UTL workers, NSSF on collision course over Shs30b savings
Kampala- The Workers that the Uganda Telecom Limited (Utl) inherited from the defunct Uganda Posts and Telecommunications Corporation (UPTC) have petitioned every authority in the country, accusing their employer of “conniving” to deprive them of their social security savings they have earned for decades.
However, the workers have a breather now after the High Court agreed to suspend the implementation of its order to the National Social Security Fund (NSSF) to refund the workers’ savings to Utl, their employer. But the workers still must seek to overturn the High Court ruling which allowed Utl to claim their savings back from NSSF or win their separate case in the Industrial Court about the same issue if they are to “save” their savings.
The Utl workers’ savings range between Shs14b to Shs30b, depending on whose calculation criterion is adopted. The workers accuse Utl officials, NSSF, the Attorney General’s Chambers, and most recently, a minister, of being insensitive to their plight. The matter has several twists and turns.
Inherited burden
As the government sold off most of its corporations in the 1990s, one area of concern was about what would happen to the employees of the state enterprises that were disposed of and passed on to private investors. UPTC, then dealing with telecommunications and postal services, was one such corporation.
In 1998, UPTC was “unbundled”, into four companies – Utl, Posta Uganda, Post Bank Ltd, and Uganda Communications Ltd. “Protracted” negotiations ensued between government and the workers’ representatives, according to Mr Emmanuel Baingana, the general secretary of the Uganda Communications Employees Union (UCEU), which brings together the former workers of UPTC.
According to the UPTC Act of 1983, UPTC workers were entitled to pension from the corporation, with its Board at the time as the “pension authority”. The UPTC pension was contributory between the employees and employer.
Mr Baingana says in 1993, the UPTC Board asked the corporation to start contributing to NSSF in respect to its employees’ savings on top of the contributory pension fund that was already in place.
When UPTC was unbundled in 1998, giving rise to semi-private companies whose employees would ordinarily only contribute to NSSF, controversy arose as to how the new companies would proceed on the issue.
The issue of whether former UPTC workers who had transferred to the new companies would still be entitled to pension, however, had been taken care of in the negotiations and written laws, especially the Uganda Communications Act, as the courts would later confirm.
The court battles
In 2003, two individuals, Mr Bernard Mweteise and Mr Asaph Ndaula, on behalf of 823 others, sued UTL and the other three successor companies of UPTC, together with the Attorney General and the registered trustees of the Uganda Communication Employees Contributory Pension Scheme (UCECPS), which brings together all the former workers of UPTC.
Ruling on the case, Justice Musoke-Kibuuka of the High Court found that all the former employees of UPTC, who were now with the successor companies, would not have their terms of service changed to their disadvantage.
Because UPTC employees were entitled to pension, the judgement read, the employees would still be entitled to pension on retiring or leaving the employment of the new companies under any other circumstances. Court further ruled that the employees would be considered to have had one continuous period of service, just bridging from UPTC to Utl and the other successor companies.
The ruling in the case filed in March 2003 was long incoming, arriving almost 10 years later, on January 22, 2013, with Justice Musoke-Kibuuka being the fourth judge to handle it. With the ruling confirming the former UPTC workers’ argument that they were entitled to pension, UTL developed other ideas.
Mr David Nambale, the Utl corporation secretary, told Daily Monitor that “it then became clear” that the workers who had been confirmed by the court to be pensionable could “in no way” be eligible for NSSF benefits.
Mr Nambale, in so arguing, relies on a clause in the NSSF Act on “excepted employment” which spells out the categories of employees who are not obliged to contribute to NSSF. The category of interest to him, as spelt out in the First Schedule to the Act, is “employment by virtue of which employees are eligible for pension benefits under the Pensions Act.”
This argument is intensely contested by the workers and Prof John Jean Barya, their lawyer. Prof Barya points out that the ruling Mr Nambale relies on – by Justice Musoke-Kibuuka – “did not in any way concern itself with NSSF but addressed the issue of pension”.
He adds that the workers exempted in the NSSF Act which Mr Nambale cites are those entitled to pension under the Pensions Act – in general public servants whose pension is drawn on the consolidated fund – which is not the case with the workers of the former UPTC. UPTC, as already pointed out, managed a pension arrangement of its own which did not fall under the clauses of the Pensions Act.
But Utl would insist on its argument resulting from the ruling that the concerned workers are not entitled to NSSF because they are pensionable.
The telecoms firm, as a result, demanded from NSSF the money that it had remitted to the Fund since 1998 in respect of the former employees of UPTC under its employment. It argued the money had been contributed in “error” because the employees were pensionable.
War erupts
The workers would have none of that, although NSSF was originally agreeable to refunding the money to Utl. If the refund were to be effected, Utl would receive back the 10 per cent of gross salaries remitted to NSSF since 1998 in respect of each of the employees, plus interest accrued on it, while the workers would reclaim their five per cent contribution, plus interest accrued on it.
Utl initiated communication with NSSF on the matter without involving the workers, communication about which the workers would find out “accidentally”, according to Mr Baingana.
NSSF mediation efforts
Ms Geraldine Busuulwa Ssali, then acting NSSF managing director, on February 6, 2015, wrote informing the Utl managing director that “the reconciliation to support the offset against the amounts you owe will be done by the close of this month”. By this letter, the transfer of the funds to Utl was imminent.
But what amounts did Utl owe that were bound to be offset? Utl corporation secretary Nambale told this newspaper that his company has not paid up its contribution to NSSF in respect of its other workers who were not formerly with UPTC for more than two years now. The former UPTC workers form just about 10 per cent of UTL’s 500 employees, going by Mr Nambale’s numbers.
Utl appears to have stopped contributing to NSSF in respect of its employees around the same time Justice Musoke-Kibuuka delivered his ruling.
The reasoning, according to Mr Nambale, is to divert part of the money which NSSF had contributed in “error” in respect of the “ineligible” employees (former UPTC workers) to cover the pending obligation in respect of the “eligible” contract employees.
According to NSSF computations that were availed to court, the money in contention is just more than Shs14b, although the workers insist it is much higher, possibly Shs30b, because they say the calculations only covered the period of up to 2013.
Whatever the exact amount, Mr Nambale is confident it would be enough to offset Utl’s outstanding arrears with NSSF, currently amounting to more than Shs7b. Utl is keen to clear its debt with NSSF in order for NSSF to issue the telecoms firm with a certificate of compliance with its obligations.
Utl, which does a big bulk of its business with government, has been crippled in recent times, unable to successfully bid for government contracts due to lack of a certificate of clearance as provided for under the NSSF Act, which is one of the requirements for a company to do business with government.
This fact came out clearer as Utl, before Justice Lydia Mugambe of the High Court, argued on whether to stay the execution of the order for NSSF to refund the contested money to the telecom firm.
The “consent to stay execution” entered on May 27, 2016, byUtl and NSSF before Justice Mugambe reads in part: “The parties hereby agree that while the applicant will provide the certificate without conditions and on standard template, the parties do acknowledge that there is still a dispute on whether or not the respondent (Utl) is fully paid up, and that the certificate has been issued in the spirit of enabling the respondent to do business and the applicant (NSSF) to pursue its appeal.”
NSSF, in order to be allowed to appeal Justice Mugambe’s ruling that ordered it to remit the money back to Utl, also accepted to deposit the contested money in the court, by way of bank guarantee, so that it may not be paid out to the employees as the appeal goes on, and to save Utl the trouble of having to enforce payment should the appeal fail.
Workers cry foul
The workers argue that there should have been no ruling by Justice Mugambe in the first place. This is because, they say, it was them who first went to court, and their case is still pending yet the case filed by Utl, which came later, was already disposed of.
When the workers “accidentally” found out that NSSF was processing the money it holds on their behalf to return it to Utl, they filed a case in the High Court. The High Court registrar, Mr Baingana, says he advised them that their issue, being a labour rights matter, the right court to handle would be the industrial court, which is at the same level as the High Court.
So they filed in the Industrial Court, suing both NSSF and Utl over their savings. Before Mr Asaph Ntegye, the chief judge of the Commercial Court, the workers, UTL and NSSF signed a temporary injunction on March 31, 2015.
The injunction barred NSSF from transferring the money it keeps in respect of the concerned workers to Utl until the case was resolved. In the same vein, NSSF would not pay out any of that money to any of the workers who may have qualified for it before the case was resolved.
As this case was still going on, Utl returned to the High Court, suing NSSF for refusing to transfer the same money, which it said it had remitted to it in error. The case was assigned to Justice Mugambe who disregarded protestations that the same matter was subject to proceedings in the Commercial Court.
Justice Mugambe invited the concerned workers to join the case as defendants, but the workers would soon be dissatisfied with her insistence on hearing the case and ruling on in light the injunction that the three parties entered in the Commercial Court. Ms Mugambe’s ruling came in September 2015.
A few things had changed then, especially the fact that NSSF now vehemently opposed the refund of the money to Utl, yet in the first place, as Ms Ssali’s letter cited above shows, it had expressed willingness to remit the money.
This change of heart by NSSF has made the workers warm up to NSSF MD Richard Byarugaba, who they say is defending their rights, while they castigate Ms Ssali, basing on the letter she wrote to Utl expressing readiness to pass on the money to Utl.
Ms Ssali had relied on an opinion by the Solicitor General, who agreed with Utl that the money had been remitted to NSSF in error and should be refunded to the telecoms company. Mr Byarugaba, when he took charge at NSSF for the second time, wrote back to the Solicitor General over the same matter, and the Solicitor General stuck to his opinion.
Minister intervenes
Mr Matia Kasaija, the former minister of Finance, on April 28, 2016, also wrote to NSSF, through the board chairman Patrick Byakakama Kaberenge, directing the Fund to pay Utl the said money.
The workers reacted by writing to the minister explaining their plight, copying in the President and 19 others. The letter, in which some allegations of conspiracy to defraud the workers were levelled against some officials, seems to have caused a stir in different places.
Elsewhere, in court, Justice Mugambe allowed NSSF’s application to stay the execution of the order to return the money to Utl, but this was not before Utl and NSSF entered the “consent to stay execution”, whose terms we referred to earlier.
Mr Byarugaba insists NSSF will not pass on the money to Utl until the court process is exhausted, which he says they are “hopeful” of winning in favour of the workers. The workers, on the other hand, are pursuing legal remedies of their own to achieve the same goal.
On the other hand, Utl appears to look at the money in contention as an important cushion as its financial woos, occasioned by the troubles that befell the Libyan government, its majority owner, are resolved. Government is the minority owner of Utl.
