Wakilii

Kyeyune and 10 Others v National Medical Stores (Civil Suit 99 of 2008)

High Court · [2024] UGHCCD 1 · 2024 Judgment for Plaintiffs AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for wrongful termination of employment, breach of contract, and damages
Decision
Plaintiffs' claims for unlawful termination upheld; damages awarded to each plaintiff with interest; costs awarded to plaintiffs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the termination of the plaintiffs' employment contracts by National Medical Stores was unlawful. The first plaintiff's contract renewal for six months instead of the standard four years contravened the Defendant's Human Resource Manual and the Employment Act 2006. For the remaining plaintiffs, termination based solely on an audit report without criminal prosecution or conviction violated the employer's own Human Resource Manual which required conviction before dismissal for criminal conduct. Plaintiffs awarded special damages comprising unpaid salary, gratuity, payment in lieu of notice, and leave pay; general damages; and in one case aggravated damages for malicious conduct by the employer.

Outcome

Plaintiffs' claims for unlawful termination upheld; damages awarded to each plaintiff with interest; costs awarded to plaintiffs

Facts

Eleven plaintiffs were employed by National Medical Stores on various contracts. In November 2007, they were interdicted on allegations of fraudulent multiple delivery of drugs. Police and auditors investigated. The Board initially reinstated the plaintiffs in December 2007 following a Board resolution, but on 10 December 2008, their contracts were terminated without notice. The first plaintiff's contract, which expired in April 2007, was renewed for only six months instead of the standard four years provided in the employer's Human Resource Manual. The remaining plaintiffs were terminated based on an audit report recommending prosecution under the Penal Code, but they were never prosecuted or convicted. Two plaintiffs did not testify: one settled with the defendant and another died during trial.

Issues

  1. Whether termination of the Plaintiffs' contracts of employment was lawful or unlawful?
  2. What remedies are available to the parties?

Orders

  • Judgment entered for each Plaintiff.
  • Plaintiff 1 (Kyeyune Jonah) awarded UGX 38,409,467 as special damages; UGX 10,000,000 as general damages; UGX 5,000,000 as aggravated damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general and aggravated damages from date of judgment until payment in full.
  • Plaintiff 3 (Simon Peter Daka) awarded UGX 35,513,367 as special damages; UGX 10,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 4 (Thomas Anywar) awarded UGX 21,933,294 as special damages; UGX 10,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 5 (Angel Sabiti) awarded UGX 22,661,262 as special damages; UGX 3,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 6 (Nabuti Peter) awarded UGX 8,421,293 as special damages; UGX 3,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 7 (Ssebowa Cyrus) awarded UGX 7,678,678 as special damages; UGX 3,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 8 (Yusuf Kajamiti) awarded UGX 8,683,824 as special damages; UGX 3,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 9 (Mwenda Steve) awarded UGX 10,776,649 as special damages; UGX 2,000,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Plaintiff 11 (Masabo Henry) awarded UGX 1,325,188 as special damages; UGX 300,000 as general damages; interest at 20% per annum on special damages from 2008 until payment in full; interest at 8% per annum on general damages from date of judgment until payment in full.
  • Defendant ordered to pay costs of the suit.

Rules and key headnotes

Contract of Employment — Renewal — Statutory and Contractual Requirements
Where an employer's Human Resource Manual stipulates a standard contract term of four years renewable after performance appraisal and at the appointing authority's discretion, renewal for a shorter period of six months instead of the prescribed four years contravenes both the Manual and section 65(1)(b) of the Employment Act 2006, and amounts to unlawful termination.
Termination — Summary Dismissal for Criminal Conduct — Requirement of Conviction
Where an employer's Human Resource Manual provides that an employee convicted of a criminal offence by a court of law shall be liable to termination, the employer cannot lawfully terminate employment based solely on an audit report recommending prosecution where no prosecution has been instituted and no conviction has been obtained.
Termination — Burden of Proof — Valid Reason
Under section 68(1) of the Employment Act 2006, in any claim arising out of termination, the employer must prove the reason or reasons for dismissal, and where the employer fails to do so, the dismissal shall be deemed unfair within the meaning of section 71 of the Act.
Remedies — Terminal Benefits — Entitlement Upon Unlawful Termination
An employee whose employment has been unlawfully terminated is entitled to terminal benefits as provided under the employer's Human Resource Manual or contract, including accrued salary to the last day of duty, payment in lieu of notice, outstanding entitlements such as leave pay and allowances, and gratuity accrued to the last day of duty.
Remedies — Severance Allowance — Inapplicability to Unlawful Termination
Section 87 of the Employment Act 2006, which provides for severance allowance, is inapplicable to a cause of action for unlawful or wrongful termination, as severance is payable only in circumstances specified in that section and not for all terminations.
Aggravated Damages — High-Handed Conduct by Employer
Aggravated damages may be awarded where an employer's conduct in terminating employment is laced with malice, high-handedness and arrogance, such as where the employer proceeded to dismiss an employee after police and technical experts cleared the employee, summoned the employee for disciplinary proceedings after replacing him, and denied terminal benefits for an extended period despite clear contractual entitlement.
Interest — Rate and Commencement — Special and General Damages
Interest on special damages in employment cases is awarded from the date of filing suit until payment in full at court rate; interest on general damages runs from the date of judgment until payment in full. In 2024, considering inflation and passage of time, 20% per annum on special damages and 8% per annum on general damages are appropriate rates.

Legislation cited (12)

Cases cited (23)

  • Stanbic Bank v Okou R. Constant (Court of Appeal Civil Appeal No. 60 of 2020)
  • Steven Wasika and Hellen Bitature v National Medical Stores (High Court Civil Suit No. 175 of 2009)
  • Ebiju James -v- UMEME Ltd
  • Barclays Bank of Uganda Ltd v Godfrey Mubiru (Supreme Court Civil Appeal No. 1 of 1998)
  • Shell Ltd -v- George Ndyabawe (2006) HCB
  • Stanbic Bank v Kiyemba Mutale (Supreme Court Civil Appeal No. 2 of 2010)
  • Hilda Musinguzi v Stanbic Bank (U) Ltd (Supreme Court Civil Appeal No. 5 of 2016)
  • Spencon Services Ltd v Ogwal Tom (Court of Appeal Civil Appeal No. 41 of 2004)
  • Habre International Co. Ltd v Ephraim Alarakaraka Kassam and others (Supreme Court Civil Appeal No. 4 of 1999)
  • Begumisa Financial Services Ltd -v- General Moulding Ltd & Anor [2007] KALR 118
  • Mukisa Biscuit Manufacturing Co. Ltd -v- West End Distributors Ltd. (No.2)
  • Prem Lata -v- Mbuya [1965] EA 592
  • JK Patel -v- Spear Motors Ltd
  • Issa Baluku v SBI INT Holdings (U) Ltd (High Court Civil Suit No. 792 of 2005)
  • Uganda Development Bank v Florence Mufumba (Court of Appeal Civil Appeal No. 241 of 2015)
  • National Medical Stores v Rosie Naikoba (Court of Appeal Civil Appeal No. 173 of 2013)
  • Ms. Fang Min -v- Belex Tours and Travel Limited Consolidated with Crane Bank Limited -v Belex Tours and Travel Limited
  • Bank of Uganda v Betty Tinkamanyire (Supreme Court Civil Appeal No. 12 of 2007)
  • Decro-wall International SA -v- Practitioners in Marketing Ltd. [1971] 1 WLR 361
  • Denmark Production case [1969] I QB 699
  • Fredrick J. K. Zaabwe v Orient Bank & Others (Supreme Court Civil Appeal No. 4 of 2006)
  • Obongo -v- Kisumu Council [1971] EA 91
  • Omunyokol Akol Johnson -v- Attorney General [2012] UGSC 4

Full judgment

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Kyeyune and 10 Others v National Medical Stores (Civil Suit 99 of 2008) [2024] UGHCCD 1 (5 January 2024)
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.