The Public Procurement and Disposal of Public Assets Authority v Pamela Sozi (Civil Appeal No. 14 of 2016) [2022] UGCA 191 (18 July 2022)

Key Facts

Issues

• The appeal challenged the trial court's award of general damages for embarrassment and the statutory four weeks' net pay under Section 66(4) of the Employment Act, arguing the amounts were excessive and based on speculative claims.
• The issue involved determining if the appellant's provision of two months' salary in lieu of notice violated the Human Resource Manual's requirement of three months' notice for employees with over 10 years of service, constituting summary termination under Section 69(1) of the Employment Act.
• The court evaluated if the appellant met the constitutional and statutory obligations to provide a fair hearing under Article 42/44 of Uganda's Constitution and Section 66(2) of the Employment Act, particularly after citing incompetence as a reason for termination.
• The central legal question was whether the Public Procurement and Disposal of Public Assets Authority lawfully terminated Mrs. Mary Pamela Sozi's employment, considering her 11-year tenure, alleged incompetence, and compliance with the Employment Act's requirements for notice, fair hearing, and summary dismissal provisions.
• The court addressed the validity of the trial judge's 15% annual interest rate on compensation (excluding general damages) and the 6% court rate, balancing statutory discretion under Section 26(2) of the Civil Procedure Act with procedural fairness requirements.

Holdings

• The court disallowed Ground 1 as the termination was found to be unlawful due to insufficient notice under the Employment Act, 2006, and the respondent was entitled to three months' notice for over 10 years of service.
• Ground 8 was disallowed as costs followed the event under section 27 of the Civil Procedure Act, and the respondent's substantial success justified the award.
• Ground 6 was disallowed as the four weeks' net pay award under section 66(4) was justified due to failure to comply with fair hearing requirements before termination.
• Ground 2 was abandoned by the appellant, but the court found it lacked merit as the learned trial judge correctly awarded one month's payment in lieu of notice.
• Ground 3 was disallowed as the respondent's claims for gratuity and unpaid leave were contractual and not speculative, with awards of UGX 6,578,313 and UGX 5,850,000 respectively.
• Ground 7 was partially allowed: interest at 15% on general damages (UGX 60M) from filing date was disallowed, but 6% court rate interest from judgment date was upheld.
• Ground 5 was disallowed as the respondent was entitled to a Certificate of Service under section 61 of the Employment Act, regardless of explicit request.
• Ground 4 was disallowed as the UGX 60,000,000 general damages award was deemed reasonable (equivalent to eight months' pay) for unlawful termination and inhuman treatment.

Remedies

• The respondent was awarded one month's payment in lieu of notice amounting to Ug. Shs. 7,800,000/=.
• The court awarded interest at 15% per annum on specified monetary awards from the date of filing until the judgment date.
• An additional 6% interest per annum was applied to the total decretal amount from the judgment date until payment completion.
• The court ordered the Appellant to pay the respondent the costs of the suit under the Civil Procedure Act.
• The respondent was refunded Ug. Shs. 1,156,374/= for deductions made from her terminal benefits.
• The court awarded four weeks' net pay of Ug. Shs. 7,800,000/= under Section 66(4) of the Employment Act.
• The respondent received UGX 6,578,313/= as payment for untaken paid leave.
• The respondent was entitled to and ordered to receive a Certificate of Service from the Appellant.
• The court awarded the respondent Ug. Shs. 5,850,000/= as gratuity.
• Interest on the general damages award was adjusted to 6% per annum, effective from the judgment date until full payment.
• The respondent was awarded Ug. Shs. 60,000,000/= as general damages for unlawful termination.

Monetary Damages

Legal Principles

• The employer was required to prove the grounds for dismissal under Section 68(1) of the Employment Act. The court found the employer failed to meet this burden, leading to the dismissal being deemed unfair.
• The doctrine of estoppel was applied to bar the appellant from asserting a different ground for termination after the notice indicated a termination with notice. Section 114 of the Evidence Act Cap 6 was cited, which prevents a party from denying a prior representation that another party relied upon.
• The court upheld the principle that costs follow the event under Section 27 of the Civil Procedure Act. It affirmed the trial judge's discretion to award costs to the respondent, who substantially succeeded in the suit.
• Principles of natural justice were central to the case, particularly the right to a fair hearing before termination. The court referenced Ridge v Baldwin (1964) AC 40, emphasizing that decisions violating these principles are void. The respondent was entitled to a hearing due to the stated reason of incompetence.
• The principle of restitutio in integrum was applied to award general damages, aiming to restore the respondent to the position she would have been in had the termination not occurred. This is a common law remedy for breach of contract.

Precedent Name

• Stanbic Bank Uganda Limited v Deogratius Asiimwe
• Bank of Uganda v Kibuuka & 4 others
• Stanbic Bank Ltd v Kiyemba Mutale
• Banco Arab Espanol v Bank of Uganda
• Ms. Fang Min v Belex Tours and Travel Limited
• African Field Epidemiology Network v Peter Wasswa Kityaba
• Ridge v Baldwin
• Bank of Uganda v Betty Tinkamanyire
• Fr. Narsensio Begumisa & 3 others v Eric Tibebaga
• National Enterprises Corporation v Mukisa Foods Ltd
• Crown Beverages Ltd v Sendu Edward

Cited Statute

• Evidence Act Cap 6
• Civil Procedure Act cap 71
• Public Procurement and Disposal of Public Assets Act No 1 of 2003
• Employment Act, No. 6 of 2006
• Civil Procedure Rules

Judge Name

• Monica K. Mugenyi
• Irene Mulyagonja
• Christopher Madrama

Passage Text

• I would make an order that the appellant's appeal substantially fails and is hereby dismissed with costs save for ground 7 which was partially allowed to the extent that interest of 15% on the award of 60,000,000/= from the date of filing the suit to the date of judgment is disallowed.
• The court held that the appellant is barred by the doctrine of estoppel from asserting a different ground for termination, as the termination letter explicitly stated it was with notice.
• The learned trial Judge found the respondent was entitled to 3 months' notice having been employed for more than 10 years, and that the termination was unlawful because it was a termination not in accordance with the terms of the contract.