Wakilii

Wanderemah and 50 Others v The Microfinance Support Center Limited (Civil Suit No. 111 of 2011)

High Court · [2015] UGHC 16 · 2015 Judgment for Plaintiffs AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Representative civil suit for breach of contract - claim for severance package by former employees
Decision
Judgment entered for the plaintiffs with awards of special and general damages, interest, and costs

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the plaintiffs proved they were former employees of the defendant and its predecessors through salary schedules and board minutes despite absence of written contracts. A board resolution to pay severance packages became part of their employment contracts and created enforceable entitlement. The defendant could not rely on procedural irregularities in signing minutes to escape liability when those failures were the defendant's own fault. Special damages of UGX 215,332,707 awarded based on the formula in the board resolution, with general damages of UGX 60,000,000 for pain and suffering. Claims by six deceased plaintiffs disallowed as suit filed after their death.

Outcome

Judgment entered for the plaintiffs with awards of special and general damages, interest, and costs

Facts

The plaintiffs were former employees of the Poverty Alleviation Project and Rural Microfinance Support Project under the Prime Minister's office who were taken on by the defendant company (Microfinance Support Center Limited) when it succeeded those projects in 2003. They were retired or terminated from employment in April 2004. The defendant's Board of Directors held meetings in 2002 and 2003 where they discussed and resolved to pay a severance package to staff equivalent to a prorated 12 months' salary plus 30% of that amount, calculated according to each employee's period of service. This was in consideration of staff never having received salary increments during their years of service. A payment schedule was prepared listing the plaintiffs among the staff to be paid. Despite this resolution, the defendant refused to pay the severance packages. The plaintiffs filed suit in representative capacity in June 2011, claiming payment of the severance package as resolved by the board.

Issues

  1. Whether the plaintiffs were former employees of the defendant company.
  2. Whether the defendant ever resolved to pay certain packages to its retired employees.
  3. What remedies are available to the parties.

Orders

  • Claim with regard to six deceased plaintiffs (Livingstone Bakyumira, Titus Auku, Gideon Lukeca, Peter Ungei, Ogole Yeko and Opiro Ayoko) disallowed.
  • Special damages of UGX 215,332,707 awarded to the plaintiffs severally in accordance with each plaintiff's entitlement as stated in Exhibit P24, with the exception of the six deceased plaintiffs.
  • General damages of UGX 60,000,000 awarded to be shared equally amongst the plaintiffs, with the exception of the six deceased plaintiffs.
  • Interest on special damages at 15% per annum from April 2004 (date of termination) until payment in full.
  • Interest on general damages at 10% per annum from 30th September 2015 (date of judgment) until payment in full.
  • Costs of the suit awarded to the plaintiffs.

Rules and key headnotes

Evidence — Documentary Evidence — Secondary Evidence — Admissibility of Photocopies
Where the original documents are shown to be in the possession of the party against whom they are sought to be proved and that party denies their existence, photocopies of those documents may be accepted as secondary evidence under Section 64 of the Evidence Act.
Employment — Proof of Employment — Methods of Proof
Although the Employment Act Cap. 219 provides that contracts of service for six months or more must be in writing, the fact of employment need not be proved solely by tendering the contracts of employment but can also be proved by other documentary evidence or oral evidence.
Employment — Severance Packages — Board Resolutions as Contractual Entitlement
When an employer's board resolves to pay a severance package to employees in consideration of their years of service and other factors, that resolution becomes part of the employees' contracts of employment and creates an enforceable entitlement binding on the employer.
Civil Procedure — Company Minutes — Procedural Irregularities — Effect on Enforceability
Where a company fails to comply with internal procedures for signing board minutes or extracting formal resolutions, it cannot use its own procedural failures to escape liability to third parties who had no control over those internal processes, and the court will not allow the company to hide behind its failure to comply with legal procedures.
Damages — Special Damages — Variance Between Pleadings and Proof
It is not fatal to a claim for special damages when the amount proved differs from the amount claimed in pleadings, provided the damages were specifically pleaded and the variance is due to arithmetic or computation errors rather than an intention to mislead the court.
Civil Procedure — Representative Actions — Deceased Plaintiffs
A suit cannot be commenced by a deceased person. Where plaintiffs die before the filing of a representative suit, the claim with regard to those deceased persons must be disallowed as they could not have been proper parties to the suit at its commencement.
Damages — General Damages — Pain and Suffering — Employer's Breach
General damages for pain, suffering and inconvenience are recoverable where an employer's failure to pay agreed severance packages caused direct loss to employees, provided the damage is the direct, immediate or proximate consequence of the breach and not too remote.

Legislation cited (4)

Cases cited (10)

  • William Ekallo v Microfinance Support Centre Ltd (Civil Suit No. 894 of 2004)
  • Microfinance Support Centre Ltd v Herbert Byabagambi Katuku (Civil Suit No. 002 of 2005)
  • Nakivubo Chemist Limited Versus Housing and Construction Ltd [1984] HCB 24
  • Marjaria Versus Kenya Batteries [1981] 2 e.a 479
  • Vicent Bagamuhunda v John Katongole (Civil Suit No. 44 of 2001)
  • Christopher Kiggundu Versus UTC, scca No.7 of 1993
  • John Nagenda Versus Sabena Belgian World Airlines (1992) KALR 13
  • Uganda Breweries Ltd Versus Uganda Railways Corporation [2002] 2 e.a 634
  • Adonia Tumusiime v Bushenyi District Local Government and AG (Civil Suit No. 32 of 2012)
  • James Fredrick Pool Nsubuga v Attorney General (Civil Suit No. 1296 of 1987)

Full judgment

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

Wanderemah and 50 Others v The Microfinance Support Center Limited (Civil Suit No. 111 of 2011) [2015] UGHC 16 (26 October 2015)
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.