Legal Alert: Key Developments in Employment Law in 2019

Executive Summary

In order to keep you abreast with the key developments in employment law in 2019, this alert is focusing on Court of Appeal decisions in Eng. John Eric Mugyenzi v. Uganda Electricity Generation Company Ltd., CA No 167 /2018; African Field Epidemiology Network v. Peter Wasswa Kityaba, CA No. 124/2017 and DFCU Bank Ltd. v. Donna Kamuli, CA No 121/2016.

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Detailed Analysis

A. Eng. John Eric Mugyenzi v. Uganda Electricity Generation Company Ltd., CA No 167 /2018: Eng. Mugyenzi’s employment as Chief Executive Officer with UEGCL was terminated on 30/07/2014. His initial action for unfair termination before the Industrial Court on 17/10/2014 was dismissed and he was referred to go to the Labour Office. His complaint before the Labour Officer in April 2015 was referred back to the Industrial Court where it was struck out on a point of law that the action before the Labour Office was statute-barred. The appeal to the Court of Appeal was primarily on the question of limitation and finding the appellant’s claim as time-barred.
In a judgment dated 18/04/2019, the Court of Appeal allowed the appeal referring it back to the Industrial Court for expeditious adjudication. The Court addressed several legal issues that it regarded as arising from the claim before the Labour Office and the Industrial Court.

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Firstly, on a point of law on limitation, the Court noted:

it can be raised at any time even after pleadings have closed;
a claimant who has filed a claim out of time before a labour officer must plead exemption and give reasons for why the exemption should be granted;
the 3 months’ limitation period under s. 71(2) of the Employment Act is only for filing a claim before the labour officer; however, there is no limitation, even as before the labour officer, for claims not falling within the ambit of s 71(1) of the Act;
the limitation period can be extended at discretion of a labour officer only after a claimant has shown cause;
there is no limitation for a claim to be filed before the Industrial Court;

Secondly, as regards remedies that can be granted in labour claims, the Court found that a labour officer has limited jurisdiction under the Act in respect of-(i) only settling matters by mediation or conciliation; (ii) grant orders for employer compliance with the Act. In respect of the latter, the Court held a labour officer cannot grant an order for reinstatement of employment and/or compensation as arise from unfair dismissal under s, 71(5) of the Act. This remedy can only be granted by a Court-of which the labour office is not such-defined as Court of Judicature or Subordinate Court. In the end, the decision confirmed the Industrial Court as a ‘court of reference’.

B. African Field Epidemiology Network v. Peter Wasswa Kityaba, CA No. 124/2017: Mr Kityaba’s employment as a scientific writer on one-year rolling contract from 2010 was terminated by AFNET on 12/02/2016 (yet a new contract was to lapse on 31/08/2017).

Mr. Kityaba lodged a complaint before the labour office for unlawful termination and the labour officer, unable to resolve the matter, referred it to the Industrial Court,which found in favour of Mr. Kityaba and awarded reliefs that included severance pay, salary arrears, general and aggravated damages. AFNET appealed to the Court of Appeal.

In a judgment dated 22/10/2019, Mandrama lzama, JA considered the appeal to concern the jurisdiction of the Industrial Court to adjudicate the claim and to grant the reliefs or awards it did.

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In a seeming deference to the Mugyenzi v UEGCL decision, the Justice of Appeal reaffirmed the limited jurisdiction of a labour officer to settle labour disputes arising from a breach of the Employment Act through mediation and conciliation and held that a labour officer has no jurisdiction to hear an action for unfair dismissal. On the other hand, he considered the Industrial Court as exercising dual jurisdiction with the High Court. Further, he viewed the jurisdiction of the Industrial Court in broad terms. Firstly, that jurisdiction includes arbitrating labour disputes referred to it by a labour officer or parties to a labour dispute. The Industrial Court adjudicates questions of law and fact referred to it under any law (apart from the Labour Disputes (Arbitration and Settlement) Act, 2006). An arbitral award could be set aside only on established grounds in arbitration law-misconduct of arbitrator; award contains an error of law on the face of it; and if there is a question of law. The Justice noted that appeals to the Court of Appeal, in relation to such adjudications of the Industrial Court, are limited to questions of law (with the appellate court’s duty to subject the evidence to fresh scrutiny inapplicable). Secondly, the Justice found the Industrial Court to possess unlimited original jurisdiction as regards the remedies it can lawfully grant, determining that there is no law that limits the Industrial Court’s awards of damages and the restrictions on compensation as stipulated in s. 78 of the Employment Act only bind labour officers.

Notably, as regards the awards grantable by the Industrial Court, the Justice held that compensation for the loss of earnings, as a result of termination, can only be awarded as damages and not as salary arrears.

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C. DFCU Bank Ltd. v. Donna Kamuli, CA No 121/2016: Appointed as a banking officer with DFCU Bank on 11/10/2011, Ms. Kamuli was subsequently promoted to Customer Service Officer on 17/01/2013 and had good appraisals until misunderstandings arose with one of the line managers and, although she was placed under a new line manager, her appraisal scores for July to September 2014 were such that she was terminated on 16/10/2014 for non-performance without being accorded a hearing. She instituted a claim for unlawful termination against the Bank before the Industrial Court. The Bank argued that during course of employment, the claimant was subjected to performance appraisals which fully involved her as well as feedback and discussions. The Industrial Court found in favour of the claimant and awarded general and aggravated damages, severance allowance, salary arrears and provident fund contribution. The Industrial Court further held she was entitled to be relieved of salary loan obligations secured by her employment. DFCU appealed to the Court of Appeal on grounds the termination was lawful and award of the Industrial Court was excessive, unfair and unlawful.
In a judgment dated 30/10/2019, Barishaki Cheborion, JA gave key determinations as to the law as follows:

There had been no unlawful termination without a hearing since the respondent had received emails and caution letters relating to her performance prior to her termination.
The Justice held the hearing envisaged by s. 66 of the Employment Act did not require employers to hold a mini-court and hearing could be conducted either through correspondences by letter or e-mail or a face-to-face hearing.
Salary is only paid for work done, and more so, a person lawfully terminated is not entitled to salary arrears.
Relief from loan obligations could not be granted without referring to terms of the loan agreement.
The Justice felt that it would have been unfair for a court to grant relief from the loan obligations yet the respondent had used and benefited from the money advanced.

Implications of the three decisions The implications can be summed as follows:

1. A complaint for unfair or wrongful dismissal arising exclusively from breach of a contract of service cannot be heard by a labour officer.

‍2. A complaint on unfair termination can be lodged before a Court more than 3 months from the date of termination. There is likewise no limitation before a labour officer for lodgement of claims not falling within the ambit of s. 71(1) of the Employment Act.

‍3. The dual jurisdiction the Industrial Court exercises with the High Court means a claim can be lodged with either court. A likely disadvantage is that more case back-log in the High Court as a result of it hearing employment claims that have hitherto been preserve of the Industrial Court.

‍4. The Industrial Court can award any remedy that it deems fit in light of the circumstances of a labour matter.

‍5. The Labour Office is to settle matters by way of mediation and conciliation. However, this creates confusion in light of s. 13 of the Act where the powers of a labour officer include adjudication.

‍6. Employers do not need to conduct a face-to-face hearing before dismissing an employee. Correspondence, by way of letters and emails, can satisfy the requirement of a fair hearing. Caution is to be made that this leeway granted by the Court of Appeal could be abused by employers to infringe employees’ right to a fair hearing.

‍7. Salary is only payable for work done. Salary arrears cannot thus be claimed even in instance of unlawful termination and the law has been settled with clarity.

‍8. An employee is not relieved of his/her loan obligations in event of termination of employment unless a loan agreement provides for it.

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Disclaimer

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.

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