Gaborone High Court Judge, Justice Tshepo Motswagole has interdicted and restrained government from floating a tender for provisions of services to collect debts on behalf of government from Civil servants for micro lenders across the country pending finalization of a dispute between government and BOTUSAFE Investment (PTY) LTD. (owned by Unions).
BOTUSAFE is a company owned by Botswana Public Employees Union (BOPEU), Botswana Teachers Union (BTU) and Botswana Sectors of Educators Union (BOSETU) .BOTUSA on behalf of its Union made an urgent application to restrain government from going through the tender process until the parties had resolved their disputes in terms of their 2006 Memorandum of Agreement(MoA).
Motswagole made an interim order stopping government from proceeding with a tender number FDP/TC/2/1/16-21 for provision of single central registry services pending final determination of disputes as provided in terms of clause 18 of the Memorandum of Agreement signed by the parties on or about 18 April 2006.
Lawyer representing Unions, Mboki Chilisa said government was in breach of an agreement which was signed by the parties in 2006.
He said in 2006 government and Unions signed Memorandum of Agreement ( MoA ) that BOTUSAFE as a company acting on behalf of the three Unions should facilitate and provide Central Registry services to the government through Ministry of Finance and Economic Development (clause 2 of the Agreement) for purposes of making payment to micro lenders registered under the three Unions.
When appearing before Justice Motswagole, Chilisa said it is surprising and shameful that government floated a tender without taking into consideration that the parties have signed an indefinite Agreement and cannot be terminated without any cordial agreement.
‘’We have a MoA for the central Registry system managed by BOTUSAFE under the instructions from Unions for the purposes of payment. This payment was to be facilitated through deduction codes issued to the Unions by Ministry of Finance and the payment was for debts owed by civil servants”, said Chilisa.
He said government can terminate the Agreement amongst others on the ground that if the applicant has failed without sufficient cause to distribute the deduction received within 24 hours, resolution for the winding up of the Agreement and if the Union commits a material breach of the terms of the Agreement which is not of remedy. Chilisa said it is clear that BOTUSAFE has complied and there was no how its contract can be terminated.
‘’It is clear from the Agreement that in the absence of any breach of Agreement set out neither party was at liberty to terminate the Agreement. In short the Agreement was to subsist in perpetuity”, said Chilisa.
State represented by Nchunga Nchunga and Pulane Kgoadi said the purpose of the tender which is floating on papers and closes on 16 December 2016 was to introduce a single Central registry pertaining to Government deduction Code and regarding public officer’s database on Loan details as well as loan Book.
Nchunga said the whole process will allow for the winding up of the process which will ultimately lead to termination of the Memorandum of Agreement. The state argued that out of the 60 000 public officers under the Union at least more than 1, 500 people walk away with Zero balances from their monthly pay particularly industrial employees.
He said due to high rate of civil servants indebtedness to micro lenders, currently the volume of payments passing through government payroll as at the end of November 2016 is a whopping 726 303.2849 arguing that the figure shows that a huge amount of monthly pay has to be administered thus putting burden on government in terms of payroll administration.
He said BOTUSAFE (PTY) LTD only account for more than 94 million Pula while its rival competitor LESAKA (PTY) LTD one of its Director is Johnson Motshwarakgole account for more than 5 million Pula.
Nchunga said government floated a single central registry tender as a measure to address problems associated with payroll management such as strain in terms of server capacity as results of the number of deductions passing through the payroll.
He further said the system will have some form of adherences to laid down minimum take home for employees and eliminate zero balances which is likely to predispose affected civil servants to be vulnerable to corrupt practices adding that it was not the intention of government to enter into an indefinite Agreement but want other parties like 10 companies which have tendered to have an opportunity to provide services to government.
In his ruling Justice Motswagole ruled in favour of Unions arguing that the matter is urgent and interdicted government from issuing any other tender for the provision of central registry services pending the final determination of any dispute between the parties.
The parties will appear again on the 17 January 2017 for the finalization of the matter.