THE UGANDA PENTECOSTAL UNIVERSITY

LABOUR LAW 1

FOURTH (4th) YEAR

GROUP FOUR (ACE)

NO NAME REGISTRATION NO SIGNATURE

1. UMOJA KENNETH U/2020/LLB/051/E
2. BEINOMUGISHA ANGEL U/2020/LLB/105/D
3. OTWILLI DAVID U/2020/LLB/055/E
4. WANIAYE CHARLES U/2020/LLB/086 /E
5. ALUM NIGHTY GRACE U/2020/LLB/168/D
6. MWIJUKYE DUNCAN U/2020/LLB/037/E
7. BRIAN KIGGUNDU U/2020/LLB/143/D
8. AZIDAH BASHIZA U/2020/LLB/039/E
9. NANKYA JALIAH U/2020/LLB/078/E
10. NANDUDU RHODA FAITH U/2020/LLB/040/E
11. NAFULA ELIZABETH U/2020/LLB/165/W
12. AYEBALE DAN U/2020/LLB/054/D
13 KIBIRIGE IVAN HENRY U/2020/LLB/174/W
14 AMOKO JERRY MANI U/2020/LLB/127/E

QUESTION:

With the aid of decided authorities distinguish between unfair termination and
summary dismissal or termination in Uganda?

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Introduction
A contract of employment establishes a relationship between the Employer and
Employee. Section 21 defines a contract of service as any contract whether oral
or written, whether implied or expressed, where a person agrees in return for
remuneration, to work for an employer and includes a contract of
apprenticeship.

Important to note a contract of service is not a contract of eternity (till death do

part), like in any other contract even marriage termination available through the
Divorce Act2.

 Termination of Employment
As already exposed termination simply refers to coming to an end of a contract
and in the case at hand contract of service.

Section 2 of the Employment Act defines “termination of employment” to mean

the discharge of an employee from employment at the initiative of the employer
for justifiable reasons other than misconduct, such as expiry of contract,
attainment of retirement age, etc. Furthermore, in an attempt to define
termination, Section 2 refers us to Section 65 3 which provides grounds from
which termination shall be deemed to take place that is;

Termination by employer
An employer has power to legally terminate the contract of employment,
following the principle of he who has power to appoint has power to disappoint.
The following are circumstances where an employer can terminate a contract of
service;

Termination by notice

1
Employment Act 6 2006
2
Section 4
3
ibid

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Considering section 65(1) (a)4 a contract of service can be ended by the
employer with notice. This is done when an employer serves a notice to the
employee for termination with reason for termination. A notice may take the
form of a redundancy notice or retrenchment notice.

Redundancy notice according to John Mugalula5 means loss of employment or

occupation by involuntary means through no fault is committed by the
employee. An employee is rendered jobless not because of any wrong
committed at work but because his services are no longer needed or useful a
case in point is where technological advancements have taken up employees'
jobs. Redundancy is implied under section 81 which provides for collective
termination.

A notice may also be served to an employee terminating his services for poor
performance, gross misconduct among other reasons which are all attributed the
employee's fault. This is fortified in Section 66(1) 6 which provides that an
employee should be informed about the reason for his dismissal in a language
he understands. Courts of law have also emphasized the need for a notice which
provides reason for dismissal for example in the case of Nassanga vs Stanbic
bank7.

It’s important that an employer has to comply with the statutory notice period as
provided under Section 58 (3)8 least the termination is regarded null and void if
challenged in the courts of law.

Expiry of contract
A contract of service can be terminated by the expiry of contract where it’s for a
specific term or period. Another case is where the contract is for performance of

4
ibid
5
Employment and Industrial Relation Law in Uganda pg371
6
Employment Act 2006
7
LDC 227/2014
8
ibid

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a specific task and the task in question has been concluded for example
conducting research and the research has been submitted.

It’s important to note that upon such expiry the contract will be considered
terminated after one week from the day of expiry as per section 65 (1) (b)9.

Termination by employee
An employee is also at liberty to terminate a contract of service, the contract of
service isn’t a prison that an employee has to keep in until a specified time. In
the following circumstances as provided for by the Employment Act an
employee can bring to an end the employer-employee relationship;

1. Unreasonable conduct of an employer

According to section 65 (1) (c)10 an employee can terminate his/her contract of
service with or without notice because of unreasonable conduct of the employer
towards the employee. The Employment Act doesn’t define unreasonable
conduct, especially on the part of the employer however case law has done so in
Nyakabwa J. Abwoli Vs Security 2000 LTD11 court held "In order for the
conduct of the employer to be deemed unreasonable within the meaning of
section 65(c)..... Such conduct must be illegal injurious to the employee and
make it impossible for the employee to continue working. The conduct of the
employer must amount to a serious breach and not a minor or trivial incident
and the employee must act in response to such breach not for any other
unconnected reason and act in reasonable time. What might be a serious or
major breach in one case may not be necessarily major in another case so each
case must be decided on its particular facts.”

9
ibid
10
Employment Act 2006
11
LDC No.108/2014

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2. Termination before the expiry of the notice term
An employee who has received a notice terminating his/her employment
contract that is in accordance with Section 58 12, can terminate his contract
before the expiration of the notice as per Section 65 (1) (d)13. The employee is at
liberty to leave even if he/she doesn’t after the expiration of the period in the
notice he is bound to do so, therefore in case he/she spots another opportunity it
would be to his/her advantage to leave before the expiration of notice period.

 Unfair termination of employment

Unfair termination of employment arises out of a failure by the employer to
follow the statutory requirements for termination of employment. Only
employees who have been employed for a period of at least thirteen weeks are
entitled to complain of unfair termination as per Section 71 (1)14.

Furthermore, the Act creates a statutory limitation period of three months within
which to file a complaint as per section 75(2) 15, this section is also of paramount
importance in that it also provides jurisdiction of labour officer, which is the
court of first instance in regard to labour disputes.

i. Termination without notice

Pursuant to Section 58(1)16 a contract of service shall not be terminated by an
employer unless he/she gives notice to an employee except in cases of summary
termination or attainment of retirement age. In case an employee is dismissed
without notice then an employee is entitled to payment in lieu as provided for in
Section 58 (4)17 or else the termination will be considered unfair termination,
this position was fortified in the case of Godfrey Kyamukama Vs Makerere
University Business School18.
12
Employment Act 2006
13
ibid
14
ibid
15
ibid
16
ibid
17
Employment Act
18
LDR No.147/2019

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 ii. Termination without reason
According to Section 68 (1)19, an employer should provide a reason for
termination failure to do so will be tantamount to unfair termination as provided
in Section 71.

In the case of Florence Mufumba vs Uganda Development Bank20court

observed that “It is our firm conviction that in TERMINATING the
employment of an employee there must be circumstances that are justifiable but
which may have no bearing on the fault or misconduct of the employee. Such
circumstances include but are not limited to expiry of contract, non-existence of
the position due to restructuring, bankruptcy or dissolution of the employer,
attainment of a retirement age and instances provided for under section 65 "
court also stated, “In our opinion whether the employer chooses to "terminate"
or dismiss an employee, such employee is entitled to reasons for the dismissal
or termination. In employing the employee, we strongly believe that the
employer had reason to so employ him/her. In the same way, in terminating or
dismissing the employee there ought to be reason for the decision"

iii. Termination without fair hearing

Pursuant to Article 44 (c)21 a right to fair hearing is non derogble that is to say at
all times it cannot be taken away or waived away. In Nassanga vs Stanbic
bank ( supra) court held that “Whereas Section 65 is to the effect that
termination of a contract of service would be effective if the employer ends it
with notice, the procedure for termination is provided for under Section 66 and
68 of the Employment Act 2006.” Section 66 (2)22 provides that an employer
before dismissing the employee shall hear and consider any representation by an

19
Employment Act 2006
20
LDC No.138 of 2014
21
Constitution Of Republic 199
22
Employment Act 2006

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employee regards his/her reason for dismissal, hence according the employee
fair hearing.

iv. Termination based on unfair reasons

Pursuant to Section 73(1) (a)23 termination of employment based on reasons
specified in Section 75 is deemed unfair termination. Section 75 24 goes on to
list a host of reasons that are not worthy of dismissing an employee among them
include but not limited to pregnancy, taking leave, membership to labour Union,
seeking office of workers representative, etc.

v. Termination not in accordance with justice and equity

Section 73(1)(b)25 provides that termination of employment is deemed unfair if
found out the circumstances of the case granting termination, the employer
didn’t act in accordance with justice and equity. John Mugalula (supra) 26 cites
the case of Rose Mwikali Nzuki V Food for the Hungry Kenya 27 where court
held that termination is unfair where employer fails to prove the reason for
termination is a fair reason.

 Remedies for unfair termination

Damages
It is trite that the only remedy for an employee who is unlawfully dismissed is
damages. In Stanbic Bank vs Kakooza Mutale28, which cited VIRES VS
NATIONAL DOCK LABOUR BOARD (1958) 1 QB 658 cited with approval
that; “It has long been settled that if a man employed under a contract of
personal services is wrongfully dismissed he has no claim under the contract
after repudiation. His only claim is for damages for having been prevented from

23
ibid
24
Ibid
25
ibid
26
Page 342
27
[2105] eKLR
28
C.A No. 2 OF 2010

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earning his remuneration. His sole money claim is for damages and he must do
everything he reasonably can to mitigate them. …”

Severance pay
Section 87(a) of the Employment Act, entitles an employee who has been in an
employer’s continuous service for a period of 6 months but is unlawfully
dismissed to severance pay. Section 89 of the Act provides that severance
allowance should be negotiable between the employer and employee. However,
where it has not been negotiated and there is no provision for a method to
calculate it, court in Donna Kamuli vs DFCU Bank29, held that the reasonable
method shall be payment of 1 month’s salary for every year the employee has
served.

Payment in Lieu of Notice

Section 58 of the Employment Act provides that a contract of service shall not
be terminated without giving the employee notice and sets down the notice
periods to be considered further more Subsection (4) provides that Where the
pay period by reference to which the employee is paid his or her wages is longer
than the period of notice to which the employee would be entitled under sub
section (3), the employee is entitled to notice equivalent to that pay period

Summary dismissal
Summary dismissal is provided for under section 69 (1) 30 to be where an
employer ends the services of an employee without notice or with less notice
period. The same section under subsection 3 provides the circumstance for
summary dismissal to be where an employee fundamentally broke his or her
obligations arising under contract of service.

29
LDC 002 OF 2015
30
Employment Act 2006

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Shell Ltd Vs George Ndyabawe31 court held that an employer may dismiss the
employee summarily if by his or her conduct the employee repudiates the terms
of contract of employment or is in fundamental breach of the contract.

There is no exhaustive list of the misconduct that justifies summary dismissal,

but according to Laws Vs London Chronicle32 one isolated act of misconduct
is sufficient to justify summary dismissal. The test is stated in the above case to
be whether the conduct complained of is such as to show the servant to have
disregarded the essential conditions of the contract of service.

Conclusion
The position of the law on unlawful and/or unfair dismissal was stated in the
case of Bank of Uganda Vs Betty Tinkamanyire33. It is trite that, a court of
law should not use its powers to force an employer to retake an employee it no
longer wishes to continue to engage. However, depending on the circumstances,
an employee who is unfairly or unlawfully dismissed, as in this case, should be
compensated adequately in accordance with the law.

List of references
Constitution of the Republic Of Uganda 1995
31
[2006]HCB
32
[1959] 1 WLR 698
33
SCCA No 12 of 2007

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Employment Act 2006

Employment and Industrial Relations Law in Uganda, John Mugalula (2019)

LawAfrica, Nairobi.

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