Wakilii

Banyankole Kweterana Co-operative Union Ltd v Mastiko (Civil Appeal No. 23 of 1999)

Court of Appeal · [2000] UGCA 50 · 2000 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from High Court judgment against an award of gratuity in a wrongful dismissal suit
Decision
Appeal dismissed; High Court award of gratuity of Shs. 38,400,000 affirmed

Observed later treatment

Treatment recorded in citing cases applied in 1 Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

Good law Followed in 0 cases and applied in 1 case, with no adverse treatment recorded. Citations rising — 6 citing cases on record, 4 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

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 Court of Appeal dismissed the appeal against a High Court award of gratuity of Shs. 38,400,000 arising from wrongful dismissal. On construction of the employment contract, gratuity under Clause 2(b) was payable for the full contract term where the employer terminated the contract without assigning a reason under Clause 11. The court held that an employee wrongfully dismissed recovers all damages legally flowing from the breach, including any gratuity promised and payable as part of the package, since he was denied the opportunity to earn it. The income tax argument was abandoned by the appellant and did not fall for decision. The award was affirmed with costs.

Outcome

Appeal dismissed; High Court award of gratuity of Shs. 38,400,000 affirmed

Facts

By a written employment contract (Ex P2), the appellant co-operative union engaged the respondent as General Manager on a four-year term with effect from 1 February 1995. On 24 November 1996, after one year and nine months, the appellant terminated the contract without assigning any reason, acting under Clause 11, which required payment of salary for the unexpired period plus a sum representing fair valuation of loss of contract. The respondent was not paid as stipulated and sued for breach of contract. The High Court awarded him Shs. 13,389,500 as salary for the unexpired period, Shs. 5,000,000 for loss of contract, and Shs. 38,400,000 as gratuity, plus costs and interest. The appeal concerned only the gratuity award. Clause 2(b) provided for gratuity at the end of the contract, computed on a per-year-of-service basis, subject to reductions only where the employment was terminated for cause under specified sub-clauses of Clause 7.

Issues

  1. Whether, on the proper construction of Clauses 2(b) and 11 of the contract, gratuity was payable for the full contract term where the contract was terminated without reason.
  2. Whether the trial judge erred in failing to account for income tax payable by the respondent on the awarded sums.

Orders

  • The award of Shs. 38,400,000/= made by the trial judge in respect of the respondent's gratuity is affirmed.
  • Appeal dismissed with costs.

Rules and key headnotes

Employment Contracts — Gratuity — Entitlement on Termination Without Cause
Where an employment contract provides for gratuity payable at the end of the contract term, and the contract is terminated by the employer without assigning any reason and without alleged fault on the employee, the employee is entitled to gratuity for the full contract term, not merely for the period served.
Breach of Employment Contract — Measure of Damages — Recoverable Benefits
An employee suing for damages for wrongful dismissal is entitled to recover the estimated pecuniary loss reasonably and probably resulting from the premature determination of the contract, including the value of any other benefit to which he is entitled under the contract, such as a gratuity promised and payable on completion of the contractual term.
Construction of Contract — Termination Clauses — Consequences of Breach
Where an employer exercises an option to break the contract by terminating without reason, it must pay all damages legally arising from that breach, including gratuity expressly provided for under the contract, since the employee was denied the opportunity to earn it.

Legislation cited (2)

  • Income Tax Act No. 11 of 1997 s.20(1)(a)
  • Income Tax Act No. 11 of 1997 s.20(1)(d)

Cases cited (2)

  • Lake v Campbell (1862) 5 LT 582
  • Southern Highlands Tobacco Union Limited v David McQueen (1960) EA 490

Cases citing this judgment (6)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

Full judgment

↓ Download PDF

The original judgment as reported. Read the original PDF before relying on any passage.

Banyankole Kweterana Co-operative Union Ltd v Mastiko (Civil Appeal No. 23 of 1999) [2000] UGCA 50 (30 May 2000)
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.