Wakilii

Kemba v Mount Meru Millers (U) Limited (Labour Dispute Reference 2 of 2021)

Industrial Court · [2023] UGIC 56 · 2023 Judgment for Claimant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute reference from Senior Labour Officer following unsuccessful conciliation at district level
Decision
Claimant awarded compensation totalling UGX 7,009,609.2 comprising severance, notice pay, leave, unlawfully deducted remuneration, general damages, and compensation for denial of fair hearing

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that the employer unlawfully and unfairly terminated the claimant's employment. The suspension without pay exceeded the statutory four-week maximum under Employment Act s.63(2), and the employer failed to afford the claimant a fair hearing before non-renewal of his fixed-term contract. The court awarded severance, notice pay, leave entitlement, compensation for denial of fair hearing, general damages, and ordered repayment of unlawfully deducted remuneration.

Outcome

Claimant awarded compensation totalling UGX 7,009,609.2 comprising severance, notice pay, leave, unlawfully deducted remuneration, general damages, and compensation for denial of fair hearing

Facts

The claimant was employed as a driver earning UGX 738,657 monthly. On 15 October 2018, he was suspended without pay for one month to allow investigations into alleged unauthorized offloading of crude palm oil. On 12 February 2019, four months after suspension, he was informed his fixed-term contract (which expired 31 December 2018) would not be renewed. His outstanding dues were subjected to a deduction of UGX 1,830,000 for loss of a truck tyre, leaving a balance of UGX 130,051. The claimant had been employed from 1 July 2016. The employer's insurer had compensated the employer UGX 1,163,650 for the lost tyre and rim. The claimant was never invited to a disciplinary hearing or given an opportunity to respond to the allegations.

Issues

  1. Whether the Respondent unlawfully and unfairly terminated the Claimant?
  2. What remedies are available to the parties?

Orders

  • It is declared that the Claimant was unfairly and unlawfully terminated from employment with the Respondent.
  • The Respondent is ordered to pay UGX 1,908,197.2 as severance allowance.
  • The Respondent is ordered to pay UGX 738,657 being one month's salary in lieu of notice.
  • The Respondent is ordered to pay UGX 738,657 as leave entitlement.
  • The Respondent is ordered to pay UGX 1,830,000 unlawfully deducted from the Claimant's remuneration.
  • The Respondent is ordered to pay UGX 2,215,971 in general damages.
  • The Respondent is ordered to pay UGX 578,127 being four weeks' net pay for failure to grant a fair hearing.
  • No order as to costs.

Rules and key headnotes

Suspension — Statutory Maximum Duration — Employment Act s.63(2)
A suspension under Employment Act s.63(2) shall not exceed four weeks or the duration of the inquiry, whichever is shorter. A suspension exceeding this statutory period is unlawful.
Suspension — Suspension Without Pay — Employment Act s.63(1)
Under Employment Act s.63(1), an employer conducting an inquiry into the conduct of an employee may suspend that employee with half pay. A suspension without pay contravenes the statutory requirement.
Termination — Fixed-Term Contracts — Non-Renewal Following Unlawful Suspension
Where an employer suspends an employee unlawfully and subsequently relies on that suspension as the basis for non-renewal of a fixed-term contract, the non-renewal is itself unlawful. An employer cannot cure an unlawful disciplinary process by allowing the contract to expire during the unlawful suspension.
Fair Hearing — Right to Be Heard — Employment Act s.66
Before reaching a decision to dismiss an employee on grounds of misconduct or poor performance, an employer must explain the reasons to the employee in a language the employee understands, afford the employee an opportunity to be heard and to have another person of their choice present, and consider any representations made. Failure to comply renders the termination procedurally and substantially defective.
Deductions from Remuneration — Permitted Deductions — Employment Act s.46
Deductions from an employee's remuneration are restricted to those permitted by law under Employment Act s.46, namely tax, rates, subscriptions imposed by law, or deductions by written consent for provident fund, reasonable rent, or union dues. A deduction for loss of property not falling within these categories is unlawful, and the employer is liable under s.47 to repay any remuneration wrongfully withheld or deducted.
Remedies — Compensation for Denial of Fair Hearing — Employment Act s.66(4)
An employer who fails to grant a hearing as required by Employment Act s.66 is liable to pay the employee a sum equivalent to four weeks' net pay.
Costs — Labour Disputes — Discretion to Award Costs
In labour disputes, costs are unlikely to follow the event on account of the nature of the employment relationship. There must be some form of misconduct, including filing a frivolous and vexatious claim, on the part of a party for costs to be awarded against such offending party.

Legislation cited (18)

Cases cited (11)

  • Twinomugisha Moses v Rift Valley Railways (Civil Suit No. 212 of 2009)
  • Kanyonga Sarah v Lively Minds Uganda (Labour Dispute Reference No. 16 of 2018)
  • Peter Kitaka & 12 Others v Mohamood Thobani (High Court Civil Appeal No. 20 of 2021)
  • Airtel Uganda Ltd v Peter Katongole (Labour Dispute Appeal No. 13 of 2022)
  • Ebiju James v Umeme Ltd (High Court Civil Suit No. 133 of 2012)
  • Donna Kamuli Vs DFCU Bank Ltd
  • DFCU Bank Ltd v Donna Kamuli (Court of Appeal Civil Appeal No. 121 of 2016)
  • Stroms v Hutchinson [1950] AC 515
  • Dr. Omona Kizito v Marie Stopes Uganda (Labour Dispute Claim No. 33 of 2015)
  • Gillabhai Ushillingi v Kampala Pharmaceutical Ltd (Supreme Court Civil Appeal No. 6 of 1999)
  • Joseph Kalule v GIZ (Labour Dispute Reference No. 109 of 2020)

Full judgment

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

Kemba_v_Mount_Meru_Millers_(U)_Limited_(Labour_Dispute_Reference_2_of_2021)_[2023]_UGIC_56_(28_February_2023)
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.