Court: Ugandan Employers Have No Duty To Give A Reason To Terminate An Employee

• Published date: 10 May 2022
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Contract of Employment, Employment Litigation/ Tribunals, Employee Rights/ Labour Relations, Trials & Appeals & Compensation
• Law Firm: ENSafrica
• Author: Mr Phillip Karugaba and Anita Kenyangi

The Ugandan Court of Appeal has re-affirmed employers' right to terminate an employee without giving reason. The court ruled that an employer could terminate an employee by either giving notice or payment in lieu of notice. This decision has resurrected the once hallowed principle held before the Employment Act 2006, that an employer could terminate an employee for any reason or for none, provided they complied with the contract of employment.

Before this, the position was that an employee was entitled to be given reasons for dismissal or termination. (Florence Mufumba v Uganda Development Bank, a decision of the Industrial Court).

The background

Former employees of Bank of Uganda sued for unlawful termination claiming that they were prematurely retired without benefits and that no reason was given to them for their termination. The Industrial Court held that the termination was unlawful and illegal and awarded each of the former employees large damages.

On appeal, the Court of Appeal made a careful distinction between "termination" of employment and "dismissal", holding that termination of an employee could be done by notice or payment in lieu of notice and therefore without need for reasons. The court recognised the likely influence of the principles of the International Labour Organization's Termination of Employment Convention of 1982 (the ILO Convention) but found that in domesticating that convention, Uganda had not made any specific enactment on the duty to give reason for termination.

The treaty question.

The Kibuuka case is useful on several points including the application of the principle of legitimate expectation to contracts of employment and the award of damages for unlawful termination. What we wish to focus on is the application of the Convention as an international treaty domesticated in part by Uganda.

Uganda ratified the Convention on 18 July 1990 and domesticated it by enactment of the Employment Act 2006. Under Article 1, the provisions of the Convention are in so far as they are not otherwise made effective by means of collective agreements, arbitration awards or court decisions, to be given effect by laws or regulations. Under Article 4 the employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.

On the other hand, the Employment Act ostensibly intended...