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Stanbic Bank Uganda Limited v Nassanga Kasule (Civil Appeal No. 182 of 2021)

Court of Appeal · [2023] UGCA 380 · 2023 Appeal Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Civil appeal (with cross-appeal) from an award of the Industrial Court
Decision
Appeal allowed; Industrial Court award set aside and respondent's claim dismissed; cross-appeal dismissed

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Holding

The Court of Appeal held that under section 65(1)(a) of the Employment Act 2006 an employer may terminate an employee's contract with or without a reason, provided the requisite notice or payment in lieu is given; no reason and no hearing are required because section 66 applies only to dismissal for misconduct or poor performance. Article 4 of ILO Convention No. 158 was never domesticated and has no force of law in Uganda. The respondent's termination was therefore lawful, so the Industrial Court's award of general damages had no basis. The cross-appeal failed: unpleaded reliefs raised only in a witness statement cannot be granted, and no aggravated or exemplary damages arise where termination is lawful. Appeal allowed.

Facts

The respondent was employed by the appellant bank from February 2001. Clause 18 of her contract allowed either party to terminate on one month's notice or one month's salary in lieu. On 14 December 2012 the appellant terminated her employment and paid her UGX 17,887,500 as three months' salary in lieu of notice, together with terminal benefits. The respondent claimed the termination was unlawful because no reason was given and she was not accorded a hearing, alleging she was terminated for having sued the bank over an email circulated by its Financial Crime Control Unit during a loan-fraud investigation that named her. The Industrial Court found the termination wrongful and awarded her UGX 65,000,000 in general damages. The appellant appealed against liability and the award; the respondent cross-appealed seeking further declarations, severance and repatriation allowances, repayment of outstanding loans, and aggravated and exemplary damages.

Issues

  1. Whether a Notice of Cross-Appeal lodged under Rule 91 of the Judicature (Court of Appeal Rules) Directions can be struck out for being argumentative or narrative under Rule 86 of those Rules.
  2. Whether termination of employment, as distinct from dismissal, requires the employer to give a reason to be lawful under the Employment Act 2006.
  3. Whether termination of employment, as distinct from dismissal, requires a hearing to be lawful.
  4. Whether the Industrial Court erred in awarding the respondent general damages following her termination.
  5. Whether the respondent was entitled to severance allowance, repatriation allowance and payment of outstanding loans that were not pleaded in her Memorandum of Claim but raised in her witness statement.
  6. Whether the respondent was entitled to aggravated and exemplary damages.

Orders

  • This appeal succeeds.
  • The cross-appeal fails.
  • The judgment and orders of the lower court are set aside.
  • The respondent's claim is hereby dismissed.
  • Costs are awarded to the appellant herein and in the trial Court.

Key headnotes

Employment & Labour — Termination distinguished from Dismissal — No requirement of reason under section 65(1)(a)
Under section 65(1)(a) of the Employment Act 2006, an employer may terminate an employee's contract of service with or without a reason; termination is simply the ending of the contract by the employer with notice, and unless the contract states otherwise no reason need be given.
Employment & Labour — Termination — No right to a hearing where no misconduct alleged
A hearing under section 66 of the Employment Act 2006 is required only where an employee is dismissed on grounds of misconduct or poor performance; where employment is terminated under section 65(1)(a) and no allegations are made against the employee, there is no need for a hearing.
Employment & Labour — Payment in lieu of notice — Curative effect
Payment in lieu of notice suffices as the notice required under section 65 of the Employment Act 2006, and it is immaterial that such payment is made after termination or that the contract stipulated a shorter notice period than the statutory minimum, where the employer ultimately pays the statutorily required notice.
Statutory Interpretation — International treaties — Dualism and domestication
Uganda is a dualist state; Article 4 of the Termination of Employment Convention No. 158 of 1982, requiring a valid reason for termination, was not enacted into the Employment Act 2006 and, not having been domesticated, has no force of law in Uganda.
Civil Procedure — Pleadings — Claim raised only in a witness statement
Parties and the court are bound by the pleadings; a witness statement is evidence-in-chief and not a pleading, so a party cannot introduce a new claim in a witness statement, and a court cannot grant relief that was neither pleaded nor proved.
Civil Procedure — Court of Appeal Rules — Notice of Cross-Appeal under Rule 91 not governed by Rule 86
A Notice of Cross-Appeal lodged under Rule 91 of the Judicature (Court of Appeal Rules) Directions cannot be struck out under Rule 86, which governs the Memorandum of Appeal; had the framers intended Rule 86 to apply to a cross-appeal they would have said so expressly.
Damages & Quantum — Aggravated and exemplary damages — Not available where termination lawful
Where termination of employment is lawful no general, aggravated or exemplary damages arise; aggravated damages are compensatory while exemplary damages are punitive and confined to the categories in Rookes v Barnard, and the two cannot both be awarded for the same cause of action.

Legislation cited (26)

  • Employment Act 2006 s.2
  • Employment Act 2006 s.39
  • Employment Act 2006 s.58
  • Employment Act 2006 s.58(3)(d)
  • Employment Act 2006 s.58(5)
  • Employment Act 2006 s.65
  • Employment Act 2006 s.65(1)(a)
  • Employment Act 2006 s.66
  • Employment Act 2006 s.68
  • Employment Act 2006 s.69
  • Employment Act 2006 s.71
  • Employment Act 2006 s.75
  • Employment Act 2006 s.87
  • Employment Act 2006 s.89
  • Labour Disputes (Arbitration and Settlement) Act 2006 s.22
  • Civil Procedure Act s.2(p)
  • Civil Procedure Rules Order 6 r.6
  • Civil Procedure Rules Order 6 r.7
  • Judicature (Court of Appeal Rules) Directions r.30(1)
  • Judicature (Court of Appeal Rules) Directions r.86
  • Judicature (Court of Appeal Rules) Directions r.91
  • Constitution of Uganda Article 28
  • Constitution of Uganda Article 42
  • Constitution of Uganda Article 45
  • Constitution of Uganda Article 287
  • Termination of Employment Convention No. 158 of 1982 Article 4

Cases cited (48)

  • Barclays Bank of Uganda v Godfrey Mubiru (Supreme Court Civil Appeal No. 1 of 1998)
  • Stanbic Bank Ltd v Kiyemba Mutale (Supreme Court Civil Appeal No. 2 of 2010)
  • Hilda Musinguzi v Stanbic Bank Uganda Ltd (Supreme Court Civil Appeal No. 28 of 2012)
  • Hilda Musinguzi v Stanbic Bank (U) Ltd (Civil Appeal No. 5 of 2016)
  • Bank of Uganda v Joseph Kibuuka and 4 Others (Civil Appeal No. 281 of 2016)
  • Stanbic Bank Uganda Limited v Deogratius Asiimwe (Civil Appeal No. 18 of 2018)
  • Uganda Development Bank v Florence Mufumba (Civil Appeal No. 241 of 2015)
  • Attorney General v Florence Baliraine (Civil Appeal No. 79 of 2003)
  • Mulindwa George William v Kisubika Joseph (Civil Appeal No. 12 of 2014)
  • Twinomujuni Moses v Rift Valley Railways (Civil Suit No. 212 of 2009)
  • Uganda Association of Women Lawyers v Attorney General (Constitutional Petition No. 2 of 2003)
  • Katamba Hussein v Uganda National Roads Authority (Civil Suit No. 18 of 2021)
  • Obore George Alfred Vs. The Inspectorate of Government & A.G. HCT-04-CV-005-2013
  • Ebere Onyekachi Aloysius V Diamond Bank Plc, (2012) 58 NLLR 92
  • Omega Enterprises (Kenya) Limited Vs Kenya Tourist Development Corporation & 2 Others, Kenya Court of Appeal
  • Macfoy Vs United Africa Co. Ltd. {1961} 3 ALL ER 1169
  • Andrew Kananura v Mary Mugenyi (Civil Suit No. 57 of 2008)
  • AM Jabi Vs Mbale Municipal Council (1975) HCB 191
  • C Ushillani Vs Kampala Pharmaceuticals Ltd, SCCA No. 6 of 1999
  • Mugisha Richard Bob Kagoro v Uganda Wildlife Authority (Civil Suit No. 263 of 2007)
  • Mary Pamela Sozi v Public Procurement and Disposal of Public Assets Authority (HCCS No. 63 of 2012)
  • Akeny Robert Vs. Uganda Communications Commission, LDC No. 023/2015
  • Caroline Turyatemba and Others v Attorney General (Constitutional Petition No. 15 of 2006)
  • Interfreight Forwarders (U) Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
  • Kifamunte Henry v Uganda (Supreme Court Criminal Appeal No. 10 of 1997)
  • National Forestry Authority v Sam Kiwanuka (Civil Appeal No. 5 of 2009)
  • Charles Abigaba Lwanga VS Bank of Uganda LDC No. 142 of 2014
  • Fang Min v Belex Tours and Travel Limited (Supreme Court Civil Appeal No. 6 of 2013)
  • Nigel Sutton Vs. Slowey Shauna Sutton, Divorce Cause No. 63/2013
  • Habre International Co. Ltd v Ebrahim Azakaria Kassam & Others (Supreme Court Civil Appeal No. 4 of 1999)
  • James Sowabiri & Another v Uganda (Supreme Court Criminal Appeal No. 5 of 1990)
  • Uganda Revenue Authority v Stephen Mabosi (Supreme Court Civil Appeal No. 26 of 1995)
  • Tumusiime & 5 Others v Mukwano Personal Care Products (Labour Dispute Reference No. 22 of 2014) [2019] UGIC 30
  • Donna Kamuli Vs DFCU, Labour Claim No. 02/2014
  • Mugisha M. Rogers v Equity Bank (U) Ltd (Miscellaneous Application No. 70 of 2019)
  • Adetoun Oladeji (NIG) Ltd Vs. Nigerian Breweries PLC, S.C. 91/2002
  • Jani Properties Ltd versus Dar-es-Salaam City Council (1966) EA 281
  • Struggle Ltd versus Pan African Insurance Co. Ltd (1990) ALR 46
  • Addis Versus Gramophone Co. Limited, [1909] AC 488
  • Stroms Bruks Aktie Bolag and others Vs. J&P Hutchison [1905] A.C 515
  • Rookes versus Barnard (1964) AC 1129
  • Esso Standard (U) Limited v Semu Amanu Opio (Supreme Court Civil Appeal No. 3 of 1993)
  • Ahmed Ibrahim Bholm v Car and General Ltd (Civil Appeal No. 12 of 2002)
  • Huljiah Vs. Hall [1973] 2 NZLR 279
  • Fredrick Zaabwe v Orient Bank (Supreme Court Civil Appeal No. 4 of 2006)
  • Obongo Vs Kisumu Council [1971] EA 91
  • Lees v. Arthur Greaves Ltd, (1974) I.C.R. 501
  • Rex Stewart Jeffries Parker Ginsberg Ltd v. Parker (1988) I.R.L.R. 483
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