Stanbic Bank (Uganda) Limited v Nassanga (Civil Appeal 182 of 2021) [2023] UGCA 342 (15 November 2023)

Key Facts

Issues

• The court examined if the Employment Act 2006 mandates a hearing before termination, distinguishing between termination and dismissal, and whether the employer's failure to provide a hearing rendered the termination unlawful.
• The court addressed whether the employer could lawfully terminate the employee's contract without providing a reason or conducting a fair hearing, relying on clause 18 of the employment contract and the provisions of the Employment Act 2006.
• The court considered if the Industrial Court's award of general damages was justified, given that the employer had made payment in lieu of notice as stipulated in the contract and under section 58(5) of the Employment Act 2006.

Holdings

• The Court dismissed claims for severance allowance, repatriation, and repayment of outstanding loans, ruling they were not properly pleaded in the respondent's original claim and thus not actionable.
• The Court declined to award aggravated or exemplary damages, finding no evidence of malice, punitive intent, or unconstitutional action by the appellant, and determined the termination did not warrant such punitive relief.
• The Court of Appeal held that the termination of the respondent's employment by Stanbic Bank was lawful under the Employment Act 2006, as the bank provided payment in lieu of notice and no misconduct was alleged. The Industrial Court's finding of unlawful termination was overturned.

Remedies

• The respondent's claim that her termination was unlawful is dismissed by the Court of Appeal, which found the termination lawful under the employment contract and statutory provisions.
• The respondent's cross-appeal is dismissed. The Court of Appeal does not grant any of the additional declarations or orders sought in the cross-appeal, including severance allowance, repatriation, or loan repayment.
• The Industrial Court's judgment, which declared the termination unlawful and awarded damages, is set aside by the Court of Appeal.
• The Court of Appeal awards the costs of the appeal to the appellant, including the costs incurred in the Industrial Court.
• The Court of Appeal allows the appellant's appeal, setting aside the Industrial Court's judgment which had found the termination unlawful and awarded general damages. The appeal succeeds on the grounds that termination was lawful under the contract and Employment Act 2006.

Legal Principles

• The court emphasized that the Employment Act 2006's notice period requirements (Section 58(3)(d)) supersede contractual provisions. The appellant's payment of three months' salary in lieu of notice, despite a contractual one-month provision, was deemed lawful under the statute.
• The court cited prior Supreme Court and Court of Appeal decisions (e.g., Stanbic Bank v. Kiyemba Mutale) to affirm that termination under Section 65(1)(a) of the Employment Act does not require a reason or hearing, distinguishing it from disciplinary dismissal under Section 69.
• The court held that termination of employment without a fair hearing, as required by Article 28(1) of the Ugandan Constitution and the principle of 'Audi Alteram Partem,' constitutes a violation of natural justice. This principle was central to the respondent's claim that her termination was unlawful.

Precedent Name

• Attorney General Versus Florence Baliraine
• Stanbic Bank Ltd. Vs Kiyemba Mutale
• Twinomujuni Moses Vs. Rift Valley Railways
• Bank of Uganda vs Joseph Kibuuka
• Hilda Musinguzi vs Stanbic Bank (u) Ltd
• Interfrieght Forwarders (U) Limited vs East African Development Bank
• Barclays Bank of Uganda Vs Godfrey Mubiru
• Ahmed Ibrahim Bholm Vs Car and General Ltd
• Rookes versus Barnard

Cited Statute

• Employment Act 2006
• Constitution of Uganda
• Judicature (Court of Appeal Rules) Directions
• Labour Disputes (Arbitration and Settlement) Act

Judge Name

• Christopher Gashirabake
• Catherine Bamugemereire
• Richard Buteera

Passage Text

• the famous article 4 of the Termination of Employment Convention No. 158 of 1982, relied on by the respondent can only bear its fruit if it were incorporated into the Employment Act, but it was not.
• Having considered the law and the evidence on record it is my finding that the learned panel erred when they found that the appellant failed to follow the procedure set out in sections 66 and 68 of the Employment Act. ... termination of an employment contract under section 65(1)(a) of the Employment Act does not always need reasons for termination. Grounds 1 and 2 of the appeal succeed...
• Having found that the respondent was lawfully terminated I decline to award any damages. Ground 3 of the appeal succeeds and ground 8 of the cross appeal fails.