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BoU sues 77 staff over amending age
Bank of Uganda headquarters in Kampala, Uganda. PHOTO/FILE
What you need to know:
- Bank of Uganda alleges that the 77 employees took advantage of the promulgation of the Registration of Persons Act, No. 4 of 2015 to lower their ages.
Bank of Uganda is suing former and current employees over a move by the employees to lower their ages in order to lengthen their contracts and continue receiving pension and other benefits from the Central Bank.
Documents seen by this publication show that some BoU employees reduced their ages by more than four years. At the time of filing the suit, 69 of the 77 employees accused were still active employees of the bank while the rest are former employees.
Bank of Uganda alleges that the 77 employees took advantage of the promulgation of the Registration of Persons Act, No. 4 of 2015 to lower their ages while registering for the national identity cards against the records they filed with the bank at the start of their employment.
The Registration of Persons Act No. 4 of 2015, promulgated on March 26, 2015, among others, provides for the issuance of national identification cards and creates the National Identification and Registration Authority (NIRA).
In the suit filed by BoU lawyers of MMAKS Advocates, in the Civil Division of the High Court, the Central Bank alleges that following the promulgation of the Act, a practice emerged in which various public servants registered dates with NIRA that gave them ages a few years younger, but seldom older than the ages previous registered by them with their employers.
This was soon discovered to be a ploy to postpone retirement dates or accrue more pension or NSSF contributions by employees pushing forward the date at which they would attain the age of 55 years at which age the BoU’s obligation to pay the 10 percent employers contribution to NSSF would cease.
On February 6, 2017, the Permanent Secretary of the Ministry of Public Service pursuant to section L-b (7) of the Uganda Public Service Standing Orders clarified that the date of birth of a public officer shall be that which was initially declared and recorded on commencement of employment.
Earlier, on November 11, 1999, the BoU’s Board of Directors then also reviewed the change of dates of birth matter and concluded in Board Resolution No 247 that the guiding age for all purposes shall be the age declared by an employee on commencing employment.
In November 2021, the government-owned New Vision reported that more than 1,000 civil servants in central and local governments had applied to have their age changed. The vast majority were inching closer to 60 years, which is the mandatory retirement age.
Documents seen by Sunday Monitor including copies of national IDs and appointment letters show that the accused current and former employees while commencing employment with the BoU filled out the formal declaration forms indicating their ages of birth which ages turned out to be different from those declared to NIRA when the accused employees were registering for national identity cards.
Enter NSSF
BoU like any employer is required to pay NSSF a monthly contribution of 15 percent of the wages of its “eligible employee. The monthly contribution is made up of a 10 percent contribution by the employer and five percent contribution by the employee.
NSSF carried out an audit of BoU’s compliance with NSSF contributions and concluded the accused employees are entitled to rely on their NIRA declared age and have the BoU continue to make NSSF contributions in relation to them, notwithstanding the discrepancy with their earlier declared age when their employment commenced.
NSSF also contended that the NIRA declared ages have retrospective effect in law and are binding on BoU. Consequently, NSSF assessed the BoU to “substantial sums” on shortfalls in NSSF contribution based on the NIRA-created age discrepancy. NSSF also added to the assessments interest and penalties which BoU opposes.
“The plaintiff, accordingly, seeks a declaration that the first defendant’s assessments on it based on the alleged NIRA age shortfalls are unlawful and void at law,” BoU lawyers write. BoU has also asked court to award the Central Bank costs for the suit.
Retirement benefits are often provided by pension systems based on a number of variables, including years of service and age at retirement. Employees who lie about their age to earn a greater pension benefit are breaking the law and risk facing serious repercussions, such as the loss of their pension payments and possible criminal prosecution.
A new automated system comprising all public sector employees’ biodata, including their age and their initial official date of employment, was introduced by the government in November 2021. When an employee is eligible for retirement, the system is set up to automatically move them from the active payroll to the pension system.
By focusing on the age stated at the time of entry into the public service, the system was created to prevent employees of the public sector from changing their age.
notu, bou react
In an interview, the chairperson of General of the National Organisation of Trade Unions (Notu), Mr Usher Wilson Owere, said he was not well versed with the matter. Ideally, he said, there should not be any dispute because NSSF relies on the correct data provided by the employer, in this case BoU.
“The issue I think is structural which they must correct. What is killing BoU is they don’t have a worker’s body that represents the issues of the workers. They should be having a union with a collective bargaining agreement,” he said.
The Deputy Director of Communications at BoU, Natamba Bazinzi, said: “This matter arose out of discrepancies in the dates of birth indicated by some staff members at the time of getting employment with the bank, which dates of birth are different from those they later indicated to other government authorities. The bank took a decision to obtain a declaratory judgement from courts of law in order to resolve the matter conclusively.”
