Wakilii

Matsiko v Banyankole Kweterana Corporative Union Limited (Civil Suit 36 of 1997)

High Court · [1998] UGHC 22 · 1998 Judgment for Plaintiff AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of employment contract and terminal benefits
Decision
Judgment entered for the plaintiff with monetary awards for salary arrears, loss of contract, gratuity, interest, and costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where an employment contract is terminated under a clause permitting termination without cause on payment of salary for the unexpired period plus fair compensation for loss of contract, salary means net pay, not basic salary or gross pay. The employee is entitled to net monthly salary multiplied by unexpired months, a lump sum for loss of contract, and gratuity unless expressly excluded. General damages are not awarded where contractual remedies are provided.

Outcome

Judgment entered for the plaintiff with monetary awards for salary arrears, loss of contract, gratuity, interest, and costs.

Facts

The plaintiff was employed by the defendant cooperative union as General Manager under a four-year contract commencing February 1991, renewed in 1995 for another four years until February 1999. On 24 November 1996, the defendant terminated the contract under clause eleven, which permitted termination without cause on payment of salary for the unexpired period plus compensation for loss of contract. The plaintiff was not paid terminal benefits. He brought suit claiming salary for the unexpired period, loss of contract, gratuity, and general damages. The defendant filed a counterclaim for UGX 557,759,802 alleging financial loss due to mismanagement, but withdrew it during trial and conceded the plaintiff was entitled to UGX 10,581,304 as terminal benefits. The plaintiff's net monthly pay was UGX 488,500. At termination, 27 months remained on the contract.

Issues

  1. How much is the plaintiff entitled to as terminal benefits under the contract?
  2. Whether the plaintiff is entitled to general damages for breach of contract?

Orders

  • Judgment entered in favour of the plaintiff.
  • Plaintiff awarded UGX 13,389,500 as salary for the unexpired contract period.
  • Plaintiff awarded UGX 5,000,000 for loss of contract.
  • Plaintiff awarded UGX 38,400,000 as gratuity.
  • Interest on the decretal sum at court rate from date of judgment until payment in full.
  • Defendant to pay the taxed costs of the suit.
  • Defendant's counterclaim withdrawn with costs.

Rules and key headnotes

Employment Contracts — Termination Without Cause — Interpretation of Salary for Compensation Purposes
Where an employment contract permits termination without cause on payment of salary for the unexpired period, and the contract distinguishes between basic salary, gross pay, and net pay in different clauses, the term salary in the termination clause means net monthly pay, not basic salary or gross pay.
Contract Interpretation — Express Terms and Omissions — Significance of Word Choice
Where a contract uses the term salary in one clause and basic salary in another, the omission of the word basic from the first clause is not accidental and the court will give effect to the distinction by interpreting salary more broadly than basic salary alone.
Employment Contracts — Termination — Fair Compensation for Loss of Contract
Where a contract provides for payment of a sum representing fair valuation of loss of contract upon termination without cause, the court will award a lump sum reflecting the employee's loss of entitlements under the contract, assessed on the facts and circumstances of each case.
Gratuity — Entitlement Despite Employer's Unproven Allegations
An employee dismissed under a termination without cause clause remains entitled to contractual gratuity where the contract does not exclude gratuity for that mode of termination, and the employer's unproven allegations of financial loss or misconduct, especially where a counterclaim based on them has been withdrawn, cannot defeat the entitlement.
General Damages — Refusal Where Contractual Remedies Provided
General damages for breach of contract are not awarded where the contract itself provides for the consequences of termination and the employee receives what is due under those terms, even where the contract was prematurely terminated.

Cases cited (1)

  • Gulaballi Ushalani v Kampala Pharmaceutical Ltd (High Court Civil Suit No. 349 of 1953)

Full judgment

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

Matsiko v Banyankole Kweterana Corporative Union Limited (Civil Suit 36 of 1997) [1998] UGHC 22 (9 March 1998)
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.