Stanbic Bank Uganda Ltd v Asiimwe (Civil Appeal 18 of 2018)

Supreme Court · [2020] UGSC 37 · 2020 Appeal Partly Allowed ✦ AI-generated summary ↓ Download

Jurisdiction

Uganda

Case Type

Second civil appeal from the Court of Appeal in a wrongful dismissal claim.

Decision

Appeal partly allowed: finding of wrongful dismissal and aggravated damages of UGX 30,000,000 upheld; general damages of UGX 10,000,000 set aside.

The full judgment

Read the complete, verbatim text of this judgment.

Cited — treatment unverified cited in 6 (treatment unverified) Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions — always read the source judgment before relying on it.

Holding

The Supreme Court held that although an employer may terminate employment by payment in lieu of notice, where the termination is expressly stated to be for the employee's fault (here, unsatisfactory performance) the employer must accord the employee a hearing; payment in lieu of notice does not cure the breach of natural justice. The finding of wrongful dismissal was therefore upheld (ground 1). The award of general damages was set aside (ground 2) because the respondent had already been paid three months' salary in lieu of notice, fully compensating the termination. The award of aggravated damages of UGX 30,000,000 was upheld (ground 3) given the high-handed and degrading manner of the dismissal. The appeal succeeded only in part.

Facts

The respondent was employed by Uganda Commercial Bank as a Bank Supervisor; the bank was acquired by the appellant, Stanbic Bank. In December 2002 his terms were varied and a fresh contract retaining him as Supervisor was executed. By letter dated 19 January 2005 his employment was terminated, the letter stating that his performance had been found unsatisfactory, and he was paid three months' salary in lieu of notice. The respondent had, however, been positively appraised in April 2003 and received a salary increment and an award of merit in 2003, with no warning or hearing about his performance before termination. He sued in the High Court for wrongful dismissal; the suit was dismissed. The Court of Appeal found the dismissal wrongful and awarded UGX 10,000,000 general damages and UGX 30,000,000 aggravated damages, plus costs. The bank appealed to the Supreme Court.

Issues

Whether the respondent was wrongfully dismissed where his employment was terminated, on stated grounds of unsatisfactory performance, with payment in lieu of notice but without a hearing.
Whether the Court of Appeal erred in awarding general damages of UGX 10,000,000 in addition to the salary already paid in lieu of notice.
Whether the Court of Appeal erred in awarding aggravated damages of UGX 30,000,000.

Orders

This appeal is dismissed in respect of grounds 1 and 3.
The award of UGX 10,000,000 by the Court of Appeal as general damages is set aside.
The award of UGX 30,000,000 as aggravated damages to the respondent by the Court of Appeal is upheld.
The appellant shall bear the costs of the appeal in this Court and in the courts below.

Key headnotes

Employment & Labour — Termination — Fault-based dismissal and the right to be heard

Where an employer terminates a contract of employment on grounds expressly stated to be the employee's fault, such as unsatisfactory performance, the employer must accord the employee a hearing in accordance with natural justice; payment of salary in lieu of notice does not atone for the denial of that right, and a fault-based dismissal effected without a hearing is wrongful.

Employment & Labour — Termination by notice — Employer's right not to be fettered

An employer may terminate a contract of employment for a reason or for no reason at all, provided it acts in accordance with the terms of the contract; the right to terminate by giving notice or by paying compensation in lieu of notice cannot be fettered by the courts.

Damages & Quantum — Wrongful dismissal — Measure of general damages

Compensation for unlawful termination of employment is confined to the monetary value of the notice period; where the employee has already been paid salary in lieu of notice, no further general damages are payable, as that payment compensates for the termination.

Damages & Quantum — Aggravated damages — Manner of dismissal

Aggravated damages may be awarded where the manner of dismissal is high-handed, degrading or injurious to the employee's dignity and future prospects, such as a false imputation of poor performance against an employee with a proven good record and the dismissal of senior staff in a humiliating manner before junior colleagues.

Civil Procedure — Second appeal — Interference with discretionary award of general damages

A second appellate court will not question findings of fact supported by evidence and will interfere with an award of general damages only where the lower court is shown to have exercised its discretion injudiciously or erred in law to the prejudice of the appellant.

Legislation cited (5)

Employment Act, Cap 219 s.25
Employment Act, Cap 219 s.25(2)(e)
Employment Act, Cap 219 s.25(3)
Civil Procedure Act, Cap 71 s.26
Employment Act 2006

Cases cited (8)

Barclays Bank of Uganda v Godfrey Mubiru (Civil Appeal No. 1 of 1998)
Stanbic Bank Ltd v Kiyemba Mutale (Civil Appeal No. 2 of 2010)
Betty Tinkamanyire v Bank of Uganda (Civil Appeal No. 12 of 2007)
Fredrick Zaabwe v Orient Bank & Another (Civil Appeal No. 4 of 2006)
Father Narsensio Begumisa and 3 Others v Eric Tibebaga (Civil Appeal No. 17 of 2002)
Ridge v Baldwin and Others [1964] AC 40
Stroms v Hutchinson [1905] AC 515
Lees v Arthur Greaves Ltd [1974] ICR 501

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.