Ex-NHIF staff face over massive salary cuts after deployment to PSC

Mary had less than 10 years left before retirement.

Having served at the defunct National Health Insurance Fund (NHIF) for over 25 years, she had hoped for a smooth transition as she prepared to exit the workforce with dignity.

Instead, anxiety and confusion now cloud her future, with her job hanging in the balance.

On June 10, 2025, shortly after the Social Health Authority (SHA) chief executive officially took office, Mary was among employees served with deployment letters recalling them to the Public Service Commission (PSC).

“I picked my letter at the SHA headquarters in Nairobi on June 23, 2025, and submitted it to PSC,” Mary recalls.

“However, PSC told me to wait because there are no jobs available at the moment. They were clear—they simply don’t have jobs for us yet.”

To add to her distress, her salary has been slashed drastically by nearly 70 per cent.

As a clerical officer at the defunct NHIF, Mary used to earn Sh240,000. Under PSC, the same position will pay her just Sh40,000.

“At PSC, they told me to prepare for a massive salary cut,” Mary says, her voice trembling.

“70 per cent of my earnings are gone. How do I survive?”

The new salary, she laments, is not enough to cover her basic needs.

She has a house mortgage and a car loan, with loan deductions exceeding Sh100,000 per month.

“I just don’t know how I will manage. With a salary of Sh40,000, before tax, how will I pay my mortgage and car loan? How will I feed my family?” she asks, holding back tears.

The deployment letter directed her to proceed on leave before reporting to her new posting. But weeks later, no clear communication has come from PSC.

“I am just waiting at home, unsure of what happens next,” she says.

Shockingly, she has been deployed on probationary terms, as though she is a new entrant into the civil service.

At least 215 deployment letters have already been issued, with an additional 400 expected in the coming days.

During a town hall meeting with SHA’s CEO, Dr Mercy Mwangangi, on June 9, 2025, employees were informed that those who had not applied for internal SHA positions would automatically be deployed to PSC or other ministries.

The very next day, on June 10, Mary received an email directing her to collect her letter and report to PSC by June 11.

Mary had been working at SHA since November 2023, after NHIF was repealed following the enactment of the Social Health Insurance Act (SHIA), 2023.

Staff from NHIF were seconded temporarily to SHA under the transition framework.

Sources familiar with the matter told The Standard that some of the affected staff have already been posted to ministries like the Ministry of Culture, while others remain at PSC awaiting further instructions.

Both those who applied for SHA positions and those who did not are among the affected.

In one of the deployment letters, signed by Mwangangi on June 10, staff were notified of the end of their temporary assignment under SHA. One letter reads:

“The PSC has now appointed you to the position of Chief Clerical Officer – General Office Services at the State Department for Public Service (for deployment) effective June 11, 2025, by Article 234 (2) of the Constitution, Section 33 of the Public Service Act, and Paragraph 6 (5) (b) of the First Schedule to the Social Health Insurance Act. This marks the end of your assignment with SHA in line with the transitional provisions governing the deployment of staff from the former NHIF.”

Mary did not apply for any of the advertised SHA positions, saying none matched her qualifications. She had hoped instead for a dignified exit with a severance package.

“I didn’t qualify for the SHA positions, so I waited for guidance on the exit package. But the CEO and board chair told us outright—there is no money for that,” she says, her voice filled with despair.

She wonders how she can now negotiate with her bank about her mortgage when she has fewer than five years until retirement and her salary has been drastically cut.

“It's simply not possible. I will retire while still paying these loans—possibly even after retirement. This is not how I imagined the end of my career,” Mary says.

She believes SHA should have offered a fair exit option for those unwilling or unable to transition to PSC jobs.

“Some of us have worked for NHIF since before it even became a parastatal. We understand SHA might not need as many people, but why not treat us with dignity? Why not provide an exit package to help us start afresh?” she asks.

SHA has an establishment of 815 staff, against 1, 732 who served under NHIF.

One appointment letter seen by The Standard offers a salary of Sh34,420 per month, with a housing allowance of Sh10,000, a commuter allowance of Sh4,000, and an annual leave allowance of Sh4,000.

The letter also demands submission of various documents, including academic certificates, national ID, KRA PIN, NSSF and NHIF numbers, certificate of good conduct, and bank details.

“You are required to signify your acceptance of this appointment in writing to enable processing,” reads the letter.

But the treatment stings. “It’s humiliating,” Mary says. “A clerk at PSC even mocked me, questioning why I expected to earn Sh190,000 when I would be doing the same clerical work she does for Sh31,000.”

Though Brian has not yet received his deployment letter, the uncertainty continues to weigh heavily on him.

“I applied for a higher job group because my current role under SHA offers better pay. I also qualified for a senior position.

The recruitment process is not as open or transparent as it should be. I am aware there is a possibility I will also receive a deployment letter to PSC,” says Brian.

Initially, immediately after NHIF was repealed by SHA on November 24, all NHIF employees were deployed to SHA.

According to employment structures at SHA, the staff were to undergo a suitability assessment.

The second option for the employees was to take an early retirement package, while the third option was to have them absorbed in the public sector.

Brian regrets that the options have silently been dropped.

“There is no clarity about the exit package, and we have been told that there is no money to facilitate it. This leaves PSC as the only option, despite the salaries being far below what we currently earn under SHA,” he regrets.

He adds, “Many SHA employees made financial commitments-loans, mortgages, and other obligations, based on our current salaries.

If we are deployed to ministries where salaries are almost four times lower, it becomes impossible to meet these obligations. This issue is causing immense fear and anxiety among staff”

Brian laments, “All we are asking from those in authority is simple—treat us with dignity. Some of us have served this organisation for many years.

Even if deployment is inevitable, let it be done transparently, with proper structures and consideration for our livelihoods.

Our financial commitments are significant, and failure to handle this matter carefully could lead to family breakdowns and immense distress.”

The letters have been given at a time the court stopped the recruitment at the entity, with employees sighting contempt of court, and illegality as they should be issued by PSC, the current employer.

A recent court ruling ordered all positions to be re-advertised publicly.

Contacted to have a legal perspective on employment, Okalle Makanda, MNO Advocates LLP, notes that under the Employment Act, there are terms of an employment contract that cannot be reviewed without the consent of the employee.

Makanda adds that on remuneration, an employer cannot review the salary without the consent of the employee.

“Oftentimes, when an employer is in the situation where they have to review salaries downwards, they offer two options. Accept the new salary or declare a redundancy.

So an employee who does not accept the reduced salary would normally be declared redundant and edited through a redundancy procedure,” explains the lawyer.

The reason for the reduction of salary, he emphasises, must be reasonable and satisfactory to warrant the reduction.

“I don't see any reason considering that redeployment means there are equivalent jobs elsewhere for these employees. If those jobs did not exist, they would have been declared redundant,” added the advocate.

But SHA CEO Dr Mwangangi was reluctant to comment on the matter, saying it is in court.

SHA chairperson Dr Abdi Mohammed, who has been at the centre of human resource matters at the authority, has, however, remained reluctant to talk.

To guarantee smooth operation at SHA, PSC extended the stay of the staff in a letter addressed to PS Ouma Oluga, dated May 19, 2025.

The employment structures have, however, been defied.

Wrangling at the establishment continues, even as Kenyans continue to demand service.