Uganda Development Bank v Mufumba (Civil Appeal No. 241 of 2015)

Observed later treatment

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

The Court of Appeal held that the respondent's services were wrongfully terminated because she was dismissed with immediate effect without statutory notice and without a fundamental breach justifying summary dismissal. An employer must give reasons where misconduct or poor performance is alleged. Damages must be assessed on restitutio in integrum, not contractual terms. The court held that general and aggravated damages cannot be awarded separately for the same tort, set aside the general damages award, upheld aggravated damages, set aside severance allowance and leave pay, reduced interest from 25% to 18% on special damages and 8% on aggravated damages. The salary loan amounts are offset from special damages. The appeal partly succeeded.

Outcome

Appeal substantially failed and only partially succeeded; awards varied with general damages, severance allowance and leave pay set aside, aggravated damages upheld, and interest reduced

Facts

The respondent was employed by the appellant bank in 1998, rising to Principal Internal Auditor. In June 2011 staff were advised to take their accrued leave; the respondent proceeded on leave from 27 June 2011 but attended office for pressing matters. On 5 July 2011 she received a memorandum to show cause why she should not be disciplined for absconding. On 8 July 2011, while in office, she was served a termination letter from the Chief Executive Officer terminating her services with immediate effect and offering three months' salary in lieu of notice. The letter gave no reasons. She protested and was invited to a Board meeting. On 10 August 2011 the Board maintained the termination, converting it into redundancy arising from restructuring of the Internal Audit Unit, and offered terminal benefits of about UGX 114,291,560. The respondent had taken housing, car, personal loans and a salary advance serviced by salary deductions. She referred the dispute to the Industrial Court, which found the termination wrongful and made several awards. The bank appealed on nine grounds.

Issues

1. Whether the Industrial Court erred in law in holding that the respondent's contract of employment was wrongfully terminated.
2. Whether an employer is obliged to give reasons for termination of employment at the time it occurs.
3. Whether the respondent was entitled to relief from paying loan amounts up to the time she would have officially retired.
4. Whether special damages not specifically pleaded were properly awarded.
5. Whether the Industrial Court could award both general damages and aggravated damages for the same tort.
6. Whether the awards of severance allowance, leave pay, salary arrears, interest and costs were lawful.

Orders

• The award of special damages by way of 66 months' salary from the time of termination to the date of the Industrial Court award is upheld, less salary loan obligations to the Appellant for the same period.
• The Appellant shall pay provident fund contributions of UGX 10,182,452 directly to the trustee of any provident fund.
• The award of UGX 2,341,554 being salary for July 2011 is upheld.
• The award of UGX 2,341,554 being leave pay for 2011 is set aside.
• The award of severance pay of UGX 83,215,239 is set aside.
• The Respondent is entitled to pursue terminal benefits from any provident fund trustee as if she duly retired, with outstanding salary loan amounts offset from terminal benefits.
• The award of aggravated damages of UGX 200,000,000 is upheld.
• The award of general damages is set aside.
• Interest of 18% per annum on special damages and 8% per annum on aggravated damages substituted for the 25% awarded.
• Costs awarded to the Respondent; ground 9 disallowed.

Rules and key headnotes

Legislation cited (25)

• Employment Act 2006 s.2
• Employment Act 2006 s.3
• Employment Act 2006 s.27
• Employment Act 2006 s.58
• Employment Act 2006 s.61(1)(f)
• Employment Act 2006 s.65
• Employment Act 2006 s.66
• Employment Act 2006 s.68
• Employment Act 2006 s.69
• Employment Act 2006 s.71
• Employment Act 2006 s.73(b)
• Employment Act 2006 s.75(b)
• Employment Act 2006 s.77
• Employment Act 2006 s.78
• Employment Act 2006 s.87
• Employment Act 2006 s.88
• Employment Act 2006 s.89
• Employment Act 2006 s.90
• Employment Act 2006 s.93
• Labour Disputes (Arbitration and Settlement) Act 2006 s.8(1)
• Labour Disputes (Arbitration and Settlement) Act 2006 s.20
• Labour Disputes (Arbitration and Settlement) Act 2006 s.22
• Judicature Act Cap 13 s.14
• Civil Procedure Act s.26
• Contracts Act s.61(1)

Cases cited (10)

• Stanbic Bank Ltd v Kiyemba Mutale (Civil Appeal No. 2 of 2010)
• Barclays Bank of Uganda v Godfrey Mubiru (Civil Appeal No. 1 of 1998)
• Bank of Uganda v Betty Tinkamanyire (Civil Appeal No. 12 of 2007)
• Okello Nymlord v Rift Valley Railways (U) Ltd (Civil Suit No. 195 of 2009)
• Forest Authority v Sam Kiwanuka (Civil Appeal No. 5 of 2009)
• Omunyokol Akol Johnson v Attorney General (Civil Appeal No. 6 of 2012)
• Kiyingi v National Insurance Corporation, [1935] H.C.B 4
• African Field Epidemiology Network (EFENET) v Peter Wasswa Kityaba (Civil Appeal No. 124 of 2017)
• Johnson and another v Agnew [1979] 1 All ER 883
• Riches v Westminster Bank Ltd [1947] 1 ALL ER 469 HL

Cases citing this judgment (11)

How later Ugandan judgments in the Wakilii corpus have cited this case. Treatment labels come from Sequitur — Uganda’s citator — each backed by a verbatim span from the citing judgment, and are not an assertion that this case is, or is not, good law.

• Kikonyogo Robert v Kyambogo University (Labour Dispute Reference No. 112 2018; MISCELLANEOUS APPLICATION NO. 42 OF 2022)
• Dr. Onio Alfred v Uganda Heart Institute (Labour Dispute No. 006 of 2019)
• Namayanja and Others v Cavendish University Uganda (LABOUR DISPUTE REFERENCE No.097 OF 2019)
• Karuguta Town Council (Civil Appeal 38 of 2022)
• Ahimbisibwe v Holy Family Virika Hospital Limited (Labour Dispute Reference 10 of 2021)
• Luigi Gianazzi v Chemtai Lucy (Civil Suit 18 of 2018)
• Kyeyune and 10 Others v National Medical Stores (Civil Suit 99 of 2008)
• Nazziwa v National Social Security Fund (Labour Dispute Reference No. 1 of 2019)
• Basiima v Attorney General & Another (Civil Appeal 16 of 2021) followed
• Bank of Africa Uganda Limited v Ssemaganda and Another ( T A Holyways Hostel) (Civil Appeal No. 131 of 2021)
• Byakika v National Social Security Fund (Civil Appeal No. 0193 of 2017)

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