[2025] UGIC 13


# **THE REPUBLIC OF UGANDA IN THE INDUSTRIAL COURT OF UGANDA AT MBARARA LABOUR DISPUTE REFERENCE NO. 001 of 2022**

- **1. CALEB MPUMWIRE :::: CLAIMANT** - **2. MAGUME JENIPHER** - **3. NABAASAJONATH** - **4. ARAKA NICKSON** - **5. MARTIN KIJUMI** - **6. ATUHEIRE PENELOPE** - **7. KYARIMPA JOYCE** - **8. TWONGEIRWE SAFINA**

## **VERSUS**

# **MBARARA UNIVERSITY OF SCIENCE AND TECHNOLOGY RESPONDENT**

## **Before:**

The Hon. Mr. Justice Anthony Wabwire Musana,

### **Panelists:**

Hon. Adrine Namara, Hon. Susan Nabirye & Hon. Michael Matovu.

### **Representation:**

- *1. Mr. Crispus Bikogoma of Ngaruye Ruhindi, Spencer & Co Advocates for the Claimants.* - *2. Mr. Timothy Mugumya of the Respondents Legal Department for the Respondent.*

#### *Case Summary*

*Employment Law: Salary reductions in public universities: Role ofPublic Service in setting public service pay: Presidential Directive to enhance non-teaching staffsalaries. Eight claimants, employees ofa Ugandan public university, sued their employer over salary reductions. The university argued the reductions were due to a government-mandated harmonisation of salaries across public universities, implemented to correct errors in a previously agreed-upon salary structure. The claimants contested this, arguing the reductions were unlawful due to ^a lack ofnotice and consent. The court found the salary reductions procedurally unfair for lack of proper notification but substantively justified because they complied with government policies on salary harmonisation. Consequently, the court awarded each claimant general damages for the procedural unfairness but dismissed claims for exemplary damages and costs.*

**xj**

**LDR 00 of 2022IC Mbarara Award. A. Wabwire'ijlusana J.**

### **AWARD**

#### **Introduction**

- **[1]** On diverse dates between the 24lh of April 1992 and the 22nd of February 2016, the Claimants were employed in various positions by the Respondent, a public university established under the Universities and Other Tertiary Institutions Act Cap. 261 *(from now UOTIA).* Each of the Claimants was confirmed in service. The Claimants applied for loans from various financial institutions. The University Secretary and Bursar issued letters of recommendation confirming the salaries appearing on the Claimant's respective payslips. Sometime during the course of service, the Respondent adjusted the Claimant's salaries. The Claimants claim that the adjustments that reduced their salaries caused them anguish and inconvenience because they were left with nothing after deductions by the banks. With the assistance of the Labour Officer at Mbarara and the Ministry of Public Service, they asked the Respondent to reinstate their salaries, but the Respondent did not. They believe that the Respondent's conduct is arbitrary, egregious, highhanded, illegal, manifestly oppressive and unconstitutional, for which they are entitled to exemplary and general damages. They also approached this Court for a declaration that their salaries were reduced when they had done nothing wrong, an order of restoration, an order for payment of the balance or differences of their salaries, general and exemplary damages with interest thereon at 24% per annum from the date of judgment until payment in full and costs of the claim. - **[2]** In its memorandum in reply, the Respondent admitted the salaries paid in July 2016 at the rates specified in and given letters of undertaking upon which they sought loans. The Respondent contended that public universities determined their salary structures up to the financial year 2015/2016. At the start of the financial year 2016/2017, the Ministry of Public Service assumed the responsibility of guiding public universities on salary. It issued a harmonised salary structure on the 29th of July, 2016. The new structure contained lower salary rates than those previously set by the Respondent. By letter dated 8,h August 2016 and 10th August 2016, the parent ministries of the Government of Uganda directed the Respondent to pay salaries based on the new structure. The Respondent contended that the changes affected all its employees. The Respondent also argues that it explained the changes to the Claimants, the labour officer, and the respective financial institutions, restructuring some of the Claimants' claims and reducing them from eleven to eight. It was also contended that the Respondent did not intend to frustrate repayments of loan obligations. The Respondent also argues that the Attorney General was the proper party to be sued. It was also contended that the Ministry of Public Service had since enhanced the Claimant's salaries. Therefore, we were asked to dismiss the claim.

#### **The Trial**

**[3]** On the 23rd of November 2023, the joint scheduling memorandum dated the 23rd of November 2023 was adopted with two issues for determination, namely: 7 **-------""x •'!**

- \ \ LDR ⁰⁰ of2022IC Mbarara AwardJ4 Wabwire Musana J.

- (i) Whether the deduction of the Claimants' salaries was lawful and - (ii) What remedies are available to the parties?

### *The Claimants' evidence*

- [4] The documents in the joint trial bundle filed in Court on the 22nd of November 2023 were admitted in evidence and marked JEX1 to JEX 26. - [5] Six of the Claimants testified. The 1st Claimant, CALEB MPUMWIRE, testified to having been appointed in 1992 and promoted in 2013 to Senior Electrician. He said his salary was enhanced in 2016 after a series of letters. On the 8th of August 2016, he applied for ^a loan based on his enhanced salary, and the Respondent University confirmed his salary and terms of employment. In August 2016, his salary was reduced without his knowledge and consent. He brought this to the attention of the university secretary, who promised to rectify the anomaly. The secretary informed him that the decision to reduce the salaries was in accordance with the directives from the Ministry of Public Service(MOPS), Ministry of Finance, Economic Planning and Development(MOFPED) and Ministry of Education and Sports(MOES). He said he took the matter up with the Labour officer at Mbarara District Local Government. He then wrote a letter to the Prime Minister. Then, on the 23rd of April 2020, MOPS explained that the government had provided 50 billion shillings for salary enhancement. He said that the respondent's Chancellor had not done anything to date. It was his evidence that this conduct had caused him torture for six years. On this basis, he asked for the remedies before the court. - [6] Under cross-examination, he told us he was a public servant and respected the law. He said the Respondent was responsible for paying salaries, and it gets money from the government of Uganda. He told us that his claim comes from a deduction. He was shown JEX5, a letter from the MOFPED on salaries. He was also shown JEX 6 and said it was ^a letter from MOFPED to the Chairman of the Public Service Non-Teaching Staff Executives Forum(PUNTSEF) communicating the agreement on enhanced salaries and was copied to the Vice Chancellor of the Respondent. He was also referred to JEX7 and said it was the consensus note on harmonisation. Then he was referred to JEX8 and said the MOPS had confirmed reaching a consensus on enhanced salaries. He said it was not the MOFPED that determined public salaries but the respondent, a public university. When he was shown JEX12, he said he was aware of the letter and that it noted the mistake. When shown JEX20, he maintained that the Respondent determined salary. He said the Respondent was wrong to implement a salary structure given to it by the MOPS. It was his testimony that the government of Uganda did not have any responsibility in the matter. When he was soon shown JEX13, he told this Court that the respondent had explained why it had taken the action because the government had instructed it. He said he did not sue the government because the respondent had paid his salary. His evidence showed that the respondent was given money but refused to pay. He told us that he was not aware of the offer t'o restructure

the loans or any person who had taken the offer. He said he had not yet paid off his loans. He admitted that as a public university, the Respondent was required to follow the directives of the Government of Uganda. He also considered that the President's letter concerned all public universities, not only the respondent.

- **[7]** In re-examination, he told us that JEX9 was about errors and not deductions. The President's directive was fulfilled, and he was paid based on that enhancement. He told us that the Respondent presents its employees' names and salary structure to the MOPPED and MOPS. - [8] NABAASA JONATH, CW2, testified next, stating that he had been appointed an electrician and confirmed on 23rd June 2016. His evidence on salary payments, enhancement, reduction, and the effect of reduction on his loan was essentially the same as that of CW1. In cross-examination, he told us that the Respondent determined salaries but that whatever it pays must be with Government approval because it is ^a public university. He said JEX 2 did not mean that the Ministry of Finance determines staff salaries in public universities. When shown JEX 13, he said he was not aware that the Permanent Secretary of MOPS had cancelled the salary enhancement. He said he was not offered the loan restructuring and had not yet paid off the loan. He confirmed co-authoring JEX12. He said he did not see the reason for the deduction of his salary. He said he was aware of JEX20 but did not think that the Accounting Officer was in order to act on this letter. - **[9]** In re-examination, CW2 told us that the Respondent made the salary structure and that in JEX20, there was no directive for a reduction of salaries. - **[10]** ARAKA NICKSON CW3 testified next. He said he was appointed a Waiter at the University Inn on 11th November 1997. The rest of his testimony did not differ from CW1 and CW2. Under cross-examination, he told us that his salary in 2016 was better than what he was earning now. He said he thought the Respondent determined salaries under orders from the MOES and that implementing the ministry's orders would not be wrong. He said he was aware of JEX20 instructing all public universities to implement a structure different from the consensus note. It gave a new salary structure due to some errors and shortages in implementing the old salary structure. He conceded that the Respondent would not be wrong to implement this new salary structure. - **[11]** In re-examination, he also conceded that errors could have led to the salary reduction. He said the Respondent determines his salary as the employer, but errors may have led to a reduction of his salary. - **[12]** MARTIN KIJUMI CW4 told us that he was appointed laboratory technician by the Respondent on 22nd February 2016 and confirmed on 27lh July 2017. He repeated the testimony of CW1-CW3 on salary reduction and its effect on his loan repayments and asked for remedies similar to those of the other Claimants. In cross-examination,yhe said that employers determine salaries in public universities. He said the Respondent|akes.directives

LDR 00 of 2022IC Mbarara Award.. A. Wabwire Musana J.

from the Ministry of Public Service but was unaware that the MOPS makes directions. He said he was also aware that MOPS sets salary scales. He noted that from JEX16 and JEX17, the MOPS handles wage bills and salary scales. He told us that he was earning more now than in 2016. He said he was unaware of a new salary structure but had heard of PU12, ^a salary structure of public universities. He recognised JEX 25 as a Circular Standing Instructional No. 2 of 2021). He told us he was unsure if the Respondent could pay any amount outside the structure. He confirmed his loan based on an enhanced salary structure. He conceded to attending two mediation meetings with the Respondent, during which they offered to have the loans restructured. He said he knew Joyce Kyarimpa, who was no longer a Claimant but was listed in JEX12. He also told us that if his loan were restructured, he would pay more, that the restructuring would be costly, and that he had not planned for it.

- **[13]** In re-examination, he told us that he was earning more as he had applied for a job following an external advert where no MOPS was mentioned. He said the salary dropped after August 2016, leaving him with UGX 200,000/= to survive. He said the Respondent determined salary. - **[14]** JENIPHER MAGUME CW5 testified to being appointed copy typist on 30th December 2001. Her testimony mirrored CW1-CW4. In cross-examination, she told us she was a public servant serving a public institution. She said matters relating to the harmonisation of salary were not communicated to her. She said she was aware of the presidential directive on harmonisation of salaries. She said she was aware of the consensus note JEX7 and the scale M14, according to which she was entitled to UGX 1,350,868/= for non-science staff. She said she was paid in accordance with JEX20, which confirmed that money had been released, and in the new structure, she was entitled to UGX 708,218/=. She said she was not sure if MOPS had changed the structure. She conceded that the Respondent was required to follow government directives. She said she had not seen the salary structure under JEX 25, which applies to staff in public universities. She told us that she was not paid under this structure and was unsure how her salary was increased to UGX 900,000/=. She denied the offer of restructuring of loans. She told us she did not accept the offer because she was already in trouble. She said she did not know any staff member who took up the offer and was unsure if the Respondent was engaging the Government on salary harmonization. - **[15]** In re-examination, she said JEX20 does not specify deductions to her salary. She said JEX 25 is for the current structure. - **[16]** The Claimants' final witness, TWONGEIRWE SAFINA CW6, testified that she was employed as a Guest House Attendant on 25lh October 2012. She mirrored CW1's and CW5's testimony on salary enhancements, reductions, and loans. In cross-examination, she said she was aware of the presidential directive on harmonising salaries and the consensus note. She said she was not aware of JEX20. She told us that the Respondent follows the directives of GOU and can't operate without following those directives. She said she did not attend any mediation meetings. *x-------* '------------—■'"^1

in LDR 00 of 2022IC Mbarara Award.;/). Wabwire Musana J. I

- **[17]** In re-examination, she said the Presidential Directives on enhancing salaries were implemented for one month and maintained that the Respondent determines its salaries. - **[18]** After her testimony, Mr. Bikogoma closed the Claimant's case.

#### *The Respondent's evidence*

- **[19]** MELCHOIR BYARUHANGA(RWI), the Respondent's University Secretary since 2018 and Accounting Officer testified in support of the Respondent's case. He said that public universities determined their salary structure up to the FY 2015/2016. In FY 2016/2017, the GOU assumed responsibility first through MOFPED and MOES, with MOPS issuing ^a harmonised salary structure at the start of FY 2016/2017 based on a presidential directive and consensus note. Upon this new salary structure, the Respondent paid staff salaries on which the staff took loans and for which the Respondent issued letters of undertaking. He said that on the 29"' of July 2016, the MOPS issued a harmonised salary structure for all public universities that contained lower rates than those in the previous one. MOPS and MOES directed the Respondent to pay FY 2016/2017 salaries under the new harmonised salary structure. In its 229,h meeting, the Respondents' top management followed these directives beginning 1st August 2017. He also told this Court that at the time, the GOU was paying staff salaries, and these changes affected all staff as a GOU policy change to harmonize the salary structures of public universities. He said the Respondent had to abide. He said that during mediation before the labour officer, the Respondent explained the salary changes to the Claimants and offered to explain and engage the Claimant's bankers to propose restructuring the loans so that repayments could fall within revised salaries. He said some Claimants took this up, and four of the Claimants were removed from the claim. He said that the current salaries were now close to the earlier enhancements. He noted that the Claimants were not entitled to the remedies sought and asked us to dismiss the claim with costs. - **[20]** Under cross-examination about JEX20, he said he was aware of the procedure for the signature of documents. He said the salary structure attached to JEX20 was the first out of a consensus note. He said that GOU reduced salaries for August 2016 because it gave the Respondent a new structure. He told us the JEX9 was a request for UGX 2,344,620,372/=, but these funds were never released. He said the presidential directive on enhancement was never implemented because the funds were not released. He told us that the Respondent used money from its budget to pay wages. MOPS decided to reduce salaries, and the Respondent made its budget under the guidance of MOPS and MOFPED. It was his evidence that the Respondent is a department of GOU, and the Claimants were appointed by the Respondent's Council and were its employees. Regarding JEX19, he said the Respondent took action by engaging the Claimants in dialogue with affected staff and involving banks to reschedule the loans. He said the Public Universities Non-Teaching Staff Executive Forum(PUNTSEF) raised concerns. Still, it was GOU that revised the salary structure and that salaries for July 2016 were based on the salariesjn the cprisensus note.

In August 2016, corrected salaries were paid. When shown JEX23, he told us that salaries were based on instructions from MOPS. He said the letters of undertaking were issued in error but were based on good faith. He said when the labour officer noted that reducing salaries was negligent, the Respondent tried to engage with MOPS. MOFPED and MOES. He told this Court that the Respondent's mandate to pay salaries is quided by MOPS.

- $[21]$ In re-examination, RW1 told us that for FY 2016/2017, MOPS was in charge of all salaries in public universities because GOU wished to harmonise staff salaries. He said in July 2016, salaries were based on the harmonised consensus note and changed in August 2016 because MOPS could not cater for the harmonised structure, and a corrected salary structure reducing salaries was issued in JEX 20. He told us the Respondent engaged GOU and the Banks to restructure the loans. He told us that non-teaching staff are still being paid differently from teaching staff and that GOU wished to retain science staff and is paying them differently. - $[22]$ The Respondent's final witness, PATRICK TWESIGYE(RW2), testified as deputy university secretary of the Respondent. His witness statement mirrored RW1's in a near-perfect "copy" and "paste". Under cross-examination, he told us that the Respondent did not submit but only received salary structures from MOPs and processed salaries in accordance with the received structures. When referred to JEX7, he explained that this was issued when a new era of public university salaries was being made and before 2016, public universities determined their own salary structure. He said JEX 7 contained a jointly worked-out salary structure by MOFPED, MOES, MOPS, and workers, and it was what was used to pay salaries in July 2016. He said M.10 salary for science was UGX 3,689,791/=. Regarding JEX20, he said there were two salary structures, and MOPS diverted from the consensus note. He said he did not know if PUNTSEF was consulted. He also told us that MOPS is mandated to determine public servants' salaries. He told us that all 500 of the Respondent's employees were affected, and while they had not reached the levels in the consensus note, GOU maintained a gradual increase in salaries if one looked at the scale M1-M20. He said partial implementation of increments was based on MOFPED releases. He said despite meetings, letters and strikes, the level in the consensus note had not yet been reached. He told us the MOPS issues CSI's every financial year, and the IPPS makes payrolls. After crosschecking, MOFPED and MOPS pay the salaries. - $[23]$ In re-examination, he told us that universities submitted salary structures to MOPS following negotiations with His Excellency, the President of Uganda, regarding the directive on enhancing non-teaching staff salaries. He told us that today, all public universities have one salary structure and that the Claimants earned higher salaries than in the FY 2015/2016. When shown JEX 25, he said this was the salary structure for FY 2021/2022 issued by MOPS and addressed to all Public Universities to determine salary for all public servants. He said the 3^rd Claimant was at M12-Non teaching science UGX 2,096,071/=. According to the consensus note, M12 Non-teaching science was at UGX 1,285,770 and for FY 2017/2017, if UGX 1,431,933/ $=$ . He said that when the harmonisation process started in FY 2015/2016, universities were deriving their salaries, and since 2016, MOPS has

determined harmonised salaries. He said the Vice Chancellor and Associate Professors had reached 100%, and the others would increase gradually. He says that in July 2016, it was hoped that funding would come because the Respondent had a standing instruction to pay on the 28th of each month. When the corrected structure was sent for FY 2016/2017, the Respondent had to abide by it.

**[24]** After RW2's reexamination, Mr Mugumya closed the Respondent's case. We invited Counsel to file written submissions, which we have summarised and considered in the award. The Court is also grateful to Counsel for their research and the industry and authorities cited.

# **Determination.**

# **Issue ^I Whether the deduction of the Claimants salary was lawful?**

# *Claimant's submissions*

- **[25]** Citing *Byanju v Board of Governors St. Augustine College Wakiso'* and Section 2 of the Employment Act 2006, it was submitted for the Claimants that their contract of service governed their employment relationship with the Respondent. We were referred to JEX2, the payslips, and JEX 4, the letters of undertaking. It was suggested that the claim that the public service determined the Claimants' salaries was a fishing expedition. Based on Section 23(1) UOTIA, it was argued that the Respondent was a corporate body with perpetual succession, a common seal and the capacity to sue and be sued. Counsel contended that a Presidential Directive increased the Claimant's salaries on 3rd September 2015, and the Respondent proceeded and paid the said salaries based on a consensus note. It was submitted that on this basis, the Claimants obtained loans for which the Respondent had written letters of undertaking. - **[26]** The second proposition for the Claimants was that their salaries were based on the Respondent's salary structure after Parliamentary appropriations and GOU's release of the funds for FY 2016/2017. In the Claimants ' view, the decision to reduce their salaries was unconstitutional. We were referred to Section 59(1 )(e) and (4)EA, which provides for wages and for any changes to be subject to written notice and agreement with the employee. There was no notice to the Claimants that their salaries would be reduced. Our attention was also directed to Section 46(1)(a)EA, which provides for permitted deductions. Counsel relied on *Aijukye v Barclays Bank (U) Ltd\* [2](#page-7-0).* It was suggested that the Respondent did not seek the Claimant's consent before the deductions occurred. Based on Section 47EA, it was submitted that an employer would be liable to refund any remuneration wrongfully deducted or withheld from an employee's salary. Counsel submitted that the 229,h meeting of the Respondent's top management reducing the Claimants' salaries was without their consent and, therefore, unconstitutional. It was also submitted that JEX 20 directed the Respondent

^' 1201/JJGJC 20

<span id="page-7-0"></span>² [20191 UGIC ^I

to correct errors and not to reduce the Claimant's salary. Counsel also attacked JEX 20 because the person signing it did not show their name. It was also submitted that the consensus note was reached with the input of PUNTSEF but that the deductions did not contain PUNTSEF's input

**[27]** Counsel for the Claimant submitted that the Labour Officer had found the reductions unlawful and negligent. By JEX 18, the MOPS had directed the Respondent to handle FY 2016/2017 complaints, but the Respondent had not taken the necessary steps. We were referred to *Magdeline Mankileng Siwela v The City Of Tshwane Metropolitan Municipality & 2 Ors[3](#page-8-0)* for the proposition that unlawful deductions are reimbursable. We were asked to resolve the issue one in the affirmative.

## *Respondent's submissions*

- **[28]** Citing Section 22 UOTIA, it was submitted that the Respondent is a public university. Hence, the Claimants are public servants subject to Uganda's laws governing public servants. We were referred to the Public Service Standing Orders 2021 Section A part (a-a), which requires MOPS to manage human resources in the public service, including setting salaries. Counsel cited Section 62(2) UOTIA, which places the Respondent firmly under GOU's control. Therefore, in adjusting the August 2016 salaries, the Respondent must comply with approved salary structures under Sections 4,5, 6 and 7 of the Public Finance Management Act 2015 and Article 153(1) of the Constitution. - **[29]** Concerning the unilateral salary cut, it was argued that Respondent complied with MOES, MOFPED and MOPS directives contained in JEX 20, 22 and 23. By Section B part (B-a) of the Standing Orders, it is the MOPS's purview to determine salary and the Respondent's to implement the directives in accordance with Section 64(1) UOTIA. It was submitted that *Aijukye* and Section 59(1 )(e) and (4)EA did not apply to the present case. It was submitted that by JEX 24, the Claimant's salaries were increased by MOPS without the Claimants consent, but they did not object. It was suggested that this was a contradiction in the Claimants case. It was argued that the Respondent was not the correct party to be sued and that the claim should be dismissed with costs. - **[30]** It was also argued that using pp(per procurationem) is a standard practice in public documents, and we were asked not to disregard JEX20. - **[31]** Finally, it was argued that PUNTSEF is involved in an ongoing dialogue to improve nonteaching staff salaries in public universities. Counsel for the Respondent concluded that the deductions were lawful and the claim should be dismissed with costs.

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Page 10 of 19

# **Rejoinder**

[32] In rejoinder, the Counsel for the Claimants found the Respondent's arguments satirical and ironic because the deduction was unlawful and unconstitutional under Article 40 of the Constitution, a directive of the Permanent Secretary can subvert the EA and Constitution, the Respondent was a body corporate, the allegation that its employees are under public service was frivolous and vexatious as they had never been employed or paid by MOPS. It was also submitted that the Respondent cannot evade liability from its employees. It was submitted that the Standing Orders 2021 were inapplicable to a 2016 dispute and that the Public Finance Management Act 2015 did not permit unlawful declarations. Counsel maintained the Respondent's autonomy. It was suggested that MOPS has an oversight role and employment terms are vested in the University Council. It was submitted that by JEX 18, the MOPS required the Respondent to explain its steps to address the Claimant's grievances. It was submitted that the legislature did not intend employees of public universities to be under the public service. Counsel suggested that RW2 had contradicted RW1's evidence on appropriations for non-teaching staff. It was submitted that there was an illegality in the present case, and on that, on the authority of Makula International Ltd v His Eminence Cardinal Nsubuga & Anor, we were asked to find in favour of the Claimants.

# **Decision**

- [33] It was a common cause that the Claimants were employees of the Respondent. The 1st Claimant was employed as an electrician on 1st May 1992. He was promoted to Senior Electrician on 1s' March 2013 at Scale M10 range of UGX 21,919,217/= to UGX 22,432,004/= p.a with a responsibility allowance of UGX 11,000 per month. The 2nd Claimant was employed as a Copy Typist on 3rd December 2001. She did not indicate her starting salary. The 3rd Claimant was employed as an Electrician on the 26th of February 2014 and confirmed on the 23rd of June 2016. He also did not indicate his salary. The 4th Claimant was employed as a waiter at the University Inn on the 11th of November 1997. His starting salary ranging from UGX 1,384,160/= to UGX1,573,896/= per annum. The 5th Claimant was employed as a Laboratory Technician on 22nd February 2016 ranging from UGX 10,330,628/= to UGX 10,893,778/= per annum with a responsibility allowance of UGX 11,000 per month and footing allowance of UGX 10,000 per month. The 6lh Claimant was appointed Guest House Attendant on 25¹¹¹ October 2012, at a scale M20 ranging from UGX 5,561,464/= to UGX 6,305,244 per annum with a responsibility allowance of UGX 6,950/= per month and footing of UGX 10,000/= per month. The 7th Claimant was appointed Kitchen Attendant on 20th October 2009 at M20 with a range of UGX 3,126,728/= to UGX 3,740,045/= per annum, and housing allowance of UGX 21,920/= per month, footing of UGX 10,000 per month and responsibility of UGX 6,950/= per month. Finally, the 8th Claimant was employed as a guest house attendant, but she did not state her appointment date. - **[34]** The 8lh Claimant'^s evidence notwithstanding, there was consensus that all the Claimants commenced their respective appointments or tours of duty before July 20'1-6. From the pleadings and evidence of all parties, it is also common that in a.letter-datedjhe'3rd of September 2015, His Excellency, the President of the Republic of Uganda directed the Hon. Matia Kasaija, Minister of Finance, Planning and Economic Development to enhance salaries of non-teaching staff of public universities beginning with the FY 2016/2017. Any arrears due to non-teaching staff for FY 2015/2016 will be paid with enhanced salaries in FY 2016/2017. The letter was admitted as JEX5. It was also common that MOFPED agreed to enhance these salaries in FY 2016/2017 in accordance with the Presidential Directive. This was contained in the Secretary to the Treasury's letter dated 2nd May 2016(JEX 6). By ^a consensus note (JEX 7), ^a harmonised salary structure for non-teaching staff was developed. By letter dated 16th May 2016(JEX8), MOES sought UGX 55.892 Billion to cover FY 2015/2016 arrears and the wage bill for FY 2016/2017. By a letter dated 12th July 2016(JEX9), the Respondent sought funding from MOFPED to meet arrears and enhancements for non-teaching staff for FY 2015/2016 and FY 2016/2017.

- **[35]** It was common cause that Claimant salaries for July 2016 were enhanced and paid based on the harmonised consensus note. On this basis, the Claimants sought loans from various financial institutions and obtained some letters of recommendation from the Respondent. - **[36]** However, in August of 2016, the Claimant's salaries were reduced. The Respondent put this to a letter from MOPS dated 29th July 2016, by which Salome Nyamungu, for the Permanent Secretary, communicated some errors in the letter dated 26,h July 2016 by which salaries for non-academic staff in public universities had been communicated. By JEX 20, the Respondent was directed to correct the errors, and it was suggested that it received two other letters from MOFPED(JEX21) and MOES(JEX24), which reduced the Claimant's salaries. The Claimants contend that this narrative is illegal, unlawful and unconstitutional. Counsel for the Claimants directed our attention to *Siwela* before the Labour Court of South Africa. Ms. Siwela was accused of being absent in that case, and her monthly salary was deducted. Nkutha-Nkontwana, J established the threshold for deductions to be procedurally and substantively fair. The Court held that deductions without the employee's consent were illegal. Because she was not permitted to make any representations on the allegations of absenteeism before her salary was deducted, Ms Siwela was entitled to a refund of the deductions with interest thereon. - **[37]** In the present case, the facts are not similar to those of *Siwela.* In the present context, in July 2016, the Claimant's salaries were enhanced in accordance with the consensus note and in August 2016, the salaries were reduced. Deductions, as rightly submitted by Counsel for the Claimants, are set out in Sections 44 and 45EA, which relate to direct or indirect payments for purposes of obtaining or retaining employment which is expressly prohibited and deductions fortaxes, rates, subscription, contributions, pensions, provident funds, rent or union dues. These are statutory deductions and not salary reductions. It is, therefore, ^a question of whether this reduction was lawful or not, and it is the opinion of this Court that the question for determination is not about a salary deduction but ^a reduction. Under Order 15 Rule 5 of the Civil Procedure Rules S.l 71-1, the Court shall address whether the Claimants' salary reductions were lawful. And for these purposes this Court wjll, as it did in

LDR 00 of 2022 IC Mbarara Award. 4. Wabwire Musana J.

*Mugisa v Equity Bank Uganda Limited'* concern itself with whether the Respondent was procedurally and substantively fair. This is a standard yardstick in employment disputes. The threshold is whether the employer followed the procedure and whether the employer's decision was substantively fair and justified.

- [38] In addressing this question, the first consideration is whether the law permits salary reductions. Under Section 58EA, an employee is entitled to receive written notice of the particulars of employment from his or her employer. These particulars include wages and their computation. Under Section 58(4), any changes to any particulars agreed upon by the employer and employee must be notified to the employee. The provision, therefore, envisages the consent of an employee. Upon such consent having been obtained, the employer would be required to inform the employee of the changes. In the circumstances of the present case, there does not appear to have been express consent of the Claimants, first on the enhancement of their salaries, as this was a Presidential Directive in September 2015, or a reduction of the salaries in August 2016 on the back of letters from MOPS, MOES and MOFPED as the Respondent argued. Therefore, for the variation of the salaries by reduction in August 2016, without notice, we would hold that reduction was unlawful for want of consent and notice. This is a procedural defect. We would be fortified in this holding by the decision of the Industrial Court in *Kiyiwa and 13 Others v Makerere University⁵* where ^a unilateral variation of a contract of employment by redesignating the employee was considered unfair and unlawful. See also *Fredrick Ouma v Spectre International Ltd⁶* - [39] We find the decision in *Ouma* persuasive on the point of consent and notice in the present case because the Claimants, having had their salaries enhanced, obtained loans on the recommendation of the Respondent, who confirmed their terms of employment, including the enhanced salaries. Reducing their salaries one month later placed them at ^a disadvantage. For want of notification, we would find the reduction of the salaries unfair. - [40] The other important consideration in this case is whether the reduction was substantively fair or justified. There were competing hypotheses on who set or determined the Claimants' salary. The answer to this question is important because it addresses the legal basis for the salary reduction and its substantive fairness and legality. The Claimants suggest that the Respondent is autonomous and that the employment contract sets salary. The Respondent submits that it is now a public university, but before 2016, it had the power to set its salary. We agree with the Respondent'^s proposition. Under the UOTIA Cap. 262, public universities are established. Section 73 UOTIA repealed the Mbarara University of Science and Technology Statute of 1989, placing the Respondent squarely under UOTIA. Under Section 62(2)(a) and (3), the estimates for salaries, allowances and charges in respect of staff of ^a public university are subject to parliamentary approval. Therefore, the Claimant's arguments on autonomy fall short of this statutory pedestal. There was a restrictive canvassing of the UOTIA in that the Claimants restricted their reading to Section 22 UOTIA.

[20231UGJC62 /[ bi LDR 00 of 2022 IC Mbarara Award. A. Wabwire Musana J.

s[2024]UGIC6I

^s [2013] eKL ^R *U*

While a public university may be established as a corporate body, parliamentary approval of its expenses is incompatible with financial autonomy.

**[41]** Perhaps even more importantly, under Section 6 of the Public Service Act Cap. 91(from *now PSA)* it is provided that the MOPS shall have authority for the overall management and administration of the public service, including the formulation and review of policies relating to structure, management system and the terms and conditions of service and shall receive and consider on behalf of Government, proposals for remuneration and benefits of persons whose emoluments are payable directly from the Consolidated Fund or out of money provided by Parliament. This means that the MOPS does not subvert the Constitution or the Employment Act as Counsel for the Claimant would have us believe. The MOPS carries out its mandate subject to the Constitution. The opening of Section 6 PSA reads " *Subject to the provisions of the Constitution".*

**[42]** The salary enhancements that triggered this dispute were a Presidential Directive in the exercise of Executive Authority. By JEX5, MOFPED was directed to enhance salaries for non-teaching staff of public universities in an appropriate manner. Accordingly, the MOPS was responsible for guiding public universities by issuing ^a harmonised salary structure in July 2016. The salaries in JEX5 were to be enhanced in an appropriate manner. By the Permanent Secretary/Secretary to Treasury'^s letter "JEX 6", it was noted that an agreement had been reached with PUNTSEF that beginning FY 2016/2017, salaries for non-teaching staff in Public Universities will be enhanced in tandem with the salaries of the teaching staff for all Public Universities. This was followed by a consensus note, which required public universities to submit their payrolls to prepare a harmonised salary structure. PUNTSEF was represented at a meeting with MOFPED, and public universities were required to submit salary structures and differentials in top-up to develop a single spine structure across all public universities. A document dated 13th May 2016 reflecting M1 at UGX 9,911,657 to M22 at UGX 755,133 was attached to the consensus note. On 16th May 2016, MOES wrote to MOFPED advising it of the harmonized salary structure and requesting funding. On the 12th of July 2016, the Respondent wrote to the PSST/ST, seeking an additional UGX 2,344,620,372/= to meet the harmonised salary. By JEX 11, the Respondent informed the Claimants that by letter dated 8th August 2016(JEX21), the MOFPED had directed salary to be paid in accordance with the MOPS letter dated 29th July 2016(JEX 22). MOES repeated this in JEX24.

**[43]** In our view, the Respondent implemented a harmonized salary scale based on a consensus note before MOPS, MOES, and MOFPED finalized the same. In effect, the formal final instrument determining non-teaching staff salaries in public universities had not been issued. Counsel for the Claimant objected to the application of the Public Service Standing Orders 2021. It was his view that they did not have a retrospective application for a salary enhancement in 2015. In *Kanimi Kaqand^a ^v Ntoroko District Local Government/* Waqona J. dealt extensively with the setting of public salaries. His Lordship examined salary in

LDR 00 of 2022IC Mbarara Award.;/]. Wabwire Musana J.

Section 10 of the Public Service Standing Orders 2021. SectionlO B part (B-a) items 2,5,6,7 and 8 provide that:

> 2. *A public officer who has been appointed, deployed and has assumed duty of the post, has a right to receive ^a salary in return for the services he or she renders to Government.*

> *5. The salary structure for the Public Service shall be determined in accordance with the pay policy of the Public Service.*

> *6. The Salary Structure shall indicate salaries attached to each salary scale in the Public Service and shall be issued by the Responsible Permanent Secretary through Circulars issued from time to time.*

> *7. Salaries shall be fixed at annual rates and paid in twelve (12) equal instalments. Salaries shall be paid correctly, promptly and as a lumpsum in accordance with the approved salary structure for the Public Service.*

> *8. No increases in salaries may be implemented without the approval of the Responsible Permanent Secretary, except the prescribed annual increment for which a public officer may be eligible in accordance with the provisions of subsection B-c*

- **[44]** From an examination of the above, Wagona J. concluded that all public salaries are ^a function of public policy. Therefore, the question in the present case would be the policy upon which the Claimants anchor their claim for enhancement. The public service suggested that there were errors in the harmonised salary structure. The MOPS is responsible for setting public salaries. Section ^B of the Uganda Public Service Standing Orders, 2010, reads exactly as the 2021 edition. The provisions above are reproduced verbatim from the 2010 Standing Orders. That would render stale the Claimants' argument of retrospective application. Therefore, the requirement to demonstrate pay policy would still stand under the Standing Orders 2010 as in the Standing Orders 2021. - **[45]** In our estimation, absent of policy, the Claimants' claim would be without foundation. For illustration, on the 30th of June 2024, the Permanent Secretary of the MOPS issued Circular Standing InstructionfCS/^ No. 14 of 2024, which set the salary structure for FY 2024/2025. Under this CSI[8](#page-13-0) the salary structure for public universities is provided in Schedule 12 under which non-teaching staff both science and non-science are in Scale PU-3 to PU-22. In keeping with *Kaganda,* we are inclined to the view that the Claimants salary enhancements were subject to the approval and authority of the Responsible Permanent Secretary at the

LDR ⁰⁰ of ²⁰²²IC Mbarara Award:4 Wabwire Musana J.

<span id="page-13-0"></span>⁸ See also see CSI No. 3 of 2023. Circular Standing Instructions may be accessed on <https://www.publicservice.go.ug/>

time the Respondent implemented the salary increments. Wagona J. holds in *Kaganda* that the Court is not in the business of setting salary scales. The Court's role in a salary inquiry would be limited to procedural and substantive fairness. In Makerere University v Kitumba⁹ the Industrial Court took the view that the guidance of the Permanent Secretary MOPS on pay policy set the salary at the Appellant University. In that case, the Court affirmed the MOPS's role in guidance on salary classifications for computer scientists in public universities. It is the view of the Court that the Presidential directive for the enhancement of non-teaching staff salaries would be implemented in accordance by way of pay policy issued by the MOPS. Section 6(1)(b) of the Public Service Act enjoins the MOPS to receive and consider proposals on behalf of the Government for remuneration. Thus, when a Presidential Directive on enhancements of salary for non-teaching staff is issued, it is received and implemented by MOPS.

- $[46]$ We agree with this dictum and would hold that, in the present context, the directive on the enhancement of non-teaching staff salaries was required to be implemented by the MOPS, MOES and MOFPED in an appropriate manner. Indeed, there is evidence that the Claimants' salaries have been improving gradually since 2016 and stood at about 75% of the long-term pay targets as of 23rd April 2020, according to the MOPS in JEX20. CSI 3 of 2023 and CSI 14 of 2024 also demonstrate enhancements in non-teaching staff salaries now place the 1^st Claimant at 94% while the 5^th to 8^th Claimants have exceeded their salary enhancements. Therefore, the MOPS is implementing the Presidential Directive in a phased manner, in our judgment. It is not the duty of an Employment and Labour Relations Court to impose its abstract view on what the remuneration of public service employees should be. That is a preserve of MOPS. The Court must see that the processes, procedures and decisions are procedurally and substantively fair. We have already established that the sudden reduction of salary was without notice and consent of the Claimants and that the Respondent in reducing the salaries was abiding with the MOPS. MOES and MOFPED directives which are justifiable policy considerations in our view. - **[47]** The other hypothesis that Counsel for the Claimant suggested is that the decision to reduce salaries was unconstitutional. Indeed, Article 158 of the Constitution provides that once the salary of a holder of public office is charged to the consolidated fund, it shall not be altered to his or her disadvantage. Article 158 is preceded by Articles 154(1) and 156(1). Article 154(1) precludes the withdrawal of any money charged on the consolidated fund without parliamentary approval. Article 156(1) provides that no money shall be withdrawn from the consolidated fund except to meet expenditure that is charged on that fund by the Constitution or by an act of parliament. - [48] Further, under Section 30 of the Public Finance Management Act Cap. 171, (PFMA) withdrawals from the consolidated fund are regulated upon issuance of a warrant by the Minister to the Accountant General and such issuance is authorised for a financial year, is a statutory expenditure, is repaying money received in error by the fund or is an advance, refund, rebate or drawback.

⁹ [2021] UGIC 59

LDR 00 of 2022 IC Mbarara Award. A. Wabwire Musana J.

- **[49]** The enactments of the constitution and PFMA read into the PSA and the role of MOPS. The policy on the enhancement of salaries for non-teaching staff in public universities and indeed the entire public service is gradually improving subject to the public resource envelope and as evidenced by the CSI. Evidently, in the present case, pay for Professors has now reached 100% enhancement. The 1^s\* Claimant is at 94% of the long-term enhancement while the 5lh to 8lh Claimants have exceeded their enhancements. - **[50]** In the matter before us, the MOES, MOFPED and MOPS were in the process of implementing the Presidential Directive in an appropriate manner when the Respondent paid salaries based on the consensus note and harmonized structure therein. As indicated above, pay policy would require the Responsible Permanent Secretary's completion per the PSA and the Public Service Standing Orders except that the salaries were varied without notice and consent. In our view, there was substantive policy justification for the reduction. We are persuaded in this view by Professor John Grogan in "Workplace Law", who writes about the South African Basic Conditions of Employment which permits the variation of terms of employment to give effect to any relevant law or wage regulating measure. We think, therefore, that the reduction in the Claimants' salaries for purposes of complying with pay policy was not unconstitutional, egregious, high-handed, arbitrary or manifestly oppressive as Counsel for the Claimants would have us believe. It was based on policy considerations under PSA. - **[51]** In conclusion, while we find the Respondent varied the Claimants enhanced salaries without notice and was procedurally unfair, the variation was necessary for the Respondent to abide by the MOPS directive to correct errors in the harmonised salary structure. Public servant's pay is subject to pay policy. We would, therefore, answer issue one in the affirmative in respective of the procedure for reduction of the Claimant's salaries but hold that the Respondent was justified in reducing the salaries as it was abiding by a lawful wage correction measure.

# **Issue II. What remedies are available to the parties?**

**[52]** Having found as we have, the Claimants will be entitled to remedies, the first of which is ^a declaration that the reduction in their pay was without notice and, therefore, procedurally unfair.

#### **General damages**

**[53]** On general damages, the Respondent took the view that the Claimants were not entitled to any remedies because it was adhering to MOFPED, MOES and MOPS directives. Conversely, we have found that under Section 58EA, the Respondent was required to give the Claimants notice of the changes or reduction to their salaries.

LDR 00 of 2022IC Mbarara Award. A Wabwire Musana J.

- $[54]$ Our attention was directed to the Claimants having taken bank loans on letters of recommendation from the Respondent. Counsel cited Maruri Venkata Bhaskar Reddy and 2 Others v Bank of India (U) Limited¹⁰ for the proposition that general damages are awarded at the discretion of the Court to restore the aggrieved person to the position they would have been in had the wrong not occurred. - $[55]$ In *Reddy*, Wamala J. observed that general damages are the direct natural or probable consequence of the act complained of. We have already found that the Respondent had good reason for varying the Claimants' salaries. For this reason, we think that while the Claimants' are entitled to general damages, in *Uganda Post Limited v Mukadisi*¹¹ the Supreme Court set principle considerations for awarding general damages in employment disputes in that general damages can be awarded to compensate the employee for noneconomic 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. - $[56]$ We have found that the Claimants were not notified of their salary reduction, so they are entitled to general damages. In terms of quantum, in Amolo and 20 Others v Makerere University Business School¹², we found the Claimants to have been unlawfully terminated on procedural grounds following a government directive to public universities to phase out kitchen staff. The Claimants had worked for the Respondent for 10 years on average and we awarded UGX $6,500,000/$ = each in general damages. In the present case, for the inconveniences they have experienced, we award the Claimants UGX 5,000,000/= each in general damages.

### **Exemplary damages**

- Counsel for the Claimant referred us to Rookes v Banard¹³ and El Termewy v Awdi & Ors¹⁴ $[57]$ for the proposition that exemplary damages are awarded where Government servants have been oppressive, arbitrary or unconstitutional, where the defendant's conduct has been calculated to make him a profit which may exceed the compensation payable to the plaintiff and where some law authorises the award of exemplary damages. - [58] In the present case, we are not persuaded that the Respondent's officers, whom the Claimants contend were not public officers, were arrogant and or acted in a manner that would attract Lord Delvin's dictum from *Rookes* to punish the Respondent because while exemplary damages can be used in defence of liberty, they can also be used against liberty. In our view, the Respondent's officers were abiding by MOPS, MOES and MOFPED directives, which they were duty bound to do and did not traffic the Claimants as did the Defendant in *El Termewy*. There was even an attempt to renegotiate the loans taken out.

- ¹² [2024] UGIC 74 - ¹³ 19641 UKHL 1

LDR 00 of 2022 IC Mbarara Award. A. Wabwire Musana J.

<span id="page-16-0"></span>^&lt;sup>10</sup> (2022) UGCommC 60

^&lt;sup>11</sup> [2023] UGSC 58

^&lt;sup>14</sup> [2015] UGHCCD 4

This was not malicious and oppressive conduct. There is, therefore, no justification for the exemplary damages as prayed.

# **Costs**

**[59]** Costs in employment disputes are the exception on account of the employment relationship except where the losing party has been guilty of some misconduct.[15](#page-17-0) In the present case, we are not persuaded to award the Claimants the costs of the claim as the Respondent was both procedurally unfair but had substantive reasons to abide by the MOPPED, MOES and MOPS directives.

# **Final Orders**

[60] In the final analysis, we find that the reduction of the Claimants' salaries was procedurally unfair, and we award each of the Claimants UGX 5,000,000/= in general damages. By reason of our finding of substantive justifiable reduction in salaries, there is to be no order of restoration of salaries. Costs of the claim shall burden neither party as the litigation rests on ^a matter of public interest for all non-teaching staff inoublic universities.

| 2. Hon. Susan Nabirye & | | |-------------------------|--| | 3. Hon. Michael Matovu. | |

<span id="page-17-0"></span>LDR 00 of 2022 IC Mbarara AwardJ/j- Wabwire Musana J.

**27\*^h January 2025**

**11.51 am**

**Appearances**

**1. For the Claimants:** Mr. Crispus Bikogoma for the Claimants **2. For the Respondent:** Mr. Timothy Mugumya for the Respondents The Claimants are in Court No representative of the Respondent.

Court Clerk: Mr. Samuel Mukiza.

Mr. Bikogoma: Matter for award, and if it is ready, we are ready to receive it.

Page 19 of 19

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