NSSF wins Ushs 14b ex – UTL workers court case

By Sarah Achen Kibisi.

The Court of Appeal has quashed a High Court order directing the National Social Security Fund (NSSF) to refund Ushs14b,  which is the 10 percent employer contribution for over 900 former employees of Uganda Telecom Limited (UTL).

Justice Cheborion Barishaki said  in his ruling that UTL’s application for judicial review before the High Court was wrongly instituted.

“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 instead order dismissing UTL’s application for judicial review,”  he ruled.

The judge said since UTL’s judicial review application has been dismissed the civil appeal no. 76 of 2018 concerning execution of the High Court arising from UTL’s judicial review application is also dismissed. Justice Barishaki said the respondents shall pay the costs in the court..

Justice Christopher Madrama and Stephen Musota ruled in favour of NSSF. The development means  the fund is now under no legal obligation to refund the employer’s 10 per cent part of the contributions directly to UTL.

Details 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), which broke off from the regional East African Posts and Telecommunications Corporation.

 When  UTL was incorporated with existed service providers it automatically took up some contracts of the services transferred to it.

 The real case involving UTL was that the relevant employees were not some of those  expected to make contributions to NSSF under the  laws.

They claimed NSSF had illegally collected the money. In 2015, UTL wrote to the fund demanding a refund of the 10 percent employer’s contributions which they claimed had been effected in error for their employees who formerly worked under UPTC and were members of Uganda Communication Employees Contributory Pension Scheme.

In response NSSF said the money was rightly collected from the legal  UTL employees as they were persons qualified and required to make statutory contributions.

Justice Lydia Mugambe ruled in favour of UTL saying holding that NSSF had illegally collected the workers’ funds.

 She said  that UTL employees were exempted from making statutory contributions to the fund and that NSSF illegally collected the money.

Justice Mugambe issued an order  of injunction restraining the Managing Director and the fund from demanding, collecting arrears or retaining contributions in respect of ineligible and exempted employees of UTL. But the NSSF was not happy with the ruling and rushed to the Court of Appeal.

NSSF Managing Director  Mr Richard Byarugaba said they welcome the positive ruling which  reinforces the good work they do.

 “We welcome the judgment  of the Court of Appeal which  affirms our position that once contributions are remitted to the fund, they belong to the employee for whom they have been paid,” he said.

 He said  that as an employer, UTL  made a big blunder  in seeking a refund of the employer’s contributions to the workers’ savings.

” It is unfortunate that UTL relied on wrong and perceived  interpretation of exemption that was never interpreted by the court,” he said.

Under the NSSF Act employers contribute 10 percent while their employees   contribute 5 percent to the workers savings ■

NSSF Managing Director Mr Richard Byarugaba addressing members

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