[2024] UGIC 74


# **THE REPUBLIC OF UGANDA IN THE INDUSTRIAL COURT OF UGANDA AT KAMPALA LABOUR DISPUTE REFERENCE NO. 134 OF 2017** *(Arising from Labour Dispute Complaint No. NDC/C. B386/2015)*

**1. AMOLO BEATRICE --- 2. NAMATA FLORENCE 3. NAIGAGA AIDAH 4. NANYONGA JUSTINE 5. NANTABA SARAH 6. MUTESI JULIAH 7. NAMUYAKALA BETTY 8. TWINOMUHANGI EVELYNE 9. ZAWEDDE JESCA 10. AANYU JOYCE 11. TENYWAHABIBI 12. ALIANO VICTORIA 13. SSEBUDDEJOHN 14. KIRYA MUSTAFA 15. MULISA EPAFANIA 16. TUMUSIIME FELIX 17. KISEMBO CHRISTOPHER 18. NANSEKO JOSEPHINE 19. EVAS TWIKIRIZE 20. TUMEHAIRWE SANDRA 21. NAMULINDA MONICA--- CLAIMANTS**

**VERSUS**

**MAKERERE UNIVERSITY BUSINESS SCHOOL :::::::::::::::::::::::::::::::::::::::::::::RESPONDENT**

### **Before:**

The Hon. Mr. Justice Anthony Wabwire Musana **Panelists:** Hon. Adrine Namara, Hon. Susan Nabirye & Hon. Michael Matovu.

### *Representation:*

*1. Mr. Charles Opio of Gumtwero & Company Advocates for the Claimants.*

*2. Mr. Charles K. Nsubuga of Muwema & Co. Advocates & Solicitors for the Respondent.*

### *Case Summary:*

*Employment law- Collective termination forredundancy- Procedure for collective termination- The Claimants sued the Respondent for unlawful termination due to the Respondent's outsourcing of kitchen services,*

*claiming unpaid overtime and leave, and seeking substantial compensation. The Respondent denied wrongdoing, citing government mandates and adherence to termination laws. The Court found the termination procedurally unlawful due to a lack ofproper notification to the labour commissioner, resulting in an award ofgeneral damages to the Claimants but rejecting claims for overtime and leave pay.*

# **AWARD**

## **Introduction and background material facts**

- **[1]** Between 1995 and 2003, the Claimants were appointed into the service of the Respondent, a public university established under the Universities and Other Tertiary Institutions Act Cap. 262 **(from now UOTIA).** Previously, the Respondent was an affiliate of Makerere University. The Claimants served as kitchen staff. Following a Government of Uganda resolution for public universities to concentrate on core activities, on the 21st of May 2015, the Respondent resolved to terminate the Claimants. Notices of termination issued with the option of three months' notice or payment of three months' salary in lieu of notice. The notices also contained a provision for payment of repatriation. - **[2]** The Claimants were aggrieved and lodged a complaint with the labour officer at Kampala Capital City Authority in Nakawa. The Claimants sought leave pay, repatriation and a handshake. During the mediation presided over by Ms Irene Nabbumba, Labour Officer, no settlement was reached. The matter was referred to the Kawempe labour office for arbitration. The labour officer, Mr. Hannington Kassaga, presided over the arbitration proceedings that the parties did not actively pursue. The matter was referred to this Court on the 20th of June 2017.

### **The Claim**

- **[3]** In their amended memorandum of claim, the Claimants contended that they had worked seven days a week from 8:00 am to 8:00 pm for which they were entitled to overtime and that the Respondent owed six hours of overtime per weekday and set their claims as far back as 1995. They also contended that they had never been allowed to take leave. They sought; - (i) UGX 1,222,546,485/= being accumulated unpaid overtime for 10 years and - (ii) UGX 74,058,104 in unremitted leave pay claiming that they had not taken leave from 2003 to 2015.

**LDR No. ¹³⁴ OF ²⁰¹⁷ Award Justice Anthony WaW lusana**

**[4]** The Claimants also asked for a compensatory order, general damages, interest at commercial and court rates and costs of the claim.

### **The Response**

**[5]** In its reply, the Respondent denied the Claimant's cause of action. Alternatively, it was contended that the Respondent was required to act in accordance with the directive to concentrate on its core function. It followed the termination law, and the Claimants were not entitled to any overtime allowance because none of them worked beyond the statutory timeframes and used to work daily shifts. It was also contended that the claimants would take leave during school holidays when they received full salary. It was claimed that their termination was lawful.

### **The Rejoinder**

**[6]** In rejoinder, the Claimants reiterated their claim, denying the shift work and contending that the Respondent had refused mediation.

#### **The Proceedings**

- **[7]** On the 18th of October 2021, the Claimants presented their case, and the matter was adjourned to the 13th of January 2022 for further hearing with a direction to file documents by the 30th of November 2021. On the adjourned day, the Claimants were present, but the Respondent was not. With Ntengye HJIC presiding, the Court heard the final part of the Claimant's case and gave directions for submissions, which the Claimant adhered to. The Respondent filed **Miscellaneous Application Number 014 of 2002,** setting aside the exparte hearing. On the 16th of January 2023, we granted the application to set aside the exparte proceedings. - **[8]** Attempts were made to reach an amicable resolution, but failing that, on the 5th of July 2023, Mr. Opio informed this Court that he had two witnesses to present. He also submitted that it was the Claimant's opinion that it was unnecessary to make any amendments to its case and maintained the joint scheduling memorandum (JSM)signed by both parties on 23rd July 2020. Mr. Opio presented two witnesses. Counsel for the Respondent was absent. Then, on the 31st of August 2023, the Respondent presented one witness and sought leave to present a final witness. Leave was granted, and the Respondent's final witness, Christine Nanyombi Mubiru, testified on the 31st of May 2024. Counsel were directed to file written submissions and highlight their arguments on the 28th of August 2024.

**LDR No. 134 OF 2017 Award JuslZe Anthony WaWt^usana**

### **Issues for determination by Court**

- **[9]** The issues agreed upon in the JSM were; - (i) Whether the Claimants were unlawfully terminated? - (ii) What remedies are available to the parties?

#### **The Claimant's evidence**

- **[10]** The Claimant called a total of 4 witnesses. Joshua Sserugendo(CWI), an Advocate practising with Kyagaba & Otatina Advocates, testified that when he worked with the Claimant's Lawyers, M/S Gumtwero & Co. Advocates, he interviewed the 1st Claimant, Beatrice Amolo and carried out background research. He said he found the matter to be a case of unlawful termination. He testified to examining records of each of the Claimants who worked for between 12 and 21 years, who were terminated on 24th August 2015 and were entitled to severance pay. He also said they were entitled to overtime, repatriation, and accumulated leave and that he calculated their entitlements and came to the conclusion that they were entitled to UGX 1,222,546,485/= being accumulated unpaid overtime for a period of 10 years and UGX 74,058,104 in unremitted leave pay claiming that they had not taken leave from 2003 to 2015. - **[11]** Under cross-examination, he conceded to the temporary appointments of some of the Claimants. He said the Claimants termination was because the Respondent was outsourcing kitchen services. He confirmed that all the Claimants received a three-month redundancy notice. He said that what the Claimants toid him about overtime was consistent with what other universities did and that he had seen kitchen staff's work hours. He also said he was told that the Respondent had a vacation period from March to September. He said he did not have evidence of overtime. - **[12]** In reexamination, he said the termination was unlawful because no notice was given to the labour officer, yet this was a mass termination. He also testified to the provisions of Sections 81 and 82 of the Employment Act 2006 on collective termination. He said his computation of overtime was based on what the Claimants told him. He also said the Claimants were not given leave because their leave forms did not contain the signatures of

**LDR No. ¹³⁴ OF ²⁰¹⁷ Award Justice Anthony WaW lusana**

the Respondent's Principal and the Dean of Academic Staff. He cited pages 197 and 198 of the Claimants Trial Bundle(CTB) and examined a payroll on Excel for his computations.

- **[13]** The Claimants called Evelyn Twinomuhangi(CW2) next. She testified that she was recruited in 2002 as a kitchen aide, would work from 6:00 am until 9:00 pm, and would work through the holidays. She testified that the Respondent never gave her or her friends any leave. When she once took leave in 2004, she was recalled halfway. She also said she worked no less than 12 hours a day and was never paid any overtime. She said that one Auma Christine and 27 others sued the Respondent and were paid overtime and leave. - **[14]** In cross-examination, she told us that her routine involved working six days a week, cleaning before breakfast at 7:00 am, and closing with supper at 8:00 pm. She told us that the shift work only commenced in 2008. She said they were divided into two groups, one working from 6:00 am to 3:00 pm and the other from 3:00 pm to 9:00 pm. She said she got leave once in 12 years but did not complete it. She said she was terminated because kitchen services were outsourced. Her contract was renewed yearly, and she was not paid any salary arrears. She also said she was paid three months' salary at termination and was terminated when she had a running contract. - **[15]** In reexamination, she said that her boss requested leave and brought her forms to fill, but leave was never approved. She said that the Respondent's officials took their meals during school holidays, and she had to work. She said she was told termination was due to outsourcing, employees were not consulted, and she was not given a token of appreciation. - [16] Mr. John Sebudde(CW3)testified that he was recruited on 20th October 2003 and recounted an experience mirroring CW2's, adding that no kitchen staff took leave or worked less than 12 hours daily. He said he had become a supervisor like the 1st Claimant when he was laid off. He confirmed the existence of a leave roster for January and June 2003 and said this was a forgery. He was not cross-examined. - **[17]** Beatrice Amolo(CW4) testified next. According to the record of proceedings, she told this Court that she was recruited on the 20,h of October 2003 as a kitchen aide. She said she would wake up at 4:30 am, report to the Head of Catering at 5:00 am, work until 9:00 p.m., and even serve examination markers during the holidays. She said her beginning salary was UGX 164,967/=, and she was aware of the right to overtime. She also said she had worked for no less than 12 hours a day on any single day and would sometimes work for 15 hours a day. She was never paid any overtime. She testified that an overtime policy of 1.5 times the basic hourly rate was developed in 2006 but never implemented. She also

**LDR No. 134 OF 2017 Award Justice Anthony Wajww rwusana**

#### Page 6 of 22

said the Respondent was in the habit of exploiting its employees. She referred to the claim by one Auma Christine and 27 others who filed Labour Dispute 908 of 2008 for unlawful termination and were paid overtime and leave. She said a collective termination required notification of the Commissioner, which was not done. She also said the token of appreciation promised under the 41st Council Meeting of the Respondent was not paid to her. She said the Respondent did not attend mediation and arbitration before the labour officer, hence the reference to this Court. She told us that she applied for leave, and it was refused. She referred us to Mr. Serugyendo's computation of the Claimant's dues. Ms Amolo was not cross-examined.

#### **The Respondent's evidence**

- [18] Mr. Mark Mugasha(RWI), the Respondent's Chief Legal Officer, testified that he knew the Claimants as former employees of the Respondent. He confirmed the government directive for all public universities to outsource non-core activities like kitchen functions. He confirmed that at its 41st Council meeting, the Respondent resolved to outsource kitchen services and to inform the Claimants of the non-renewal of their contracts. He said the Claimants were duly notified and paid all their terminal benefits. He told us that none of the Claimants worked overtime and had a shift system. Because the Respondent was an institution of learning, the Claimants did not work during the school holiday. He said that the policy on overtime required the Principal's approval before staff could work overtime, and no such approval had been granted in the Claimants case. - **[19]** Under cross-examination, RW1 said that the Respondent informed the Commissioner of the impending termination of the Claimants. He said each individual claim was paid ^a different amount, and in 2015, the Respondent's management approved a payment of UGX 2,000,000/=. He said he did not have the attendance register to show how the Claimants worked. He told us that each year had two holidays. When he was referred to CEX34 on page 197 CTB, he said that this was a leave request by the Domestic Bursar for kitchen aides to go on leave during school holidays. He was shown CEX36 of the revised overtime policy. He acknowledged that CEX2(g) was the 1st Claimant's leave application for 18 days in 2006. He said that, according to Section 7.7 of the Respondent's Human Resource Manual(HRM), the Principal recommended and approved overtime. - **[20]** In re-examination, he told us that the Claimants took leave during school holidays and before 2009 would be requested and granted. He said the Claimant's records are for leave during breaks. It was his evidence that in 2011, only three staff remained at the Respondent's premises during school breaks. He also said that the Claimants were working

**LDR No. 134 OF 2017 Award Jusl^AnthonyWabaiit^usara**

in 3 shifts at this time. He said that to prevent abuse of the overtime policy, any overtime was recommended by the Head of Department, approved by the Principal, and would not be paid without approval. He said all terminal benefits were paid, and this was an overpayment.

- **[21]** The final witness, Christine Nanyombi Mubiru(RW2), testified following an application by Mr. Nsubuga to adduce the evidence of one witness. She testified in her capacity as Human Resource Director. She corroborated RW1's testimony on the resolution not to renew the Claimants' contracts and the handshake resolution. The Claimants were notified and paid their entire terminal benefits. She repeated the RW1's evidence on the overtime policy and shift work. - **[22]** In cross-examination, she told us that when she made the witness statement, she was acting director of human resources and that the Ministry of Public Service had since changed the titles. She told us outsourcing was a form of restructuring. She also told us that the Claimants were collectively terminated. She said the Respondent did not write to the Commissioner to inform him of the collective termination. - **[23]** In re-examination, she told us that the responsibility of writing to the Commissioner lay with the Ministry of Education because it was the one that had given the directive. That is was the Respondent's duty to implement the directive. - **[24]** After RW2's evidence, the Respondent closed its case. We directed the parties to file written submissions and invited Counsel to highlight the submissions on the 28lh of August 2024. We have summarised and considered the submission in rendering our ruling. The Court thanks Counsel for their succinct arguments and the authorities cited and supplied.

## **Determination**

## **Issue No. 1. Whether the Claimants were unlawfully terminated?**

### **Claimant's submissions**

**[25]** Citing Section 81EA and *Dr Kiwalabye v Mutesa ¹ Royal University[1](#page-6-0)* and *Abiqaba v Bank of Uganda²* and the evidence of RW1 and RW2 under cross-examination, it was submitted that the Respondent did not comply with the requirement to inform the Commissioner of the

<span id="page-6-0"></span>**¹ [20201UGIC 34**

**LDR No. 134 OF 2017 Award Justice Anthony WatawkrMusana lusana**

**^; 120171 UGIC 24**

Collective Termination. It was suggested that the termination was fraught with unfairness and inequity and denied the Claimants a fair and transparent exit process. Counsel also cited *Okou v Stanbic Bank[3](#page-7-0)* and *Musakiriza* v *African Vending Systems Limited[4](#page-7-1)* for the proposition that the Respondent just woke up and terminated the Claimants. Mr. Opio repeated these points in his oral address.

# **Respondent's submissions**

**[26]** Mr. Nsubuga submitted that following the resolution to outsource kitchen functions, the Respondent held a meeting to sensitise the Claimants and prepare them for the exit. Notices of termination were issued. He submitted that this was not a collective termination within the meaning of Section 81EA. Instead, it was a redundancy declared by the Respondent under a government requirement to outsource kitchen services. Counsel cited *Nankabirwa v The Board of Governors St. Kizito Technical Institute Kitovu[5](#page-7-2)* for the proposition an employer has an inherent right to restructure posts in his or her organisation. Counsel also cited *Programme for Accessible Health Communication and Education (PACE) vs Graham Nagasha[6](#page-7-3)* For the proposition that employees who are not unionised should be notified individually at least three months before termination, Mr. Nusbuga believed the Claimant's termination was lawful.

### **Rejoinder**

- **[27]** Concerning the preparatory meetings, Mr. Opio countered that they were held before the Respondent'^s 41st Council meeting, which resolved not to renew the Claimant's meeting. Counsel argued that the Claimant did not attend any preparatory meeting. Mr Opio reiterated his submission on the procedurally defective collective termination. He relied on *Adora and Others v Brookside [7](#page-7-4), PACE* and *Lwanga.* Counsel also argued that terminal benefits were not paid. - **[28]** In closing, Mr. Opio relied on *Kamegero v Marie Stopes Uganda Limited[8](#page-7-5)* and *Mugisa v Equity Bank Uganda Limited[9](#page-7-6)* for the proposition that procedural and substantive fairness are twin tenets; the absence of one renders a dismissal unlawful.

**LDR No. 134 OF 2017 Award Justice Anthony WamfikMisana**

<span id="page-7-0"></span>**³LDC 171/2014**

<span id="page-7-1"></span>**⁴ [2021] UGIC 11**

<span id="page-7-2"></span>**⁵ [20161 UGIC15 6LDA 35 of 2018**

<span id="page-7-4"></span><span id="page-7-3"></span>**⁷ [2020] UGIC 45**

<span id="page-7-5"></span>**⁸ [20231 UGIC 52**

<span id="page-7-6"></span>**⁹ [20231 UGIC 62** Page 9 of 22

## **Decision**

- **[29]** It is trite that a Court shall not fetter the employer's right to terminate an employee, provided the employer follows procedure. Or, as this Court stated in *Akewa v Loving one by one Ministries ¹⁰,* termination must follow procedure. Otherwise, it is unlawful. - **[30]** Mr. Nsubuga, appearing for the Respondent, argued that this was not a collective termination but a redundancy. We profoundly disagree. The argument would be strange, especially given this Court's interpretation, application and treatment of the provisions of Section 80EA. The provision reads as follows;

### *"80. Collective termination*

*(1)Where an employer contemplates terminations of not less than ten employees over not more than three months for reasons of an economic, technological, structural or similar nature, he or she shall—*

*(a)provide the representatives of the labour union, if any, that represent the employees in the undertaking with relevant information and in good time which shall be at least four weeks before the first of the terminations shall take effect, except where the employer can show that it was not reasonably practicable to comply with such a time-limit having regard to the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations shall be carried out, and the information in paragraph (a) shall include the names of the representatives of the Labour Union if any that represent the employees in the undertaking;*

*(b)notify the Commissioner in writing of the reasons for the terminations, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out.*

*(2)An employer who acts in breach of this section commits an offence.*

**w[2024] UGIC 54**

**LDR No. 134 OF 2017 Award Justice Anthony Wai lusana**

- **[31]** Under this provision, the Court is concerned with two things: The reason for termination and whether it falls within the ambit of *economic, technological, structural or similar nature.* The second matter that the Court concerns itself with under this provision is a matter of procedure, and for this, the law is straightforward, providing two procedural steps; - (a) the employer issues notice of intended termination to the union if employees are unionized and to the employees if they are not represented. The notice specifies the number and category of workers to be affected and the duration of the terminations. - (b) the employer notifies the commissioner of the reasons and duration of the termination.

This is the procedure, even if it involves a single employee. We will return to procedural fairness because we think it is necessary to first address the argument that redundancy is outside Section 80EA.

**[32]** This Court pronounced itself on redundancy in *Aporo v Mercy Corps Uganda[11](#page-9-0)* where we observed that:

> *"In the employment sphere, redundancy means a situation in which an employee is laid off work because the employer no longer needs the employee.[12](#page-9-1) There is also judicial concurrence that redundancy is an acceptable means of severing the employment contract. In Zte(U) Ltd V Sseyiga Hermenegild and 6 Others[13](#page-9-2) the Industrial Court observed that it was a settled position of the law that termination as a result ofrestructuring or reorganization is acceptable and is in conformity with the Termination of Employment Convention No. 158 of 1992, which Uganda ratified and domesticated in the Employment Act 2006. Further, in Dr. Elizabeth Kiwalabye vs Mutesa ¹ Royal University¹⁴ it was held that the employer reserves the right to determine the requirements of his or her business so as to improve its efficiency, and the Courts cannot fetter his or her discretion to increase or decrease the number and or quality of staff required for the business. The only role of the Court is to ensure that the reorganization or restructuring is carried out in accordance with the law or that the subject of the Court's inquiry is whether such termination for redundancy is fair and, therefore, lawful.*

**LDR No. 134 OF 2017 Award Justice Anthony Waj lusana**

<span id="page-9-0"></span>**¹¹ [20241 UGIC 23**

<span id="page-9-1"></span>**¹² Black's Law Dictionary 11th Edn by Bryan Garner at page 1531**

<span id="page-9-2"></span>**¹³ Labour Dispute Appeal No. 24 of 2019**

**M Labour Dispute Claim No. 005 of 2017**

- **[33]** Redundancy is, therefore, an acceptable reason for terminating a contract of employment. According to Professor John Grogan, a foremost author on labour law on the African continent, in "Workplace Law''[15](#page-10-0) places redundancy in the category of retrenchment, a form of termination for economic, technical and structural reasons. The Learned Author quoted *Hlongwane & Anor* v *Plastix(Pty) Ltd[16](#page-10-1)* for the proposition that employers are frequently compelled for economic reasons to review their staffing levels and terminate the employment of some of their employees to effect savings. In Hlongwane, the Court distinguished between retrenchment and redundancy, noting that in redundancy, employees become redundant as a result of the introduction of new technology or reorganisation. Section 80EA employs the exact words of termination for economic, technological, structural or similar reasons. At home, in his text " Essentials of Uganda's Employment Law"[17](#page-10-2), the Learned Author Nelson Nerima argues that redundancy is not ^a mode but a cause of termination and may be necessitated by restructuring, which makes positions redundant. Mr. Nerima also suggests that outsourcing services enables a company to focus on core business. In other words, reorganization or introduction of technology or indeed new work methods such as outsourcing renders the employees redundant. They lose their jobs or are terminated because the employer has no further use for them. This explanation places Mr Nsubuga's assertion at odds with the literature on redundancy, and, therefore, the argument that redundancy does not fall within a collective termination under Section 80EA does not hold. We shall return to this point in paragraph[35] of this award. - **[34]** The matter before us is indisputable, and the Claimants accept that the Government of Uganda directed public universities to outsource the kitchen function and focus on their core, research, teaching and publication. CEX 2(a), CEX3(a), CEX 4(a), CEX 5(a) and all other notices of termination indicated that redundancy had been declared. For this reason, the Respondent would pay the Claimants three months' pay in lieu of notice and repatriation. Some of the Claimants' employment contracts had expired; for others, the contracts were set to expire at some near future date. All these notices of termination were dated the 24th of August 2015. In our estimation and judgment, the termination was the redundancy declaration. The only question is whether the termination was procedurally and substantially fair. - **[35]** The prescript of Section 80EA is very clear. A termination involving ten or more employees over three months for reasons of *economic, technological, structural, or similar nature is*

**LDR No. 134 OF 2017 Award Justice Anthony Wai lusana**

<span id="page-10-0"></span>**¹⁵ 3rd Edn Juta & Co. 1998 at page 159**

<span id="page-10-1"></span>**¹⁶ (1990) 11ILJ ¹⁷¹**

<span id="page-10-2"></span>**¹⁷ Uncle Books, Kampala 2018 at page 71**

#### Page 12 of 22

*called a collective termination,* and the termination is over a period of three months. In the present case, the termination notices were issued to the Claimants on the 24th of August 2015, following the Respondent's Council 41st meeting held on the 21st of May 2015, at which it was agreed to outsource kitchen services with effect from the 1st of August 2015. This termination would fall under the definition of a collective termination because the number exceeded ten employees, terminated within three months for reasons of the outsourcing of kitchen services. In other words, the Claimants were rendered redundant. In our judgment and given Section 80EA, this was a collective termination for redundancy. The only question is whether it was lawful?

[36] The procedure of a collective termination, as outlined in paragraphs [30] and [31], is to issue notice to the employee's representatives if they are unionized, to the employees if they are not represented, as Mr. Nsubuga correctly argued, and to notify the Commissioner. The law provides for notice of at least four weeks. In our examination of the notices of termination, Professor Wasswa Balunya wrote:

> *"The purpose of this letter is to communicate to you Councils' decisions to lay off Staff an its appreciation ofyour service over the years. In line with the above decisions, this is to inform you that;*

- *i) Ordinarily your contract will expire on September 09, 2015. However, by the decisions of the School Council, a redundancy has been declared and as ^a result, Management is obliged to give you a three (3) months notice, but we would wish to pay you the three(3) months' salary in lieu ofnotice ifyou so agree;"* - [37] In effect, the Respondent communicated a decision to terminate on the grounds of redundancy and offered to make payment in lieu of notice. That would render the collective termination effective immediately or a summary collective termination with the option of payment of three months' salary in lieu of notice. Mr. Opio concedes to compliance with the requirement for notice in Section 80(1 )(a)EA. In *Sure Telecom Uganda Limited vs Brain Azemchap¹⁸* the Industrial Court was emphatic that collective termination must abide by the procedure in Section 81EA *(now Section 80(1)EA),* and the first such requirement is providing relevant information at least four weeks' notice before the first of the terminations is likely to take place. In the present case, the Respondent indicated that it was obliged to give three months' notice but offered payment in lieu of notice. This would comply with Section 80(1 )(a), giving the Claimant more than four weeks' notice.

**" LDA 005 of 2017**

**LDR No. 134 OF 2017 Award Justice Anthony Wai lusana**

**[38]** Section 80(1 )(b) EA requires the employer to provide the Commissioner with the reasons for the termination, the number and category of employees to be affected and the period over which the intended terminations are to be carried out. This provision is anticipatory. Professor Balunywa's letter of the 24th of August 2015 communicated a termination decision and not an intention to terminate. It was not copied to the Commissioner of Labour. RW1 and RW2 testified that the Commissioner was notified but did not produce a copy of the notification. RW2 conceded under cross-examination that the Respondent, as an institution, did not notify the Commissioner. Mr. Nsubuga's argued that it was the duty of the Ministry of Education to inform the Commissioner. We do not accept this argument because the Claimants were employees of the Respondent, and the Respondent was implementing the decision to terminate the Claimant's services collectively. In the case of *Okumu and2 Others v Shreeji Stationers 2009 Uganda Limited[19](#page-12-0) we* observed that the procedural requirements as mandatory. In our view, there was non-compliance with the procedural requirement to notify the Commissioner under Section 80(1 )(b)EA. This is a procedural defect.

- [39] The procedural defect above is compounded by the option to pay three month's salary in lieu of notice. In *Veronica Mkiwa Mwalwala v Faiza Bhanji t/a Villa Kalista Enterprises[20](#page-12-1)* the Employment and Labour Relation Court of Kenya at Mombasa was considering a termination for redundancy and found the same to be procedurally flawed because the notice of intention to declare a redundancy was the same as the notice of termination and there was no consultation. In that case, the Court considered the wording of Section 40(1) (a) and (b) of the Kenya Employment Act Cap. 226. which provides for intended redundancy and not a termination for redundancy. The Court held that a notice of intended redundancy was not the same as a notice of termination, and any default in issuing a notice of intended redundancy could not be cured by payment in lieu of notice. This dictum is most persuasive because Section 80(1 )EA provides for contemplated terminations. It does not provide for immediate termination but is anticipatory, except where the employer can justify the need to dispense with notice. In our estimation, contemplated termination is about fairness, which is to prepare the employee for job loss. - **[40]** It is, therefore, our judgment that the notice of termination issued to the Claimants on the 24th of August 2015 was procedurally defective in that it did not meet the requirements of Section 80(1)(b)EA. - <span id="page-12-0"></span>**¹⁹ [20231 UGIC 10** - <span id="page-12-1"></span>**20120201 KEELRC 1821 (KER)**

**LOR No ¹³⁴ OF 2017 Award Justice Anthony Wj^rwusana lusana**

**[41]** The final point on substantive fairness of a redundancy termination is the requirement for consultation. In *Aporo v/e* observed that where the employer finds that it must sever an employment relation due to redundancy, there ought to be a consultative process. In our view, the idea of a consultative process promotes fair labour practices. The termination is not because of a fault of the employee. The fairness of the decision taken to terminate a given employee calls for ^a level of transparency in declaring a given position redundant. The minutes of the 41st meeting of the Respondent's Council do not indicate representation of the Claimants or a resolution to engage the Claimants in the exit plan. The meeting agreed to notify the Claimants of the Council's decision. The decision was made and communicated to the Claimants. It is not that an employee would be expected to veto or refuse a decision to terminate them for redundancy, but the dictates of fairness suggest that the consultation is to prepare the employee for the effects of termination and loss of employment. That is the dicta expressed in **Williams & Others v Compare Maxam Limited[21](#page-13-0)**

> *"In general terms, employers acting reasonably will seek to act by giving much warning as possible in impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so."*

**[42]** In the present case, the Respondent did adhere to the consultative prescripts of a collective termination for redundancy. For the procedural defects in failing to issue notice to the Commissioner and the defective notice to the Claimants, we would find, as we hereby do, that the collective termination of the Claimants by the Respondent did not comply with the provisions of Section 80(1 )(a) in consulting with the Claimants or their representatives and Section 80(1)(b)EA by failing to notify the Commissioner of Labour. We cannot find that the termination was fair and lawful on the grain of authorities. We would hold that the termination was unlawful. Issue one would be answered in the affirmative.

**LDR No. 134 OF 2017 Award Justice Anthony Wai wpMusana**

<span id="page-13-0"></span>**²¹ [1982] IRLR 83 Per Judge Abigail Holt.**

## **Issue 2 What remedies are available to the parties.**

**[43]** Having found as we have, the Claimant would be entitled to remedies. But, on the authorities of *Adora* and *Ochuru v Ace Global (J) Limited²²* Counsel for the Respondent argued that termination under Section 81EA(now Section 80EA) does not attract the same remedies as those granted under other forms of termination because the termination is occasioned by technological, economic and structural reasons, which renders the employer incapable of maintaining the same number of employees. That is the position of remedies in cases of redundancy terminations. But for completeness, we shall consider the individual remedies sought by the Claimants.

## **Compensatory order under Section 78EA**

- [44] The Claimants sought UGX 23,112,991 as compensatory orders under Section 78EA. Counsel for the Respondent argued that the Claimants were not entitled to any compensatory order because they were not unlawfully terminated. In rejoinder, it was argued that the Respondent was at fault in the collective termination, hence the entitlement to compensation. - **[45]** With tremendous respect to both Counsel, compensatory orders under Section 77EA( not Section 78EA) are exclusive to the labour officers and limited to a maximum of three months wages. This Court exercises a broader discretion, including the jurisdiction to grant general damages and has held that the Section 77EA compensatory order is not awardable in claims before the Court. In the circumstances, the claim is denied.

#### **Severance pay**

**[46]** Mr. Opio argued that the Claimants were entitled to severance pay because they were unfairly dismissed. He cited *Kamuli v DFCU Bank²³* and *Kamegero* in support of the claim for **UGX 248,400,228/=** as severance pay. Mr. Nsubuga countered that the claim for severance pay was not provided for under Section 87(a) to (f)EA. We agree with Mr. Nsubuga that an unlawful collective termination is not provided for under Section 86EA. Counsel cited the law before the Revised 6th Edition 2023. The law permits for severance pay in the case of unfair dismissal, death other than an employee's own serious and wilful misconduct, termination of an employee for physical incapacity not occasioned by serious and wilful misconduct, death or insolvency of an employer, where a contract of employment

**2 [20211 UGIC 73**

**" [20151 UGIC ¹⁰**

**LDR No. 134 OF 2017 Award Justice Anthony Wai lusana**

#### Page 16 of 22

is terminated by ^a labour office for failure to pay wages and such other circumstances as the Minister may, by regulations provide. There is no provision for payment of severance pay for unlawful or unfair termination for redundancy. Neither do the Employment Regulations 2011 provide for payment of severance pay. In these circumstances, we decline to grant the prayer for severance pay.

# Earned annua! leave

- **[47]** The Claimants' case was that they had worked continuously and never taken leave. We were invited to consider CEX2(g) and (h) and pages 197 and 198 CTB for the proposition that in 2005-2006, the Claimants applied for leave, which was declined. Counsel cited *Mugisha & Ors v G4 Security Services (U) Ltd²⁴* for the proposition that an employee could only claim leave if they applied for it and it was not granted. We were asked to award the Claimant's UGX 74,058,104/= - **[48]** In reply, Counsel for the Respondent argued that there was uncontroverted evidence that the Claimants took leave. Relying on *St Kizito SSS Bugolobi & Anor v Odyek* [25](#page-15-0) Counsel argued that the Claimants should have shown that they applied for leave, which was rejected. - **[49]** In rejoinder, Mr. Opio suggested that Mr. Nsubuga had been disingenuous. - [50] The position of the law, as restated by Mr. Nsubuga, prevails. To succeed in an action for leave entitlement, an employee must demonstrate that he or she applied for leave and it was denied. In *Akoko v Uganda Manufacturers Association[26](#page-15-1)* this Court was considering the import of Section 54, now 53EA. We maintained the dicta that leave, while being a statutory right, is only operationalized by agreement between the parties because the employer must be able to arrange his or her business in a manner that allows for continuity. Therefore, an employee must still show that he or she applied for leave, which was denied. - **[51]** In the case before us, the leave application forms for the 1st Claimant in CEX2(g) and (h) for 2004 and 2006 were on record. CEX 34 on pages 197 and 198 of the CTB also demonstrated leave applications for 2004 and 2005. There was no other record of any application for leave, which was denied. The Claimant's evidence was that the leave for 2004 and 2005 was denied. The Respondent countered that the Claimants all took leave during the school holidays. However, there was no documentary evidence to support this

**LDR No. 134 OF 2017 Award Justice WamwkMusana**

**^z\* HCCS No 113 of 2008 and 269 of 2009**

<span id="page-15-0"></span>**²⁵ [20201 UGIC 26**

<span id="page-15-1"></span>**²⁶ LDR139 of 2019** contention in the same way that there was no documentary evidence to support applications for leave in all other years except 2004 and 2005. Did the Dean of Students and/or the Respondents' Principal reply to the Domestic Bursar's letters of 29th June 2004 and 7th December 2005? We think that this was an application for leave and we were not provided with any answer to it. Therefore, in keeping with Akoko, we would be inclined to the view that the 1st, 2nd, 3rd, 4th, 7th, 8th, 9th. 10th, 11th, 12th, 13th, 14th, 15th, 16th, 17th' 18th, 19th, 20th and 21st Claimants would be affected by the June 2004 and December 2005 leave applications. In our view, it is proven that this leave was applied for. It has not been demonstrated that it was rejected or taken. On the balance of probabilities, it is more likely than not that the Claimants took this leave and we are inclined to the view that they would not be entitled to any payment in lieu of leave.

**[52]** Further, it is also quite inconceivable that for over 10 years, the Claimants applied for leave; it was denied, and they did not protest until their eventual termination. There is no evidence of any complaint concerning leave during the subsisting employment that would support the denial of leave. In the circumstances, we cannot accept the Claimants' contention that they applied for leave and it was denied or that, for some other reason, we should depart from this dictum of the Industrial Court.

## **Overtime**

- **[53]** Counsel for the Claimant argued that there was evidence that the Claimants worked from 6:00 am to 8:00 pm or 9:00 pm. Mr. Opio cited Mugisha for the proposition that there was no evidence to show that an employer had paid overtime. It was argued that the Claimants had pleaded and proven overtime payment as special damages of UGX 1,222,546,485/= - [54] Mr. Nsubuga, for the Respondent, contended that pages 1-4, 12-30,32-34,108-116,136- 152,156-158 and 166-192 of the RTB was a record of shift work of two shifts, that is, morning until afternoon and afternoon until evening. Counsel also contended that there was a change in overtime policy because it had been prone to abuse and that the revised policy required overtime to be approved by the Principal. - **[55]** In rejoinder, the Claimants reiterated their earlier claim. - **[56]** The statutory pedestal for overtime is set in Section52(1),(2), and (3) EA and a working week is a maximum of forty-eight hours per week unless agreed otherwise by the employer and employee but not exceeding ten hours per day or fifty-six hours per week under Section 54(4)EA. In cases of shift work, under Section 52(5), a person may exceed ten hours a day. Where parties exceed the eight-hour day, the employee shall be remunerated at a minimum

**LDR No. 134 OF 2017 Award Jus^eAnlhony^bJⁱ ^'^usana"**

rate of one and a half times the normal hourly rate if the overtime is on normal working days and at two times the hourly rate.

- **[57]** From the statutory purview, working hours and overtime computation are mathematical. In other words, the calculation of overtime dues is precise. That explains why Counsel for the Claimants approached the matter of overtime as a claim for special damages. At law, special damages are specifically pleaded and strictly proven. Ssekaana J. in *Mujib and Another v Attorney General*[27](#page-17-0) observes that evidence adduced on proof of special damages must show particularity in accordance with the pleadings, and the claim must also be based upon precise calculation as to enable the defendant access facts which makes such calculation. - **[58]** In the matter before us, the claim for overtime was pleaded 4(e)(iv) of the amended memorandum of claim for UGX 1,222,546,485/=. The particulars were tabulated at 32 hours per week, 1664 hours per year over 10 years and multiplied against the wages. The Claimants evidence of overtime was contained in the witness statement of CW1, Mr. Serugyendo, who testified that he had interviewed the first claimant, reviewed the case file, and established the Claimants' terms of service. In paragraph 11 of his witness statement, he said he discovered that the Claimants were claiming accrued overtime, and in paragraph 16, he set out to calculate the same. Based on his interview with the Claimants, he concluded that the Claimants had worked for 12 hours a day, accumulating 32 hours per week, aggregated at 1664 hours per year of 16,640 hours for a minimum of 10 years and were therefore entitled to UGX 1,222,546,485/=. While Mr. Serugyendo's approach was certainly in line with the provisions of the EA, in our view, it did not tell the whole story. Pages 2-4 of the RTB contain what appears to be an attendance register. In it, the first claimant is listed as signing in on the 14th of June 2010 at 8:00 am and signing out at 2:00 pm, representing a six-hour shift. On the 15th of June 2010, the 1st Claimant is listed as signing in at 10:15 am and signing out at 2:30 pm. On the 16th and 17th of June 2010, Ms. Amolo is listed as attending six-hour shifts. This pattern does not show extra hours of work. It demonstrates that there was a shift policy and, on the balance of probabilities, makes for a more believable case than the testimony of computation by Mr. Serugyendo based on his interviews of the Claimants. CW2 concession of shift work during cross-examination cements the view that the Claimants were working in shifts. Overtime is precise, and we do not think the Claimants have been precise in averaging their overtime over 10 years. - **[59]** In her evidence, Ms. Amolo pointed us to the finding of the labour officer in **C. B 908 of 2008 Auma Christine and 27 Others v Makerere Business School** where a labour officer

**LDR No. 134 OF 2017 Award Jusb^AnlhonyWa^tf^usana**

<span id="page-17-0"></span>**²⁷ [2023] UGHCCD ¹⁸⁷ V**

found that those complainants were entitled to overtime payments in excess of the statutory hours. In that case, the Respondent did not provide records, and the labour officer took the Complainants' evidence. We note that a decision made by a labour officer does not bind this Court. However, if employees complained to labour officers, under Sections 9 and 10EA, a labour officer has powers of inspection against any infringement, and reports from the labour officer form firm foundations for any findings. In the present case, there was no such finding from the labour officer that this Court would rely on to make a finding supporting the Claimant's claim for overtime. As indicated, we are not persuaded that as ^a claim for special damages, the Claimants have proven their claim, and therefore, the claim for overtime fails and is denied.

#### **General damages**

- **[60]** Citing *Kamuli,* and *Kamegero,* Counsel for the Claimant argued that the Claimants were unlawfully terminated and had worked for over 10 years with good performance. On the authorities, he suggested that age, the position of responsibility, duration of the contract and inconvenience were some of the considerations for general damages. He thus asked for UGX 100,000,000/= for each of the twenty-one Claimants. Counsel for the Respondent did not submit on the prayer for general damages. - **[61]** The position of the law in respect of general damages in employment disputes has been settled by the Supreme Court in In *Uganda Post Limited v Mukadisi,[28](#page-18-0)* the Honourable Professor Lillian Tibatemwa Ekirukubinza JSC, with Mwondha, Tuhaise, Chibita and Musoke, JJSC concurring, confirmed that an employee would be entitled to a claim for general damages as an independent award for unlawful termination. The relevant principle in determining general damages is that general damages are not tied to specific financial losses. The court assesses general damages and is not restricted to the salary or pecuniary benefit stipulated in the employment contract. They are awarded to compensate the employee for non-economic harm and distress caused by the wrongful dismissal. These damages include compensation for emotional distress, mental anguish, damage to reputation, and any other non-monetary harm suffered due to the dismissal. - **[62]** Mr. Nsubuga drew our attention to the earlier decisions of the Industrial Court in *Adora* and *Ochuru.* In *Adora,* the Industrial Court awarded two months' salary as compensation for procedural irregularities in the termination because it would be unjust enrichment to award anything more if the employer had failed to keep the employees. In *Ochuru,* the Claimant sought UGX 10,000,000/=. The Industrial Court found the termination lawful and declined to grant redundancy pay as the EA did not provide for it. Recent precedent in *Omara v*

**LDR No. 134 OF 2017 Award Justice Anthony WaJ^fMusana lusana**

<span id="page-18-0"></span>**²⁸ [2023] UGSC 58. We cited this decision in Sserunjogi v Safeboda (Labour Dispute Reference 47 of 2022) [2024] UGIC 36 (16 August 2024) . [**

*Roofings Company Limited²⁹* holds that general damages are awardable for an unfair redundancy termination. In that case, the Claimant was granted UGX 5,000,000/= in general damages. In Andrew Muholo Teyie v Nation Media Group Limited, the Employment and Labour Relations Court of Kenya awarded a ten-month salary as compensation for an unfair redundancy termination.

- **[63]** In the present case, each of the Claimants had worked for at least ten years. The evidence is that the Respondent terminated the Claimants collectively and unlawfully. As indicated, redundancy terminations are a loss of job for no fault of the employee. In the case of *Williams* cited in *Aporo,* Judge Holt's guidance is towards fairness that considers reasonable warning. In the instant case, the Claimants were not informed of the intended terminations well in time. They were not consulted and prepared for their impending redundancies. While the Respondent offered three months' notice and a handshake, persuasive, comparative jurisprudence points in the other direction. In *Teyie* where Aboudha J observes that because redundancy is the termination of employment through no fault of an employee, there should be no rush to get rid of the employee by payment in lieu of notice. - **[64]** On the grain of authorities, we are persuaded that the Claimants are entitled to general damages for the procedural mistakes that rendered their termination unlawful and unfair. In *Mubbale Wycliff and 59 Ors v Makerere University^⁰* the Claimants were employed for ^a long period at about the same level as the present Claimants and were found to have been unlawfully terminated. We awarded them UGX 5,000,000/= each in general damages for unlawful termination. Having served the Respondent for varied periods ranging from the 1st of December 1998 for the 17th Claimant to the 20th of October 2003 for the 1st, 8th and 13th Claimants until the 24th of August 2015, on average earnings of UGX 170,965/= per month, we think that an award of UGX 6,500,000/= would suffice in general damages and we hereby award the same to each of the Claimants.

### **Interest**

**[65]** Citing *Kamegero,* Counsel for the Claimant sought interest at 20%. In *Mubbale, we* awarded interests at 10% per annum from the award date until payment in full. As Section 26 of the Civil Procedure Act Cap. grants the Court discretion to award interest, we award interest on general damages at 11.5% from the date of this award until payment in full.

### **Costs**

**" [20241UGIC ³²**

**LDR No. ¹³⁴ OF ²⁰¹⁷ Award Justice Anthony Wah^pMusana wpMusana**

**³⁰ LDR 022 of 2015**

- **[66]** Counsel for the Claimant prayed for the costs of the claim. He suggested that from the record of proceedings the Respondent had absconded from Court on many dates, promised to be available but wasted Courts time. He also argued that there were previous costs of UGX 1,350,000/= on the 17th of December 2019. Counsel for the Respondent abandoned his prayer for costs in the event of dismissal of the claim. - **[67]** Our dicta on costs is that they are awardable in the event of misconduct of the losing party. In the present case, adherence to the procedural requirements of a collective termination would have avoided this litigation. That would be considered pre-litigation misconduct. Regarding Mr. Opio's claim of Counsel for the Respondent's abscondment, we think that from the legal meaning of abscondment, it is impossible to say that the Respondents Counsel absconded from the trial. Counsel attended Court, though not as regularly as they should have. We are therefore satisfied that the Claimants should have the costs of the claim, but as the claim succeeds only on the declaration of unfair collective termination and general damages, the Claimants shall have one-half of the taxed costs of the claim. This is informed by the purpose of a redundancy termination, which is intended to cut an employer's costs.

## **Final Orders**

- **[68]** In the final analysis, we make the following orders; - **(i)** It is hereby declared that the Respondent's collective termination of the Claimants was unfair and unlawful. - **(ii)** Each Claimant is awarded the sum of UGX 6,500,000/= as general damages with interest at 11.5% per annum from the date of this award until payment in full. - **(iii)** The Claimants are awarded one-half of the taxed costs of the claim.

**It is so ordered.**

**Signed, dated and delivered at Kampala this 28th day of November 2024.**

**Anthony Wabwire Musana,** Judge, Industrial Court of Uganda.

**LDR No. 134 OF 2017 Award Jusl**

### Page 22 of 22

# **THE PANELISTS AGREE:**

- 1. Hon. Adrine Namara, - 2. Hon. Susan Nabirye & - 3. Hon. Michael Matovu

28th of November 2024

10:08 am

### **Appearances**

- 1. For the Respondent: - 2. For the Claimants:

Mr. Richard Habwanga The 1st, 2nd 3rd , 4th, 6th, 7th, 8th, 9th, 10th, 12th,

Mr. Charles K. Nsubuga

Mr. Samuel Mukiza

13th, 14th, 15th, 16th, 17th and 21st Claimants in Court. Mr. Mark Mugasha, the Respondent's Director Legal in Court.

Court Clerk:

Mr. Habwanga

Matter is for award, and we are ready to receive it.

Court:

Award handed down in open court.

Anthony Wabwire Musana, **Judge, Industrial Court of Uganda**

**LDR No. 134 OF 2017 Award JuslZe**