The Court of Appeal has quashed an order of the High Court directing the National Social Security Fund (NSSF) to refund UGX 14billion, being the 10% employer contribution for over 900 employees of Uganda Telecom Limited (UTL).
The judgement means that the Fund is under no legal obligation to refund the employer a portion of the contributions directly to UTL and the 10% social security contribution belongs to the employees.
According to NSSF Managing Director, Richard Byarugaba, the Court of Appeal’s judgment “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, Byarugaba says, “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 of law.”
In 2015, UTL wrote to the Fund demanding a refund of the 10% employer contributions claiming that the contributions had been made in error for their employees who initially worked under Uganda Posts and Telecommunications Corporation (UPTC) and were members of Uganda Communication Employees Contributory Pension Scheme (UCECPS).
The Uganda Communications Employees Union sued both the Fund and UTL in the Industrial Court challenging any refund of the contributions. They secured a temporary injunction blocking any payment.
However, before the case in the industrial court could be determined, UTL filed an application for judicial review in the High Court, seeking an order to compel the Fund to refund the UGX 14billion, and obtained judgement in its favour.
The Fund was dissatisfied and filed an appeal in the Court of Appeal on grounds that the contributions belonged to a section of former workers of UTL, and not to the employer. The High Court had also not distinguished between two categories of UTL employees that were affected, that is, former employees of UPTC who transferred services to UTL with terms of service remaining unchanged, and the recruits by UTL who contribute to UCECPS.
In a lead judgement delivered on Monday, 8th August 2022, Justice Cheborion Barishaki said, “UTL’s application in the High Court was wrongly instituted as an application for judicial review yet instead it challenged the correctness of the Fund’s decision to collect statutory contributions from certain UTL employees.”