Wakilii

Nsiimire v Umeme Limited (LABOUR DISPUTE REFERENCE No. 184 OF 2022)

Industrial Court · [2025] UGIC 35 · 2025 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute reference arising from MGLSD/LC/615/2021 concerning alleged constructive dismissal following restructuring and redesignation
Decision
Claimant's position rendered redundant following legitimate restructuring; alternative employment offer rejected; compensation awarded for loss of employment and outstanding entitlements; claims for unfair termination and severance dismissed

Observed later treatment

Cited — treatment unverified cited in 1 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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.

No adverse treatment recorded Cited 1 time with no adverse treatment recorded; not yet tested on the merits. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The Industrial Court held that the claimant's position as Telecommunication Engineer was legitimately rendered redundant following COVID-19 restructuring. Her redesignation to ICT Help Desk Officer was alternative employment, not a demotion, as the original position ceased to exist. The claimant's rejection of the alternative role was reasonable given her lack of required qualifications, but this did not constitute constructive dismissal. The court awarded compensation for loss of employment (UGX 20,000,000), outstanding salary balance (UGX 905,419), and untaken leave (UGX 1,245,332), but dismissed claims for unfair termination, severance, and bonuses.

Outcome

Claimant's position rendered redundant following legitimate restructuring; alternative employment offer rejected; compensation awarded for loss of employment and outstanding entitlements; claims for unfair termination and severance dismissed

Facts

The claimant was employed by Umeme Limited as a Telecommunication Engineer from April 2005, earning UGX 4,605,686 monthly. In March 2021, following COVID-19, the respondent restructured its business, declaring the Telecommunication Engineer position irrelevant and obsolete. Four employees, including the claimant, were affected. Instead of declaring redundancy, the respondent redesignated the claimant to ICT Help Desk and User Support Officer in December 2021, maintaining her salary and benefits. The claimant rejected the redesignation, claiming it was a demotion to a lower grade position for which she lacked qualifications. She resigned on 17 January 2022, alleging constructive dismissal due to unfair treatment, including being placed on an illegal Performance Improvement Plan. The respondent paid her terminal dues but the claimant claimed additional entitlements including unpaid salary, leave, bonuses, and compensation for unfair termination.

Issues

  1. Whether the claimant was unlawfully terminated by the Respondent?
  2. Whether the claimant is entitled to the remedies sought?

Orders

  • The Respondent is ordered to pay the Claimant UGX 905,419 as outstanding balance on salary for April 2022.
  • The Respondent is ordered to pay the Claimant UGX 1,245,332 as payment for untaken leave.
  • The Claimant is awarded UGX 20,000,000 as compensation for loss of employment.
  • Interest of 12% per annum shall accrue on the compensation from the date of this award until payment in full.
  • Claim for three months' payment in lieu of notice dismissed.
  • Claim for severance allowance dismissed.
  • Claim for bonuses for 2020 and 2021 dismissed.
  • Claim for inflationary adjustments dismissed.
  • Claim for general damages of UGX 200,000,000 dismissed.
  • Claim for balance on remaining part of contract dismissed.
  • No order as to costs.

Rules and key headnotes

Redundancy — Restructuring — Operational Requirements — Employer's Managerial Prerogative
An employer has the prerogative to determine the requirements of its business to improve efficiency and profitability, including the right to reorganize or restructure the organisation, and courts cannot fetter this prerogative provided the employer maintains mutual trust and confidence and ensures procedural and substantive fairness in the process.
Redundancy — Termination by Redundancy — Definition and Requirements
Termination by redundancy occurs when an employer's need for employees to carry out work of a particular kind has ceased or diminished, or is expected to cease or diminish, for reasons of an economic, technological, structural, or similar nature. The key test is whether the dismissal is attributable wholly or mainly to the cessation or diminution of the employer's requirements for that work, regardless of the terms of the contract or the function performed.
Redundancy — Alternative Employment — Duty to Offer and Employee's Right to Reject
An employee rendered redundant is not automatically dismissed but is merely dislocated until opportunities to relocate that person in suitable alternative employment have been explored and exhausted. An employer should objectively assess and offer suitable alternative employment, but the employee has the right to accept or reject such offer. Where an employee reasonably rejects alternative employment that is not suitable, the employer cannot be faulted for the rejection.
Redundancy — Redesignation vs Demotion — Position Ceasing to Exist
Where a position has been rendered redundant and ceases to exist as a result of economic, technological, structural, or similar reasons, the employer cannot be faulted for offering alternative employment even if it is of a lower grade than the previous redundant position. Such redesignation cannot be construed as a demotion because the previous employment ceased to exist and the proposed alternative is a new engagement that may be under new terms.
Constructive Dismissal — Definition and Requirements — Repudiatory Breach
Constructive dismissal occurs when an employee resigns because the employer has created a hostile work environment through conduct that constitutes a repudiatory breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more essential terms of the contract. The employee must prove that the employer's conduct was so unreasonable and intolerable that they could not be expected to stay, and that they resigned in response to that conduct.
Constructive Dismissal — Resignation After Redundancy — No Existing Contract
Where an employee's position has been rendered redundant and ceases to exist, and the employee refuses to assume a new role offered as alternative employment, there is no existing contract from which to resign. In such circumstances, a resignation based on a non-existent contract does not amount to constructive dismissal, as there is no contract that could have been breached.
Redundancy — Compensation — No-Fault Termination — Restitutio in Integrum
Although the Employment Act does not provide a statutory remedy for termination by redundancy, an employee whose termination is by way of redundancy is entitled to compensation for loss of employment based on the principle of restitutio in integrum, as termination by redundancy is a no-fault termination. Where an employee reasonably rejects alternative employment and has served for a long duration with a clean record, they are entitled to compensation for loss of employment through no fault of their own.

Legislation cited (7)

Cases cited (30)

  • Makula International Ltd v His Eminence Cardinal Nsubuga & Anor (Civil Appeal No. 4 of 1981)
  • Adam Kafumbe Mukasa & 2 Ors v Uganda Breweries Ltd (Civil Appeal No. 115 of 2018)
  • Muyimbwa Paul v Ndejje University (Labour Dispute Reference No. 222)
  • Ugafode Micro Finance Ltd MDI v Mark Kyoribona (Labour Dispute Appeal No. 034 of 2019)
  • Kandimaite Alfred v Centenary Rural Development Bank Limited (Labour Dispute Claim No. 024 of 2014)
  • Abwooli v Security 2000 Limited (Labour Dispute Claim No. 0108 of 2014)
  • Mbiika Dennis v Centenary Bank (Labour Dispute Claim No. 023 of 2014)
  • Achiro Beatrice Adong v Uganda Land Alliance (Labour Dispute Reference No. 179 of 2015)
  • Edema McJohn V Magnum Security
  • Edotun James V Okra Beverages Limited
  • George Wimpey Ltd V Cooper
  • Susan Njeri Warui V Postal Corporation of Kenya, Cause No. 1374 of 2016 (2022 eKLR)
  • Elizabeth Kiwalabye v Mutesa 1 Royal University [2020] UGIC 34
  • Kayiwa Muhamed Kigongo & 13 others (Labour Dispute Reference No. 121 of 2015)
  • Programme for Accessible Health Communication and Education (PACE) v Graham Nagasha (Labour Dispute Appeal No. 35 of 2018)
  • Safeway stores v pic Barrel 1 [1967] 1 ALLER 644
  • Murray v Foyle Meats Ltd [1999] ICR 827 HL
  • ZTE Uganda Ltd v Seyiga Hermenegild & Others (Labour Appeal No. 34 of 2017)
  • Ndaula and Another v Post Bank Uganda Ltd
  • SA Breweries (PTY) Ltd v Louw (2018) 39ILJ 189(LAC)
  • Johaness v 4Gs Secure Solutions (Pty) Ltd No. J 3933/18
  • Taylor v Kent County Council (1969)2 QB 560
  • Freshmark (PTY) Ltd v Commission for Conciliation, Mediation and Arbitration and Others (2003) 24 ILJ 373(LAC)
  • Western Excavating (ECC) Ltd v Sharp [1978] ICR 222 or [1978] QB761
  • Office v Roberts (1981) IRLR 347
  • Benedicto Musisi vs Attorney General
  • Rosemary Nalwadda v Uganda Aids Commission (High Court Civil Suit No. 67 of 2011)
  • Kasozi Iga v UBA Ltd (Labour Dispute Reference No. 183 of 2020)
  • Uganda Post Limited v Consolette Mukadisi (Supreme Court Civil Appeal No. 13 of 2022)
  • Mugisha M Abrahim & Another v G4S Security Services (U) Ltd

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.

Full judgment

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Nsiimire_v_Umeme_Limited_(LABOUR_DISPUTE_REFERENCE_No._184_OF_2022)_[2025]_UGIC_35_(28_March_2025)
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