Former NSSF MD loses case against Minister Amongi

URN

The High Court in Kampala has dismissed the case in which former Managing Director of National Social Security Fund Richard Byarugaba was challenging the decision not to renew his contract.

The Civil Division Judge Musa Ssekaana on Friday dismissed the case on grounds that the decision by the Labour and Gender Minister Betty Among to reject his name for the appointment as the Managing Director of the National Social Security Fund-NSSF was within the law and no irrationality has been shown in the decision-making process.

In August 2023, Byarugaba filed a petition against the Attorney General and the Gender and Labour Minister Betty  Amongi, seeking court orders for Amongi to fulfill her statutory duties and complete his reappointment as the NSSF MD, as recommended by the Board and required by the law.    

Byarugaba’s argument is based on procedural irregularities and the decision leading the Minister to the Board’s recommendation for his reappointment. He said there was a violation of his legitimate expectations by not affording him a fair hearing. 

He further went on to say that Patrick Ayota his successor was not fit to head NSSF and he consequently added him(Ayota) to the list of the respondents. 

Byarugaba had served the NSSF MD since August 1, 2010, and his second appointment, which began on November 29, 2017, expired on November 30, 2022. 

Byarugaba argued that even before his second contract could run its course, Amongi attempted to prematurely end it by stating that he should have retired upon reaching 60 years of age.  

He told Justice Ssekaana through his lawyer Anthony Bazira that only with the intervention of the Attorney General was he able to complete his second term of office.

The NSSF Board of Directors had recommended renewing the contracts of both Byarugaba and his then-deputy Ayota.   

However, Amongi renewed only the contract of the Deputy MD and deferred Byarugaba’s appointment, citing various allegations, including financial impropriety, collusion with contractors, defiance of presidential directives, and corruption.   

  

Despite meetings at State House on December 6, 2022, and receiving guidance from President Yoweri Museveni to conclude Byarugaba’s appointment process, Amongi did not follow the guidance.  

Byarugaba argued that this, along with ignoring the February 2023 report of the Parliamentary Select Committee on the state of affairs at NSSF where he was cleared of financial impropriety allegations, makes the decision not to renew his contract illegal, irrational, and procedurally incorrect. 

According to Byarugaba, the decision also disregarded the Inspector General of Government’s report, which cleared him of allegations and supported the Board’s recommendation based on his previous performance in office.

However, as the matter was pending in court, Amongi elevated Ayota and appointed him as the Managing Director of the fund.  

Byarugaba asked the court to allow him to amend his petition and include Ayota as the third respondent such that he could be given a fair hearing and defend himself over the allegations. His application succeeded and Ayota was consequently put as the third respondent in this case to determine issues at once.

After adding Ayota,  Byarugaba told Court that Ayota was appointed on August 18th, 2023, while holding the substantive statutory position of Deputy MD on a fixed five-year term, making him ineligible for the MD up appointment.     

Through his lawyer  Bazira, Byarugaba requested the court to invalidate Ayota’s appointment and issue a permanent injunction to prevent Ayota from acting as the MD of the fund.

After being listed as a respondent,  Ayota swore a 38-page affidavit firing back at his former boss saying that he (Ayota) has all the requisite competencies and work experience to serve as Managing Director of NSSF.  

He said, the interests of the entire countrywide membership of the fund override any purported interest that Byarugaba has in a leadership position that he was found unfit to occupy.

Ayota told the Court that in the interest of justice, Byarugaba’s appointment should not be granted. He argued that if granted, there would be a leadership lacuna that could put the whole fund in limbo without a substantive accounting officer to safeguard members’ savings.

According to Ayota, his appointment was done lawfully, is valid, and was not done to defeat the present application for judicial as alleged by Byarugaba.

Ayota further stated that the 18 trillion shilling fund is at risk of misuse and stagnation and warned that it would be against the public interest for the fund to go without strategic leadership. 

He said in the interest of justice, fairness, and equity, Byarugaba’s application should be dismissed with costs for lack of merit and to favor the stability of the fund.

In his decision today, Justice Ssekaana has dismissed the application by Byarugaba saying it was devoid of merit.

Ssekaana has explained that the recommendation by the Board of NSSF to the Minister does not become a directive or an order to the Minister who is vested with the powers to appoint the Managing Director.

“It is inconceivable to think that a recommendation is binding on the person or entity to which it is addressed.

Recommendations call for the exercise of discretion in accepting or rejecting them. In all cases, recommendations are simply suggestions for further action”, said Ssekaana.

According to Ssekaana, the Minister was acting by the law-NSSF Act and the Act does not provide for a hearing before any decision is made for appointment or reappointment of the Managing Director of NSSF, affected persons must be accorded a hearing.

” Demanding a hearing before the Minister can exercise any discretion to appoint would be asking for so much and would be an absurdity. The decision-maker should not be unnecessarily burdened in deciding by demanding hearings at every stage”, said Ssekaana.

He added that such a hearing will only be required in exceptional circumstances if the person sets out strong and cogent grounds for it which was not the case with Byarugaba.

The Judge ruled that Byarugaba had not proved to the court that there was bias or breach of the rules of natural justice. 

It is the Judge’s finding that Byarugaba was investigated by separate organs including Parliament and IGG not at the instigation of Minister Among but rather on the statutory and Constitutional mandate of different government agencies. 

Ssekaana ruled that the appointment of Ayota was an act involving the Minister responsible for the affairs of NSSF through reporting and exercising supervisory function after applying her mind to the exercise of power and following the prescribed law.

According to Ssekaana, the Minister should not be interfered with in the absence of any justification or any breaches of the law.

“The court will not lightly presume abuse or misuse of power and will make allowance for the fact that the decision-making authority is the best judge of the situation”, Ssekaana held.

He said the decision to challenge Ayota’s appointment by Amongi based on the new recommendation of the Board cannot successfully be challenged without the Board being a party to these proceedings because they would be unfairly condemned and unheard in respect of their decision.

“The Board of NSSF was never restrained and was not part of the court matters and there is no way they should have sat back or refrained from executing their duties about the appointment of a substantive Managing Director of National Social Security Fund”, said Ssekaana.

Records indicated that the  NSSF under the stewardship of Byarugaba and his then Deputy Ayota currently has 2,000,000 members and assets worth 18 trillion Shillings and based on this performance, Byarugaba wanted the decision not to renew his contract to be set aside.