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Court: Ugandan employers have no duty to give a reason to terminate an employee  

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 to domesticate the Convention, did not enact the Convention wholesale. The Employment Act omitted the principle in Article 4 on the requirement for reason for termination. The Court of Appeal therefore found that absent a specific provision in the Ugandan Employment Act and in the face of binding decisions, there was no basis for a duty to give reason in every case of termination.

It is interesting that the court ignored the wide latitude of Article 1 of the Convention that it could be brought into effect in a country by decisions of the courts. In other words, the Convention permits the courts to apply it and make it part of the law. Enactment of domesticating laws is only one of the methods recognised under Article 1.

In Nigeria, the position has swung from “employment at will” in which there is no duty to give reasons to terminate to the full application of the Convention requiring an employer to give reasons for termination (Ebere Onyekachi Aloysius v Diamond Bank Plc )(Shadrack Duru v Sky Bank Plc).

Uganda’s history on the application of international law

The Judicature Act does not list international law as a source of laws to be applied in the courts in Uganda. Thus a treaty must be ratified under the Ratification of Treaties Act and then domesticated by an Act of Parliament. However, the courts have been happy to give effect to international law, at times even going so far to apply treaties before domestication.

In the recent controversial case of Katamba Hussein v Uganda National Roads Authority on the felling of the tree dwelling place of some traditional spirits, the court was happy to consider several UNESCO Conventions on cultural heritage rights without considering whether they had been passed into Uganda legislation.

In Uganda Association of Women Lawyers v Attorney General, Hon. Justice Mpagi-Bahigeine, in the Constitutional Court, commenting on the applicability of the Convention for Elimination of Discrimination Against Women (CEDAW) was emphatic that where Parliament procrastinates (domestication of a treaty), the courts of law being the bulwark of equity would not hesitate to fill the void when called upon to do so or whenever the occasion arises (for more info on international law in Uganda, click here.)

Conclusion

It is not clear whether Uganda deliberately did not adopt Article 4 on the duty to give reason for termination. If the Convention presents the current standards in employee justice, this decision is a step backwards for the rights of workers in Uganda.

Phillip Karugaba

ENSafrica Advocates | Uganda | Partner

pkarugaba@ENSafrica.com

Anita Kenyangi

ENSafrica Advocates | Uganda | Associate

akenyangi@ENSafrica.com