Wakilii

Kengrow Industries Ltd. v Chandran (Civil Appeal 7 of 2001)

Supreme Court · [2002] UGSC 19 · 2002 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second civil appeal from a Court of Appeal decision upholding a High Court award of damages for wrongful dismissal from employment
Decision
Appeal substantially succeeded; damages reduced to salary for the residue of the contract (US$12,600) plus allowances, with the Court of Appeal's increases to general damages and interest set aside

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Holding

The Supreme Court partly allowed the appeal. It upheld the concurrent findings that the respondent was wrongfully dismissed and that the contract was to last at least two years, the duration being inferred from his two-year work permit. Where an employer repudiates a contract of employment, the wronged employee's only remedy is damages measured by the remuneration for the residue of the contract; the respondent was entitled to 12 months' salary (US$12,600), not the longer period awarded below. The Court of Appeal had erred in increasing both general damages and the interest rate without any cross-appeal contrary to Rule 90, so those increases were set aside and the trial court's figures restored.

Facts

The respondent, recruited in India where he had worked for the appellant company for three years, was brought to Uganda and, after final negotiations in Jinja, appointed General Manager. His oral terms included a five-year engagement at US$1,050 monthly, a furnished house with utilities paid, school fees for two children, air passages and biennial vacations. The company obtained a two-year work permit for him. The agreed terms were honoured from March 1997 until early 1998. On returning from a business trip in March 1998, the respondent found another man, appointed Chief Executive Officer, occupying his office. He was relocated to petty duties and eventually told not to disturb the new man. The company paid salary to April 1998, kept him in the company house until May, and only disconnected his telephone in December 1998. No dismissal order or notice was given; the company kept promising to sort out his problems. He sued for breach of contract, while the company claimed he had left voluntarily.

Issues

  1. Whether the terms of the contract, including the agreed salary, were in issue and what salary had been agreed.
  2. Whether the respondent voluntarily left the company's employment or was wrongfully dismissed.
  3. What the agreed duration of the contract of employment was.
  4. What the proper measure of damages was for wrongful dismissal of the respondent.
  5. Whether the Court of Appeal could increase the award of general damages where no cross-appeal had been filed.
  6. Whether the Court of Appeal could increase the rate of interest where no cross-appeal had been filed.

Orders

  • Appeal allowed substantially.
  • Respondent to be paid US$12,600 being salary for the balance of the contract of employment (twelve months).
  • Food allowance awarded for 12 months at shs.167,000 per month, totalling shs.2,004,000.
  • Award for education expenses of shs.720,000 upheld.
  • Court of Appeal's increase of general damages from shs.5,000,000 to shs.14,000,000 set aside and the High Court award of shs.5,000,000 restored.
  • Court of Appeal's increase of interest from 6% to 20% set aside and the trial judge's rate of 6% per annum restored.
  • Respondent to be paid half his costs in the Supreme Court and half his costs in the Court of Appeal.
  • Respondent to be paid his full costs in the High Court.

Key headnotes

Employment & Labour — Wrongful Dismissal — Remedy of the Wronged Employee
Where a contract of employment is repudiated by the employer through dismissal, whether express, implied or constructive, the employee cannot insist on continuing to be provided with work and payment, and the only remedy available is damages.
Damages & Quantum — Wrongful Dismissal — Measure for Fixed-Term Contract
On wrongful termination of an employment contract for a fixed period that is not terminable on notice, the employee is entitled to recover as damages the equivalent of the remuneration for the balance of the contract period, on the principle of restitutio in integrum.
Employment & Labour — Wrongful Dismissal — Burden of Proof
Once a plaintiff proves that he was dismissed without the notice provided for in his contract, the onus shifts to the employer to establish misconduct justifying the dismissal, and dismissal is not justified unless the employee's conduct showed a deliberate intention to disregard the essential requirements of the contract of service.
Civil Procedure — Appeals — Necessity of a Cross-Appeal to Vary a Decision
A respondent who seeks to have the decision of the court below varied or reversed must give notice of cross-appeal under Rule 90 of the Court of Appeal Rules; an appellate court cannot increase an award of damages or the rate of interest in favour of a respondent who has not cross-appealed.
Contract Law — Oral Contract of Employment — Inferring Duration from a Work Permit
Where the terms of an oral employment contract are disputed and the employer's negotiators do not testify, a court may infer the intended minimum duration of the contract from the period of the expatriate employee's work permit secured by the employer.
Civil Procedure — Second Appeals — Re-evaluation of Evidence
Rule 29(1) of the Rules of the Court bars a second appellate court only from receiving additional evidence; it does not bar that court from re-evaluating the evidence on record, particularly where the complaint is one of mixed law and fact.
Damages & Quantum — Mitigation by the Wrongfully Dismissed Employee
A person who is wrongfully dismissed must mitigate his damages by obtaining alternative employment, and steps taken towards earning a livelihood after dismissal amount to mitigation.

Legislation cited (7)

  • Judicature Statute 1996 s.7
  • Employment Decree 1975 s.24(1)
  • Employment Decree 1975 s.24(3)
  • Employment Decree 1975 s.16
  • Immigration Act
  • Court of Appeal Rules 1996 r.90(1)
  • Rules of the Supreme Court r.29(1)

Cases cited (8)

  • Milly Masembe v Sugar Corporation Ltd (Civil Appeal No. 1 of 2000)
  • East African Airways v Knight (1975) EA 165
  • Kyobe v East African Airways (1972) EA 403
  • G. Ushillani v Kampala Pharmaceuticals Ltd (Civil Appeal No. 6 of 1998)
  • Witu v Peake (1913/14) 5 EALR 17
  • Bosa v High Commission (1950) 17 EACA 42
  • Laws v London Chronicle (1959) 2 All ER 285
  • Pepper v Webb (1969) 2 All ER 216
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.