Row as UTL plans to raid Shs15b workers’ savings

Kampala.

A proposed scheme by the Uganda Telecom (UTL) top management to plough back retirement benefits of 1,986 employees from the National Social Security Fund (NSSF) has sparked off jitters in successor companies of the defunct Uganda Posts and Telecommunications Company Limited (UPTCL).

The move, in which at least Shs15 billion, will be returned to the Libyan majority-owned Uganda Telecom, instead of being paid directly to the beneficiaries, is being opposed by the workers who have separately hired lawyers to take on both UTL and NSSF in legal battle.

In a February 6 letter to UTL, (then) managing director Ali Amir and NSSF deputy managing director Geraldine Ssali indicated that the Workers Fund was moving to return unspecified amount of money to the workers, but without the knowledge of the beneficiaries.

“I am pleased to inform you that the reconciliation of the first batch of 985 members was completed and the team is now handling the second batch of 983 members,” Ms Ssali wrote.

The letter explains that the first batch, according to UTL records, was covered for 16 years with regards to the matter on hand. The number, however, grew to 1,968 employees at the same time being entitled to pension.

“Having put all the above into perspective coupled with incomplete data sets, management would like to advise that the reconciliation to support the offset against the amounts you owe will be done by the close of this month,” the letter reads 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.

Officials from both UTL and NSSF prior to the writing of the letter had met on February 4 and discussed the status of the claim but the workers, some employed with UPTCL’ successor companies namely Uganda Communications Commission, Posta and Post Bank, say they have been kept in the dark about the deal.

Some employees this newspaper talked to on condition of anonymity for fear of being admonished denied official knowledge of the matter and said they had only learnt of it through rumours.

They claimed UTL wants to plough their retirement benefits into the company due to its poor financial health.

The UTL’s chief legal counsel, Mr David Nambale, formerly corporation secretary at NSSF, said the decision is in “good faith” and the funds, once processed, will be wired directly to the beneficiaries’ respective accounts.

“Any company making a claim for payment that was made in error has nothing to do with the financial health. A claim is a claim and we have the right,” he argued, adding that they are following the law and nothing is illegal, and are ready to seek legal redress from court if NSSF or any other party dares to stand in the way.

The key players

NSSF take: The workers Fund’s managing director, Mr Richard Byarugaba (L) , and his deputy Ms Geraldine Ssali (C) acknowledged that if the workers in question are pensionable, they are not supposed to contribute to NSSF. Ms Ssali said the scenario is equivalent to paying double social security. “If they are entitled to pensions, they are not supposed to be contributing with us, and that is clear in the law. Our people are in position of establishing how much they owe us and what we owe them,” she said.

Ploy: Workers’ representatives, the National Organisation of Trade Unions (Notu) oppose the move, saying it is a ploy by a few individuals to cheat the unsuspicious workers. The Notu chairman, Mr Usher Owere (above), said some individuals are influencing the processes to cheat, but added they are investigating the matter to establish the facts.

The genesis

UPTCL was privatised in 1997 and split into four successor firms. However, the 1993 Public Enterprise Reform and Divestiture Act and Uganda Communication Act of 1997, gave UPTCL employees, those who wished, the right to transfer their services to the successor companies under the same or revised working conditions but under permanent and pensionable terms.

In 2003, a group of 823 former UPTCL employees led by Mr Bernard Mweteise and Mr Asaph Ndaula sued the successor companies of the former through the Attorney General over retirement benefits.

According to court documents filed at the time, between 1998 and 2001, the successor companies had retrenched the group and paid them only gratuity instead of pension for their services before and after.

The High Court in Kampala presided over by Justice Kibuuka Musoke in December 2013 ruled in favour of the workers and ordered UPTCL’ successor companies to immediately pay the workers their pension.

Justice Musoke declared that the plaintiffs were entitled to pension calculated in accordance with their original contracts of service which were transferred from UPTCL to the respective successor companies. He said such pension must be calculated and ascertained upon the total period of service in UPTC and the successor company and based upon the last pensionable emoluments of each plaintiff is payable.

To date, however, UTL is yet to fulfil its obligation but company officials indicated that they are not in financial capacity to do so urgently but rather will turn to government for indemnity.

During an interview last month, Mr Nambale also admitted that workers are not aware of the move to plough back their retirement benefits from NSSF.

“The process is simply ongoing so we just couldn’t tell them to create unnecessary excitement but we will do so at an appropriate time, he said.

“For now we have suspended any remittances to NSSF pending review of this decision,” he added.
The government has 31 per cent in UTL and Libya’s LAP Green 69 per cent shares. In 2000, government divested 51 per cent of its shares to UCOM, a consortium led by a Germany based tech firm Detecon, Telecel International from Switzerland and Egypt’s Orascom Telecom, and retained only 31 per cent proprietorship in UTL.
The downfall of Col Muammar Gaddafi’s government was a big blow too and marked the start of the company’s financial woes. Last week, the company claimed it owes government Shs17 billion in outstanding unpaid bills which it said it needs urgently.According to insiders, UTL is in poor financial health, is indebted to a number of suppliers and banks and rumours are abuzz that the company could be acquired.

Mr Nambale, however, discounted the company’s poor financial health as the reason for making the claim of workers benefits.

“Although court in December did not go into details, it directed us to pay workers their pension, but of course which means at the same time we cannot be remitting their savings to NSSF. It is the same way civil servants who are pensionable do not contribute to NSSF.”

This newspaper has leant that UTL has also not remitted NSSF savings for the workers entitled for close to two years.

Mr Nambale admitted so but added that reconciliation will be done along with the money they want back from NSSF.

“The process is ongoing to net off what we owe them and what they owe us, and the remainder is our claim. But logically, our debt—what they owe us is bigger.” Both NSSF and UTL officials said assessment of the claim and documents is ongoing, so it is premature to establish the total sum of the claim.

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