Court of Appeal has cancelled an order of the High Court directing National Social Security Fund (NSSF) to return Shs. 14 billion of the 10% employer contribution for over 900 employees of Uganda Telecom Limited (UTL).
In 2015, Uganda Telecom (UTL) top management and NSSF were sued by UTL employees as they tried to scheme and get back retirement benefits of 1,986 employees from NSSF.
In a February 6th letter to UTL, then managing director Ali Amir and the then NSSF deputy managing director Geraldine Ssali indicated that the Workers Fund was moving to return an unspecified amount of money to the workers, but without the knowledge of the beneficiaries.
The letter explained that the first batch, according to UTL records, was covered for 16 years regarding the matter on hand. The number, however, grew to 1,968 employees.
The letter read in part, “UTL’s management said they had been remitting money to NSSF in error. The regulator of both NSSF and the pensions scheme Uganda Retirements Benefits Regulatory Authority (UBRA) acting boss Moses Bekabye, said the matter had been brought to their attention and a legal team was assigned to examine its contents.”
According to Daily Monitor in 2015, prior to the writing of the letter, officials from both UTL and NSSF met on February 4th and discussed the status of the claim but the workers, some employed with UPTCL’s successor companies namely Uganda Communications Commission, Posta and Post Bank, said they had been kept in the dark about the deal.
The Uganda Communications Employees Union, therefore, sued both the Fund and UTL in the industrial Court challenging any refund of the contributions. They secured a temporary injunction blocking any payment.
Before the case in the industrial court could be determined, UTL filed an application for judicial review in the High Court, seeking an order to compel the fund to refund Shs. 14 billion, and obtained judgements in its favour.
Following a ruling in May 2016, in which High Court Judge Lydia Mugambe ordered NSSF to pay the contested sum to UTL, the Fund sought permission to appeal, leading to the two parties entering a “consent to stay execution” on May 27, 2016.
According to the consent, NSSF was to be allowed to appeal the ruling, but after depositing bank guarantees with the court to the tune of the contested sum.
NSSF would also provide UTL with a certificate of compliance showing that the telecom company had paid up its contributions to the Fund, whose absence UTL said was precluding it from competing for public contracts.
“When NSSF was required to issue bank guarantees and a certificate of compliance, they issued documents that were defective. This was in contravention of the agreement we had with them when they were granted the right to appeal,” Mr Andrew Kibaya, a lawyer for UTL lawyers Shonubi noted.
This week however, three justices of the Court of Appeal who included Cheborion Barishaki, Stephen Musota and Christopher Madrama cancelled the High Court decision insisting that UTL’s application in the High Court was wrongly instituted as an application for judicial review yet it instead challenged the correctness of the Fund’s decision to collect statutory contributions from certain UTL employees.
Speaking about the ruling, Richard Byaruhanga, the NSSF Managing Director, contended that this was a win to the UTL workers and the fund.
He said, “We welcome the Court of Appeal’s judgement because it affirms our position that once contributions are remitted to the Fund, they belong to the employee for whom they have been paid.
“Regarding this particular case, we are confident that as an employer, UTL errored in seeking a refund of the employer contributions on the basis of an alleged exemption.”
By Kalamira Hope
Leave a Reply