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Polly Kapapa Kaddu v Ibero Uganda Limited (Labour Dispute Reference 162 of 2023)

Industrial Court · [2026] UGIC 50 · 2026 Judgment for Claimant 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
Decision
Judgment entered in favour of the Claimant with declarations of unfair and unlawful termination and awards of general damages, aggravated damages, severance pay balance, interest, and costs.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that the respondent's unilateral abandonment of mutual separation negotiations in favour of a disguised termination by notice constituted an unfair and unlawful termination. The court found that the employer's issuance of a termination letter while mutual separation discussions remained unresolved halted any semblance of mutuality and violated the requirement of genuine consent. The claimant was awarded general damages, aggravated damages, and the balance of severance pay, with interest.

Outcome

Judgment entered in favour of the Claimant with declarations of unfair and unlawful termination and awards of general damages, aggravated damages, severance pay balance, interest, and costs.

Facts

The claimant was employed by the respondent as a Senior Accountant from October 2009 and 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 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 given a formal notice of termination placing her on garden leave for three months. She was directed to hand over her office and company property immediately, and her email access was deactivated. She received UGX 107,950,000 in terminal benefits. The claimant alleged she was summarily dismissed on 20 March 2023 without fair hearing or disciplinary process. The respondent maintained the termination was lawful with notice and that the claimant remained on payroll during garden leave.

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. When an employer issues a termination letter while mutual separation discussions are still ongoing and unresolved, the process of mutual separation officially ceases and the termination becomes a unilateral act by the employer, not a mutual agreement.
Termination of Employment — Disguised Dismissal — 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 a termination constitutes an unfair labour practice and will be held to be both unfair and unlawful. The employer's sudden shift from proposing a mutual separation agreement to enforcing a forced handover and placing the employee on mandatory garden leave is a disguised, unilateral action rather than a lawful termination by notice.
Termination of Employment — Acceptance of Terminal Benefits — No Estoppel
An employee's acceptance of unilaterally deposited notice pay and terminal benefits does not operate as a waiver of their rights to challenge an unlawful termination, nor does it validate an otherwise unlawful discharge, where the employee has made prompt and consistent protests. The doctrine of approbation and reprobation does not apply because the employment relationship is characterised by inherently unequal bargaining power, and courts must strictly scrutinise actions that circumvent the requirement of genuine consent.
Termination of Employment — Distinction Between Termination and Dismissal
The employment contract ends in one of two ways: termination or dismissal. Where the reason for discharge 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 — Unlawful Termination — Assessment Principles
General damages are awardable in employment disputes to compensate for non-pecuniary losses such as emotional distress, injured feelings, reputational harm and mental anguish. They are awarded in addition to statutory remedies such as notice pay and severance. The quantum is discretionary and guided by facts including the employee's age, status in the industry, manner of termination, length of service, disruption of career prospects, employability and earnings. General damages should not double the employee's fixed income.
Aggravated Damages — High-Handed Conduct — Injury to Dignity
Aggravated damages are extra compensation for injury to an employee's feelings and dignity caused by the manner in which the employer acted. Aggravating circumstances include illegalities and wrongs in the termination compounded by the employer's lack of compassion, callousness and indifference. The employer's conduct must be degrading to the employee. Factors such as malice or arrogance on the part of the employer, causing humiliation or distress, are regarded as increasing the employee's injury.
Severance Pay — Unfair Termination — Computation
Where the parties do not agree on the quantum of severance pay, it shall be one month's pay for each year of service. The Employment Act provides for irreducible minimums, and an employer can offer its employees better terms than those in the Act. Where an employee has been unfairly and unlawfully terminated, the employee is entitled to severance pay computed at 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 Reference 162 of 2023) [2026] UGIC 50 (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.