[2011] UGHC 197

## **THE REPUBLIC OF UGANDA**

# IN **THE HIGH-COURT OF UGANDA AT KAMPALA**

**HCT-00-CV-CS-0118 OF'2008**

**HUDSON MUSOKE::::: PLAINTIFF**

### **VERSUS**

#### **UGANDA REVENUE AUTHORITY ■-"DEFENDANT**

### **BEFORE: HON. LADY JUSTICE ELIZABETH MUSOKE**

### **JUDGMENT**

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The alleged plaintiff sued the defendant for special and general damages for wrongful dismissal and/or terminal. benefits, unpaid gratuity, |o 'repatriation allowance, interest and costs of the suit.

During the scheduling conference, the following facts were agreed:

the **• K** 1) By letter dated 24/3/2000, the defendant appointed the plaintiff and plaintiff accepted the appointment to the position of Principal Revenue Officer/Legal.

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- •• nf the defendant by letter 2) The plaintiff was confirmed in the service or dated 4/12/2000. - promoted the plaintiff to the rank of Senior Principal Revenue Officer/Legal. 3) The plaintiff executed his tasks and responsibilities dilige defendant - consequent whereof, the plaintiff was interviewed by the Board of Directors and appointed Manager Prosecution with effect from 18/4/2005. \* 4) In the year 2005, the defendant underwent a restructuring exercise - 5) On the 20th July 2005, the plaintiff's services with the defendant were terminated by letter.

The agreed issues were:

- terminated. 1) Whether the plaintiff's employment with the defendant was wrongfully - benefits were paid, and if so, whether they were .^T) 2) Whether any *properly- paid.*

is entitled to any reliefs. *3) Whether the plaintiff*

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^presented by Mr. Peter Walubiri while the defendant, representation several times, ended up with Mr. Matthew who changed Mugabi. The Plaintiff was

Clause 14. 2 of the Human Resource Manual Manual (HRM). He denied any knowledge of a letter from the defendant dated 3/8/2005 rectifying the clause from 14.2 to 13.2 (Exhibit DI). The plaintiff was the sole witness for his side-whole the defendant called evidence of four witnesses. Aged 46, at the time of giving testimony, the plaintiff testified that he rapidly rose through the ranks due to his extremely good and exemplary performance, but was surprised to receive a letter from a Head of a department other than his, terminating his services under

The plaintiff further testified that he lodged an appeal against unlawful termination of his services, with the Chairman Board of Directors (BOD) of 'fC, th Defendant copied'to the Commissioner General, and Commissioner, ond Board Affairs as per the Human Resource Manual Legal Services ana ouaiu Manual (Exhibit"PJ"). whereby he complained that.

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- appointing authority, the Board of Directors, had not passed any resolution to the. termination his services. - 9hts under rules of natural justice as embedded in Clause 12.1.5(f),

12.l2(b) (c).(d); 12.1.4. of the Human Resource Manual Manual were violated as he did not know why he was subjected to such disciplinary action.

iv) Clause 13.2 indicated for termination did not apply to him.

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- v) The sighato.ry of termination letter was not an authorized person. His line Commissioner ought to be the one to discipline him. - . vi) The termination letter was so abrupt and backdated to a week earlier.

Bank had no relationship with the defendant's indebtedness .applied to allegedly guaranteed by the defendant, which was not the case. SCB took court without joining *obligation to pay ' computation of his benefits by the defendant.* the "guarantor"; the plaintiff's **Us** the plaintiff to to the his terminal benefits. The plaintiff further disputed the He did not\* receive any reply from the Board of Directors at all. Neither did he receive- his terminal benefits which the defendant' claimed had been the settlement of a Standard Chartered Bank (SCB) loan

been the court on behalf of the defendant court on 14/7/2005 when he got better, and before his termination. subjected to writing or. asked ln cross'examination Chartered Bank, not his terminal benefits; he had no outstanding advances unaccounted for; his non-appearance for' was due to sickness and he later attended S the plaintiff denied ever having a drinking problem or any\* disciplinary action; he had not been warned in to explain any employment related issue; he had been 9 nt in his work resulting in promotion. Regarding the loan with SCB1, defendant only committed himself to pass over monthly deductions from his salary to the Standard

For the defendant, DW1, Mr. Kazibwe, Moses Kawumi, the immediate boss of the plaintiff throughout his tenure at the defendant, testified that the When the plaintiff.failed to appear again on the terminated. ' to his Commis-- DVV1 pointed out an plaintiff was a good lawyer who on the whole had performed his duties ■satisfactorily sometimes, however, he absented himself from work. DW1 incident when the plaintiff missed appearing at for the defendant in a case at the Tax Appeals Tribunal TAT); the incident that led to the plaintiffs termination t hich the matter had been adjourned, DW1 had referred the matter issioner for action. He later learnt that the plaintiff had been SS admitted that he had never demanded for any written

he DW1 had recommended the body. The appearance. Qarding the plaintiff's work alleged earlier infractions; though 9 ve a written warning on 8/7/2005. ^r special duties and promotions as per Exhibit "PF" and "PG". He n°t a.ware of any appearance by the plaintiff before any disciplinary plaintiff had eventually appeared before the TAT, and the defendant had not suffered any financial loss due to plaintiff's earlier non-

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Department under which the plaintiff worked testified that the plaintiff was .a good lawyer, intelligent, enthusiastic and social, but his performance was from his home Icohol and looked dis-shevelled.- She counseled him as she' smelling of ^a affected by personal challenges that included coming to work while under the influence of alcohol. She had also got reports from staff, and DW2, Ms. Jenifer Semakula-Musisi, the Commissioner heading the n.improus occasions before. However, this time she went had done on numeruu . , ^f"rrprⁱ the matter to the Management Executive Committee' further and reterreu . \* ^a thp olaintiff. DW2 had participated in the meeting which ^I nC which termjnated int ^p 'management on this. DW1 had reported to her the failure by the plaintiff to attend at the TAT for a case, which prompted her to forcefully summon him' to her office. While there, he said he was sick but was.

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was not summoned, to the meeting. terminated'beplaintiff,butthep|aintiff VSr aPPeared before that committee, prior to termination.

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' was no part of the disciplinary procedure envisaged by the |VO defendant. 2 had herself never written to the plaintiff any warning letter, and there record of the counseling sessions she held with the plaintiff which she said were

DW3 was the defendant's financial controller, Sekimpi Joshua, who testified that he computed the plaintiff's terminal benefits. He explained how. he arrived at the computation of the benefits, saying that the balance, after deducting what the plaintiff owed the defendant, and all statutory )1^ deductions, was sent to Standard Chartered Bank to settle the plaintiff's The defendant sent ^a total of Shs. 13,657,841= to the outstanding loan. Bank.

DW4 Grace Muliisa, was an official from Standard Chartered Bank Ltd. Sh t stifled that Bank and the defendant had signed a Memorandum of |Q\_e d ncJjng (MoU) whereby the parties agreed that the defendant would bed monthly instalments from employees with loan facilities from

employment defendant. Before the Bank had the plaintiff arrested for defaulting, they had held confirmed receipt by the Bank of the plaintiff's terminal benefits from the ) If the employee, however,' lost his status with the defendant, the letter would pass on that IcZy employee's terminal benefits to the Bank. All the employee was required todo was to fill an application form with a recommendation from the employer/defendant. the Ban\* and send ⁱtt0 the Bank employed by the some discussions which bore no fruits. DW4 . This was as long as such employee was defendant.

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On whether the plaintiff's employment with the defendant was wrongfully terminated, it was the plaintiff's case that Clause 14.2 under which the to Clause 13.2 as the plaintiff had already left the' In any case he did not receive the letter. Clause used alcohol clause did not apply to automatic dismissal but for The procedure. or narcotics would be subjected to disciplinary plaintiff's termination member who to rectify the same defendant's employment. 14 2 2 the only provision that could be construed to be the basis of the under Clause 14.2 was to the effect that any staff plaintiff was terminated vide Exhibit "P.1" did not apply to the plaintiff and any belated attempts by the defendant were functus officio in their attempt

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had to be in accordance with Clause 12.1.5 (f) procedure as disciplinary action, which and (g) of the Hu man Resource Manual. Since there was no disciplinary envisaged under Human Resource Manual, the termination wrongful, and it could not be termination under Clause 13.2 under which the plaintiff was never terminated.

*2005* to support his proposition that termination under Clause 14.2 of the of misconduct against the plaintiff in the amended plaint, that is to say, attending an official function while drunk and disorderly; failure to satisfy or was embarrassing even in court. The only evidence adduced related ¹ AT? offset probationary obligations or requirements; conduct that discredited or to the defendant, were never proved either at a Counsel c the plaintiff ne'd Articles 43, which guaranteed the right to a just and fair Human Resource Manual was not termination on notice or payment in lieu of notice but unlawful dismissal. He further submitted that the allegations ^I Mr. Walubiri relied on *Bank of Uganda Vs Tinkamanyire Civil Appeal No. 49 of* a -fair hearing on the allegation of absenteeism. This disciplinary hearing or a to the failure by plaintiff to attend court 2 times to which the plaintiff gave idence that he had been sick but went to court as soon as he improved. ontended that the most fundamental flow was failure to accord

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**I** treatment before aⁿ administrative body/Tribunal and 173'(b) that barred ublic Servants without just cause. Further, Clause 12.1.2. of an Resource Manual which provided for hearing by a disciplinary mittee of cases of gross misconduct by staff in plaintiff's category, was never adhered to. Even the plaintiff'^s appeal to the Board of Directors t-^5 under Clause 12.2.5. was never responded to.

On the right to a fair hearing, Counsel further'submitted that both DW1 and Counsel relied Betty Tinkasimire's case to be implied by courts of law where a Statutory DW2 accepted that apart from the letter from DW1 to the plaintiff when he missed court, and the informal talk in DW2's office, the plaintiff was not subjected "to any formal disciplinary process. Neither the Management Committee-that terminated him nor the Board of Directors ever summoned form of protection was /W *^G sasira Vs IGG aild Attorney General, CA No. 62 of 2009* to state that f ^e should not only be done but should be seen to be done. the plaintiff to hear his side. (Supra) and *Mellock Vs A. Bardeen Corporation [1971] 2 ALL ER 1278* for the that the right to be heard in a person's defence was a very proposition fundamental protection less effective or did not include it. He further relied

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Cou ^| concluded by asking court to hold that the plaintiff'^s employment Rgfully terminated and the acts of the defendant were oppressive.

" Manual and the staff Code of Conduct, which enjoined him, inter alia, to **I** uphold ^a high • level .of integrity, ethical values and'professionalism in • handling all personal and corporate transactions. He was also to be on .for termination by either party of the contract on giving 2 months' notice. probation for 6 months. Further, the plaintiff's contract of service provided *IT* reason. (See *Robert Mukembo Vs Ecolab EA (U) Ltd CS No. 54/2007).* The plaintiff was contractually bound to abide by both the Human Resource ¹ , C°unseⁱ for the defendant, did not agree. He submitted that there was a proper reason for termination of the plaintiff's services and that the defendant acted reasonably in treating the reason for dismissal as sufficient-

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**I** fair. He absenteeism relevant to determine whether termination was just and the testimony of DW1 that there was marked to termination were relied on by the plaintiff from work, pointing out the incident when the-Counsel relied on *Kayondo Vs The Cooperative Bank CS 899/89* for the proposition that an employer is not bound to give reasons for terminating /ices of his employee, but evidence showing circumstances leading IIIt\* OCI Vlv

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Plaintiff failed tn =» attend the TAT hearing. Even after DW1 met him in the evening of the day of hjs the absence. misdemeanours, was, vide the Human Resource Manual, punishable by either surcharge, written warning, suspension or termination. Absenteeism which fell under 2\_C medical evidence. non-appearance, no explanation was offered for The .allegation that the plaintiff had been sick was not supported by

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On whether the plaintiff was warned before termination, Counsel submitted **I** DW1 warned the plaintiff three times in line with the provisions of the Human Resource Manual which encouraged giving opportunity to staff to **I I** considered very crucial and non-attendance was viewed , that the plaintiff was verbally warned several times as per DW1 and DW2's testimony of friendly warnings and counseling. According to his testimony, ⁵ ' attendance was seriously even where no monetary loss was reported. plaintiff's career, .improve before more serious disciplinary action was taken. [See Clause 3 0 page 77 of the Human Resource Manual], DW2 who had got complaints from several quarters said she had initially taken a counseling approach knowing that documenting anything would be detrimental to the until she took matters to a higher level. She said court

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**1** the 173 (b) of the Constitution did not apply to the (Clause 3.0). Further, Clause 12.1.4 provides for preliminary action to be ' taken in case of mis-deminours, which is that the staff <shall.be> required to him of the Human Resource Manual and need to notify the defendant when She then counseled him on absenteeism and supposed drunken 'sick. **I to** appearance. DW2 further testified that the plaintiff was thereby subjected disciplinary proceedings as on that occasion she had given him an explain his conduct which he did not satisfactorily do. 2\_Z> was not a public servant. And although He was fair hearing, in the case of mis-demeanours under which the plaintiff s case fell, the procedure for disciplining staff under the defendant's Human Resource Manual was by affording the staff an opportunity to improve their behaviour or performance which was done in this case. state a response against allegations of shortcomings against him. DW2 had in this respect testified that he called plaintiff to her office and reminded Reliance was opportunity to C nsel stated that after this, more serious disciplinary action was done in the form of termination. put by Counsel on *William Mukasa Vs URA CS 528 of 2005* for Proposition that Article Plaintiff as. the plaintiff .entitled to a

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Counsel was not followed, then it is the defendant's case that general or exemplary damages was .too excessive. The 2J -⁹ neral damages should be restricted to the period of notice allowed, and the payment in lieu submitted in the alternative that if court finds the procedure for . disciplining the plaintiff the demand for was paid to the plaintiff in this case. (See *Bank of Uganda Vs Betty Tinkamanyire SCCA No. ¹² of 2007,* and *Board of Governors' Bugema Adventist S. S* Vs *Elias Bananuka HCCA No. 29/2008,* and *Barclays Bank of Uganda Vs Godfrey Mubiru, SCCA No. ¹ of 1998).*

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**1** In the further alternative, Counsel relied on *Martin Fat'aa & Others Vs URA HCCS ⁰³³⁹ of ²⁰⁰⁹* to state that the award of damages, if at all, should be **I** commensurate to the plaintiff's level/ranking.

> DW1 Counsel also distinguished *Bank of Uganda Vs Betty Tinkamanyire's case (SC)* (supra) stating that there was no malice involved in the termination of the found in Tinkamanyire'^s case, since the testimonies of- plaintiff, as was and DW2 shows that the plaintiff was even shielded the plaintiff from on earlier occasions. ' disciplinary action

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Further, **<** on the rectification, Counsel maintained that the termination was still fair and just. On whethei- the plaintiff 13.2 as n '■ was dismissed under Clause 14.2 and not Clause rectified by the defendant, Counsel submitted the definition of 2S ation under the Human Resource Manual only made reference to ssation of employment under Clause 13.2, and there can be no other form of termination, hence the rectification to the correct clause. the benefits computed as payable to the plaintiff were also computed with 13.2 as the basis for the payment. Even if court were to fault the defendant"

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she was subjected to summary dismissal, in the present case there was justifiable grounds to terminate the plaintiff. Counsel finally asked court to . find that termination of the plaintiff was lawful. , Counsel further distinguished Betty Tinkamanyire's case (SC) (supra) in that whereas the title ot her dismissal letter talked of retirement when in fact *2. L*

^| have examined the evidence on record, the submissions of both learned Course! and the laws and-other legal instruments relied on by the parties.

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The plaintiff had just been appointed, upon restructuring, to Manager $\overline{2}$ Prosecution, when 4 months later, his services were terminated. The letter $\frac{1}{2}$ of termination read thus:

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" $20^{01}$ July 2005

Mr. Hudson Musoke **Manager Prosecutions URA**

## Re: **TERMINATION OF YOUR SERVICES**

This is to inform you that your services with URA have been terminated with effect from 22^nd July 2005, under Clause 14.2 of the Human Resource Manual Manual (HRMM). In accordance with the said clause, you are $2\hat{c}$ entitled to two (2) month's salary in lieu of notice plus any accumulated leave due to you, less any staff indebtedness on proof of handover.

Please handover all URA assignments, records and property in your possession, especially the URA Identity Card, to the AC-Litigation before departure.

Yours faithfully

.............sign.......... **Frank Katusiime** For: COMMISSIONER CORPORATE SERVICE

## **Commissioner General** $c.c.$ **Commissioner Legal Services & Board Affairs Commissioner Internal Audit and Tax. Investigation** Assistant Commissioner Finance & Administration Assistant Commissioner Human Resource"

According to the plaintiff's testimony, he received the letter on the $27^{\text{th}}$ July $250$ 2005. On August the 1^st 2005, the plaintiff made appeal to Board of Directors as follows:

"1^st August 2005

The Chairman^® Board of Directors **Uganda Revenue Authority** P O Box 7279 Kampala^-

Dear Sir

## APPEAL AGAINST TERMINATION OF SERVICE Re:

Reference is made to the above subject matter. I was appointed Manager Prosecution in the Legal Services and Board Affairs Department on the $18^{th}$ April, 2005 by a directive/resolution of the Board of Directors, Uganda Revenue Authority. I accepted the appointment and commenced my-3 duties. I have carried out all my assignments with due diligence. However, I was surprised on the 25^th July 2005 to receive a letter dated 20^th July 2005signed on behalf of the Commissioner Corporate Service terminating my services with effect from $22^{nd}$ July 2005.

A copy of the letter, which was not copied to you is enclosed.

I feel that I have been unfairly treated. I was not assigned any reason for such drastic action. I have never been called upon to give any explanations or defence on any allegation against me. In fact I do not know why I am penalized so harshly.

In that I am of the firm view that the rules of natural justice were not $\beta$ followed. In any case I would not fall under the Department of Corporate Services. The clause under which I was terminated, viz, Clause 14.2 in the current Human Resource Manual Manual, does not apply to the circumstances of my case or even call for such action as termination.

I have now been rendered without employment or a way forward at such $\cdot$ 3 short notice. This is a matter which requires your prompt and direct intervention under Clause 12.2.5 of the HRMM, as the appointing authority. $\frac{1}{1}$ have been constrained to appeal to you directly, because this was a decision of the Management Executive Committee, of which the membership comprises the persons/officers I would have normally appealed to.


*terhiinatin6^^rateful if this appeal meets your favourable action and the n "fted so that I can continue with my service.*

*Y°urs faithfully;* . . '

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....................*sign,,. HUDSON MUSOKE*

*The Commissioner General Commissioner Legal Services and Board Affairs Lncl. Letter of Termination"* c.c. *c.c.*

**1** Human Resource Manual. They regretted any inconveniences caused. **1** The plaintiff testified that he never received this letter. On the ³ August 2005, the defendant wrote to the plaintiff clarifying that 33 the clause under which he was terminated was 13.2 and not 14.2 of the

> Clause 14.2 of the Human Resource Manual mentioned in the letter of termination is headed "HEALTH AND SAFETY PROCEDURES", and the 30 only sub-clause that cbuld relate to discipline thereunder is Clause 14.2.2 ' which reads:

*"Alcohol and other Drugs. '*

*A member of staff who uses alcohol or illicit substances like narcotics and other addictive drugsshall be subject to disciplinary action."* **L**

12.1.5 describes "Penalties (Disciplinary Action) as follows?

An *officer who commits an offence may be subjected to one of the following disciplinary actions, depending on the gravity of the offence.*

- a) *Written warning1.* - b) *Suspension. ' '* "• - c) *Surcharge.* - d) *Loss ofsalary.* - e) *Demotion.* - f) *Termination of appointment.* - . g) *Dismissal*

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**3** Clause 12.1; Offence:, '

*"Any gross inis-conduct, and misdemeanour shall constitute an offence* **1** *and shall render the offending employee liable to penalties or disciplinary action as specified in Section 12.1.5 of this manual. L*

Clause 12.1.3; Departmental Disciplinary Committee;

*"There shall be formed Departmental Disciplinary Committee to handle cases of misconduct other than cases handled by the Management Disciplinary Committee, and misdemeanours as specified in Section ⁸ of the Rules and Regulations Annexture ³A."* - ' 3

And 13.2 says:

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*TERM!NATION OF APPOINTMENT*

- *member of staff by giving due notice (but not necessarily reasons thereto). a) The Authority reserves the right to terminate the services of any* - *employment contract, termination notice for members of staff shall' require two months notice or payment of two months' salary in lieu. b) Except in the case of gross misconduct or as otherwise provided in an* - rece/Ve t/?e *following entitlements, where applicable: c)* XI *staff member whose appointment is terminated by the Authority, shall • V.*

**3** *i) Salary earned and all entitlements up to the end ofperiod worked; \**

*ii) Cash payment for any outstanding leave which is computed using* **³** *the commutation ofleave formula.*

*Hi) Benefits from the staff provident fund in accordance with the laid down rules and regulations.* •

**3** *iv) Any other retirement or pension award under these rules if qualified, and entitled.*

> *The Authority reserves the right to deduct any monies owed to or guaranteed by the Authority from this payment. '^&lt;*

**1** his plaint inter alia complained about summary/wrongful dismissal The plaintiff had in wjth neither a hearing nor a resolution from the Board of


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Directors. In their response to the above, paragraph ⁴ of the Written J Statement of Defence-stated:

4 *(i); The plaintiff was lawfully terminated for conduct that offended the provisions of the defendants Human Resource Manual to wit;* «

*a) Absenteeism from duty during official working hours.*

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*b) Conduct that discredited and was embarrassing to the defendant.*

- *assigned to the plaintiff.* ' ' - *Failure to attend court on days fixed for the hearing of cases* - **3** *disorderly-.* -• *Attending an official function of the defendant while drunk and* - *c) Failure to satisfy*' *or offset his probationary obligations and or requirement's.* - *- Failure to attend court 'on days fixed for the hearing of cases assigned to the plaintiff.* - **3** *disorderly. - Attending an official function of the defendant while drunk and* - *ii) The plaintiff was properly and lawfully terminated under the provision ofS. 13.2 of the defendants Human Resource Manual."*

**3** evidence Out of the above reasons for termination, ^I note from DW1 and DW2's *Lfr* and the submissions that absenteeism from duty during office

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the testimony and submissions of the defendant. - °urs and failure to attend court on days fixed for hearing were the ones '■ canvassed in

lawful taking, into account all the above. been instituted. The defendant insists it was under Clause 13.2 of the' Human Resource Manual. The defendants in their submissions state that **3** alcohol or illicit drugs is be subject to disciplinary action and under the. categories of disciplinary actions **3** submissions disciplinary procedure for termination can only under clause 13.2 (supra). ^I tend to disagree with this proposition because-under clause 14.2.2, a member of staff who' used M teimination was under Clause 14.2 so disciplinary proceedings should haver by the Although 12.1.3 talks of.misdemeanours specified in Section 8 of the Rules and Regulations, the Section quoted must have been a slip of the pen 4-2/ ^I am to determine whether the termination of the plaintiff's services was. The plaintiff insists that his^4 contends, that there is no mentioned under 12 1.3 spelt out above provides for Departmental Disciplinary Committees to handle cases'of misconduct and misdemeanours for cases not handled Management Disciplinary Committee, and misdemeanours. clause 12.1.5, termination of appointment is be one of them. The defendant, in their ' misdemeanours under the Human Resource Manual. However, Clause

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which cause misdemeanours are spelt out in Section 9.2 and not Section 8 provides for "Guidance to Employee Conduct" which has nothing to T do with misdemeanours. And even if there was intentionally no disciplinaryprocedure for misdemeanours as Counsel contents, when misdemeanours' can even lead to dismissal, then the court would imply this in the defendant's manual, as it is part and parcel of fair and just treatment which is a constitutional right.

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Be the above as it may, it appears to me that the mention of clause 14.2 in reasons for termination and the line of cross-examination of the plaintiff by the defendant and the evidence of DW2, all pointed to the fact that the **3** the giving **J** performance of the plaintiff. It is only after the plaintiff mentioned in his appeal letter that clause 14.2 was not the appropriate regulation to terminate him that Exhibit D1 came in to correct the "error", to make it now a general termination. To me, apart from clause 13.2 (a) which gives the defendant the right to terminate the services of any member of staff by. due notice, the rest of the provisions under 13.2 can apply to the termination letter was not an accidental slip. The use of alcohol was 'mentioned in the Amended Written Statement of Defence as one of the defendant believed that use of alcohol negatively impacted

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clause 14.2, but carried out. The defendant then sought to use the "magic" clause as a cover. But this court cannot allow the use of the magic clause 13.2, to . deny the plaintiff his-constitutional rights, especially where clearly there-' **3** were known allegations, the basis of which he was terminated, without a-**3** hearing. a change of heart happened and it was thought wiser to' rely on clause 13.2 especially since no disciplinary proceedings had been termination under any other regulation in the Human Resource Manual e.g. clause 14.2.2, where it resulted into termination. I, therefore, agree with the plaintiffs Counsel that the termination was originally meant to be under

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Even if the 14.2 had been ^a slip of the pen, and 13.2 was the clause meant, **3 •** still the court would need to look at the evidence showing the **3** circumstances which led to the termination of the plaintiff to assist court determine whether the termination was just unfair, and to that extent that-(Supra). " evidence would not be ignored. (See *Kayondo Vs The Corporative Bank*

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Article 42 of the Constitution of the Republic of Uganda states: Having said the above, ^I need to reiterate that the right to a fair hearing is - now constitutional.

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"A/jy *person appearing before any administrative official or body has a right to be treatedjustly and fairly and shall have a right to apply to a court oflaw in respect ofany administrative decision taken against him or her."* Z/

The right to a just and fair treatment is non-derogable (Article 44 (c). Both DW1 and DW2 agreed that the plaintiff was a good lawyer and performed faced any disciplinary proceedings. supervisor, also agreed that before the plaintiff was terminated, he was not **J 3** do agree that up to the point DW1 wrote to plaintiff about the failure to attend the TAT the first time, the plaintiff had never been warned in writing or V", was a subjected to any disciplinary hearing. DW2 on the other hand testified that' the session she held 'with the plaintiff at her office when she forcefully disciplinary procedure as she gave him ah DW1, the plaintiff's immediate well his duties, except for some absenteeism from duty. Both witnesses summoned her, opportunity'to give his account of the complaints against him but he did notit satisfactorily; hence her reference of the matter to the Management Executive committee who decided on termination without reference to the

Plaintiff. ■Indeed Counsel for the defendant stated that the disciplinary • proceedings envisaged in respect of misdemeanors was the opp afforded the plaintiff for improvement of behavior/performance counseling, which culminated in the final proceedings in the DW No more hearing was required.

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but also in many decided cases. ^I am surprised at the casual attitude with which the defendant deals with **9** disciplinary actions/termination of services, especially of high level staff. S- (Manager is by no means a low caliber staff). The requirement tor fair treatment in disciplinary hearings was emphasized not only constitutionally,

*2.* and **J** The plaintiff's-supervisors stated that they wanted to shield the plaintiff from disciplinary action as per the evidence of DW1 and DW2, such that nothing was documented about any previous counselings. Everything preferably remained verbal, for fear of spoiling the plaintiff's career.' Then one.incident of failure to go to court happened for which admittedly no explanation wasdemanded by DW1, the plaintiff's supervisor. His letter (Exhibit DH) only eXpresSed dismay at his failure to attend and to communicate the reason, i informed him of the next day for appearance. The plaintiff did not ^t

have Monday 11th July 2005 again, and DW1 and DW2 acted swiftly to action (termination) taken. No one thought it necessary to have fair play by giving attend on Even the Preliminary Actions (12.1.4) for misdemeanors which the absenteeism was, required pre-investigation actions before disciplinary action is carried out, under (a):. *t.* a hearing to the plaintiff even when the mechanisms for this 5 are well laid out in the HRM (Clause 12.1.2 and 12.1.3) and guaranteed in the constitution.

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*"Where the performance of ^a staff has not proved satisfactory or where he commits misdemeanor, the staff will be required to state his response against the allegations or shortcomings made against him,"*

This was not done, as the plaintiff was never asked to formally respond". allegations against the plaintiff were not formally put to him requiring a' formal response. ^I don't-think the HRM envisaged that one on one verbal exchanges would suffice as fair hearing. The session in DW2's office cannot be taken as having satisfied the requirement for preliminary investigations or.disciplinary action, since the

The court does not wish to second guess the magnitude of conduct that would have justified termination. The court's concern is the callousness of J/JS the defendant in the handling of the affairs of the plaintiff. He appealed to •

**27** ## **?** the Board he was bound to appeal to first, constituted the of Directors regarding the unfair treatment meted out to him, since the other officers Management Executive Board of Committee that had treated him unfairly. The Directors did not have the courtesy to respond. Neither did theS, Commissioner General nor the Commissioner, Legal and Board Services,

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decision especially an adverse decision, is taken. The need to comply with the above were well put in *John Vs Rees [1970] Ch 345 at 402* when Megarry J stated: Rules of natural justice,'Audi Alteram Patem, require that both sides are • heard before a

*"It may be that there are some who may decry the importance which the courts attach to the observance of the rules of natural justice. 'When something is obvious', they may say, 'why force everyone to go through the tiresome waste of time involved in framing charges and giving ah opportunity to be heard? The result is obvious from the start. Those who take this view do not, I think, do themselvesjustice. As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were, of unanswerable charges, which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determination that, by discussion, suffered a change. Nor are those with any knowledge'*

*made without their being afforded any opportunity to influence the course of events".* **S** *°f human nature who pause to think for ^a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been*

issue is answered in the affirmative. ^I find that the dismissal was wrongful. The 1st

The second issue is whether any benefits were paid, and if so, whether they were paid property.

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It was the plaintiff's case that on termination he was not paid any terminal benefits. Though he raised the matter to the Board of Directors in hisappeal, and also in his Notice of Intention to sue, the defendant did not **3** inform him of the fate of his terminal benefits. Three years later when the **3** suit was filed, the defendant said the terminal benefits were paid to the The plaintiff's Counsel submitted that the plaintiff had **3** never Bank. authorized the defendant pay his terminal benefits to the Bank. There was *3* defendant his terminal benefits. Even the Bank never to pay the communicated to him about receipt of his terminal benefits. That is why the • no relationship between his indebtedness to the Bank and the obligation of

Bank authority for the payment to the Bank of the benefits, but the plaintiff was not a party fo it;, and neither did the loan application form refer to it the Memorandum of Understanding. The plaintiff seeks to recover the terminal benefits. sued him and had him imprisoned for the debt after attaching his j Property. DW4 had referred to the Memorandum of Understanding as the

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(d) empowered the defendant to deduct any monies owed to or guaranteed loan though facilitation of the defendant, on the basis of the Memorandum arrangements that the benefits were to be reduced to the extent of the loam ' If the Memorandum of Understanding was not in place, the'plaintiff would **3** have been required to bring a letter of undertaking from his employer. DW4 testified that Standard Chartered Bank had called the plaintiff and informed him that the benefits received were not enough to cover his • indebtedness. A loan statement from Standard Chartered Bank was also of Understanding with Standard Chartered Bank to the tune of Shs. 42,826,746=. (Clause 9.1 of the HRM). It is through the same ^I he defendant was of a different view. It was their case that Clause 13.2 by the defendant from the terminal benefits. The plaintiff had secured a

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- furnished to court under cover of letter dated 30/7/2010 indicating that the money was received by the Bank for the account of the plaintiff.

I have considered the above submissions. I have no doubt that the $\frac{1}{2}$ terminal benefits of the plaintiff were paid direct to Standard Chartered Bank in line with the provisions of the Memorandum of Understanding between the Bank and the defendant. DW4 stated so and was a credible witness. Was this in breach of the plaintiff's right to receive his benefits, especially since the plaintiff was not party to the Memorandum of Understanding? When the plaintiff took the loan from Standard Chartered Bank, he was aware that the facility was availed through prior. arrangements by the defendants with Standard Chartered Bank, for the benefit of the defendant's staff. It is not stated anywhere that the defendant benefited at all from the arrangement. According to DW4, there were some benefits attached to the arrangement which included better interest rates and no requirement for a letter of undertaking from the employer as this was taken care of by the Memorandum of Understanding. It would not be just to make the defendant pay the terminal benefits twice when the Bank received the same and applied it to the plaintiff's loan repayments as per the loan statement furnished to court at court's request under cover of

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have it. claim is overruled. The second issue is answered in the affirmative. - Even if the defendant had paid the plaintiff his benefits directly, the loan would be even bigger. The end result would still be the same that the Bank would let the law take its course for the balance. This defendant's letter dated 30/7/2010. The plaintiff cannot eat his cake and He cannot seek to deny the Memorandum of Understanding, the arrangement under which he got the loan. It was for the staff benefit, but it also had some conditions attached to it. ^I would only blame the defendant^ for not communicating to the plaintiff the fate of his benefits. The loan was outstanding.

gratuity, terminal benefits, and any other entitlements, general,and **3** exemplary damages, interest and costs of the suit. The last issue is whether the plaintiff is entitled to any reliefs as claimed. • The plaintiff claimed for special damages by way of unpaid earnings,

Counsel put forward the following claims: **3**

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a) Although termination letter was dated 22/7/2005, plaintiff received it on 27/7/2005, the next day was a public holiday and a Friday, the only immediate working day being Monday the 1/8/2005. The plaintiff

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therefore wanted payment of a full salary for July 2005. However, Exhibit DN indicates that the plaintiff received the termination letter on $\epsilon$ 25/07/2005: It is not controverted. I agree with the defendant's counsel that this inconsistency in the plaintiff's testimony on this issue renders the rest of the plaintiff's evidence on this claim suspect. The claim is, therefore, disallowed.

b) Payment in lieu of notice amounting to Shs. 9,568,760=. This should be be 2 month's pay (clause 13.2 (b) of the HRM. According to DW3, the above was computed and paid as part of the terminal benefits to Standard Chartered Bank towards settlement of the plaintiff's loan repayment. This was not controverted. The claim therefore fails.

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c) Commuted leave. The plaintiff claimed for committed leave of 57 $6\%$ days as opposed to the computed leave of 29 days. According to the evidence of DW3, the Human Resource Department computed the 29 days from the records of the defendant. The plaintiff, on the other hand, did not specifically prove that he was entitled to more than 29 days. Neither did he state the period when he was supposed to go $\mathcal{G}$

on leave and was prevented from doing so by the defendant. This claim is disallowed.

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- deductions. It is disallowed. **n** d) Bonus; the plaintiff claimed bonus for the financial year 2004/2005 of Shs. 4,784,380=. According to Exhibit "D. K" and the evidence of DW3, this was 'part of the benefit? computed and paid to the banker after deducting what was due to the defendant and the statutory - **o** e) Gratuity; the plaintiff claimed for gratuity of Shs. 68,895,072= to cover Clause 13.7.2 (b) of the HRM. (24% of annual gross salary for every **0** year served). In *William Mukasa* Vs *URA HCCS ⁵²⁸ of ²⁰⁰⁵* at page 1.6, **0** the court noted that during the restructuring of the defendant in 2005, 20/7/2005, and since he had served for three months in that position. the period from 1st April 2000 when he joined the defendant to 27th July 2005 when he left, being a total of 5 years, in accordance with all remaining contracts below Assistant Commissioner (where the plaintiff fell) were terminated with effect from 31/3/2005. If this is so, the plaintiff started on a clean slate when he took up the appointment as Manager, Prosecutions on April 19th, 2005. It was terminated on' •

He is annual gross salary for the relevant year. entitled to be paid on a prorata basis for the 3 months served at 24 /o of the annual oross .qal^rv fnr thp rp|p>\/nnf x/par .

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- f) PAYE and NSSF; Counsel contended that the PAYE and NSSF should not have featured in the computation of terminal benefits. •• ^I agree with the defendant's Counsel that Section 19 (1) of the Income computation. DW3 also explained in his testimony that anything beyond Shs. 4,920,000= attracts a tax of 30%, and anything lower, -a . benefit. The claim under this item is disallowed. • commuted leave bonus were passed' on to NSSF for plaintiff's Tax Act Cap. 340, and Section 11 (2) of the NSSF Act, Cap.. 222, allows the stated deductions from the relevant items under flat rate- tax of Shs. 546,000=. Further, 5% of the July salary and - **I** defendant if not unlawfully terminated to of Shs. 712,872,620=. The defendant relied on Bank of Uganda Vs Betty Tinkamanyire SCCA 12 of 2007 to state that such a claim was g) Loss of earnings; the plaintiff sought to be paid for the remaining period of 12 years and 5 months he would have worked for the the tune

speculative and not justified in law. ^I agree entirely and disallow this claim. .

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h) General damages; Counsel for the plaintiff submitted that the plaintiff grossly inhumane manner without a penny forcing his children to drop. truck for Shs, 6 million having bought it earlier at Shs. 35 million. He' suffered. The plaintiff sought general damages of Shs. 500million.- **fl** who had .been a good and dedicated employee for 5 years, was . terminated from employment by the defendant in a callous and was arrested and imprisoned for 2 months. He was effected both in ' his personal and professional life, and his reputation and social status out of school. He ended up being sued by the Bank and sold his'

Counsel for the defendant countered that the plaintiff's arrest and detention' **fl** had ^a truck costing Shs. ³⁵ million but sold at Shs. 6million. He maintained awardable. had nothing to do with this case. Neither did plaintiff provide proof that he' that the termination was lawful hence no general damages were\* The defendant's actions and omissions abrupt termination of one'^s employment. Directors calls for an award of general damages. was not responded to and no explanation-of the defendant's . callous and oppressive behavior was given by the defendant, even at the hearing. He was terminated without being afforded a chance to be hSard in a disciplinary proceeding. His constitutional rights were thus violated. This-^I have already found that the termination of the plaintiff's employment was. unlawful for. reasons given. rendered the plaintiff and his family destitute, a natural consequence of His appeal to the Board of

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**u** ^I take into account the fact that the plaintiff had worked for the defendant for 5 years; 4 months in the position from which he was terminated. The ' . court feels that the plaintiff deserved better treatment from the defendant, need to treat their own in a more humane manner. which is otherwise taken as one of the respectable institutions. There is *&*

> of the.. The When u they plaintiff also sought for exemplary damages for the acts defendant which he said, as a public institution, should not be left' npunished The defendant's treatment of the plaintiff was cruel. terminated the plaintiff, he clamoured for. a review of his case by the

. general and aggravated damages, ^I shall award ^a sum of Shs. 35million **I** which ^I consider adequate. - Board of Director with copies to the Commissioner General and Board Secretary, his plea were ignored. This was so even when a Statutory notice to sue was served on the defendant. This behavior does not befit aninstitution of the defendant's standing in society. The plaintiff only came to *\** **•** know the computation and the fate of his terminal benefits after 3 years. Iagree that this treatment was highly oppressive and humiliating to the. / plaintiff. There is justification for award of aggravated' damages. For both.

Interest;

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The plaintiff is awarded interest at the rate of 25% per annum on gratuity. *^J I* award from 22nd July 2005 till payment in full, and 10% on general and aggravated damages from the date of judgment till payment in full.

The plaintiff is awarded costs of this suit.

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costs. It is so ordered. above indicated with ' **7/.** In conclusion, the plaintiff succeeds to the extent as

Elizabeth Musoke JUDGE

10/06/2011

**I**

## THE REPUBLIC OF UGANDA

# IN THE HIGH COURT OF UGANDA AT KAMPALA

## CIVIL SUIT NO. 0118 OF 2008

**HUDSON MUSOKE**

#### **PLAINTIFF** }

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#### VERSUS **UGANDA REVENUE AUTHORITY** DEFENDANT

### **DECREE**

THIS SUIT coming on this 10^th day of June, 2011 for final disposal before Hon. Lady Justice Elizabeth Musoke in the presence of the Plaintiff and Mr. Mathew Mugabi, Counsel for the Defendant IT IS DECREED and **ORDERED** that:

- The Defendant do pay to the Plaintiff gratuity for the 3 months he $a)$ served as Manager Prosecutions on a prorata basis at 24% of the annual gross salary for the relevant year. - The Defendant do pay to the Plaintiff $Shs.35,000,000/$ = as general $b)$ and aggravated damages for wrongful termination of employment. - The Defendant do pay to the Plaintiff interest on the gratuity at c) 25% p. a from $22^{nd}$ July, 2005 till payment in full. - The Defendant do pay to the Plaintiff interest on general and $d$ ) aggravated damages at 10% from date of judgment till payment in full. - The Defendant do pay to the Plaintiff the costs of this suit. . e)

DATED at Kampala this $\mathcal{L}^{0H}$ day of $\mathcal{L}^{0H}$ . with pressure $-2011.$

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**Kwesigabo, Bamwine and Walubiri Advocates COUNSEL FOR PLAINTIFF** **Asst. Commissioner Litigation, URA COUNSEL ^F OR DEFENDANT** Lfcafe

DEPUTY/feGlSTRAR

2011. GIVEN under my hand and the Seal of Court this^^of

*I* EXTRACTED by: **Kwesigabo, Bamwine and Walubiri Advocates** Plot 10 Clement Hill Road P. O. Box 21161 Tel: 341295/6 Fax: 343168 ■KAMPALA