Odora and 2 Others v Stanbic Bank Uganda Limited (Labour Dispute Reference 33 of 2017)

Observed later treatment

No later-treatment classification is recorded for this judgment.

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

Held that an employee who retires early on medical grounds due to physical incapacity not occasioned by her own serious and willful misconduct is entitled to severance allowance under section 86(c) of the Employment Act 2006 and the employer's severance policy. The employer cannot deny severance pay on the basis that the employee retired before an independent medical report was issued, where the employer accepted the retirement based on an earlier medical report and did not offer alternative lighter work. Severance pay is calculated at one month's salary for every year served. The employee is entitled to automatic repatriation after ten years of service irrespective of place of recruitment. Liability for a salary loan cannot be shifted to the employer where the employee was not permanently incapacitated and chose to retire in the interest of her health.

Outcome

Claimant awarded severance pay, repatriation allowance, and general damages. Other claims dismissed. Loan to be rescheduled.

Facts

The claimant was employed by the respondent bank from 1983 to 2014 in various positions, lastly as Manager CV Projects and Acting Manager Payments. Her work involved sitting for long hours before a computer, which resulted in degenerative lumbar disc disease causing severe back pain. A medical report from Mulago Hospital gave her three options: do lighter work, undergo corrective surgery, or retire on medical grounds. She chose to retire early in the interest of her health. The respondent accepted her application for early retirement on 14 October 2014 based on the Mulago medical report. The respondent did not pay her severance allowance or repatriation allowance. Her terminal benefits of UGX 41,773,179 were held as a lien against an outstanding salary loan. She filed a complaint before the KCCA Labour Officer who computed her benefits at UGX 760,703,976 and referred the matter to the Industrial Court when the respondent did not respond.

Issues

1. Whether the claimant is entitled to terminal benefits or any other remedies claimed.
2. Whether the claimant is entitled to severance pay computed in accordance with the Collective Bargaining Agreement.
3. Whether the respondent should be penalized for not paying severance allowance when it fell due.
4. Whether the claimant is entitled to unremitted contributions to the pension fund.
5. Whether the claimant is entitled to salary for October 2014.
6. Whether the claimant is entitled to shift liability for her salary loan to the respondent.
7. Whether the claimant is entitled to repatriation allowance.
8. Whether the claimant is entitled to salary arrears for January and February for 12 years.
9. Whether the claimant is entitled to general and aggravated damages.

Orders

• The claimant is entitled to severance pay calculated at UGX 7,923,973.083 per month for 31 months, amounting to UGX 245,643,165.60.
• The claim for penalty for not paying severance allowance is dismissed as it falls within the purview of the Office of the Director of Public Prosecutions.
• The claim for unremitted contribution to the pension fund is dismissed.
• The claim for salary for October 2014 is dismissed.
• The claim to shift liability for the salary loan to the respondent is dismissed. The bank is directed to reschedule the loan repayment so that the claimant can continue servicing it at the rate she negotiated with the bank and not at a commercial rate.
• The claimant is awarded UGX 5,000,000 as repatriation allowance from Kampala to Arua.
• The claim for salary arrears for January and February for 12 years is dismissed.
• The claimant is awarded UGX 7,000,000 as general damages.
• The claim for aggravated damages is dismissed.
• Interest at 12% per annum is awarded on the severance pay and repatriation allowance from the date of this award until payment in full.
• No order as to costs.

Rules and key headnotes

Legislation cited (12)

• Employment Act 2006 s.86
• Employment Act 2006 s.86(c)
• Employment Act 2006 s.88
• Employment Act 2006 s.91
• Employment Act 2006 s.91(2)
• Employment Act 2006 s.57
• Employment Act 2006 s.57(3)
• Employment Act 2006 s.38
• Employment Act 2006 s.38(3)
• Employment Act 2006 s.68
• Labour Disputes (Arbitration and Settlement) Act s.8(3)(d)
• Constitution of Uganda Article 126(2)(c)

Cases cited (7)

• Donna Kamuli v DFCU Bank Ltd (Labour Dispute Case No. 2 of 2015)
• African Field Epidemiology Network v Peter Kityaba (Court of Appeal No. 124 of 2017)
• Hobbs vs TDI Canada Ltd 2004; Can II 44783(ON CA) cited in Mrs. Pamela Sozi v The Public Procurement and Disposal of Public Assets Authority Hccs No. 063 of 2012
• Francis v Canadian Imperial Bank of Commerce 1994 Can II 1578(ON CA)
• Stanbic Bank v Constance Okou (Court of Appeal No. 60 of 2020)
• Bank of Uganda v Tinkamanyire (Supreme Court Civil Appeal No. 12 of 2007)
• FX Mubuuke v Uganda National Association of Building and Civil Engineering Contractors Ltd (Labour Dispute Reference No. 86 of 2016)

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