Reserve Bank orders TNM to pay pension for 63 ex-workers

In a bold move which is likely to tame abuse of workers rights in the telecommunications sector, the Reserve Bank of Malawi (RBM) ordered Telekom Networks Malawi (TNM) plc to pay pension to 63 ex-employees of the company’s call centre.

TNM had not placed the employees on a pension scheme because “they were on fixed term contracts”, which prompted them to lodge a complaint to Communication Workers Union of Malawi (COWUMA).

However, the RBM letter addressed to TNM’s Acting Chief Human Resources and Administration Officer and copied to COWUMA, stresses that employees on fixed term contracts are not exempted from complying with the Pension Act, 2023.

COWUMA Secretary General Hamilton Deleza said the union took up the matter with TNM management to collect the anomaly but “they were adamant”.

Consequently, according to Deleza, COWUMA then complained to RBM’s Pension Unit responsible for regulating pension compliance by both administrators and employers.

The RBM letter to TNM reads in part: “Section 10 (1) of the Pension Act, 2023, requires all employers in Malawi to place their employees on the mandatory pension scheme unless otherwise exempted”.

According to the letter, the Government Notice Order No. 32 Pension (Salary Threshold and Exemptions) Order, 2011, says the only exempted class of employees are as follows:

1. Seasonal Workers

2. Expatriate Employees with temporary work permit

3. Domestic workers

4. Members of Parliament in their capacity as such.

“In light of the limited exemptions, TNM is required to submit a plan on how it intends to regularize the position of the concerned members,” concludes the letter, signed by Limbikani D. Nundwe, on behalf of the Director of Pension and Insurance Supervision.

Efforts to speak to TNM plc proved futile.

But Deleza hailed RBM’s move considering that “it has taken over a year” for the regulator to give this direction as “there was significant resistance and delaying tactics” by TNM.

“We are very happy with RBM’s directive. It is an issue that arose out of ignorance on the part of TNM. The law is clear.

“We will ensure that these former employees are paid all their dues as they missed the pension contributions, possible bonuses and interests.

“TNM must pay everyone the exact amount they deserve on behalf of the pension administrator Old Mutual. They are not above the law,” Deleza said.