The Minister of Employment, Labour and Social Security, Umaru Napoleon Koroma, has held discussions with workers, employers, the Ministry, and the company developing a digital platform for end-of-service benefits on implementing Section 25 of the Employment Act 2023.
The discussion focused on clarifying the law’s requirements, addressing concerns raised by employers and workers, and considering practical arrangements to administer and monitor the benefits. Section 25 covers employees’ end-of-service benefits.
The meeting followed a directive from Minister Koroma two weeks ago to circulate a notice on the full implementation of the provision and the need for compliance. The Ministry then consulted employers and workers and received their comments, requests for clarification and suggestions on how the law would work in practice.
In his address to participants, the Minister said that consultation and collaboration were important for effective implementation. He said: “Employers and employees depend on each other and their relationship enables business and the wider economy to prosper and be sustainable.
Koroma said the Ministry remained committed to upholding the law, while addressing the legitimate concerns of all sides. “The engagement was designed to bring stakeholders together to understand requirements, discuss issues that had arisen and identify workable approaches to implementation,” he said.
The Minister acknowledged that discussions about the matter started before he took over. He said it was important to build on work already undertaken and not to treat the process as a new initiative.
The meeting focused on a technical presentation and demonstration delivered by Mahmoud A. Idris, Executive Chairman of Smart Systems (SL) Ltd, developers and administrators of the End of Service Benefits Platform. The proposed digital system aims to facilitate the administration, monitoring, and enforcement of end-of-service benefits.
The presentation showed that the platform would link employers, employees, trustees, fund managers, and the Ministry through a single system. The functions include registering relevant parties, calculating benefit liabilities, tracking funds, and helping the Ministry monitor compliance.
One announced feature is a way to calculate liabilities using employee and salary data to determine an employer’s obligations. It is designed to reduce the likelihood of error that can occur with manual calculations.
Other features include a recognition ledger for accrued benefit liabilities and approval workflows to enhance accountability for employers, trustees, fund managers, and the Ministry. Other suggested uses include investment portfolio management, monitoring returns on invested funds, and generating compliance reports.
The reports are expected to provide the Ministry with information on employers’ obligations and contributions, investment returns and any shortfall between accrued liabilities and the funds available. The system is also designed to help officials track compliance over time, rather than measure compliance at a single point in time.
Idris said the proposed platform could accommodate a progressive approach, noting that employers may need time to comply with applicable funding requirements. Participants discussed a phased approach, including the proposed benchmark of at least 7.5 percent of liabilities by 2029, with progress tracked against the relevant compliance targets. The benchmark was proposed in the context of the implementation discussion.
Stakeholders also questioned the practicalities of how workplaces would manage end-of-service benefits. Among the topics discussed was the practice of paying benefits once a year at employees’ request. Participants also discussed how workers’ loans from employers are treated in relation to future benefits.
Another concern was whether money deposited for end-of-service benefits could be withdrawn or siphoned off later. The questions raised pointed to the need for clear procedures, safeguards, and accountability mechanisms. Stakeholders highlighted the need to protect workers’ entitlements and ensure funds set aside for benefits are managed appropriately.
The discussion revealed that implementation is more than a method of calculation. It also needs clarity on how contributions are logged, how funds are managed, how access to those funds is controlled and how compliance is reviewed. The Ministry’s engagement with employers, workers and other parties is intended to address those practical questions as the implementation process continues.
“The Ministry’s goal is to ensure compliance with the Employment Act while working together with employers, workers and other stakeholders to find practical responses to the challenges identified,” Koroma said. He acknowledged the need to protect employees’ entitlements but also recognised the concerns employers have raised about how to meet the requirements.
The meeting is part of the Ministry’s broader efforts to strengthen labour administration and promote compliance with the Employment Act 2023. The Ministry continues to consult and consider the proposed digital platform to support the effective administration of end-of-service benefits and safeguard the interests of employers and employees.
