Wakilii

Mwetex Zmukanka v Attorney General and Another (Labour Dispute Claim 20 of 2017)

Industrial Court · [2023] UGIC 64 · 2023 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute claim transferred from High Court concerning wrongful termination of employment contract
Decision
Claimant's claim for wrongful termination upheld; awarded general damages but denied specific performance and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that termination of an employment contract without the employee's consent to payment in lieu of notice constitutes unlawful termination under the Employment Act. Following Stanbic Bank v Constant Okou, the court found that an employer cannot unilaterally terminate by paying salary in lieu of notice without obtaining the employee's consent. The claimant was awarded general damages of US$ 7,500 but specific performance was denied as it does not apply to employment contracts.

Outcome

Claimant's claim for wrongful termination upheld; awarded general damages but denied specific performance and costs

Facts

The claimant was employed by the Ministry of Health as a project officer for the International Specialized Hospital project at Lubowa on a 36-month contract from 1 July 2016 at US$ 5,000 monthly. On 24 February 2017, approximately seven months into the contract, the Permanent Secretary terminated his employment with immediate effect, offering one month's salary in lieu of notice. The termination letter cited a directive from top management but gave no specific reason. The claimant had not been paid salary and had made a demand in March 2017 before termination. The respondent's witness testified that termination was based on advice from the Solicitor General to save government revenue, as the claimant had not commenced work five months into the contract. All salary arrears and one month's payment in lieu of notice were subsequently paid.

Issues

  1. Whether the Claimant's contract of service was wrongfully and or lawfully terminated?
  2. What remedies are available to the claimant?

Orders

  • Declaration that the Claimant was wrongfully and unlawfully terminated from the Respondent's service.
  • Respondent ordered to pay the Claimant US$ 7,500 as general damages.
  • The sum awarded shall carry interest at 15% per annum from the date of the award until payment in full.
  • No order as to costs.

Rules and key headnotes

Employment & Labour — Termination of Employment — Payment in Lieu of Notice — Requirement of Employee Consent
Under the Employment Act, an employer cannot lawfully terminate an employment contract by unilaterally paying salary in lieu of notice without obtaining the employee's consent. Section 58(5) of the Employment Act does not prevent an employee from accepting payment in lieu of notice, but this presupposes that consent must be obtained. Termination without notice and without consent constitutes wrongful termination.
Employment & Labour — Wrongful Termination — Justification under Section 69(3) of the Employment Act
Where termination is found to be wrongful for want of proper notice or consent, it cannot be justified under Section 69(3) of the Employment Act unless the employee has by their conduct fundamentally broken their obligations under the contract of service. Justification for summary dismissal requires evidence of employee misconduct or fundamental breach.
Employment & Labour — Remedies — Specific Performance — Inapplicability to Employment Contracts
Specific performance is not available as a remedy in employment contracts. Once an employment contract has been terminated, a court cannot make an order for specific performance to compel an employer to retain an employee against the employer's will. The only remedy available to a wrongfully dismissed employee is an award of general damages and other remedies under the Employment Act.
Employment & Labour — General Damages — Assessment Principles
General damages for wrongful termination are assessed based on the common law principle of restitutio in integrum and should consider the prospects of the employee obtaining alternative employment, how the services were terminated, and the inconvenience and uncertainty of future employment prospects. Relevant factors include the employee's earnings, age, position of responsibility, and duration of the contract.
Contract Law — Illegality — Currency Denomination — Government Policy versus Statutory Prohibition
A contract denominated in foreign currency is not rendered illegal merely because it contravenes government policy as expressed in a ministerial circular. Illegality requires a statutory prohibition with the force of law. A circular from the Ministry of Finance requiring contracts to be awarded in Uganda Shillings does not have the force of law to render a contract denominated in US Dollars illegal, though such a contract may be irregular or contrary to policy.
Employment & Labour — Costs — Exception to General Rule in Employment Disputes
In employment disputes, the grant of costs to the successful party is an exception rather than the rule, on account of the nature of the employment relationship. Costs will only be awarded where it is established that the unsuccessful party has filed a frivolous action or is culpable of some form of misconduct.

Legislation cited (8)

Cases cited (14)

  • Mbonyi Julius v Appliance World Limited (Labour Dispute Reference No. 103 of 2016)
  • Hilda Musinguzi v Stanbic Bank (U) Ltd (Supreme Court Civil Appeal No. 5 of 2016)
  • Barclays Bank of Uganda Ltd v Godfrey Mubiru (Supreme Court Civil Appeal No. 1 of 1998)
  • Ochuru Henry v Ace Global (U) Ltd (Labour Dispute Reference No. 164 of 2017)
  • Stanbic Bank v Constant Okou (Civil Appeal No. 60 of 2020)
  • Finishing Touches v Attorney General (High Court Civil Suit No. 144 of 2010)
  • Makubuya Enock William v Bulaimu Muwanga Kibirige (Court of Appeal Civil Appeal No. 01 of 2015)
  • Irene Rebecca Nassuna v Equity Bank Uganda Ltd (Labour Dispute Claim No. 6 of 2014)
  • Stanbic Bank v Kiyimba Mutale (Supreme Court Civil Appeal No. 10 of 2010)
  • Stroms v Hutchinson [1950] AC 515
  • Dr. Omona Kizito v Marie Stopes Uganda (Labour Dispute Claim No. 33 of 2015)
  • Donna Kamuli v DFCU Bank Ltd (Labour Dispute Claim No. 002 of 2015)
  • Joseph Kalule v GIZ (Labour Dispute Reference No. 109 of 2020)
  • Nicholas Mugisha v Equity Bank Uganda Ltd (Labour Dispute Reference No. 281 of 2021)

Full judgment

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

Mwetex_Zmukanka_v_Attorney_General_and_Another_(Labour_Dispute_Claim_20_of_2017)_[2023]_UGIC_64_(29_May_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.