Wakilii

Kyamugisha v Mutungo Executive Hotel Ltd and Uganda Revenue Authority (CIVIL SUIT NO 285 OF 2019)

High Court · [2025] UGHC 181 · 2025 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for declarations, damages, and orders arising from termination of employment based on background information
Decision
Plaintiff's suit dismissed; no costs awarded to either party

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the plaintiff's dismissal during probation was lawful. The contract was a probationary contract terminable without notice upon unfavourable background checks under Employment Act s.66(1). The 2nd defendant observed natural justice by giving the plaintiff opportunity to respond to allegations through email and written statement. The 1st defendant was not liable for providing background information in good faith when formally requested. Suit dismissed with each party bearing own costs.

Outcome

Plaintiff's suit dismissed; no costs awarded to either party

Facts

The plaintiff was employed by the 1st defendant as operations manager from October 2016 to July 2017 when he resigned. In July 2018, the 2nd defendant appointed him as a customs officer on a six-month probationary contract. The contract provided for post-employment background checks and termination without notice if unfavourable results emerged. During probation, the 2nd defendant conducted background checks with the plaintiff's former employers. The 1st defendant reported three issues: an employee under the plaintiff's supervision disappeared with company money; the plaintiff levied corkage charges and did not remit them; and he resigned without notice after being reprimanded. Based on this information and after investigations involving the plaintiff's written statement and email exchanges, the 2nd defendant terminated the plaintiff's contract in November 2018. The plaintiff's appeal to the Staff Appeals Committee was unsuccessful. The plaintiff sued claiming the information was false and his dismissal unlawful.

Issues

  1. Whether the plaintiff was lawfully dismissed by the 2nd defendant?
  2. Whether the 1st defendant is liable for the plaintiff's loss of earnings at the 2nd defendant?
  3. What remedies are available to the parties?

Orders

  • Preliminary objection by the 2nd defendant overruled.
  • Suit dismissed.
  • Each party to bear their own costs of the suit.

Rules and key headnotes

Probationary Contracts — Termination Without Notice — Employment Act s.66(1)
A probationary contract under the Employment Act is a contract not exceeding six months' duration, in writing, and expressly stating it is for a probationary period. Such a contract may be terminated without notice or payment in lieu of notice under section 66(1) of the Employment Act Cap 226. Including a probationary clause in a full term or fixed term contract does not make the contract a probationary one.
Dismissal During Probation — Background Checks — Contractual Terms
Where an employment contract expressly provides for termination without notice upon unfavourable background checks and such checks are conducted in accordance with the employer's Human Resource Management Manual, termination on that basis is neither unlawful nor unfair. The disciplinary procedural requirements do not apply to termination based on qualification or suitability for employment.
Natural Justice — Right to Be Heard — Article 42 of the Constitution
Article 42 of the Constitution requires that any person appearing before an administrative body be treated justly and fairly. The right to be heard does not always require physical appearance before a committee. It suffices that the affected person knows the nature of the accusation, is given opportunity to state their case through representations or written statements, and the body acts in good faith.
Fair Hearing — Article 28 vs Article 42 — Administrative Decisions
Article 28 of the Constitution guaranteeing the right to a fair hearing applies to proceedings before a court or tribunal established by law. When an employer makes a decision to terminate an employee's contract, it is making a management or administrative decision, not acting as a court or tribunal. The applicable constitutional provision is Article 42, which requires just and fair treatment by administrative bodies.
Background Information — Liability of Former Employer — Good Faith
A former employer who provides background information about a former employee in response to a formal request from a prospective employer is not liable for the consequences of that information unless the information was knowingly false, malicious, or made with ill-motive. Where the former employer in good faith believed the information to be true and correct, there is no actionable liability even if the information is considered injurious by the former employee.
Jurisdiction — High Court — Employment Disputes
The High Court has unlimited original jurisdiction under Article 139(1) of the Constitution. While the Employment Act and Labour Disputes (Arbitration and Settlement) Act make the labour officer the court of first instance in labour disputes, these provisions cannot oust the unlimited original jurisdiction of the High Court as they are subservient to Article 139(1) of the Constitution.
Wrongful Dismissal vs Unlawful Dismissal — Terminology
The Employment Act does not provide for wrongful dismissal but rather for unfair and unlawful dismissal. Unlawful or unfair dismissal covers situations where termination is effected in violation of the Employment Act, Labour Disputes Act, in breach of an employment contract, or in violation of law generally or public policy, including dismissal based on discrimination, retaliation, or ill-motive.

Legislation cited (13)

Cases cited (13)

  • Ridge v Baldwin & Others [1964] AC 40
  • Hilda Musinguzi v Stanbic Bank (U) Ltd (Supreme Court Civil Appeal No. 5 of 2016)
  • David Kayondo v The Cooperative Bank (U) Ltd (Court of Appeal Civil Appeal No. 091 of 1992)
  • Kameke Growers Cooperative Society Limited v North Bukedi Co-operative Union (Supreme Court Civil Appeal No. 8 of 1994)
  • Uganda Revenue Authority v Rabbo Enterprises (U) Ltd & Another (Supreme Court Civil Appeal No. 12 of 2004)
  • Richard Ndemerweki v MTN (U) LTD (Labour Dispute Application No. 101 of 2014)
  • MTN (U) LTD v Richard Ndemerweki (Court of Appeal Civil Appeal No. 291 of 2016)
  • Mark E. Kamanzi v National Drug Authority & Another (Miscellaneous Application No. 138 of 2021)
  • Mauda Atuzarirwe v URSB (High Court Miscellaneous Cause No. 249 of 2013)
  • Ben Rhaieim Aimen v Granda Hotels (U) Ltd (Industrial Court Labour Appeal No. 002 of 2023)
  • Byrne v. Kinematograph Renters Society Ltd [1958] 1 WLR 762
  • Barbra Awidi Michelle v Uganda Revenue Authority (High Court Miscellaneous Cause No. 322 of 2021)
  • Robert Cuossens v Attorney General (Supreme Court Civil Appeal No. 8 of 1999)

Full judgment

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Kyamugisha v Mutungo Executive Hotel Ltd and Uganda Revenue Authority (CIVIL SUIT NO 285 OF 2019) 2025 UGHC 181 (14 April 2025)
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.