lish­ing of an ad­vi­sory board be de­ter­mined.

“The no­tice is un­law­ful, ir­reg­u­lar and has no ba­sis in law as it is against the con­sti­tu­tion, which calls for pub­lic par­tic­i­pa­tion,” Ms Mugo said in a sworn state­ment.

Hear­ing starts on Jan­uary 24, di­rected the judge.

-FILE

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