Juliet Nanyombi v Tropical Bank Limited (Labour Dispute Claim 56 of 2015) [2022] UGIC 72 (22 April 2022)

# **THE REPUBLIC OF UGANDA IN THE INDUSTRIAL COURT OF UGANDA AT KAMPALA LABOUR DISPUTE CLAIM NO. 056/2015 ARISING FROM HCT-CS-271/2013**

# **BETWEEN**

**JULIET NANYOMBI CLAIMANT**

### **VERSUS**

**TROPICAL BANK LIMITED RESPONDENT**

#### **15** Before 1) The Hon. Head Judge, Ruhinda Asaph Ntengye

#### **Panelists**

- 1. Ms. Adrine Namara - **20** 2. Ms. Susan Nabirye 3. Mr. Michael Matovu

#### **AWARD**

#### **25 Brief Facts**

**30**

**5**

**10**

By contract made on 4/1/2008 the claimant was employed by the respondent as <sup>a</sup> junior officer grade VI for 3 years. She rose through the ranks until June 2013 when she was serving as branch manager at the Nakivubo branch of the respondent bank. According to the respondent one Semakula Godfrey <sup>a</sup> bank customer on 6/4/2013 issued cheques to the Nakivubo branch in favour of Kakira Sugar Works which the claimant acknowledged by stamping **"CHECKED"** without verifying the financial status of the customer's account. This according to the respondent misled Kakira Sugar Works to believe that its account had been credited with the funds on the deposit slip and supplied Semakula with

**35** sugar. This according to the respondent was done by keeping the cheques in the drawer until there was sufficient money (after 1 month) when the money would be credited to the Kakira Sugar Works Account.

**1 | P a g e**

The claimant, according to the respondent, was accorded <sup>a</sup> fair hearing and found culpable after which she was terminated.

- **40** According to the claimant, it was <sup>a</sup> customer care officer who received the verified the cheques for correctness through 2 other people and lastly the claimant as manager would validate the cheque as for it to be honored. The claimant denied having received the questioned cheques which she came to know about on 13/4/2013 when the customer relation manager was inquiring - **45** about other cheques deposited much later. She was informed that the questioned cheques had been retuned for insufficiency of funds. The customer then informed her that it was true after which she made a report to the Senior Manager.

**50** Subsequently she was suspended and appeared unrepresented at the disciplinary committee and later she was terminated.

### **Issues**

- 1) Whether the claimant was unfairly terminated - 2) What remedies are available?

# **Representations**

**55** The claimant was represented by Mr. Silas Baguma of Kalenge, Mwanika, Kisubi & Co. Advocates while the respondent was represented by Mr. J. M. Musisi of M/s. JM Musisi Advocates & Legal Consultants.

# **Evidence adduced**

**60** The claimant adduced evidence from herself alone while the respondent adduced evidence from Kassim Kasawuli, a Human Resource Manager of the respondent.

In her testimony the claimant informed court that she did not receive the questioned cheques because the customer care officer, one Maria Goretti Mukwaya did not pass the same to her but instead kept them and yet the said Maria Goretti was not dismissed. She came to learn about the cheques at <sup>a</sup> much later time.

**65**

The respondent's evidence was that the questioned cheques were stamped **"CHECKED"** by the claimant without verifying the customer's financial status and the customer presented the bank slips to Kakira Sugar Works which released the

**70** sugar and once the slips were sent to the Bank dated 06/02/2013, sugar having been released, there was no money on the account.

# Submissions

**75** It was the submission of counsel for the claimant that the claimant was dismissed for the inadequacies of other bank officials since she was not aware of any bank rules that she did not follow which were stated in her termination letter. According to counsel no Bank rules and procedures allegedly not followed by the claimant were adduced in evidence and therefore no reason for a dismissal was proved in accordance with **Section 68(1) of the Employment Act.**

80 Counsel argued that no cheques allegedly cleared by the claimant were adduced in evidence so as to prove breach of the prescribed procedure. According to counsel the inscription **"CHECKED"** was not to confirm that money had been remitted.

According to counsel, the witness of the respondent could not prove the significance of the stamp **"CHECKED"** and therefore there was no proof of the failure of the claimant to supervise her staff.

Counsel strongly argued that failure of the respondent to allow the claimant appear with a person of her choice during the disciplinary proceedings eroded the fairness of the hearing and rendered the claimant unfairly terminated.

90 **95** 100 In reply to the above submissions, counsel for the respondent strongly submitted that the receipt of the questioned cheques was acknowledged and stamped **"CHECKED"** by the claimant without verifying the financial status of the customer. According to counsel the report of the claimant made to the Bank Inspector acknowledged that customers used to deposit for purchase of goods from Kakira sugar works and used to ask for a **"CHECKED"** stamp, yet she did not know what it verified and according to counsel this imputed negligence on her part. In his view, the findings of the disciplinary committee were open and transparent and there was no evidence that the claimant was denied the right or choice to appear with another person during the disciplinary proceedings. Counsel argued that even if the court would fault the respondent on this aspect of <sup>a</sup> fair hearing, liability would be to the extent of payment of 4 weeks' wages in accordance with **Section 66(4) of the Employment Act.**

# **Decision of court**

**3 <sup>|</sup> P a g e**

105 The duty of <sup>a</sup> banker to <sup>a</sup> customer was clearly expressed in the case of Barclays Bank of Uganda Vs Godfrey Mubiru SCCA 1/98 as follows:

> **"Managers in the banking business have to be particularly careful and exercise a duty of care more diligently than managers of most businesses. This is because banks manager and control money belonging to other people and institutions, perhaps in their thousands and therefore are in a special fiduciary relationship with their customers whether actual or potential."**

This court in the case of **Anyango Beatrice Vs Kenya Commercial Bank, LDR 325/2015** at page 7 of the Award observed that one of the roles of a bank manager was to **"keep the bank funds safe and avoid any kind of loss through**

115 **fraud or otherwise."**

> Although the claimant denied having come across the questioned cheques and by implication having placed on them the **"CHECKED"** stamp, in cross examination she confirmed that she was aware of the **"CHECKED"** stamp and informed court that some customers needed it although she did not understand why they insisted on the said stamp. In her own words in cross-examination she said:

**"Several customers would ask to stamp "CHECKED". This was not an assurance that Kakira was paid, we had it because the customers wanted** .....**I had it in my custody. It was not everyone who brought a deposit slip that got the stamp.... It was to the comfort of some of our customers."**

Later on the claimant insisted that she did not know the significance of the stamp and its implication although she is reported to have said during the disciplinary hearing as she explained the process of posting money on a cheque that

130 135 **"....cheques are received by the customer care officer who verifies the face of the cheque together with the money on the account and if all is well the cheque is received and stamped and the customer is given the duplicate copy of the deposit slip. The customer then goes to her office and she verifies the cheque after which she stamps the depot slip with "CHECKED".**

> Although she informed the committee that she was not aware of the fact that the customer's cheques were kept at the branch because his account

was insufficient, the committee did not believe her and found her grossly negligent in stamping the customer's copies of the deposit slips.

140 145 The evidence on the record suggests that the claimant in endorsing the cheques with <sup>a</sup> **"CHECKED"** stamp was not aware of the implication and was not even in the know why she was using the stamp. Given the role of the Manager as expressed in the case Barclays Bank of Uganda Vs Godfrey Mubiru (supra) the claimant should have taken interest in knowing why certain individuals were interested in the stamp **"CHECKED".**

> We agree with the respondent that failure to appreciate the significance of her stamp and therefore the likelihood that it could be misused was being negligent in her duties as Bank Manager.

150 **Section 66 of the Employment Act** provides for entitlement of <sup>a</sup> person of the choice of the employee to be present at the hearing.

The case of Ebiju James Vs Umeme HCCS 133/2012 held that (inter alia)

**"The notice should set out clearly what the allegation against the plaintiff and his rights at the oral hearing, such rights would include the right to respond to the allegations against him orally and/or in writing, the right to be accompanied at the hearing and the right to cross examine the defendant's witnesses or call witness of his own."**

160 165 We have perused the notice of hearing signed by the Chairperson of the Disciplinary Committee. It is short of informing the claimant any of the about rights and therefore we fault the respondent for not indicating clearly the said rights. However, it is our considered opinion that the failure of the claimant to comprehend the implications of using the **"CHECKED"** stamp onto the deposit slips of the questioned cheques amounted to a fundamental breach of her obligations to protect the bank against potential loss and this was in contravention of **Section 69(3) of the employment Act** which provides

> **"An employer is entitled to dismiss summarily, and the dismissal shall be termed justified, where the employee has, by his or her conduct indicated that he or she has fundamentally broken his or her obligations arising under the contract of service."**

- 170 Consequently, we find that the termination of the claimant was justified. However, for failure to clearly indicate the rights of the claimant in the notification so as to afford her <sup>a</sup> fair hearing, we hereby under **Section 66(4)** fault the respondent and order that the claimant be paid 4 weeks' wages for this failure. - 175 The next issue is **what remedies are available.**

Since the finding of the court is that the claimant was justifiably terminated no remedies arise therefrom.

In the result, the claimant having failed to prove the claim of unlawful or unfair termination, it is hereby dismissed, save for the four weeks' wages, with no orders as to costs.

## **Delivered** & **signed by:**

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

185 **PANELISTS**

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

<sup>190</sup> Dated:22/04/2022