The High Court rules that employee appraisals should be conducted in accordance with standards and set timelines and the absence thereof subjects decisions of public officials or bodies on non-renewal to concerns over unfairness, arbitrariness and procedural impropriety. The Court also rules that a fixed term contract with an option for renewal creates a legitimate expectation for a renewal as well as a similar expectation of fair treatment before a decision not to renew is taken.
In order to keep you abreast with the key developments in employment law in early 2020, this alert focuses on the decision of the Civil Division of the High Court in Emily Mbabazi v Rural Electrification Agency& 2 Others, HCMC No 165/2019.
Facts: The Applicant (Emily Mbabazi), joined the First Respondent (Rural Electrification Agency) as an assistant procurement officer in 2009. In 2010, she rose to the position of procurement officer and, later in 2013 after successful interviews, was appointed to the position of Head, Procurement and Disposal Unit on an initial contract of four (4) years, which was renewable and was subject to performance reviews every six (6) months as well as an annual performance appraisal. On April 19, 2017, the Applicant applied to the Second Respondent (Rural Electrification Board) to have her contract renewed. After several follow-ups by the Applicant, on July 28, 2017, the Third Respondent (Godfrey R. Turyahiko), the Executive Director of the First Respondent, who was on forced leave at the time, wrote to the then Ag. Executive Director directing him to write to the Applicant and communicate his decision not to renew her contract. The Applicant lodged an appeal to the Second Respondent concerning the procedural irregularities in reaching the decision not to renew her contract. The Second Respondent responded to the appeal after one (1) year and upheld the decision of the Third Respondent. The Applicant lodged an application before the High Court for judicial review concerning the Respondents’ decision not to renew her contract of service. She sought a declaration that the decision was illegal, unconstitutional, unjustified, unreasonable; was against the principles of natural justice; and was characterized by procedural irregularity. She also sought orders for certiorari, prohibition, mandamus; general and exemplary damages; and costs for the application.
Issues: The application was determined on the basis of the following issues: (i) (ii) whether the decision of the respondents not to renew the applicant’s contract was marred by procedural irregularities; and (iii) what remedies are available to the parties.
Legal arguments: The Applicant’s contention was on the premise that the Third Respondent, who had failed and refused to appraise the Applicant throughout the period of her employment; conducting a sham appraisal only 4 days to the end of her contract, and was on forced leave due to ongoing investigations, had no power to make the decision not to renew her contract. A further contention was that the Second Respondent did not grant the Applicant an opportunity to be heard and failed to exercise its powers under regulation 7(1) of the Electricity Establishment and Management of the Rural Electrification Fund and instead, it simply upheld the decision of the Third Respondent. On the other hand, the Respondents contended that the decision not to renew the Applicant’s contract was based on appraisals which showed that her performance was wanting and that the Second Respondent had delegated its power to recruit and renew contracts to the Third Respondent.
The decision of the Court: In a judgment delivered on March 13, 2020, Hon. Judge Ssekaana held that—
(a) It was illegal and unlawful for the Third Respondent, who was on forced leave, to return and exercise powers of the Executive Director and effect a decision that was vested with the Second Respondent.
(b) The Applicant was to be reappraised every 6 months to determine whether, at the end of her contract, the appointing authority would be able to exercise the discretion to renew the contract of employment.
(c) The absence of any appraisal exposed the Applicant to unfairness and arbitrariness in determining whether to renew her contract or not.
(d) The purported appraisal carried out 4 days to the end of her contract was irregular and contrary to the Human Resource Manual. It was a sham appraisal made to achieve an intended purpose of not renewing the Applicant’s contract and as such was a clear abuse of power that the Court would not allow to stand.
(e) Decision-makers must not allow their personal interests and beliefs to influence them in the exercise of their statutory powers but must exercise those powers impartially and should not pre-judge the case.
(f) The actions of the Third Respondent were malafide since it involved the improper exercise of power or abuse of discretion.
(g) The Second Respondent acted irrationally when it merely endorsed the illegal decision of the Third Respondent and its purported delegation of the power to recruit employees and renew contracts was illegal.
(h) The employees legitimately expected to be treated fairly before any decision is taken not to renew their contracts of employment. Legitimate expectation envisages that, if the administration—by a representation—has created an expectation in some person, then it will be unfair on the part of the administration to whittle down or take away such legitimate expectation.
The applicant expected to have the contract extended or renewed since it was clearly promised in the original contract. Any intended frustration of the legitimate expectation had to be explained through a hearing.
The learned Judge awarded the following remedies to the Applicant—
(i) A declaratory order that the decision of the Respondents in dismissing the Applicant’s contract without a fair hearing was unjustified, unreasonable and against the principles of natural justice and was characterised by procedural impropriety.
(ii) An order of certiorari quashing the decision of the Respondents not to renew the Applicant’s contract.
(iii) An order of mandamus compelling the Respondents to appraise the Applicant and consider the reinstatement of the Applicant or renewal of the Applicant’s contract of employment basing on the alternative appraisals.
(iv) Uganda Shillings fifty million (UGX 50,000,000/=) as damages due to the circumstances of the case which had occasioned suffering to the Applicant.
(v) Costs of the application.
The implications of the decision of the High Court can be summed as follows—
1. Employees whose contracts of service, or Employer’s Human Resource Manual provide for appraisals should be appraised in accordance with the standards and timelines provided therein.
2. “A last-minute appraisal” cannot cure the absence of appraisals throughout the course on one’s employment.
3. While terminating fixed term contracts that contain an option of renewal, the employer must give the employee a hearing. This is to address the employee’s legitimate expectation that their contract will be renewed.
4. A person who is out of office on leave cannot lawfully exercise the powers vested in the office that he ordinarily holds.
However, it is to be noted that the said legal implications are in relation to an employee in the public service, since this was an application for judicial review. Nonetheless, employers in the private sector are strongly advised to consider the above implications and ensure proper appraisals are always carried out within the time frame stipulated in either the employment contract or the Human Resource Manual. Further, if an employment contract is not to be renewed, prudence requires that a legitimate explanation for the same be offered to the employee and preferably at least a month or more before the contract is to expire.
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No information contained in this alert should be construed as legal advice from ALP East Africa or ALP Advocates or the individual authors, nor is it intended to be a substitute for legal counsel on any subject matter.
For additional information in relation to this alert, please contact the following:
– Lastone Gulume
– Lucy Suky
Associate, Dispute Resolution Department