Why High Court has Extended Orders Suspending Housing Levy

May 21, 2019

The High Court has extended orders suspending the 1.5 percent deduction of employees’ salaries towards the Housing Fund.

Justice Maureen Onyango on Monday extended the orders until May 27 to allow for the consolidation of the various cases filed against the plan. The matter will be mentioned on Monday, May 27, 2019.

On April 17, the Labour Court issued orders temporarily stopping the government from implementing the levy to allow the consolidation of a case by Consumers Federation of Kenya (Cofek) with another earlier filed by the Central Organization of Trade Unions (Cotu).

The housing fund levy was first suspended in December 2018 following an urgent application by the workers’ umbrella body Cofek.

Cofek through advocate Henry Kurauka says it is “unreasonable to compel citizens who will not secure a house to contribute towards house ownership [by] another person without corresponding benefits”.

said the Housing Fund levy is illegal, unconstitutional, discriminatory, oppressive, irrational and without basis and is not a priority to Kenyans.

“There are more pressing issues like 13 counties being ravaged by hunger, drought and farmers unable to secure farm input in time,” he argued.

Kurauka argued there is no proof that consultations were done before section 31 (a) of the Employment Act, which introduces the housing fund levy, was inserted into the Finance Act.

According to Cofek, the levy will increase unemployment as employers will opt to cut down their workforce to cope with inflation.

“The scheme does not guarantee that all contributors under the scheme will get houses after investing their money,” Kurauka submitted.

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