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Polly Kapapa Kaddu v Ibero Uganda Limited (Labour Dispute Complaint No. KCCA-CEN-LC-040-2023; Labour Dispute Reference 162 of 2023)

Industrial Court · [2026] UGIC 51 · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute reference arising from Labour Dispute Complaint No. KCCA/CEN/LC/040/2023 concerning alleged unlawful termination of employment
Decision
Judgment entered in favour of the Claimant with declarations and monetary awards for unfair and unlawful termination.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that the employer's unilateral abandonment of mutual separation negotiations in favour of issuing a termination notice constituted a disguised dismissal and an unfair labour practice. Where an employer commences discussions for a mutual separation agreement and, before they are concluded, terminates the employment relationship under the guise of a termination by notice, such termination is unfair and unlawful. The claimant was awarded general damages, aggravated damages, and the balance of severance pay.

Outcome

Judgment entered in favour of the Claimant with declarations and monetary awards for unfair and unlawful termination.

Facts

The Claimant was employed by the Respondent as a Senior Accountant from October 2009 and was promoted to Head of Finance and Accounting in August 2020. On 20 March 2023, she was invited to a meeting where she was told she was no longer a right fit for the company's expansion and was presented with a draft Mutual Separation Agreement. She requested time to review it and raised concerns via email on 22 March 2023, asking for the reason for termination. On 24 March 2023, she was served with a formal notice of termination placing her on garden leave for three months. She was directed to hand over company property immediately, her email was deactivated, and she was removed from company communication platforms. She received UGX 107,950,000 in terminal benefits. The Claimant alleged she was summarily dismissed on 20 March 2023 without due process, while the Respondent maintained the termination was lawful with notice.

Issues

  1. What was the manner of termination of the claimant's employment contract and whether the same was lawful?
  2. What remedies are available to the parties?

Orders

  • A declaration is made that the termination of the Claimant's employment contract was both unfair and unlawful.
  • The Respondent is ordered to pay the Claimant UGX 50,793,750 as general damages.
  • The Respondent is ordered to pay the Claimant UGX 33,862,500 as aggravated damages.
  • The Respondent is ordered to pay the Claimant UGX 82,527,500, being the outstanding shortfall of her contractually and legally due severance allowance.
  • Interest shall accrue on the severance pay balance at the rate of 10% per annum from 24 June 2023 until payment in full.
  • Interest shall accrue on the awards for general and aggravated damages at the rate of 15% per annum from the date of this award until payment in full.
  • The Respondent shall bear the costs of this claim.

Rules and key headnotes

Termination of Employment — Mutual Separation Agreements — Requirement of Genuine Consent
A valid mutual separation agreement requires absolute choice, consent, consensus, or free will from both parties. If the element of mutual choice is missing, it cannot legally qualify as a mutual separation agreement. The concept of mutuality cannot exist alongside unresolved or incomplete negotiations.
Termination of Employment — Disguised Dismissal — Abandonment of Mutual Separation Negotiations
Where an employer commences discussions for a mutual separation agreement and, before they are concluded, terminates the employment relationship under the guise of a termination by notice, such termination constitutes a disguised dismissal and an unfair labour practice. When an employer issues a termination letter while mutual separation discussions are still ongoing, the process of mutual separation officially ceases and the termination becomes a unilateral act by the employer.
Termination of Employment — Acceptance of Terminal Benefits — No Estoppel
An employee who accepts terminal benefits paid out after a summary dismissal is not estopped from challenging the lawfulness of the termination where the employee explicitly stated, before termination, that they accept separation only conditionally and intend to seek legal redress if their terms are not met. The doctrine of approbation and reprobation does not have universal application in the employment relationship because, unlike contract law, the employment relationship consists of unequal bargaining power.
Termination of Employment — Distinction Between Termination and Dismissal
Where the reason for discharge of the contract of employment is for no fault of the employee, the law regards that as termination. When an employment contract ends because the employer is dissatisfied with the employee's conduct or performance, it is called a dismissal. All dismissals are terminations, but not all terminations are dismissals. The fine distinction is whether the discharge is due to the employee's fault.
General Damages — Unfair Termination — Factors for Assessment
General damages in employment disputes are discretionary and based on the unique facts of each case. The correct legal principles for assessing general damages for unlawful termination are the employee's age, duration of employment, salary, employability, manner of termination, and evidence of mitigation of job loss or inability to obtain alternative employment.
Aggravated Damages — High-Handed Conduct — Employer's Duty of Good Faith
Aggravated damages are awardable where the employer's conduct in effecting termination was degrading to the employee, lacked compassion, and was characterised by callousness and indifference. Employers must act in good faith and with high sensitivity during dismissal, as the manner of termination can severely damage a worker's self-esteem and community standing. Aggravating circumstances include illegalities and wrongs in the termination compounded by the employer's lack of compassion.
Severance Pay — Computation — Unfair Termination
Under Section 86(a) of the Employment Act, an employer shall pay a severance allowance where an employee has been in continuous service for a period of six months or more and where the employer unfairly dismisses the employee. Where the parties do not agree on the quantum of severance pay, it shall be one month's pay for each year of service.

Legislation cited (12)

Cases cited (26)

Full judgment

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Polly Kapapa Kaddu v Ibero Uganda Limited (Labour Dispute Complaint No. KCCA-CEN-LC-040-2023; Labour Dispute Reference 162 of 2023) [2026] UGIC 51 (5 June 2026)
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.