Wakilii

Rhaeim Aimen v Granada Hotels Uganda Limited (Labour Appeal 2 of 2023)

Industrial Court · [2023] UGIC 120 · 2023 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from Labour Officer's decision in Labour Dispute No. MGLSD/LC/520/2020
Decision
Appeal substantially succeeded. Appellant's dismissal declared unlawful. Monetary awards made for compensation, severance pay, public holiday pay differential, and general damages with interest.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that an employee serving a probationary period in a fixed-term contract is entitled to a fair hearing before dismissal for poor performance under Section 66 of the Employment Act 2006. The Court found that Section 66's notwithstanding clause trumps Section 67(1)'s exclusion, as the constitutional right to a fair hearing is non-derogable. The Appellant was unlawfully dismissed without a hearing and awarded compensation including four weeks net pay, severance pay, general damages, and adjustments for public holiday pay.

Outcome

Appeal substantially succeeded. Appellant's dismissal declared unlawful. Monetary awards made for compensation, severance pay, public holiday pay differential, and general damages with interest.

Facts

The Appellant, a Tunisian national, was recruited as Cost Controller by the Respondent on a one-year fixed-term contract commencing 10 May 2021 with a six-month probation period. On 28 October 2021, after approximately five and a half months of service, the Respondent terminated the Appellant's employment citing unsatisfactory performance following an audit. The termination letter gave two weeks' notice as provided in the contract. The Appellant was not given a hearing before dismissal. He filed a complaint with the Labour Office alleging unlawful termination and seeking various remedies including compensation, terminal benefits, and damages. The Labour Officer found the termination lawful, holding that the Appellant was on a probationary contract to which Section 67 of the Employment Act applied, and that no hearing was required. The Appellant appealed to the Industrial Court.

Issues

  1. Whether the Labour Officer erred in refusing to admit the Respondent's Human Resource Manual as evidence.
  2. Whether the Appellant was serving under a probationary contract at the time of termination.
  3. Whether the Appellant was entitled to four weeks net pay for failure to be accorded a fair hearing.
  4. Whether the Appellant was entitled to basic compensatory wages and additional wages.
  5. Whether the Appellant was entitled to monetary compensation for annual leave, public holidays, and weekends.
  6. Whether the Appellant qualified to claim severance allowance.
  7. Whether the Labour Officer erred in refusing to refer the issue of general damages and interest to the Industrial Court.

Orders

  • The Labour Officer's finding that the Appellant was serving a probationary contract is set aside and replaced with a finding that the Appellant was serving a probationary period under a fixed-term contract.
  • The Appellant was not given a fair hearing and was unlawfully dismissed.
  • The Labour Officer's order that the prayer for payment on public holidays fails is set aside and replaced with an award of US$ 332.4.
  • The Labour Officer's finding that the Appellant was not entitled to severance pay is overturned and replaced with an order for the Respondent to pay US$ 750 as severance pay.
  • The Appellant is awarded US$ 1,500 as compensation for failure to grant a fair hearing.
  • The Appellant is awarded US$ 1,500 in general damages.
  • All monetary awards shall attract interest at the rate of 21% from the date of the award until payment in full.
  • No order as to costs.

Rules and key headnotes

Probationary Period — Distinction from Probationary Contract
A probationary clause in a fixed-term employment contract does not convert the entire contract into a probationary contract. A probationary contract under Section 2 of the Employment Act 2006 must be exclusively for probation, not exceed six months duration, be in writing, and expressly state that it is for a probationary period. A fixed-term contract of longer duration containing a probationary clause remains a fixed-term contract with a probationary period.
Fair Hearing — Right During Probationary Period
An employee serving a probationary period in a fixed-term contract is entitled to a fair hearing before dismissal for misconduct or poor performance. Section 66(1) and (2) of the Employment Act 2006, which opens with the notwithstanding clause, trumps the restriction in Section 67(1) that excludes the application of Section 66 to probationary contracts. The notwithstanding provision gives Section 66 an overriding effect on all other provisions in Part VII of the Employment Act.
Non-Derogable Rights — Fair Hearing
The right to a fair hearing is a constitutional and non-derogable right under Article 44(c) of the Constitution of Uganda. Section 67(1) of the Employment Act 2006, if construed to deny a probationer the right to a hearing, would not conform with the Constitution. Courts must construe statutory provisions in a manner that does not derogate from non-derogable constitutional rights.
Labour Officer — Jurisdiction and Procedure
A Labour Officer is not a Court within the meaning of Section 1 of the Evidence Act. Labour Officers have discretion under Section 13(1)(c) of the Employment Act 2006 to determine the procedure for disposing of complaints and are not bound by strict rules of evidence applicable to Courts. The Labour Officer cannot take judicial notice of decisions or evidence in other labour complaints as these are not proceedings before a Court of record.
Probationary Period — Purpose and Effect
The purpose of a probationary period is to serve as a testing or trial stage during which the employer assesses the employee's suitability, competence, and fit for the position, and the employee evaluates the work environment. During probation, certain protections available to confirmed employees may not apply, reflecting the reciprocal nature of the trial period and enabling ease of disengagement through shorter notice periods.
Severance Pay — Eligibility After Six Months Service
Under Section 87 of the Employment Act 2006, an employee who has served for six months or more and is unfairly dismissed is entitled to severance pay. An employee who commenced employment on 10 May and was terminated on 28 October, working until 10 November, has completed exactly six months of service and qualifies for severance pay if the dismissal is found to be unlawful.

Legislation cited (18)

Cases cited (38)

  • Father Nanensio Begumisa and 3 Ors v Eric Tiberaga [2004] KALR 236
  • Kifamunte Henry v Uganda (S.C Criminal Appeal No. 10 of 1997)
  • Buryahika Stephen & Anor v Hoima Sugar Ltd & Ors (H.C.C.S No. 2015)
  • Abdallah Kimbugwe v Kiboko Enterprises Ltd (LDA 13 of 2021)
  • Mbogo v Shah and Anor [1968] EA 932
  • Engineer John Eric Mugyenzi v Uganda Electricity Generation Co Ltd (C.A.C.A No. 167 of 2018)
  • Ozuu Brothers Enterprises v Ayikoru Milka (High Court Civil Revision No. 0002 of 2016)
  • Rajasthan State Road Transport Corporation v Krisjan Kant 1995 AIR 1715
  • Maudah Atuzarirwe v Uganda Registration Services Bureau & others (H.C.M.C No 249 of 2013)
  • Heydon's case (1584) 3 Co Rep 7a
  • Monica Munira Kibuchi & Ors v Mount Kenya University (Constitutional Petition No. 64 of 2016)
  • David Wangi v People Performance Group Ltd (LDC 05 of 2018)
  • Mbonyi Julius v Appliance World Limited (LDR 103 of 2016)
  • Charles Onyango Obbo & Anor v Attorney General (Constitutional Petition No.15 of 1997)
  • Nyamuchoncho & Anor v Attorney General & 2 Ors (M.C No. 241 of 2017)
  • Mark E Kamanzi v National Drug Authority and Another (H.C.M 138 of 2021)
  • St Giles Medical Rehabilitation Centre v Patsanza (SC 668 of 2015)
  • Madawo v Interfresh Limited 2000 (1) ZLR 660
  • Commercial Bank of Zimbabwe v Kwangwari HH79/2003
  • Ubuntu Education Fund v Paulsen NO and Others [2019] ZALAC 56
  • Simeon O Ihezukwu v University of Jos & Others [1990] NGSC 49
  • James Ebiju v Umeme Ltd (H.C.C.S No.133 of 2012)
  • Re Gulf Oil/Cities Serv Tender Offer Litig 725 F Supp 712
  • Veneto Hotel & Casino SA v German American Capital Corp 2018 NY Slip Op 02414
  • Hilda Musinguzi v Stanbic Bank (U) Ltd (SCCA 05/2016)
  • Nicholas Mugisha v Equity Bank Ltd (LDR 281 of 2021)
  • United States International University v The Attorney General & 2 others [2012] eKLR
  • Kyamanywa Simon v Uganda (S.C. Crim Appeal No. 16 of 1997)
  • Geogas SA v Tranno Gas Ltd (The Baleares) [1993] 1 Lloyds Rep 215
  • Ugafode Microfinance v Mark Kyoribona (LDA No. 034 of 2019)
  • Insight Management Ltd v Anguyo Ronald (LDA No. 13 of 2020)
  • Peter Waiswa Kityaba v African Epidemiology Network (LDR 84 of 2016)
  • Donna Kamuli v DFCU Bank Ltd (LDC 002/2015)
  • Francis Dominic Meru v Nakasero Hospital (LDR 223 of 2019)
  • Stroms v Hutchinson [1950] AC 515
  • Stanbic Bank (U) Ltd v Constant Okou (Civil Appeal No. 60 of 2020)
  • Joseph Kalule v GIZ (LDR No. 109/2020)
  • David Akonye v Libya Oils (LDC 082 of 2014)

Full judgment

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Rhaeim_Aimen_v_Granada_Hotels_Uganda_Limited_(Labour_Appeal_2_of_2023)_[2023]_UGIC_120_(13_November_2023)
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.