Wakilii

Rashid Nyende and 44 Others v Shoprite Checkers (Uganda) Limited (Labour Dispute Reference 179 of 2021)

Industrial Court · [2026] UGIC 40 · 2026 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute reference arising from collective termination for redundancy following corporate asset sale
Decision
Claims for wrongful termination dismissed as premature; terminal benefits awarded on equitable grounds for the 1st to 14th Claimants; 16th to 45th Claimants settled with the Respondent

Observed later treatment

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Holding

Held that a claim for wrongful termination filed before actual termination is premature and does not establish a justiciable controversy. Where an employer properly issues redundancy notices and the employee is terminated on the stated date, section 64 of the Employment Act governs the timing of termination. However, applying equity under Article 126(1) of the Constitution and section 14 of the Judicature Act, the Court granted terminal benefits despite the premature filing, as the claimants were entitled to severance and notice pay arising from redundancy on the eventual termination date. The Court declined to apply section 27 of the Employment Act on automatic transfer of employment contracts where the employer chose to cease operations and declare redundancy rather than transfer employees to a successor company.

Outcome

Claims for wrongful termination dismissed as premature; terminal benefits awarded on equitable grounds for the 1st to 14th Claimants; 16th to 45th Claimants settled with the Respondent

Facts

Forty-five management employees of Shoprite Checkers (Uganda) Limited brought a claim for wrongful termination following the sale of the Respondent's entire business to Majid Al Futtaim Hypermarkets Uganda Limited. The Respondent, facing financial difficulties exacerbated by the Covid-19 pandemic, decided to exit Uganda and sell 100% of its assets. On 3 August 2021, the Respondent issued redundancy notices to all 45 Claimants stating termination would take effect on 30 September 2021. The Claimants formed a Committee to negotiate terminal benefits and sought transfer of their contracts to the successor company. Negotiations failed when the Respondent refused to recognise the Committee and insisted on individual negotiations. The Claimants filed their claim on 9 September 2021 before the stated termination date. Thirty Claimants subsequently settled with the Respondent. The matter proceeded to determination for the 1st to 14th Claimants, with the Respondent barred from participation for contempt of court.

Issues

  1. Whether the Respondent unlawfully terminated the 1st to 14th Claimants?
  2. What remedies are the parties entitled to?

Orders

  • It is declared that the Claimants were not unfairly and unlawfully terminated.
  • The claims for general, punitive and aggravated damages are denied.
  • The Claimants are awarded severance pay of one month's salary for every year worked totalling UGX 510,866,729.
  • The Claimants are awarded notice pay of three months' salary totalling UGX 85,612,496.
  • Each of the Claimants is awarded UGX 500,000 in repatriation costs.

Rules and key headnotes

Termination — Redundancy — Timing of Cause of Action
A claim for wrongful termination is premature when filed before the actual termination date stated in the employer's notice; termination under section 64 of the Employment Act occurs on the date the contract is ended, not when notice is given or negotiations fail.
Business Transfer — Automatic Transfer of Contracts — Distinction from Redundancy
Section 27(2) of the Employment Act on automatic transfer of employment contracts applies where a trade or business is transferred and the employer intends to transfer employee contracts; it does not apply where the employer elects to cease operations and terminate employees for redundancy rather than negotiate transfer of contracts to a successor company.
Redundancy — Collective Terminations — Procedural Requirements
Where an employer contemplates collective terminations for economic or structural reasons, section 80 of the Employment Act requires the employer to notify employee representatives and the Commissioner of Labour, providing reasons, the number and categories of workers affected, and the intended period of termination.
Severance Pay — Quantum — Failed Negotiations
Where parties fail to negotiate the rate of severance pay in a redundancy termination, the employee is entitled to one month's pay for each year of service; employees terminated for redundancy require greater protection as they are not at fault for the loss of employment.
Notice Pay — Long Service — Statutory Entitlement
Employees with over ten years of service are entitled to three months' notice pay under section 57(3)(d) of the Employment Act.
Equity — Power to Grant Relief Despite Procedural Defect
A court sitting in equity may grant terminal benefits to employees terminated for redundancy despite finding the claim premature, where the termination occurred after filing and the employees are entitled to such benefits; the maxim ubi jus ibi remedium requires that equity not suffer a wrong where there is a remedy, particularly where negotiations have failed through no fault of the employees.
Damages — General Damages — Requirement of Unlawful Termination
General damages for economic inconvenience, mental anguish, and emotional distress are not awarded where the court finds the termination was neither unfair nor unlawful; such damages compensate for harm caused by wrongful dismissal and require a finding of unlawfulness.

Legislation cited (12)

Cases cited (16)

Full judgment

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Rashid Nyende and 44 Others v Shoprite Checkers (Uganda) Limited (Labour Dispute Reference 179 of 2021) [2026] UGIC 40 (8 May 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.