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ISSUE 56 | SEPTEMBER 2023
AN OFFICIAL NEWSLETTER OF THE FEDERATION OF UGANDA EMPLOYERS
THE VOICE OF EMPLOYERS
THE EXECUTIVE DIRECTOR’S MESSAGE
Dear Esteemed Member,
The National Social Security Fund (NSSF) Amendment Act 2022 requires all Employers to register their employees irrespective of their number. As a key stakeholder on labour and employment matters, FUE participated in a workshop aimed to consolidate the enforcement of social security compliance within the ICT sector. Its significant to note that due to the advancement of technology and development of digital tools, the
demand for jobs within the ICT sector will increase greatly hence the need to align social protection. In light of the above, Employers are advised to remit mandatory statutory contributions in the course of employment.
Due to the changing work trends, the Federation in partnership with Tinkr conducted an interactive webinar themed, ‘Digital Transformation: Potential Opportunities, Challenges and Significance For Leadership and Organisational Management’. The training sought to enlighten the business community on various opportunities, challenges and benefits of digital transformation that are substantial to excel in the labour market. We encourage business leaders to adapt new technology and develop digital strategies to enhance employer competiteveness and improve service delivery.
As a member-based organisation, FUE has grown to over 700 Employers including start-ups, large corporations, sectoral associations, Small and Medium Enterprises (SMEs) located all over the country. It was an absolute pleasure to pay courtesy visits to our members, Vision Group, Tembo Steels (U) Ltd and Seed Effect Uganda located in Kampala, Iganga and Adjumani districts respectively. The visits provided a platform to appreciate the good work done in these organisations as well as an opportunity to share tenets on leadership and labour law to ease employment relations and advance business growth.
Furthermore, save the date for the launch of the Employer of the Year Awards (EYA) Survey 2023 slated for Friday 6th October at the Kampala Serena Hotel from 8:00am (EAT).
Together for Employers.
FUE PARTICIPATES IN SOCIAL PROTECTION STAKEHOLDER WORKSHOP
The Federation of Uganda Employers (FUE) participated in a high-level conference for the Technology and Communications Sector which was organised by the National Social Security Fund (NSSF) in partnership with the Ministry of Gender, Labour and Social Development (MGLSD), the Ministry of Information Communication Technology (ICT) and National Guidance. The conference was convened on Thursday 21st September 2023 at Imperial Royale Hotel, Kampala with the main purpose of enhancing social protection. Participants included officials from MGLSD, Uganda Communications Commission (UCC), NSSF and National Information Technology Authority (NITA-U) in addition to proprietors and employees of various telecommunications networks, broadcast media houses, postal and courier operations.
This conference is part of the on-going partnership strategy by MGLSD and NSSF in engaging Employers in various sectors to establish the status of compliance to their NSSF obligations as well as raise awareness among stakeholders to enhance compliance. According to Hon. Betty Amongi, the Minister of Gender, Labour and Social Development, these engagements commenced in the industrial parks under the MGLSD and NSSF partnership agreement with the Uganda Investment Authority (UIA), in the road construction sector through corporation with Uganda National Roads Authority (UNRA), and in the Oil and Gas Sector through the Ministry of Energy and Mineral Development. In these four engagements, the following were noted;
- About 630 businesses were identified most of which are Small and Medium Enterprises (SMEs) and the number of workers covered by these businesses was about 35,000
- The average NSSF compliance rate of employers remitting the full NSSF contributions on time was reported at 51%
- Evidence of serious violations of workers’ rights was reportedly found
Therefore, the National Social Security Fund has granted an amnesty to non-compliant employers to update their NSSF staff contributions by 1st February 2024. After this date, enforcement will attract penalties. This is in accordance with the NSSF Act, Section 7, Regulation 3 under the National Social Security Fund (Registration of Employers and Employees) Order S1 222-1, every employer regardless of the number of employees must register with NSSF and also submit a list of their employees to the fund.
The Federation implores all employers to fully comply with the NSSF obligations dutifully and other labour laws to reduce litigation. It’s significant to note that compliance with social security laws like NSSF motivates employees to be more productive since there is guaranteed income protection.
DATA PROTECTION AND COMPLIANCES BEYOND THE EMPLOYMENT LAWS GENERAL TRAINING
According to a global study by Thales and Ponemon Institute, 48% of corporate data is stored on the cloud however only 32% of organisations believe that protecting that data is their responsibility. On 12th September, the Federation conducted a General Training on, ‘Data Protection and Compliances Beyond the Employment Laws of Uganda,’ at the FUE Training Centre in Kiwanga-Namanve. Participants included business owners, legal professionals, Human Resource practitioners, IT and Security Personnel among others.
The training content comprised of a comprehensive understanding of data protection beyond the employment laws covering crucial aspects often overlooked by Employers. Participants received strategies on developing ethical and responsible data handling practices. Furthermore, the need to identify potential risks and vulnerabilities related to data breaches and non-compliance were emphasised.
In addition, business owners had the opportunity to network and interact with experts and professionals working in the technology and data field to promote valuable partnerships and collaborations to discover new methods of record keeping for the safety of the organisation.
Therefore, it’s key for Employers to adapt the responsible use of technology to minimise loss of confidential data that can lead to loss of stakeholders, partners and potentially tarnish the company image in this digital era.
For a customised training suited to your organisations needs, do not hesitate to reach out to Yusuf Nsubuga, Our Training Manager on email@example.com
FUE AND TINKR HOST EMPLOYERS’ DIGITAL TRANSFORMATION WEBINAR
The World Economic Forum estimates that by 2025, 85 million jobs may be displaced by a shift in the division of labour between humans and machines while 97 million new roles that are more adopted to the new division of labour between humans, machines and algorithms may emerge.
FUE in partnership with Tinkr conducted an informative webinar on ‘Digital Transformation: Potential Opportunities, Challenges and Significance For Leadership and Organisational Management’ on Wednesday 27th September 2023 from 10:00am (EAT). The training sought to enlighten the business community on various opportunities, challenges and benefits of digital transformation that are significant to excel in an economy where technology is a key driver.
During the webinar, participants were enlightened on leveraging and embracing innovation for growth, improving operations and sustainable development. Insights on structures and systems to manage digital transformation were shared. Additionally, Employers had access to practical
resources and tools to boost innovation management at the workplace.
The labour market is highly competitive and requires Employers to discover new products, services and constantly improve work operations to stay afloat. FUE is readily available to offer training opportunities to support business leaders in various sectors of the economy to thrive.
To watch the recording of the webinar, click the link below:
FUE PARTICIPATES IN THE SAY PROJECT LAUNCH
IN LIRA DISTRICT
According to Statistica 2022 findings, the youth unemployment rate in Uganda remained nearly unchanged at 6.98%. As a key stakeholder on labour and employment matters, FUE was delighted to participate in The Say Project Launch at the Job Centre in Lira District on 13th September 2023. The Say Project is an initiative of AVSI Uganda to provide skilling in agripreneurship for increased youth employment with funding from the Dutch Embassy in Uganda.
Our Executive Director in his remarks reiterated FUE’s role as a significant partner to provide skills development for youth within the Northern region. He emphasised the Federation’s responsibility to secure internship placements and facilitate work readiness programs to enhance job creation. In addition, Mr. Opio encouraged Employers to take advantage of the initiative to develop graduate trainee opportunities and apprenticeship programs.
We look forward to working with relevant stakeholders to boost employability and entrepreneurship among the youth. Let’s make concerted efforts to change the narrative of poverty in Africa!
TEMBO STEELS HOSTS FUE AT THEIR INDUSTRIAL PLANT IN IGANGA
On Friday 1st September, Tembo Steels (U) Ltd, an esteemed FUE member hosted Our Executive Director, Douglas Opio and staff representatives to their plant in Iganga to describe the process of making steel. TSUL is the most diversified and integrated steel plant in Africa with the largest product portfolio through integrated route covering all four verticals of steel that are strengthened by the resilience of innovation.
TSUL produces sponge iron, TMT bars and wire rod products. The raw materials used by the company are purchased from Kabale and other districts in Uganda supporting the Buy Uganda, Build Uganda (BUBU) Policy. The plant also gathers scrap from the community that is sorted and recycled then turned into sponge iron. This sponge iron is a significant raw material to produce high quality steel. In 2020, TSUL commissioned the first DRI plant in East Africa.
As a good Employer, TSUL has fostered good industrial relations within the company through Alternative Dispute Resolution (ADR) solving over 90% of workplace conflicts amicably. The company has recruited over 3,000 employees from the local community to improve livelihoods as well as ensured Occupational Safety and Health (OSH) hence eliminating occupational accidents, injuries and death in the manufacturing process. In addition, TSUL has championed Corporate Social Responsibility (CSR) initiatives to give back the community located around the factory premises.
The Federation recognises the good work TSUL is doing to produce high quality products, reduce unemployment rates and advance sustainable development. Special appreciation to all FUE members for upholding good employment practices and for their positive contribution to national development. Let’s keep the Employers’ flag flying high!
FUE MEMBER ENGAGEMENT
Our Executive Director, Douglas Opio paid a courtesy visit to Seed Effect Uganda, a valuable FUE member located in Adjumani District on 11th September 2023. The visit culminated into training sessions on leadership and labour laws to build capacity of the Employers within the region.
In addition, Mr. Opio paid a courtesy visit to Vision Group on Wednesday 27th September 2023. Vision Group sits on the FUE Governing Council Board and has a strong media presence in print, broadcast and digital media platforms. We believe this collaboration will amplify FUE’s work and services to serve Employers’ interests and needs.
FUE STAFF COMMENTARY
COMPLY WITH NSSF OBLIGATIONS TO BE
A GOOD EMPLOYER
“…We should support the right of every person to retire with dignity”, says Elizabeth Warren, the US Senator. Similarly, Chris Chocola advised: “If we do not act now to strengthen Social Security, the system that so many people depend upon today, we will be unable to meet its promises to tomorrow’s retirees, and it will be a burden to our children and grandchildren with exhaustive taxes”.
The right to social security is a human right. It is recognized in numerous human rights instruments, including the Universal Declaration of Human Rights and the International Covenant on Economic, Social and Cultural Rights, and is crucial for guaranteeing a life in dignity. Besides, social protection is one of the targets for the 2030 Agenda for Sustainable Development adopted by all United Nations Member States including Uganda in 2015.
According to the International Labour Organisation (ILO), Social protection, or social security, is a human right and is defined as the set of policies and programmes designed to reduce and prevent poverty and vulnerability throughout the life cycle. Emmanuel Cleaver, former US Congressman, House of Representatives counseled: “Social security is a covenant that should not be broken”.
One of the social security schemes for employees is the National Social Security Fund (NSSF) – a scheme where an employer and worker make specific regular contributions which are then invested by the fund and a lumpsum is paid to the worker upon retirement. To be specific, the employer is under obligation to deduct 5% from the employee’s total gross monthly wage and add 10% of the total gross monthly wage making a total contribution of 15% for each employee which is remitted to NSSF monthly.
According to NSSF Amendment Act, 2022, An employer includes: the Government; a company registered or incorporated under the Companies Act, 2012; a partnership registered under the Partnership Act, 2010; a trustee incorporated under the Trustees Incorporation Act, Cap. 165; a business registered under any other law for the time being in force governing the establishment of business entities; the governing body of an unincorporated association; and a manager or a subcontractor who provides employees for the principal contractor; but where a person enters into a contract by which some other person is to provide employees for any lawful purpose of the manager and it is not clear from the contract which of the two persons is the employer, the manager shall be deemed, for the purposes of this Act, to be the employer”.
The same NSSF Act makes it mandatory for all formal employers (registered businesses) to register with NSSF and submit a list of their employees to the fund (NSSF) irrespective of the number of staff they employ and make mandatory NSSF contributions for their staff members apart from employees in the exempted employment like those under the Public Service Pension Scheme.
Currently, data from NSSF shows that employer compliance rate stands at 54 percent which implies that 46 percent of formal employers do not comply with their NSSF obligations. In this regard, Patrick Ayota, the Managing Director NSSF, in his remarks during the recent NSSF – Ministry of ICT and National Guidance partnership conference to enhance social protection categorized employers into three categories: Good employers as those who comply with their NSSF obligations dutifully; Bad employers as those who are inconsistent in remitting their employees’ NSSF contributions and at times remit half of what they are obliged to pay; and then the ugly employers as those who deduct their employees’ 5 percent contributions but do not remit the money to NSSF.
Employers in those two undesirable categories above are reminded that noncompliance with the employment and labour laws like the NSSF Act is an offence. Section 44 of the NSSF Amendment Act, 2022 prescribes offences and penalties for: Knowingly making false statements/representations; Failure to disclose material facts; Failure to register or furnish particulars required under the Act; Making an unauthorized deduction from a wage; And failure to pay contributions within the time prescribed. Upon conviction for any of the above offences, one can be sentenced to imprisonment not exceeding one year and a fine of five hundred currency points (UGX10,000,000).
Therefore, much as compliance with NSSF is a legal requirement for all formal employers, there is also a business case for employers who provide NSSF and other social security benefits for their employees as it motivates them to be more productive when they know that you care about them and their families. A work environment that provides freedom from fear among employees inspire a positive work culture, creates happy employees, and hence leading to increase in productivity and business competitiveness. Indeed, as Diane Watson rightly advised, social security programmes should be strengthened and preserved for future generation.
By Patrick Ajuna, Policy and Research Officer