Wakilii

Uganda Hotels, Food, Tourism and Allied Workers and Another v s Sports View Hotel Kireka Limited (Labour Dispute Reference 271 of 2019)

Industrial Court · [2023] UGIC 127 · 2023 Claim Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute reference arising from unfair termination claim, heard exparte after respondent failed to appear
Decision
Claim succeeded with costs to the Claimants; respondent ordered to pay terminal benefits and general damages

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Industrial Court held that the termination of an employee on grounds of redundancy without following the procedure prescribed in the Collective Bargaining Agreement and section 81 of the Employment Act 2006 was unlawful. The employer failed to give the required notice to the employee, the union, or the Commissioner of Labour before termination. The employee was entitled to payment in lieu of notice (4 months' salary), severance pay (18 months' salary), repatriation allowance, general damages for unfair termination, and a certificate of service.

Outcome

Claim succeeded with costs to the Claimants; respondent ordered to pay terminal benefits and general damages

Facts

The 2nd Claimant was employed by the Respondent hotel from 2 October 2000 as a receptionist and rose to Front Office Manager by the time of her termination on 21 December 2018. She was a member of the HTS Union (1st Claimant). The Respondent was a member of the Uganda Hotel Owners Association and party to a Recognition Agreement and Collective Bargaining Agreement with the union. On 21 December 2018, the Respondent terminated the 2nd Claimant's employment on grounds of redundancy due to restructuring caused by economic conditions. The termination letter was dated the same day as the effective termination date. The Respondent did not give prior notice to the employee, the union, or the Commissioner of Labour as required by the CBA and the Employment Act. Despite mediation efforts and court service, the Respondent failed to appear or file a defence.

Issues

  1. Whether the 2nd Claimant's contract of employment with Sports View Hotel was unfairly terminated by the Respondent?
  2. Whether the 2nd Claimant is entitled to terminal benefits?
  3. What remedies are available to the parties?

Orders

  • Declaration that the 2nd Claimant's termination was unlawful.
  • Respondent to pay UGX 1,600,000 as payment in lieu of notice (4 months' salary).
  • Respondent to pay UGX 7,200,000 as severance pay (18 years of service).
  • Respondent to pay UGX 1,000,000 as repatriation allowance.
  • Respondent to pay UGX 15,000,000 as general damages for unfair termination.
  • Respondent to issue the 2nd Claimant with a certificate of service.
  • Costs awarded to the Claimants.
  • Claim for future earnings denied.

Rules and key headnotes

Collective Bargaining Agreements — Legal Effect — Incorporation into Individual Contracts
The terms of a collective bargaining agreement are incorporated into the contracts of employment of employees subject to its provisions and give rise to legally enforceable rights under section 39 of the Employment Act 2006.
Termination — Redundancy — Procedural Requirements
Where an employer terminates employment on grounds of redundancy or restructuring, the employer must give one month's notice to the affected employees or their union and notify the Commissioner of Labour before termination, as required by section 81 of the Employment Act 2006.
Termination — Redundancy — Notice Periods under Collective Bargaining Agreement
Where a collective bargaining agreement prescribes notice periods for redundancy based on length of service, an employee with ten years or more continuous service is entitled to four months' notice or pay in lieu of notice.
Termination — Unfair Termination — Failure to Follow Procedure
Termination of employment without following the procedure laid down in the applicable collective bargaining agreement and the Employment Act constitutes unlawful termination, even where the substantive ground for termination (redundancy) may be legitimate.
Remedies — General Damages — Jurisdiction of Industrial Court
The Industrial Court has jurisdiction to award general damages that are compensatory in nature for unfair termination, the quantum of which is decided at the court's discretion based on the merits of each case, and is not limited to the awards prescribed under section 78 of the Employment Act which are within the jurisdiction of labour officers.
Remedies — Future Earnings — Speculative Claims
A claim for compensation for future earnings for the remaining period of a contract is speculative and cannot be granted, as the contract could terminate for other reasons unrelated to the unlawful termination.
Costs — Exceptional Circumstances — Employer Misconduct
Costs will be awarded to an employee in exceptional circumstances, including where the employer's conduct in failing to appear or defend the claim warrants such an award, notwithstanding the general principle that costs are not routinely awarded in labour disputes due to the unequal bargaining power between employer and employee.

Legislation cited (10)

Cases cited (2)

  • Sseyiga Hermenegild & 6 Ors Versus ZTE
  • Netis Uganda vs Walakira Charles

Full judgment

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

Uganda_Hotels,_Food,_Tourism_and_Allied_Workers_and_Another_v_s_Sports_View_Hotel_Kireka_Limited_(Labour_Dispute_Reference_271_of_2019)_[2023]_UGIC_127_(23_August_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.