Muwanga v Lint Marketing Board (In Liquidation) (Civil Appeal 15 of 1998)

Observed later treatment

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.

Holding

The Court of Appeal held that a company in liquidation remains a legal entity until wound up, so Lint Marketing Board (In Liquidation) was the proper respondent and the preliminary objection failed. Applying section 17 of the Employment Decree, the Court held there was no proof that the incorporated subsidiary acquired the whole or greater part of the respondent's property, so no change of employer occurred and the appellant remained the respondent's employee; even if there had been, the original and new employers were jointly liable. The trial Judge erred in refusing to award allowances and terminal benefits after finding unlawful dismissal. The appeal was allowed and the appellant awarded arrears, allowances, repatriation and redundancy indemnity.

Outcome

Appeal allowed; appellant awarded arrears of salary, allowances, repatriation and redundancy indemnity totalling Shs. 1,016,091.75 with costs

Facts

In March 1978 the appellant was appointed by the respondent as a personnel officer on probation and confirmed on permanent and pensionable terms in September 1979. His contract stipulated termination by three months' notice or three months' salary in lieu. In March 1981 he was transferred to the respondent's Edible Oil and Soap Industry with terms unchanged. In March 1988 that department was incorporated into a limited liability subsidiary, but the appellant's terms with the respondent were never altered. He worked in the new company for over 10 years on secondment until January 1992, when liquidators of the subsidiary terminated his employment following its liquidation. He declined the offered terminal benefits, contending the subsidiary was not his employer, and sought re-deployment with the respondent. The respondent refused, citing restructuring. He sued for general damages, special damages, arrears of salary and allowances. The trial Judge awarded only three months' salary in lieu of notice and disallowed the other claims.

Issues

1. Whether the appeal was competent given that the respondent was in liquidation and a receiver had been appointed.
2. Whether the appellant remained an employee of the respondent up to the termination of his employment.
3. Whether the trial Judge erred in disallowing the appellant's claims for allowances, arrears of salary, terminal and other benefits.

Orders

• Preliminary point of objection overruled.
• Appeal allowed.
• Order dismissing the appellant's claims for allowances and other terminal benefits set aside.
• Appellant awarded arrears of salary and allowances totalling Shs. 1,016,091.75.
• Costs here and in the court below to the appellant.

Rules and key headnotes

Legislation cited (2)

• Employment Decree No. 4 of 1975 s.17
• Companies Act (Cap 85) s.244

Cases cited (2)

• Hadley v. Baxendale
• Perestrello v United Paint Co [1969] 1 WLR 570 (CA)

Cases citing this judgment (1)

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.

• Olal v Nsereko & 2 Ors (Civil Suit No. 113 of 2011) followed

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