Jolly Busingye & 2 Ors v Uganda Revenue Authority (Labour Dispute Claim 8 of 2018) [2022] UGIC 65 (24 February 2022)

Full Case Text

## THE REPUBLIC OF UGANDA IN THE INDUSTRIAL COURT OF UGANDA AT KAMPALA LABOUR DISPUTE CLAIM NO.008 OF 2018 ARISISNG FROM CIVIL SUIT NO. 71 OF 2012

| & JOLLY BUSINGYE 2 OTHERS | CLAIMANT | |------------------------------------|------------| | VERSUS | | | UGANDA AUTHORITY REVENUE | RESPONDENT |

## **BEFORE**

**1.** The Hon. Head Judge, Asaph Ruhinda Ntengye

## **Panelists**

**o**

- 1. Mr. Michael Matovu - 2. Ms. Susan Nabirye - 3. Ms. Adrine Namara

## **AWARD**

## **Brief facts**

The claimants were employed by the respondent and at the time of termination of their employment they were stationed in the Customs department.

They were accused of involvement in fraudulent validation of different consignments and tampering with a system known as Asycuda++ system and were advised to take their annual leave as investigations were carried out.

Q Subsequently they appeared before a Management Disciplinary Committee which found them culpable and recommended fortheirdismissal. They were not satisfied with the decision to dismiss them and therefore filed this claim for unlawful dismissal.

## **ISSUES**

- **1. Whether the claimants were unfairly, wrongfully and unlawfully dismissed from employment.** - **2. Whether the claimants are entitled to the remedies sought.**

#### **REPRESENTATIONS:**

The claimants were represented by M/s. Bena Mutamba of M/s. Luganda, Ojok & Co. Advocates while the respondent was represented by Mr. Ronald Baluku of the Legal Services & Board Affairs Department of the respondent.

#### **EVIDENCE ADDUCED**

Evidence was adduced from both the 1st and 3rd claimants while the 2nd claimant adduced evidence through her Attorney. The respondent adduced evidence from one Bena Frances Arinaitwe. All this evidence is contained in the respective written witness statements on the record. What we getfrom the evidence of the claimants is a denial that they at all validated the consignments that they were alleged to have fraudulently validated.

The effect of the respondent's evidence is that the respondent having detected collusion and fraudulent activities and an investigation having revealed that the claimants were some of the employees involved in the fraud by tampering with an Asycuda++ system of the respondent culminating in the fraudulent validation of certain consignments, they were dismissed after a fair hearing.

#### SUBMISSIONS

On the first issue counsel for the claimants strongly submitted that the claimants never committed the offences of fraudulent validation and never tampered with the Asycudda System. Counsel contended that the same consignments could not have been validated by two different ICDS (internal customs depots) since it was not possible for customs officers attached to different ICDS to be responsible for clearing the same consignments.

Counsel contended that the consignments alleged to have been validated by the claimants never reached their respective ICDS/Bonds. According to counsel, the documents required by the 1st and 3rd claimants for validation were never forwarded by the ICD keepers at Spedag and Transami, indicating that the goods never reached the respective two ICDS (Spedag and Transami).

Counsel further argued that consignments No. 0737, D80544, D80426, D78761 and D76140 did not reach Jinja ICD as testified by the 2nd claimant who came to know about them from one Juliet Koreny, a customs Officer at the ICD by then.

**o**

According to counsel, the 1st entry of a consignment would be at the Boarder point but there was no such entry in respect to the concerned consignmens implying that the employees at the Boarder point were responsible. He submitted that in the absence of evidence that the consignments reached the respective ICDS it was not possible that the claimants validated the same.

It was the further contention of counsel for the claimants that no evidence was established to show that the claimant's computers were used for validation and tampering with the Asycudda System. Counsel argued that the 3rd claimant could not have validated the consignments when validation allegedly occurred at the time she was on leave during which she never reached the Transami ICD. It was argued strongly for the claimants that the charge having been collusion and syndicating with other people, the respondent ought to have named the Information Technology Staff that the claimants allegedly colluded with. According to counsel the claimants could not be guilty of tampering with the Asycudda System without collaboration with the I. T department especially when the M. D. C report indicated that the very people in the fraud were those who were formerly URA staff who at the time were in hiding.

**o**

According to counsel, the two IT personnel charged with tampering with the Asycudda system were discharged, and reinstated to work yet they were capable of logging onto the system using staff passwords.

Counsel contended that there was no evidence linking the claimants to the importers (drivers) who allegedly admitted liability and paid the tax due and that none of them during investigations implicated the claimants.

It was counsel's submission that Joyce Ajidim (2nd claimant) a Barrier Officer, could not validate goods her role having been to receive trucks and transit information documents from drivers, compare information on them with the actual truck container, record in the barrier register and take the documents to her superior one Hussein Makku who would validate the consignment while one Clovince Friday was the System Administrator at the respective ICD (Jinja).

According to counsel, in the absence of evidence from the Customs officer, one Makku and from the system administrator, the 2nd claimant would not have been held culpable.

Counsel for the claimants contended that the claimants were denied a right to be heard. According to counsel by the time the claimants gave testimony before the MDC, the Commissioner Internal Audit and Compliance (CIATI) and the Assistant Commissioner Field services (AC-FS) had already made their findings and report against them without their defences. According to counsel the appearance by the claimants before the MDC was only procedural as the respondent had through the CIATI and AC-FS) already made findings against the claimants.

In response to the above submissions, counsel for the respondent submitted strongly that the claimants were afforded a fair hearing which was characterised by notices inviting them to appear before the management disciplinary Committee which contained details of the charges. The hearing of the 1st claimant was adjourned to get further information and the claimants were informed about the adjournment, and about the next hearing date. Counsel argued that the MDC listened to the IT and Internal Audit to enable it understand how the Asycudda System operated and gave the claimants an opportunity to explain themselves before the MDC made recommendations.

Counsel argued that the claimants were guilty of gross misconduct as prescribed underthe respondent's Human Resources Manual at page 133 and the respondent was entitled to summarily dismiss them without notice.

In his submission, the first claimant having been a Zonal Leader who was tasked to ensure proper operation of the Asycudda System, admitted that she did not carry out adequate work to ensure compliance with customs procedures. According to counsel it was negligence on the part of the 1st claimant to have realised that the documents were missing after one Kikwaya facilitated her to check for them. Counsel argued that the defence of the 1st claimant that the Asyccudda System had technical issues was not tenable since she had not reported the need to review the system.

Counsel submitted in regard to the 2nd clamant that since she had access rights to the Asycudda System the defence that she did not know how to operate it was not acceptable and she only used one Friday Clovince as a scape goat.

In respect to the 3rd claimant, counsel contended her negligence was exhibited when she informed the MDC that she had no responsibility for the Transit one Documents (TIS) and went ahead to validate a consignment without the attendant **rd**

documentation. According to counsel her denial of her supervisory role over Bond Officers contrary to the inland Container depot guidelines that provided for Customs Officers to be having such a role over the ICD keepers was not acceptable and tantamounted to neglect of her duties, which led to the fraudulent validation of consignments. Counsel argued that the plea of the 3rd claimant in her evidence that she did not understand the charges brought against her was an afterthought since she never asked the MDC to give her more information about the charges.

Counsel for the respondent argued that the contention that the same consignments could not be validated by two different ICD officers was not tenable since this contention related to only some of the consignments. According to counsel while the 1st claimant and 3rd claimant's charges were in relation to consignments D4227, D42277, D42745 and D42746 **"each of them have separate consignments which are not shared"** and the 1st claimant was also charged with validation of consignments D59259, D519168 and D8581. Counsel argued that on the other hand the 3rd claimant was responsible for consignments D10984, D65585, D65587 and D46015 as shown by exhibits CIC and C3D at pages 67 and 110 of the claimant's bundle. According to counsel none of the 1st and 3rd claimants informed MDC that they did not know the consignments they validated. It was argued for the respondents that the question as to which computers were used in tampering with the Asycudda System was not relevant.

#### Decision of court

**o**

We have no doubt that the claimants were employees of the respondent in the customs department stationed at the respective Inland Customs Depots (ICDs). The first and 3rd claimants were charged with fraudulently validating entry Nos. D22774, D42277, D427745 and D47246. In addition, the 1st claimant was charged with fraudulently validating entry No. D59259 and No. D51968.

On perusal of the MDC proceedings both claimants denied having validated the said consignments. The evidence of the claimants was to the effect that one could not validate the same consignments and in cross examination the respondent's witness confirmed this position.

In his submission on this point counsel for the respondent seemed to suggest that since the 1st and 3rd claimants did not during the disciplinary proceedings raise the issue as to which consignments were alleged to have been validated, the MDC was

right to make the recommendation for dismissal. We do not agree to this submission. The onus was on the respondent to prove on a balance of probability that each of the two claimants fraudulently validated certain consignments. Given the evidence of the respondent witness and that of the claimants, it is obvious that the 1st and 3rd claimants could not have validated the said consignments

According to the claimants they did not validate the consignments because the said consignments never reached the respective ICDS. There is no doubt that evidence of consignments having reached the ICDS would be found in the documents availed to the claimants by other officers called ICD keepers and these documents would be used to compare what the Asycudda system showed. No evidence was led by the respondent show that the said documents were availed to the 1st and 3rd claimants, indicating that the respective consignments most probably, did not reach the respective ICDS for purposes of validation.

From the evidence available, the details of the consignments were expected to be captured in the Asycudda System at the Boarder entry by employees of URA stationed there at.

According to the respondent witness, the fraud was by customs officers who would validate the consignments for entry numbers in the Asycudda System and cancel the bonds and then the IT officers would delete the entry leading to the drivers of the trucks to divert the consignments to the owner's premises who would take them without paying taxes. Obviously this was a general description of the wider scale of fraud but not particularised to the claimants in the instant case since nothing showed that the claimants validated any consignment or cancelled any Bond. As the respondent witness testified in cross examination information in respect to the consignments disappeared at the Boarder where different URA officers were positioned and he was not aware if any of them was prosecuted.

The evidence is clear that the 2nd claimant as a barrier officer received the trucks and transit information documents from the drivers and passed them on to her supervisor one Hussein Makku who was expected to validate the consignments together with a Systems Administrator one Clovince Friday. In the absence of evidence from these two personalities, it was not fair to find the 2nd claimant culpable.

Although we agree with the submission of counsel for the respondent that procedures and standards of hearing before disciplinary committees are lower than in the ordinary courts, the said committees are required to gauge and find that there was a probability that the employee committed the alleged offence. On the evidence available, it is clear that it was more probable that the consignments in issue were not validated by the claimants and that many more people were involved in the scam than the claimants whereby the probability that the claimants did not participate in the scam was higher.

Accordingly their termination was based on evidence that did not connect any of them hence it was wrongful and unlawful.

The last issue is whether the claimants are entitled to reliefs sought?

We shall discuss and possibly award reliefs as they were pleaded in the memorandum of claim.

(a) Given the discussion and conclusion earlier in this Award, it is hereby declared that the claimants were unfairly and wrongfully dismissed.

## (b)Three months' pay in lieu of notice

**o**

There is no dispute over the employment period of the 1st and 2nd claimants who were first employed in April 1992. Counsel for the respondent contended that the 3rd claimant was first employed in 1997. Since she was dismissed in 2007 she, like the rest had worked for at least 10 years. There is no doubt that the claimants were entitled to 3 months' notice in accordance with Section 58(3)(d) of the Employment Act and paragraph 2.4.2. of the respondents Human Resource Manual. Each claimant shall therefore be paid 3 months' salary in lieu of notice subject to the necessary taxation.

## (c) Unpaid *Vi* salary during suspension period

There was no denial that the respondent owed this claim to the claimants. Therefore the claimants shall be paid their /2 salary with necessary tax deductions.

#### (d) Entitlement up to end of employment

Although this court has held that the employee is not entitled to payment of salary for the remainder of years of the contract, as in the case of Rebecca Nassuna Vs Equity Bank LDC No. 006/2014, where this specific entitlement is provided for in the contract or Human Resource Manual, the decision does not apply.

We have perused the Human Resource Manual of the respondent which under clause 13.2 provides for entitlement of employees upon termination. The respondent cannot be allowed to deny her own H. R. Manual. Accordingly the claimants shall be entitled to "salary earned plus all entitlement up to the end of the employment." In other words each of them shall be paid salary each ought to have earned by the time he/she should have either retired or the contract ended by effluxion of time.

As per calculations of the claimants (in absence of the contrary) the

| claimant shall be paid 1st | 258,057,492/= | |----------------------------------------|---------------| | claimant 2nd shall paid be | 51,952,572/= | | 3rd claimant shall paid be | 428,148,000/= |

These sums shall be subject to the necessary tax deductions.

#### (e) Service Award

The respondent submitted that the claimants were paid their service Award up to 30th June 2005 when she underwent a restructuring process. However, the evidence of this payment was not shared with this court. On perusal of the Human Resource manual, whereas clause 13.9.2 is about gratuity, clause 13.9.3 is about the service award which is calculated at a rate of 15% of the gross salary for each year of service up to 1st July 2005. The rate applicable to the earlier period is 2.5%. This same ratio is provided for under clause 2.4.6 of the same Human Resource manual.

We have perused the method of calculation of the service awards payable to the claimants and in the absence of the contrary, we hereby grant 19,995,439/= to the 1st claimant, 19,995,439/= to the 2nd claimant and

14,590,588 to the 3rd claimant. All payments shall be liable to lawful tax deductions.

#### (f) General damages

Given the nature of termination, particularly considering that the respondent had experienced a fraud in the tax collection system and that the dismissals was an attempt to deal with the fraud; and considering that the claimants were terminated without evidence connecting to each of them thus renderingthem unemployed, and consideringthe nature and salaries of each of them, as well as the fact that they have been allowed salary payment up to end of employment. We hereby grant each of them 5,000,000/= as general damages.

## (g)Interest

**o**

Given the inflationary rate of the currency, we hereby grant a 15% interest per annum on the above sums from the date of this Award all payment in full.

#### (h) Costs

No order as to costs is made.

In conclusion, the claimant's case succeeds in the above terms.

#### Delivered & Signed by:

1. The Hon. Head Judge, Asaph Ruhinda Ntengye

# **o** Panelists

1. Mr. Michael Matovu.

2. Ms. Susan Nabirye

3. Ms. Adrine Namara

Dated :24/02/2022

#### **9**