[2024] UGIC 11


# **THE REPUBLIC OF UGANDA IN THE INDUSTRIAL COURT OF UGANDA AT KAMPALA LABOUR DISPUTE REFERENCE NO. 007 OF 2022** *(Arising from LD No. KCC/NDC/L. C/153/2021)*

# **KAIMA GERALD ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::CLAIMANT**

# **VERSUS**

## **BRITTANIA ALLIED INDUSTRIES LTD :::::::::::::::::::::::::::::::::::::::::::::::::::::: RESPONDENT**

# **Before:**

The Hon. Mr. Justice Anthony Wabwire Musana

## **Panelists:**

- 1. Hon. Jimmy Musimbi, - 2. Hon. Emmanuel Bigirimana & - 3. Hon. Michael Matovu.

#### *Representation:*

- *1. Mr. Levis Karugaba of M/S Masanga & Co Advocates for the Claimant.* - *2. Mr. Yesse Mugenyi of Mugenyi & Co Advocates for the Respondent.*

#### **RULING**

## **Introduction**

**[1]** This ruling is in respect of a preliminary point of law raised by Mr. Karugaba, appearing for the Claimantfa/so *Respondent(Defendant) to the Counterclaim)* to the effect that this Court does not have the jurisdiction to hear and determine the Respondent'sfa/so *Counterclaimant)* counterclaim. By way of brief background, the Claimant lodged a claim seeking a declaration that the Respondent unfairly and unlawfully terminated him. In its defence, the Respondent filed a counterclaim seeking recovery of UGX 49,268,998/=, a loss occasioned by the Claimant's breach of the employment contract when he diverted three consignments of the Respondent's goods to an unknown destination. In the joint trial bundle, it was common to both parties that the Claimant was dismissed for diversion of goods. The dismissal letter is attached as CEXB12 and REXB14. Counsel filed written submissions, which we have summarised.

Page 2 of 5

## **Submissions of Counsel for the Respondent**

**[2]** Mr. Mugenyi, appearing for the Respondent, submitted that it was improper for the Claimant to file a reply to the Counterclaim. On the authority of **Ssentamu Joseph v Jibu Corporate Uganda Ltd¹** Counsel argued that having failed to file an application contesting jurisdiction, the Claimant was barred from disputing jurisdiction of this Court. In Counsel's treatment of the synopsis of the jurisdiction of this Court, he cited **Uganda Revenue Authority v RABBO Enterprise Ltd and Another[2](#page-1-0)** for the definition of jurisdiction as the authority bestowed on a Court by a statute to decide matters. We were referred to Section 8(1 )(a) of the Labour Disputes( Arbitration and Settlement) Act, 2006(from *now LADASA),* which enjoins the Industrial Court to arbitrate labour disputes referred to it. It was submitted that the word arbitrate means to adjudicate disputes.[3](#page-1-1) We were invited to find that the counterclaim is a labour dispute under Section 2 LADASA. Counsel argued that this Court enjoys referral jurisdiction and that under Section 93(2) of the Employment Act, 2006(7rom *now EA),* a labour officer handles a breach of the employment contract by either party. Mr. Mugenyi asserted that the reason for dismissal was a breach of the employment contract, which occasioned a loss to the Respondent/Counterclaimant, and this Court could entertain the counterclaim.

### **Claimant/Respondent to the counterclaim's submission**

**[3]** Mr. Karugaba agreed with his learned opposite number on the definition of jurisdiction. His point of departure was that this Court did not have original jurisdiction to handle a claim that had not been referred to it by the Labour Officer. He suggested that the forum for such a claim would be the courts of judicature. Counsel cited **Engineer John Eric Mugyenzi v Uganda Electricity Generation Co. Ltd[4](#page-1-2)** in support of his proposition.

#### **Rejoinder**

**[4]** In rejoinder, Mr. Mugenyi reiterated his submission in the main and only added that if the Claimant was disowning the dismissal letter, then he ought to withdraw the claim altogether. In effect, the Labour Officer could not have referred any matter without termination, which is the basis of the counterclaim.

#### **Determination**

**[5]** We think it necessary to quickly dispel Mr. Karugaba's notion that the Industrial Court is not a Court of Judicature because it is. In answer to the question of whether the Industrial Court was one of the Courts of Judicature, in **Justice A. Ruhinda Ntengye & Justice Lina L.**

H. C. C. S No 51 of 2021

<span id="page-1-0"></span>² S. C. C. A No. 12 of 2004. Counsel oiled other cases to the same effect.

<span id="page-1-1"></span>³ Per Wolayo J. in Leads Insurance Ltd v Kisuule & Sons & IRA H. C. M. C No. 17 of 2014

<span id="page-1-2"></span>⁴ C. A. C. A No. 167 of 2018.

**Tumusime Mugisha v Attorney General[5](#page-2-0) 6,** the Justices of the Constitutional Court were unanimous;

*"Our answer to that is yes. The Industrial Court is one of the Courts of Judicature as per Article 129 of the Constitution."*

That is all there is to the question.

- **[6]** Moving to the matter of jurisdiction, it is trite that the jurisdiction of the Court can only be granted by law, and if the Court conducts proceedings without jurisdiction, they are a nullity. ⁶ In **Baku Raphael Obudra and Another VS Attorney General[7](#page-2-1)** it was held that jurisdiction is a creature of statute. Jurisdiction cannot be assumed even with the consent of parties.⁸ - **[7]** The jurisdiction of this Court is an already resolved matter. The statutory pedestal of our jurisdiction is that the Industrial Court is established under Section 7 of the LADASA. Its functions are spelt out in Section 8, including arbitrating disputes referred to under the LADASA and adjudicating upon questions of law and fact arising from references to the Industrial Court by any other law. The Court, therefore, has referral and appellate jurisdiction. The Industrial Court has concurrent jurisdiction with the High Court of Uganda but does not have unlimited original jurisdiction in labour disputes.[9](#page-2-2) The Court of Appeal of Uganda has assisted enormously in guiding on the jurisdiction of this Court. In **Engineer John Eric Mugyenzi vs Uganda Electricity Generation Co. Ltd [10](#page-2-3)** it was held that the Industrial Court should use its jurisdiction to adjudicate on issues of fact or law under **Section 8(1 )(b) and 8(2) of the LADASA** to handle all labour disputes referred to it, including claims for general, special and punitive damages **which come under any other law** and can be adjudicated by the Industrial Court. In terms of this, the Industrial Court has jurisdiction to arbitrate and adjudicate on all labour disputes referred to it or as a matter of appeal from a decision of a Labour Officer. Such matters include issues of fact and law arising from the references to the Court by any other law, including actions in tort connected to or arising from the employment relationship. This Court regularly considers claims of defamation arising from the publication of a dismissal or termination[11](#page-2-4), declarations and social security benefits[12](#page-2-5). - **[8]** What is peculiar about the objection now is that the Claimant suggests that the Respondent may not lay a counterclaim before this Court. This is an odd argument considering the explicit provisions of the law. A labour dispute within the meaning of Section 2 LADASA is

<span id="page-2-0"></span>⁵ Constitutional Petition No. 33 of 2016 at page 12 line 21 of an original copy of the judgment.

⁶ Desai Vs Warsaw, 1967,E. A 351.

<span id="page-2-1"></span>⁷ S. C. C. A No. ¹ of 2005

⁰ The term jurisdiction is defined in Owners of Motor Vessel Lillian "s" v Caltex Oil Kenya Limited [1989] KLR ¹ cited with approval in Ozuu Brothers v Ayikoru Milka H. C. C. R 006 of 2016

<span id="page-2-2"></span>⁹ See Asaph Ntengye J. and Linda L. Mugisha J. vs A. G Constitutional Petition No. 33 of 2016. Under Section 94 EA this Court has appellate jurisdiction from decisions of the labour officer.

<span id="page-2-3"></span>¹⁰ C. A. C. A No 167 of 2018.

<span id="page-2-4"></span>¹¹ LDR 335 of 2017 Mutono Laban v Kampala International University A

<span id="page-2-5"></span>¹² LDC 208 of 2021 Avraham Avivi V SBI International I

#### Page 4 of 5

any dispute or difference between an employer or employers and an employee or employees or a dispute between employees. It is common ground that the Claimant and Respondent enjoyed an employment relationship. According to Black's Law Dictionary [13](#page-3-0) a dispute is a conflict or controversy, especially one that has given rise to a particular lawsuit. The dismissal letter (CEXB12 and REXB14), a document common to both parties, is also the basis of each party's respective causes of action: the termination and the ciaim for loss. There is a new and emerging jurisprudence of labour relations which is rooted, in our view, in the reciprocal duty of trust and confidence that underpins the employment relationship. Conflictual it might be, but in the employment relationship, the employers expect employees to have a level of trust and confidence, the breach of which would give rise to an employer's grievance. In our view, it is perfectly proper for an employer to bring their grievance to the Industrial Court; it is, after all, a labour dispute between the employer and its employee. Indeed, in **Lagu Emmanuel & Anor v ABB Limited and ABB Limited v Lagu Emmanuel & 2 Ors[14](#page-3-1)** the Industrial Court ordered ^a refund for a bonus overpayment made to an employee in error reasoning that the Respondent (employer) had proven the counterclaim.

- **[9]** There is also statutory support for the thesis that an employer can file a claim in the Industrial Court; Section 69(3) EA entitles an employer to dismiss an employee summarily where the employee has fundamentally breached his or her obligations arising under the service contract. Under Section 88(1) (b) and (c), EA severance allowance is not payable where an employee refuses to be reemployed unreasonably after dismissal or abandons and absconds from employment, potentially permitting the employer to commence an action for infringement of the Employment Act. It follows that the Industrial Court entertains and should entertain employer's grievances. For the reasons above, we would hold that this Court has jurisdiction to entertain the Respondent's counterclaim. The objection would be overruled. - **[10]** The other matter that merits comment is the Respondent's argument that the Claimant should have filed an application disputing jurisdiction. Counsel cited Ssentamu *(supra)* in support of this proposition. There is no judicial unanimity on the point. In Ssentamu, Wamala J. held that filing an application disputing jurisdiction was mandatory. His Lordship held that failure to do so means a defendant would be estopped from raising any further dispute to jurisdiction. The fundamental problem this stance raises is the forum in which a Claimant served with a counterclaim would raise their objection to jurisdiction because, technically, the defendant to a counterclaim has already filed a claim in the Court's jurisdiction. Mubiru J. took a different view in **Ozuu Brothers Enterprises Ltd v Ayikoru Milka[15](#page-3-2)** where His Lordship suggested an inevitable conclusion that filing a defence is a submission to the Court's procedural rather than substantive jurisdiction. A party who files a defence is not precluded from raising the issue of jurisdiction in the defence or as ^a preliminary point of law. In **Okullu Paul & Another v Ocepa Andrew[16](#page-3-3)** we preferred the

<span id="page-3-0"></span>¹³11th Edn by Byran Garner page 593

<span id="page-3-1"></span>¹⁴ Consolidated LDC No. 283 of 2016 [2022] UGIC 70

<span id="page-3-2"></span>¹⁵ H. C. Civil Revision No. 0002 of 2016

<span id="page-3-3"></span>¹⁶ LDR 09 of 2022

broader approach in Ozuu. We do not see any reason to depart from that persuasion. In our view, in the present case, the Claimant filed a claim before this Court and, upon receiving the counterclaim, would not be precluded from challenging the Court's substantive jurisdiction, which we firmly hold.

**[11]** In the final analysis, the objection to jurisdiction is overruled.

**Signed in Chambers at Kampala this 17th day of May 2024.**

**Anthony labwire Musana,** Judge, In qstrial Court

#### **The PaneHsts Agree:**

- 1. Hon. Jimmy Musimbi, - 2. Hon. Emmanuel Bigirimana & - 3. Hon. Michael Matovu.

#### **17th May 2024**

**9:56 am**

#### **Appearances by order of seniority**

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

Mr. Yesse Mugenyi. Mr. Emmanuel Banya.

Parties absent.

**Mr. Samuel Mukiza.**

Matter is for ruling.

Ruling delivered in open Court at 10:09 a.m.

Court Clerk: **Mr. Mugenyi:**

**Court:**

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