The Minister of Employment, Labour and Social Security, Umaru Napoleon Koroma, has engaged key stakeholders on the implementation of Section 25 of the Employment Act 2023, which provides for end-of-service benefits for employees.
The engagement brought together representatives of the Labour Congress, the Employers’ Federation, the Ministry and Smart Systems (SL) Ltd, the service provider responsible for developing and administering the proposed End-of-Service Benefits Platform.
The meeting followed a directive issued by the Minister two weeks earlier for a notice to be circulated on the full implementation of the legal provision and the need for compliance. The Ministry subsequently received feedback from employers and workers, including requests for clarification and proposals on practical approaches to implementing the law.
Speaking at the meeting, Minister Koroma underscored the importance of consultation and collaboration among employers, employees and other stakeholders, noting that their mutual interests are essential to the sustainability of businesses and the wider economy.
He reaffirmed the Ministry’s commitment to enforcing the law while ensuring that legitimate concerns raised by both employers and workers are considered in the implementation process.
The Minister explained that the engagement was intended to clarify the requirements of Section 25, address concerns and identify practical measures to facilitate compliance. He also acknowledged that discussions on the implementation of end-of-service benefits had commenced before his tenure, stressing the importance of building on the work already undertaken.
As part of the engagement, Mahmoud A. Idris, Executive Chairman of Smart Systems (SL) Ltd, delivered a technical presentation and demonstration of a digital platform designed to support the administration, monitoring and enforcement of end-of-service benefits.
The proposed platform is intended to provide an integrated system connecting employers, employees, trustees, fund managers and the Ministry. Its key functions include registering relevant parties, calculating benefit liabilities, tracking funds and monitoring compliance with the law.
During the presentation, Idris outlined features designed to improve accuracy, transparency and accountability in managing end-of-service benefits. These include an automated liability calculation mechanism that determines employers’ obligations based on employee and salary information, helping to minimise errors associated with manual calculations.
The platform also incorporates a recognition ledger for recording accrued benefit liabilities and approval workflows intended to strengthen accountability among employers, trustees, fund managers and the Ministry.
Additional features include investment portfolio management, monitoring returns on invested funds and generating compliance reports. These reports are expected to help the Ministry assess employers’ accrued liabilities, contributions, investment returns and any gaps between their obligations and the funds available to meet them.
Idris further explained that the proposed system would enable the Ministry to monitor compliance progressively, recognising that employers may need time to meet applicable funding requirements.
A phased implementation approach was discussed, including a proposed benchmark of at least 7.5 per cent of liabilities by 2029, with progress monitored against the relevant compliance targets.
Stakeholders also raised practical concerns about the implementation of Section 25, including the practice of paying end-of-service benefits annually at employees’ requests, the treatment of loans obtained by workers from their employers in anticipation of future benefits, and the risk of funds being withdrawn or diverted after being deposited.
These concerns highlighted the need for clear implementation guidelines, adequate safeguards and effective accountability mechanisms to ensure that employees’ entitlements are protected and funds set aside for end-of-service benefits are properly managed.
In response, Minister Koroma reiterated the Ministry’s commitment to ensuring compliance with the Employment Act 2023 while working collaboratively with employers, workers and other stakeholders to address the challenges identified.
The engagement forms part of the Ministry’s broader efforts to strengthen labour administration, promote compliance with employment legislation and protect the interests of both employers and employees.
