Court clothes NSSF against Shs14b pay to ex-UTL staff

NSSF members line up at Workers’ House in Kampala to apply for the 20 percent mid-term access of their savings in March. The Workers’ Fund won the appeal filed by UTL over returning employees contributions. PHOTO / FILE

What you need to know:

  • In his lead decision, Justice Cheborion Barishaki said UTL’s application for judicial review before the High Court was wrongly instituted.

The Court of Appeal has quashed a High Court order directing the National Social Security Fund (NSSF) to refund Shs14b,  which is the 10 percent employer contribution for more than 900 employees of Uganda Telecom Limited (UTL).

In his lead decision, Justice Cheborion Barishaki said UTL’s application for judicial review before the High Court was wrongly instituted.

“I find that the learned trial judge erred in entertaining UTL’s applications as a case for judicial review. I would allow civil appeal 285 of 2016 and set aside the ruling and orders of the High Court …and substitute instead with an order dismissing UTL’s application for judicial review,” Justice Cheborion ruled last week.

He added: “UTL’s judicial review application having been dismissed, follows that civil appeal no. 76 of 2018 concerning execution of the High Court arising from UTL’s judicial review application must also be dismissed. The respondents shall pay the costs here and in the court below. It is so ordered.”

The other justices who ruled in favour of NSSF were Christopher Madrama and Stephen Musota.

The judgment means that the Fund is now under no legal obligation to refund the employer’s portion of the contributions directly to UTL and the 10 percent social security contribution belongs to the employees unless an appeal is filed before the Supreme Court.

The facts of the case are that UTL was incorporated under the Companies Act, and it was supposed to offer services, including cellular, pay phones, rural telecommunications, terminal apparatus provisions, and value added services.

The company succeeded Uganda Posts and Telecommunications Corporation (UPTC).

So upon incorporation into UTL by operations of statute, it had some contracts of the service transferred to it.

UTL’s primary case was that the relevant employees were not some of those envisaged to make contributions to the Fund under the relevant laws.

They claimed NSSF had illegally collected the money.

To that effect, in 2015, UTL wrote to the Fund demanding a refund of the 10 percent employer contributions claiming that the contributions had been made in error for their employees who initially worked under UPTC and were members of Uganda Communication Employees Contributory Pension Scheme.

But NSSF had argued that the money was rightly collected from the relevant UTL employees as they were persons envisaged to make statutory contributions.

Justice Lydia Mugambe ruled in UTL’s favour, holding that NSSF had illegally collected the funds.

Justice Mugambe, among others, ruled that UTL employees were exempted from making statutory contributions.

“An order of injunction prohibiting the MD NSSF and NSSF from demanding, collecting arrears or retaining contributions in respect of ineligible and exempted employees of UTL,” Justice Mugambe of the High Court, ruled then.

However, being dissatisfied with the ruling, NSSF appealed before the Court of Appeal.

NSSF welcomes court of appeal ruling

On Friday, the NSSF welcomed the court’s decision. “We welcome the Court of Appeal’s judgment 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 erred in seeking a refund of the employer contributions on the basis of an alleged exemption that was never subjected to interpretation by the courts,” Mr Richard Byarugaba, the Fund’s managing director, said in a statement on Friday.

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