EXAMINING THE ENTITLEMENT OF A LEGAL REPRESENTATIVE TO A DECEASED'S PENSION, GRATUITY & SURVIVOR'S BENEFIT: A CASE STUDY OF LYDIA HATEGA v. ATTORNEY GENERAL & ADMINISTRATOR GENERAL (LABOUR DISPUTE CLAIM NO. 019 of 2014)"

 

INTRODUCTION

In Uganda's public service sector, employees receive retirement benefits in the form of Pension and Gratuity, with the amount varying based on their rank and salary scale. Pension is typically paid upon retirement, while Gratuity is disbursed at the end of the employee's service, regardless of their retirement status. As former Ugandan Minister of Public Service, Henry Kajura once said, "Pension and Gratuity are crucial retirement benefits that provide financial security for public service employees and their families."

With effect from 25^th March 1994, a deceased public servant’s legal representative is entitled to a survivor’s benefit under the Pension (Amendment) Statute No. 4/1994.

This blog sheds light on which public servant is entitled to pension, under what circumstances, and whether a deceased public servant’s legal representative is entitled to his or her pension, death gratuity and survivor’s benefit.

SUMMARY OF THE CASE

The Claimant was a widow and administrator of the Estate of the Late Francis Xavier Hatega who worked as a Foreign Service Officer from April 1968 to April 1991 when he passed on. The claimant thereafter applied for death gratuity which was calculated at 206,064/= but which according to her was never paid. She then filed this suit claiming for accumulated annual pension for 23 years from the date of service to the date of death at a tune of 829,000,000/=, unpaid death gratuity for 15 years from the date of death to a tune of 540,000,000/=, and interest at 10% per year.

The claimant's counsel argued that the claimant, as the legal representative of the deceased, was entitled to the deceased's accumulated pension for 23 years from the date of service, death gratuity for 15 years from the date of death, and survivor's benefit based on Article 254 of the Constitution and Section 21 of the Pensions Act. Counsel also relied on Article 21 of the Constitution to argue against discrimination and Article 274(1) of the Constitution to suggest that existing laws could be construed with adaptations necessary to bring them into conformity with the constitution.

The respondent argued that pension is only payable to living retired civil servants, and there is no legal basis for the claimant's entitlement to survivor's benefits introduced by the Pensions (Amendment) Statue No. 4/1994. They further contended that the amendment cannot have a retrospective application, and as the late Hatega died in 1991, Article 21 of the Constitution could not confer a benefit retrospectively. The respondent suggested seeking an interpretation of the constitution by the Constitutional Court as a remedy.

COURTS DECISION

Ø  Legal Representative’s entitlement to deceased public servant’s accumulated pension.

On whether the claimant was entitled to the accumulated pension and or death gratuity together with the survivor’s benefit, court in reference to Article 254 of the Constitution stated that the Article applies to Public Servants who have retired from the service. Pension is therefore payable to a public servant who, having served the public service and having been entitled to pension as per his/her contract of service, is retired in accordance with the terms of employment or otherwise by operation of the prevailing legal regime. Court specifically held that:

“Given that pension is payable on retirement, it means that it is not retrospective to the date the concerned public servant started work. In the course of employment, the employee is entitled to salary and any other allowable benefits up to the time of retirement. Consequently, there is no legal basis for the argument and contention of counsel for the claimant that having obtained letters of administration to the Estate of the late Hatega, she was entitled to “accumulated pension for 23 years from the date of service in public service on 20/4/1968 till the date of death on 22/04/1991”

Court clearly pointed out that every pension or other allowance under the Pension Act ceases upon death of the person to whom it is granted unless a person who is in receipt of a pension or other allowance under the Act dies before the expiry of fifteen years after the date of his or her retirement, then pension will continue to be paid if the deceased is survived by a spouse, to the spouse, for the unexpired period of the 15 years.

Ø  Legal Representative’s Entitlement to a Deceased Public Servant’s Death Gratuity.

Court agreed with the claimant that as legal representative, she could was entitled to the deceased’s death gratuity. However, the calculation of death gratuity should be in line with Section 19 of the Pensions Act. Court held that the computation of the death gratuity is based on rank, salary and length of service. As such, there was no legal basis for the claimant’s claim of death gratuity “for fifteen years from the date of service on 20th April 1968 calculated at a present ambassador’s annual salary of Ugx. 36,000,000/= giving a total of 540,000,000/=”. 

 

Ø  Legal Representative’s Entitlement to Survivor’s Benefit.

Court held that The Pensions (Amendment) statute 4/ 1994 which provides for survivor’s benefit did not provide for a retrospective operation and court cannot apply it retrospectively. The commencement date of the 1994 statute having been 25/03/1994, the claimant could not claim benefits (survivor’s benefits) that were not legally provided for before the demise of her husband; she could only claim for death gratuity.

Court noted that the Estate of a deceased person before March 1994 could only be able to access “survivor’s benefits” if only the deceased died at or during his retirement as provided for under Section 18 (2)(a) of the Pensions.

LEGAL IMPLICATIONS OF THE DECISION.

·       Pension is only payable to a living retired civil servant. Where a civil servant dies before retirement, no pension is payable to them unless a person who is in receipt of a pension or other allowance under the Act dies before the expiry of fifteen years after the date of his or her retirement. In that case, the pension will continue to be paid if the deceased is survived by a spouse, to the spouse, for the unexpired period of the 15 years.

·       Given that pension is payable on or after retirement, it is not retrospective to the date the concerned public servant started work, and as such, a legal representative of a deceased civil servant cannot claim his/her pension.

 

·       A legal representative of a deceased civil servant is entitled to death gratuity computed based on the rank, salary scale and length of service

 

·       Where the civil servant dies holding a pensionable office and is not on probation or agreement, or while holding a non- pensionable office in which he has been confirmed, his legal representatives are entitled to a survivor’s benefit.

 

NB: This Decision made it clear that there is a distinction between pension and survivor’s benefit. The Industrial Court also pointed out thatalthough the Pensions (Amendment) Statue No.4/1994 states that it is an amendment to the Pensions Act, on perusal of the Pensions Act, Chapter 286 of the laws of Uganda, there are discrepancies. Section 16 of the Principal Act, Cap 286 does not contain subsection (1) which Amendment Statute 4/1994 intended to amend so as to grant pension to a surviving spouse or child of a deceased public servant. Even then, this amendment contradicts the constitutional provision in Article 254 which provides for pension on or after retirement. Court rejected the contention that the Amendment Statute 4/1994 provides for survivors’ benefits as opposed to pension since the words used in the statute refer to the payment as pension and the deceased as pensioner.

From the above analysis, the Industrial Court seemed to disagree that the Pensions (Amendment) Statute No. 4/1994 is an amendment to the Pensions Act Cap. 286, but only acknowledged its new introduction of the “survivors” benefit, as a distinct benefit from pension.

 

 

CONCLUSION

In conclusion, the decision on the entitlement of legal representatives to deceased public servants' retirement benefits has significant implications for both civil servants and their beneficiaries. The court has clarified that pension is only payable to a retired civil servant, and not retrospectively to the start of their employment. However, a legal representative of a deceased civil servant is entitled to death gratuity and survivor's benefits, subject to certain conditions. This decision underscores the importance of proper retirement planning and highlights the need for civil servants to understand their entitlements and ensure that their beneficiaries are aware of their rights in the event of their death. Overall, the decision provides much-needed clarity on the entitlements of legal representatives and serves as a guiding principle for future legal disputes in this regard.