Wakilii

Ushillani v Kampala Pharmaceuticals Ltd (Civil Appeal 6 of 1998)

Supreme Court · [1999] UGSC 36 · 1999 Appeal Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Second appeal to the Supreme Court from a Court of Appeal decision in an employment breach-of-contract suit.
Decision
Appeal substantially allowed; judgment entered for the appellant for 17 months' salary arrears in addition to the special and general damages assessed by the lower courts.

Observed later treatment

Cited — treatment unverified cited in 9 (treatment unverified) Sequitur — Uganda’s citator · Derived from citing cases in the Wakilii corpus — not an assertion that this case is good law.

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.

No adverse treatment recorded Cited 9 times with no adverse treatment recorded; not yet tested on the merits. Citations fading — 10 citing cases on record, 10 in the most recent three data years. Derived from citing cases in the Wakilii corpus — a deterministic signal, not legal advice.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

Where an employer wrongfully repudiates a fixed-term employment contract that is terminable on notice, the wronged employee cannot treat the contract as subsisting and the measure of damages is remuneration for the stipulated notice period, not the balance of the term. Section 16 of the Employment Decree 1975 does not displace this common-law rule. However, unpaid remuneration for periods actually worked or spent in employment is a debt recoverable separately from damages; the lower courts had overlooked pleaded and proved arrears. The appeal succeeded substantially: the appellant recovered seventeen months' arrears in addition to the special and general damages already assessed, and the costs order was corrected in her favour.

Outcome

Appeal substantially allowed; judgment entered for the appellant for 17 months' salary arrears in addition to the special and general damages assessed by the lower courts.

Facts

The appellant, an Indian chemist, was recruited in 1989 as Production and Quality Control Manager for the respondent's Kampala pharmaceutical factory under a five-year written contract running from January 1991, terminable on six months' written notice or pay in lieu. After working about fourteen months she was paid for only nine. The company suffered a financial crisis arising from a director's fraud; the original directors sold their shares, management changed, and the company was renamed. When the appellant returned from leave in February 1992 no work was assigned to her; she was repeatedly told to await instructions she could not obtain. The respondent paid her hotel accommodation until May 1992, and she retained the company car until December 1994. In February 1993 she demanded a letter of termination so that she could seek alternative employment, but the request was ignored. She sued in the High Court in May 1993 for breach of the employment contract.

Issues

  1. Whether the lower courts erred in overlooking unpaid salary arrears for the period the appellant worked and was paid only in part.
  2. Whether the measure of special damages for wrongful repudiation of a fixed-term employment contract terminable on notice is the notice period or the unexpired balance of the term.
  3. Whether section 16 of the Employment Decree 1975 displaces the common-law rule on the measure of damages for a repudiated employment contract.
  4. Whether the appellant was required to mitigate her damages and on whom the burden of proving available alternative employment lay.
  5. Whether the Court of Appeal erred in awarding the respondent the costs of the trial suit.

Orders

  • Appeal allowed substantially.
  • Judgment entered for the appellant for arrears of remuneration for October 1991 to February 1993 (17 months) in the sum of UShs 3,400,000 and US$34,000.
  • Special damages of UShs 1,200,000 and US$12,000 and general damages of UShs 4,900,000 assessed by the lower courts confirmed.
  • Costs of this appeal and of the High Court suit awarded to the appellant.
  • Half of the costs in the Court of Appeal awarded to the respondent.

Rules and key headnotes

Employment & Labour — Wrongful Repudiation — No Election to Treat Contract as Subsisting
A contract of employment is an exception to the general rule on repudiation; where the employer wrongfully repudiates it, the innocent employee cannot elect to treat the contract as subsisting but must sue for damages for wrongful dismissal, save in exceptional and rare cases where the personal confidence between the parties survives.
Employment & Labour — Measure of Damages — Fixed-Term Contract Terminable on Notice
Where a fixed-term employment contract contains a provision enabling either party to terminate on notice, the measure of damages for wrongful repudiation is the equivalent of remuneration for the stipulated notice period, not for the unexpired balance of the term, on the principle of restitutio in integrum.
Employment & Labour — Statutory Interpretation — Employment Decree 1975 s.16
Section 16 of the Employment Decree 1975 obliges an employer to provide work and pay only while the contract is binding and does not apply to a contract that has been terminated by repudiation; it therefore does not alter the common-law measure of damages for wrongful dismissal.
Damages & Quantum — Salary Arrears — Debt Distinct from Damages for Breach
Unpaid remuneration for a period actually worked or during which the employee remained in employment is a debt recoverable independently of damages for breach of contract, and where it is pleaded and proved it must be awarded even if it was subsumed within a broader damages claim.
Damages & Quantum — Mitigation — Burden of Proof
The burden of proving that suitable alternative employment was available to a wrongfully dismissed employee lies on the employer; evidence merely that the employee was highly qualified does not discharge that burden, which must be matched by evidence of an available and demanded comparable position.
Civil Procedure — Costs — Appellate Interference with Discretion
Costs are in the discretion of the court and ordinarily follow the event; an appellate court will not interfere with a trial court's exercise of that discretion unless it was exercised unjudicially, on wrong principles, or without good reason given.

Legislation cited (5)

Cases cited (9)

  • Southern Highlands Tobacco Union Ltd v McQueen (1960) EA 490
  • Roper v Johnson (1878) LR 8 CP 167
  • Denmark Productions Ltd v Boscobel Productions Ltd (1968) 3 All ER 513
  • Hill v C A Parsons & Co Ltd (1971) 3 All ER 1345
  • Sheik Jama v Dubat Faroh (1959) EA 789
  • Kiska Ltd v De Angelis (1969) EA 6
  • Addis v Gramophone Co Ltd (1909) AC 488
  • Latchford Premier Cinema Ltd v Ennion (1931) 2 Ch 409
  • Pilkington v Wood (1953) 2 All ER 810

Cases citing this judgment (9)

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.

Full judgment

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

Ushillani v Kampala Pharmaceuticals Ltd (Civil Appeal 6 of 1998) [1999] UGSC 36 (24 February 1999)
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.