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Poor Records Complicate Former EAC Employees' Compensation Claims

The EAC collapsed in 1977. At the time, all the former employees were on a contributory pension scheme under Crown Agents in London. But after the collapse of the Community, Crown Agents filed for bankruptcy and indicated their inability to meet the obligation of compensating the former employees.
L-R Permanent Secretary Edith Mwanje and James Magode Ikuya (second left) the State Minister of the East African Community Affairs making submissions before the EAC Committee. Photo by Dominic Ochla

Audio 3

The government continues to face an uphill task in the compensation of former employees of the defunct East African Community – EAC due to poor records.

The EAC collapsed in 1977. At the time, all the former employees were on a contributory pension scheme under Crown Agents in London. But after the collapse of the Community, Crown Agents filed for bankruptcy and indicated their inability to meet the obligation of compensating the former employees.

This consequently left them at the mercy of their respective governments. As a result, the respective EAC partner states that included Uganda, Kenya and Tanzania individually decided to inherit the liability of compensating the affected employees.  Uganda, amended the Pensions Act to accommodate the services of the former employees of the defunct EAC to be considered as being pensionable without causing loopholes in the law.

But recently, Kole North MP Dr Samuel Opio Acuti raised concerns about the former EAC employees who have not been paid their benefits since 1977. Dr Acuti has pointed out that the ex-employees who received some compensation do not understand what the government exactly paid for, and that the criteria used to compute their benefits remain unexplained.

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The matter which was presented to Parliament in July was since referred to the Committee of the EAC Affairs for further investigation. However, commitee chairperson Noeline Kisembo Basemera says they have interacted with the officials from the Ministry of Public Service and their counterparts from the Ministry of East African Community Affairs to understand the status of the compensations but they all lacked documentary evidence.

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James Magode Ikuya, the State Minister of the East African Community Affairs explained that his Ministry which was established in 2007 inherited issues of the claimants that had already dragged on for a very long time. He added that the Ministry continues to receive numerous claims from people who were already paid but have denied being compensated.

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Records show that during the financial Year 2020/2021, a total of 83 claimants from other departments and 460 ex-employees of East Africa Airways were paid a joint sum of  8.071 billion Shillings, while, 183 others have been verified for payments amounting to 2.748 billion Shillingsin financial year 2022/2023.

Another list of 166 former employees of East Africa Airways has been verified and is due for payment amounting to  8.033 billion Shillings this financial year.

Initially, Minister Magode said that Ssekabanja and Company Advocates, the law firm that is representing the ex-employees initially submitted to the Ministry a total of 720 claimants worth USD 65,044,939  (about 250 billion Shillings).  But on August 24, 2021, the law firm submitted another claim worth USD 132,923,862 (about  506 billion Shillings), as outstanding arrears for the claimants. The claims have been forwarded to the Ministries of Finance, and Public Service awaiting guidance and verification. 

In 2000 President Yoweri Museveni directed the establishment of an Inter-Ministerial Committee comprising representatives from the Ministry of Public Service, Ministry of Finance, Attorney General and Office of the Auditor General to determine the actual liabilities that had accrued. 

In the same year, June 2000, the task force undertook an investigation and produced a report that revealed a total of 1,465 ex-employees had already been fully paid including their gratuity and interest.  The Taskforce revealed that 3,705 had received partial payment for Commuted Pension and Gratuity, Interest, and/or Provident Fund.

At the time, the Taskforce established an outstanding amount totalling 15.829 billion shillings. There was a total of 4,113 ex-employees who had never received any payment when compiling the report, implying that the total number of former employees was 5,170.