As employers start to refund the January house levy that was deducted on its employees following a court ruling that also halted further deductions, the Teachers Service Commission (TSC) has remained tight lipped on the fate of billions that were deducted from teachers payslips.
A good number of employers have issued statements, apologizing and promising to refund the deducted January housing levy in February payroll.
The latest institutions are Absa bank and Jaramogi Oginga Odinga University of Science and Technology which have promised to refund all staff members their housing levy deductions made in January by February.
This follows a warning from Federation of Kenya Employees (FKE) which asked all its members to stop further deductions of the levy from their employees.
“In light of the court order, we advise our members, not to deduct the levy unless the Court of Appeal rules otherwise after the hearing of the substantive appeal or in the alternative, should the government challenge the said ruling in the Supreme Court, the said Court reverses the ruling delivered,” said Ms Jacqueline Mugo, the executive director and chief executive officer of FKE.
In January the Court of Appeal threw out the State’s stay application to reinstate the housing levy that was deemed unconstitutional.
The Court of Appeal ruled against the State’s plea to suspend the declaration of unconstitutionality made by the three-judge High Court bench.
“Public interest, in our view, tilts favour of in not granting the stay or the suspension sought. Public interest tilts in favour of awaiting the determination of the issues raised in the intended appeals,” Justices Lydia Achode, John Mativo and Mwaniki Gachoka said.
However after the ruling, President William Ruto insisted that the affordable housing plan would continue, adding that the court should have given the government time to complete creating the law to actualise the plan.
“For the avoidance of doubt, I want to tell them that we were in the reprocess of creating a law to guide the process and they should have given us time. We will also appeal the case so that we continue with the programme and create jobs for millions of Kenyan youth…” Mr Ruto said on Friday on his second day of Meru County tour.
Members of Parliament (MPs) are now in a rush to polish the housing levy law to ensure the deductions are continued.
This means Kenyans might have the 1.5 per cent levy, that had been abolished by the courts, deducted from their salary as early as March.
The Kenya Union of Post Primary Education Teachers Union (KUPPET) has threatened to sue the Commission for failing to refund the housing levy.
KUPPET has demanded for a refund of the housing levy deducted from teachers’ January pay.
KUPPET Secretary General Akelo Misori said TSC cannot give an excuse by saying the deductions happened because they had already prepared the payroll.
“We have seen in this country teachers being paid even on the 17th of the following month where there were small issues with the payroll. Now a big issue where the Court of Appeal has given an order calls for a recall for any payroll which has gone to the bank,” Misori said.
He said they had seen payslips of a number of teachers indicating the levy was deducted.
“Many members from around the country have shared their payslips with us and they all indicate the Commission deducted the Housing levy tax from the January 2024 salaries,” Misori said.
“This is despite there being clear orders by the High Court and Court of Appeal declaring the Housing Levy illegal and unconstitutional,” he said.
Misori said the court ruling came in good time to allow TSC to make appropriate changes to the payroll.
He said the move by TSC to deduct teachers the illegal levy shows the Commission was willing to disobey the law.
He said KUPPET wants the immediate release of the Housing deductions.
“We have also sought an assurance from the Commission that it will obey court orders going forward. Including and specifically the orders on the Housing Levy,” he said.
Misori urged the government to take all necessary measures to protect teachers’ earnings and benefits.
He said KUPPET will take all measures to protect teachers’ earnings and benefits.
“This includes instituting contempt proceedings against TSC in their personal capacity over this matter of the Housing Levy tax,” he said.
“Amid the economic difficulties that teachers and all Kenyans are facing, the last thing we expect from a responsible employer is the making of illegal deductions from their pay,” Misori said.
“If we knew they were going to blatantly disobey court orders then we could have yelled on the streets. The yelling which they understand best,” Misori said.
“But we thought they would be responsible Commission and a responsible employer.”
Misori said the union was never in support of the Finance Bill 2023 which caused uproar among Kenyans.