THE REPUBLIC OF UGANDA
THE INDUSTRIAL COURT OF UGANDA HOLDEN AT KAMPALA
LABOUR DISPUTE APPEAL NO. 022 OF 2016
(ARISING FROM KCCA/CENT/LC/93/2016)
BETWEEN
NETIS UGANDA........................................................................... CLAIMANT
AND
CHARLES WALAKIRA.................................................................. RESPONDENT
BEFORE
1. Hon. Chief Judge Ruhinda Asaph Ntengye
2. Hon.Lady Justice Linda Tumusiime Mugisha
PANELISTS
1. Mr. Ebyau Fidel
2. Ms. Harriet NganziMugambwa
3. Mr. F. X. Mubuuke
AWARD
This is an appeal against the decision of the Labour Officer sitting at Kampala City Council Authority. The appeal was based on several grounds but the appellant chose to argue only two grounds.
- The labour officer erred in law when he diverted his role from a mediator to an adjudicator in so far as he made a ruling which is enforceable under the court.
- The labour officer erred in law when he awarded salary arrears from the date of termination to the date of the award which are not awardable under the law.
On the first ground, counsel for the appellant strongly argued that the role of the Labour Officer under the Employment Act did not include adjudication. He stressed that the labour officer under section 12(i) of the Employment Actis to resolve the dispute by agreement between the parties.
He argued that section 93 of the same Act provides for settlement by conciliation or mediation. He contended that sections 4, 5 and 24 of the LabourDisputes (settlement and Arbitration) Act 2006 emphasize the role of the l
Labour Officer to mediate and reconcile the parties. He relied on the authority of this court in OUMA VsOAKWOOD INVESTMENT LTD labour dispute Reference No. 046/2015. He submitted that by adjudicating the dispute, the labour officer over stepped and exceeded his authority.
In response counsel for the respondent vehemently opposed the submission. He argued that under section 13 of the Employment Act, the labour officer has power to settle the dispute among others, by adjudication. He also relied on regulation 8(1) of the Employment regulation SI No. 61/2011.
We have perused and internalised section 12 of the Employment Act s and 12 (i) of the said Act provides for the conflict between an employer and an employee under a contract of employment to be reported to a labour officer and section 12(ii) provides:
“A labour officer shall on receipt of a report under subsection (i) resolve the matter by agreement between the parties, involving as much as is practically possible in the negotiations, the workers or labour union that may be present at an aggrieved party’s work place.”
Section 13 of the same law provides for the Labour Officers power to
“(a) Investigate the complaint and any defence put forward to such a complaint to settle or attempt to settle any complaint made by way of conciliation, arbitration, adjudication or such procedure as he or she thinks appropriate and acceptable to the parties to the complaint with the involvement of any labour Union present ......”
In Civil Appeal 008/2015 SURE TELECOM VS BRAAIN AREM CHAD this court had this to say:
“We form the opinion that under section 13(i)(a) the labour officer has power to choose either of the four methods of resolving the complaint before him. Whereas he or she could abandon the method of adjudication and engage the parties in arbitration or conciliation, once he or she has done this, it would be improper to return to adjudication once either of the two fails. In the same way, once the labour officer has engaged the parties in either arbitration or conciliation, it is improper for him or her to at the same time engage them in adjudication”.
Given the above decision of this court, and given the express provisions of section 13, it is our firm decision that section 12 cited by counsel for the appellant only emphasizes the method of mediation and conciliation but does not exclude the power of adjudication which is one of the methods provided for under section 13.
Consequently ground No.2 fails.
On the third ground counsel for the appellant argued that there is no provision in the Act that gives the labour officer power to award salary arrears and therefore it is unlawful for a labour officer to give such award.
In response counsel for the respondent vehemently disagreed. He submitted that in accordance with the case of FLORENCE MUFUMBA Vs U.D.C, LDC138/2014 the Labour Officer was entitled to grant salary arrears up to date of the award. He argued that the Labour Officer being a court of first instance was bound to follow theprecedents of this court. He contended that under section 93(3) of the employment Act, the labour officer was entitled to make the aggrieved party whole by following the precedent of this court.
After carefully considering the submissions of both counsel on the third ground, it is pertinent for this court to look at section 78 of the Employment Act. It provides
Compensatory Order:
- An order of compensation to an employee who has been unfairly terminated shall, in all cases, include a basic compensatory order for four weeks wages.
- An order of compensation to an employee whose services have been unfairly terminated may include additional compensation at the discretion of the labour officer, which shall be calculated taking into account the following :
- The employee’s length of service with the employer;
- The reasonable expectation of the employees as to the length of time for which his or her employment with that employer might have continued but for the termination;
- The opportunities available to the employee for securing ;comparable or suitable employment with another employer;
- The value of any severance allowance to which an employee is entitled under part IX;
- The right to press claims for any unpaid wages, expenses or to the claims owing to the employee;
- Any expenses reasonably incurred by the employee as a consequence of the termination;
The above section in our view is intended to limit the power of a labour officer in the award of compensation in respect to complaints that they handle. The section details circumstances under which compensation is awardable and factors that the labour officer may take into account. Unlike this court, the labour officer is under section 78(3) granted power to award a maximum amount of 3 months wages.
This court in the case of FLORENCE MUFUMBA (supra) and any other cases used its wide powers under the Judicature Act and the Constitution of the Republic of Uganda, to grant damages that it deemed fit in the circumstances. We are of the considered opinion that the labour office, unlike this court, does not have the privilege of going beyond what is provided for under section 78 of the law mentioned above and therefore has no privilege to base their award on the precedent of this court.
We are fortified in this contention by the provisions of section 94(2) of theEmployment Act cited by counsel for the respondent to the effect that “The Industrial Court shall have power to confirm, modify or overturn any decision from which an appeal is taken and the decision of the Industrial court shall be final.”
The above provision in our view is intended for this court to provide changes in the decision of the Labour Officer if this court believes that such changes meet the justice of the case in view of the limited power of the Labour Officer.
It is our considered opinion that in the event that the labour officer considers that the compensation deserved by a dismissed employee is beyond what he/she is empowered to give under Section 78, he/she has the option to refer the issue to this court for determination.
Consequently we agree with the submission of counsel for the appellant that the decision of the Labour Officer to award the compensation that he did, offended section 78(3) of the Employment Act. Nonetheless, it seems to us that the decision as to whether the dismissal was unlawful or not is not contentious in this appeal. This follows the withdrawal of ground No. I by the appellant which ground stated:
“The Labour Officer erred in law when he held that the respondent was unfairly and unlawfully terminated both procedurally and substantially”.
Therefore whereas we fault the Labour Officer for having given compensation beyond what is authorised by the provisions of section 78 of the Employment Act, we have no alternative but to confirm the decision that the respondent was unfairly dismissed.
The next question for this court is:
Having declared that the compensation made by the labour officer offended section 78 of the Employment Act, would this court be competent to reconsider, or provide what it deems fair compensation or damages for the undisputed unlawful dismissal?
Section 94 of the Employment Act, (SUPRA) particularly subsection (3) empowers this court to confirm, modify, or overturn the decision of the Labour Officer.
We have perused the decision of the labour officer, particularly the compensation aspect. As already noted it offended section 78 of the employment Act and it is hereby set aside. Under section 94 weshall proceed todeal with each of the items that the labour officer granted with a view to confirm modify or overturn them.
The first item concerns leave. The labour officer granted the appellant 8,076,923/=as 42 days untaken leave.
This court has time and again reiterated that in order to be entitled to leave an employee must show that he was interested in taking leave but his employer denied him the same. In his evidence the claimant stated that he discussed his leave for 2014 with a Mr. Sheriff, C.E.O who asked him to take leave at a later date because there were serious business issues. It was the submission of the respondent that in the first year of employment the claimant was not entitled to leave. It was further submitted that during the second year of service though entitled, the claimant never applied for it.
The contract of employment excluded the first year of employment from entitlement to leave. We think this was in contravention of section 54(1) (a) ofthe Employment Act providing for annual leave and section 54(3) which nullifies such contracts. Nonetheless the claimant did not show in his evidence that indeed he applied for leave and it was not granted. This court expected more than a verbal statement from him that he asked and he was denied leave. At his level in the organisation he ought to have known that leave was to formally be applied for and that having not done so it was to be forfeited. The claim for leave for the second year therefore fails. Since the contract illegally provided for no leave during the first year, we take it that on that basis the claimant did not apply for the same and this court need not blame him for not exercising an entitlement that was illegally withdrawn. Accordingly we grant the claimant payment in lieu of leave for the first year.
The second order given by the labour officer was an order of basic compensation for unfair termination and additional compensation totalling to 20,000,000/- which we will return to later in this Award.
The third order related to severance pay. According to section 89 of theEmployment Act, calculation of severance pay is negotiable between the employer and the employees or labour union.
In Donna Kamuli Vs. DFCU LDC 002/2015this court held that in the absence of an arrangement between the employer and the employees as to the calculation of severanceallowance, an unlawfully terminated employee be entitled to an amount equivalent to his/her salary for every month per year worked. The claimant was employed on 1/4/2014 and he was dismissed on 15th April 2016.
From the evidence of the claimant, he earned 4,000,000/= per month from 1/4/2014 up to 1/01/2015 and up to termination he earned 5,000,000/=. Therefore we award the claimant a total of 9,000,000/= for the two years that he worked.
The labour officer also awarded the claimant payment for work done on public holidays. He found that the claimant worked without taking 1 day off as
Provided for in section 51 of the Employment Act. He based his decision on the evidence of the claimant that he used to work Monday to Sunday without a day’s rest.
In our considered view this evidence when tested against the respondents evidence that the claimant’s working on the seventh day was his own decision should have led the Labour Officer to decide otherwise.
It is our view that annexureB‘TERMSBinding the contract' requiring the claimant to work in excess of working hours to achieve targeted goals was not in respect to an assignment that was not within the claimant’s employment contract. It was work that he wasexpected to do in accordance with his contract and therefore if working excess hours was meant for him to achieve targets within his employment, he could not turn aroundto say that he was entitled to extra pay for fulfilling his contractual obligation.
We therefore find that the claimant was not entitled to payment for work done on the public holidays or the rest days.
The Labour Officer awarded 3,018,000 as car hire charges. The only evidence available was from the claimant who informed the Labour Officer hat he had gone into this hire arrangement with one Sherriff the C.E.O at the time. In the absence of the testimony of Sheriff, and given the evidence of one Namakoye that the claimant was paid an allowance to facilitate his movements, the finding of the labour officer was wrong and the award of car hire cannot stand.
We shall now return to the award relating to compensation for unfair termination and also to failure to hold a fair hearing.
It is not in dispute that the claimant was unlawfully terminated. This being the case he was certainly entitled to compensation for the unlawful dismissal. He had a job from which he could fend for his family and from which as a person he got gratification and emotional satisfaction. Having lost the job, we believe he is entitled to compensation.He had just worked for two years when he lost his job. He earned 5,000,000 per month and this could no longer be as a result of theunlawful action of the respondent. Considering all factors including that the claimant did not show any trial to mitigate loss we think 35,000,000/ is sufficient as general damages. No Order as to costs is made.
Signed:
1. Hon. Chief Judge Ruhinda Asaph Ntengye
2. Hon.Lady Justice Linda Tumusiime Mugisha
Panelists
1. Mr. Ebyau Fidel
2. Ms. Harriet NganziMugambwa
3. Mr. F. X. Mubuuke
Dated: 04TH/08/2017