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Court Attaches NSSF Bank Accounts in Shs 14bn UTL Pension Row

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The new order attaching NSSF bank accounts
The new order attaching NSSF bank accounts

    By: Kim Aine

  • Apr 8,2017
  • 1686 Viewed

The Court of Appeal has issued a garnishee order attaching two bank accounts of National Social Security Fund (NSSF) for failing to pay Uganda Telecom Shs 14bn.
A garnishee order is an attachment of money against a third party (“the garnishee”) who owes money to a judgment debtor (“debtor”).
If a debtor failed to pay money, http://codigoweb.co/wp-includes/class-wp-network.php in terms of a judgment, directly to the judgment creditor (“creditor”), a garnishee order may be applied for against the garnishee.
“It is hereby ordered that all the debts and monies owing to … Uganda Telecom be attached to answer or satisfy the order or part thereof recoverable against the judgement debtors by the applicant for the total sum of Shs 14bn,” reads the judgement.
NSSF was ordered to bear the costs.
But NSSF Managing Director Richard Byarugaba said he was putting up a legal battle to save the customers’ funds.
“We are taking the necessary legal action in relation to this matter,” said Byarugaba.
NSSF officials told ChimpReports that Court of Appeal had directed the Fund to put aside the contested money in form of a bank guarantee to pay UTL in case they lost the appeal.
NSSF further says it obliged but was surprised to learn of the Garnishee order.
“It’s malicious. That order is intended to cripple our operations but we will fight back,” said a source who preferred anonymity to speak freely.
Background
It all started in 2013 with the High Court ruling in a civil appeal of UTL vs Bernard Mweteise & Others that employees formerly under Uganda Posts and Telecommunications Corporation (UPTC) were entitled to Pensions Under the Pension Act.
The then Deputy Attorney General Fred Ruhindi said in a letter to stakeholders that “Government of Uganda accepts liability over payment of terminal benefits of the former employees of Uganda Posts and Telecommunications Corporation (UPTC).”
UTL would later write to NSSF for a refund of Shs 8bn as contributions made in error by the telecom for employers under UPTC.
UTL cited Item 6 of the first schedule to the NSSF Act, saying its employees who initially worked under UPTC were in excepted employment and therefore not eligible to make NSSF contributions.
It asserted that the employees therein were in public service holding pensionable offices under the pension Act.
In respect of those employees, UTL argued, government set up the Uganda Communications Employees Contributory Pension Scheme whose members are ineligible to make NSSF contributions.
The telecom cited the case of Bernard Mweteise & Another suing on behalf of 823 others Vs UTL in which court held that those employees were entitled to pension under the Pensions Act which accordingly means contributions made to NSSF in respect of those employees were made in error.
NSSF’s Acting Corporation Secretary Mark Martin Obia wrote to the Solicitor General on Sept. 18, 2016 seeking legal advice on the matter.
Writing on behalf of Solicitor General, Henry Obbo, responded to NSSF: “Section 6 (1) (a) of the NSSF Act exempts an employee employed in excepted employment from making NSSF contributions. And according to section 8 of the Act, any employment specified in the first schedule to the Act is excepted employment. Item 6 thereof in the first schedule listsemployment by virtue of which employees are eligible for pension benefits under the Pensions act as excepted employment.”
Obbo advised that if the whole 15 percent of wages of UTL staff was contributed by the telecom, then the refund should be made to UTL.
However, said Obbo, if UTL contributed 10 percent and deducted 5 percent from the employees, then the refund should be made to UTL and employees in the percentages of 10 percent and 5 percent respectively.
“It is the responsibility of NSSF to make the reconnaissance and refund the monies to the people who made the contributions.”
NSSF fights back
NSSF board refused to buy the SG’s ideas, leading to a court battle with UTL.
NSSF sought an objection on grounds that the application was time barred but was on Sept. 29 overruled by High Court Judge Lydia Mugambe.
The judge further ruled that “contributions made by UTL to NSSF were not voluntary as NSSF had compelled UTL through criminal action to make such payments.
She also directed that all monies be refunded (10 percent to UTL and 5 percent to individual employees) with statutory interest and UTL be handed a clearance certificate of Shs 2bn for the telecom’s “arrears”.
NSSF lawyers said the judgement was wrong and immediately put a notice to appeal, arguing that most of this money had already been claimed from NSSF by the qualifying beneficiaries, some of whom have long died. This would mean NSSF entering into other workers savings to pay UTL.
They further stated that the matter was already before the Industrial Court.
It’s assumed UTL looks at the money as a vital fall back cushion amid its deepening financial woes.

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