Kyamugisha v Mutungo Executive Hotel Ltd and Uganda Revenue Authority (CIVIL SUIT NO. 285 OF 2019) [2025] UGHC 181 (14 April 2025)

# **THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA (CIVIL DIVISION) CIVIL SUIT NO. 285 OF 2019**

**DANIEL KYAMUGISHA ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF**

### **VERSUS**

## **1. MUTUNGO EXECUTIVE HOTEL LTD T/A AFRIQUE SUITES 2. UGANDA REVENUE AUTHORITY ::::::::::::::::::::::::::::::::::: DEFENDANTS**

## **BEFORE: HON. JUSTICE BONIFACE WAMALA JUDGMENT**

### **Introduction**

[1] The plaintiff brought this suit against the defendants seeking declarations that the allegations made by the 1st defendant to the 2nd defendant were false and baseless; that the defendants are liable for the plaintiff's loss of earnings; a declaration that the 2nd defendant wrongfully or unlawfully dismissed the plaintiff; and for orders that the 1st defendant retracts the statements made to the 2nd defendant with an apology; that the defendants pay to the plaintiff a sum of UGX 781,775,895/= as special damages for loss of earnings; for general and exemplary damages, interest and costs of the suit. The plaintiff's claim arose out of termination of his contract of employment with the 2nd defendant based on background information availed by the 1st defendant to the 2nd defendant.

[2] The brief facts according to the plaintiff are that on 11th October 2016, the plaintiff was appointed by the 1st defendant as an operations manager at Afrique Suites Hotel. He resigned from the said employment on 10th July 2017. On 31st July 2018, the plaintiff was appointed by the 2nd defendant as a customs officer with a gross consolidated monthly salary of UGX 3,493,355/=. However, on 30th November 2018, the 2nd defendant dismissed the plaintiff on ground that upon conducting post-employment background checks in line with the employment contract, it had established that the plaintiff while in his previous employment had been involved in fraudulent activities that had occasioned loss to his employer. The background information provided by the 1st defendant was to the effect that one employee supervised by the plaintiff had disappeared with the company monies; that the plaintiff had levied corkage charges on clients and not remitted the money; and that upon being reprimanded, he had resigned without notice. The plaintiff averred that the said allegations and/or information availed by the 1st defendant to the 2nd defendant was not truthful and he was not given a fair hearing before the same was relied on by the 2nd defendant as required by the principles of natural justice. The plaintiff thus instituted this suit.

[3] The 1st defendant filed a written statement of defence (WSD) denying the plaintiffs' claims and stated that after the plaintiff's resignation, they were contacted by the Uganda Revenue Authority (the 2nd defendant) and requested to fill in a background information check form as the former employer of the plaintiff. The 1st defendant's Managing Director filled the form giving the true information about the plaintiff as their former operations manager. The 1st defendant denied giving false information and averred that the dismissal letter shows that the 2nd defendant acted independently and made further investigations of the background check results which it confirmed to be true before taking the decision to dismiss the plaintiff. The 1st defendant prayed to Court to dismiss the suit with costs.

[4] The 2nd defendant also filed a WSD denying the plaintiff's claims and stated that the plaintiff was offered and accepted a probationary appointment with the 2nd defendant as a customs officer. During the probation and in line with the terms of the contract, the 2nd defendant undertook post-employment background checks to ascertain the suitability of the plaintiff for employment and upon conclusion of the background check exercise, it was found that the plaintiff did not meet the requirements for employment with the 2nd defendant. The plaintiff was subsequently dismissed in accordance with the employment contract. The plaintiff appealed the dismissal which appeal was heard by the Staff Appeals Committee that maintained the decision to dismiss the plaintiff. The 2nd defendant prayed for dismissal of the suit with costs.

### **Representation and Hearing**

[5] At the hearing, the plaintiff was represented by **Mr. Munyaneza Daniel** from M/s Ajju, Baleese, Bazirake (ABBA) Advocates; the 1st defendant was represented by **Mr. Gad Wilson** from M/s Gad & Co. Advocates while the 2nd defendant was represented by **Mr. Barnabas Nuwaha** from the Legal Services and Board Affairs Department of the 2nd defendant. Counsel made and filed a Joint Scheduling Memorandum. Evidence was adduced by way of witness statements. The plaintiff led evidence of one witness; the 1st defendant led evidence of one witness while the 2nd defendant led evidence of two witnesses. All the parties' counsel made and filed written submissions which have been considered by the Court in the determination of the matter before Court.

#### **Preliminary Objection**

[6] In their submissions, Counsel for the 2nd defendant raised a preliminary objection to the effect that the suit is unfounded in law and was filed in a wrong forum given that it is a claim based on a labour dispute whose primary jurisdiction lies with the labour officer in accordance with the Employment Act, 2006. I will first deal with this objection.

[7] Counsel for the 2nd defendant cited the provision under section 93 of the Employment Act 2006 which stipulates that "except where it is expressly provided for by this Act or any other Act, the only remedy available to a person who claims an infringement of any of the rights granted under this Act shall be by way of a complaint to a labour officer". Counsel submitted that the plaintiff's cause of action which is set out as loss of earnings and unlawful dismissal shows that the suit is based neither on breach of contract nor tort. Counsel submitted that according to the rights and remedies sought to be enforced by the plaintiff, the suit should have complied with the provisions under the Employment Act and the Labour Disputes (Arbitration and Settlement) Act. Counsel prayed to the Court to strike out the suit as bad or unfounded in law.

[8] In reply, Counsel for the plaintiff relied on Article 139(1) of the Constitution of the Republic of Uganda to the effect that the High Court has unlimited original jurisdiction in all matters and such other jurisdiction as may be conferred on it by the Constitution or other law. Counsel submitted that the 2nd defendant was added as a party to the instant case pursuant to an order of the Court in order to achieve effectual and complete adjudication and settlement of all issues involved in the suit before the Court. Counsel prayed that the preliminary objection be overruled.

### **Determination by the Court on the preliminary objection**

[9] It should be pointed out that the present suit was not brought as purely an employment dispute. The plaintiff's alleged cause of action was based on information supplied by the 1st defendant to the 2nd defendant which is alleged by the plaintiff to have been false and injurious to him. The said information led to the termination of the plaintiff's employment with the 2nd defendant and thus loss of earnings, amongst other damages. As such, termination of the plaintiff's employment was a consequence of the conduct leading to the cause of action and not the basis of the cause of action. This explains why the plaintiff had not actually sued the 2nd defendant. The suit was initially brought against the 1st defendant and it was upon the application of the 1st defendant that the 2nd defendant was added to the suit as a co-defendant for purpose of achieving an effectual and complete resolution of the dispute.

[10] It may be true that the plaintiff did not classify the basis of his cause of action. What is clear, however, is that the plaintiff showed that he had a right to retain his employment with the 2nd defendant; the said right was infringed by the 1st defendant by supplying false and injurious information and by the 2nd defendant by not properly and fully investigating the information; and he, as a result, suffered loss and damage. Those elements are well established upon the plaintiff's pleadings. The plaint by the plaintiff therefore establishes a reasonable cause of action against the defendants. The cause of action is not primarily based on an employment dispute and the plaintiff rightly instituted the action in a court with unlimited original jurisdiction.

[11] For completeness, however, let me point out that even if the matter was an employment dispute that fell within the provisions of the Employment Act Cap 226 and the Labour Disputes (Arbitration and Settlement) Act Cap 227, the High Court would not be necessarily barred from entertaining the dispute. The position of the law is that the High Court is vested with original unlimited jurisdiction by virtue of Article 139(1) of the Constitution of Uganda and such appellate or other jurisdiction conferred on it by the Constitution or any other law. For a provision of a statute to oust the said jurisdiction of the High Court, it must state so expressly or by clear implication. The same cannot be presumed. This position can be deciphered from various decisions of the courts on the subject in a number of cases, which include *David Kayondo v The Cooperative Bank (U) Ltd Court of Appeal Civil Appeal No. 091 of 1992; Kameke Growers Cooperative Society Limited v North Bukedi Co-operative Union, SCCA No. 8 of 1994;* and *Uganda Revenue Authority v Rabbo Enterprises (U) Ltd & Another, SCCA No. 12 of 2004 [2017] UGSC 20*.

[12] On the case before me, while I agree that the cited provisions of the Employment Act and the Labour Disputes (Arbitration and Settlement) Act made the office of the labour officer the court of first instance in labour disputes, and that such provisions have the effect of ousting jurisdiction for courts and tribunals with limited jurisdiction; the provisions are incapable of ousting the unlimited original jurisdiction of the High Court since they are subservient to Article 139(1) of the Constitution. This is borne out by the

decision in *Uganda Revenue Authority v Rabbo Enterprises (U) Ltd & Another (supra)*. In the circumstances, even if the facts herein were different, there would have been nothing barring the plaintiff from lodging the dispute in this Court. The preliminary objection raised by the 2nd defendant's counsel is therefore without merit and is overruled.

### **Agreed Facts**

[13] In the joint scheduling memorandum, the parties through their counsel agreed to the following facts, namely that;

(a) The plaintiff was on 11th October 2016 appointed by the 1st defendant to work as an operations manager at Afrique Suites Hotel Mutungo until 4th July 2017 when he resigned.

(b) On 31st July 2018, the plaintiff was appointed by the 2nd defendant as a customs officer (Grade One) and was dismissed on 30th November 2018.

(c) The 2nd defendant carried out background check on the plaintiff with his former employees among them the 1st defendant.

(d) The 2nd defendant requested the 1st defendant to fill a background information check form as the former employer which information the 1st defendant availed.

(e) The plaintiff was on 30th November 2018 dismissed by the 2nd defendant.

### **Issues for Determination by the Court**

[14] Three issues were agreed upon for determination by the Court, namely;

*(a) Whether the plaintiff was lawfully dismissed by the 2nd defendant?*

*(b) Whether the 1st defendant is liable for the plaintiff's loss of earnings at the 2nd defendant?*

*(c) What remedies are available to the parties?*

### **Burden and Standard of Proof**

[15] In civil proceedings, the burden of proof lies upon he who alleges. Section 101 of the Evidence Act, Cap 6 provides that;

*"(1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he or she asserts must prove that those facts exist.*

*(2) When a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person."*

[16] Section 103 of the Evidence Act provides that; "*The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person"*.

[17] Accordingly, the burden of proof in civil proceedings normally lies upon the plaintiff or claimant. The standard of proof is on a balance of probabilities. The law however goes further to classify between a legal burden and an evidential burden. When a plaintiff has led evidence establishing his/her claim, he/she is said to have executed the legal burden. The evidential burden thus shifts to the defendant to rebut the plaintiff's claims.

### **The Evidence**

[18] The plaintiff led evidence of one witness, the plaintiff, **Kyamugisha Daniel** who testified as **PW1**. The 2nd defendant led evidence of two witnesses, namely, **Mr. Muhindo Isaac Baake**, a retired Detective Assistant Superintendent of Police working in the 2nd defendant's Tax Investigations Division, who testified as **DW1** and **Mr. Jimmy Okuja**, Acting Manager Human Resource with the 2nd Respondent, who testified as **DW2**. The 1st defendant led evidence of one witness, **Dr. Margaret Kamya**, a retired medical doctor and director of the 1st defendant, who testified as **DW3**.

### **Resolution of the Issues**

*Issue 1: Whether the plaintiff was lawfully dismissed by the 2nd defendant?*

#### **Submissions by Counsel for the Plaintiff**

[19] Counsel for the plaintiff cited the provision under Article 42 of the Constitution which provides for a right to be heard before an administrative body, and Articles 28 and 44 (c) of the Constitution which provide for the right to a fair hearing as a non-derogable right. Counsel further cited the case of *Ridge v Baldwin & Others [1964] AC 40* in which it was held that even if the respondents had powers of dismissal without complying with the regulations, they were bound to observe the principles of natural justice and a decision reached in violation of the principles of natural justice, especially the one relating to the right to be heard, is unlawful and void. Counsel submitted that the 2nd defendant dismissed the plaintiff on grounds that it had established that he was involved in fraudulent activities at his former workplace such as charging hotel clients' corkage and keeping the monies to himself which led to his resignation without notice. Counsel stated that the plaintiff had shown in evidence that the allegations were false, that he had tendered in his resignation which was accepted, and that he was never appraised, reprimanded or found culpable of any disciplinary offence.

[20] Counsel stated that the employment background check form purportedly relied on by the 2nd defendant was not signed and dated although the name of the author was indicated. Counsel argued that the form automatically became invalid and it was wrong for the 2nd respondent to rely on it. Counsel further stated that under clause 2 of the investigation report (DE4), the objective was to prove the authenticity of the allegations and make a report with appropriate recommendations; clause 4 of the report provided for investigations methodology which required accessing the credibility of the source of the allegations; and clause 5.3 provided for offense No. 35 which is not apparent in the Human Resource Manual.

[21] Counsel further submitted that DW1 testified that he did not get access to any reprimand letter, did not see any minutes of a disciplinary hearing, and never requested for any appraisal forms. Counsel submitted that the investigations did not adhere to the objectives and methodology; the plaintiff was never invited for any disciplinary hearing by the 2nd defendant and the plaintiff's appeal to the staff appeals committee for a fair hearing and comprehensive investigations was rejected. Counsel concluded that having pointed out that the background check was not adequately carried out, coupled with the failure by the 2nd defendant to accord the plaintiff a fair hearing, the decision to dismiss the plaintiff was unlawful and ought to be declared null and void by the Court. As such, the Court was invited to issue a declaration that the plaintiff was wrongfully or unlawfully dismissed by the 2nd defendant.

### **Submissions by Counsel for the 2nd Defendant**

[22] Counsel for the 1st defendant made no submissions on Issue 1. Counsel for the 2nd defendant cited the provision of Section 66 of the Employment Act to the effect that a contract of employment can be terminated by way of notice or payment in lieu of notice and the case of *Hilda Musinguzi v Stanbic Bank (U) Ltd SCCA No. 5 of 2016* to the effect that the right of an employer to terminate a contract cannot be fettered by the court. Counsel submitted that clause 4 of the plaintiff's contract provided that he was supposed to serve a probationary period of six months and confirmation would be subject to being found suitable upon post-employment background checks being made, among other requirements. Counsel stated that failure to be found suitable would culminate in termination of the contract. Counsel further stated that under clause 6.1 of the contract, the 2nd defendant reserved a right to dismiss the plaintiff without notice or payment in lieu of notice in the event of unfavorable background check. Counsel also pointed out that under section 2.4.1 of the 2nd defendant's human resource management manual, a candidate whose vetting returns an unfavorable report shall have his contract terminated. Counsel submitted that since the plaintiff was under a probationary contract, the 2nd defendant's management invoked the clauses of the contract and the Human Resource Management Manual (HRMM) to terminate the plaintiff's contract.

[23] Counsel further submitted that the plaintiff in paragraph 8 of his witness statement admitted to having been made aware of the allegations and writing a comprehensive statement elaborating his employment experience with the 1st defendant. Counsel stated that the checks carried out by the 2nd defendant specifically with the plaintiff's former employer, the 1st defendant, revealed undesirable feedback. Counsel also cited the provisions of section 67 (1) of the Employment Act 2006 to the effect that notification and hearing prior to termination of a contract are not mandatory or required when dismissal occurs during a contract of probation. Counsel argued that a reading of the said provisions of the Act, the plaintiffs contract and the provisions of the HRMM revealed no requirement to hear out the plaintiff as much as a hearing was conducted by the 2nd defendant.

[24] Regarding the allegations concerning the unsigned background form and inadequate investigations, Counsel submitted that DW2 had testified that the feedback form was attached to a cover letter and that even if the form had no signature, it had the name of the 1st defendant's director and its form and content was not denied by the 1st defendant. Counsel submitted that the investigations were thoroughly undertaken and the participation of the plaintiff was not denied. Counsel concluded that the 2nd defendants adhered to the rules of natural justice more so where it was not a statutory requirement and there was a full blown investigation undertaken by the 2nd defendant with the involvement of the plaintiff. #### **Determination by the Court**

[25] The claim by the plaintiff under this issue is that before relying on the information supplied by the 1st defendant, the 2nd defendant did not carry out a thorough investigation, did not give him a fair hearing as required by the principles of natural justice and, as a result, wrongly or unlawfully dismissed him based on false and unsubstantiated allegations made by the 1st defendant. The plaintiff claims that he was never invited for a disciplinary hearing by the 2nd defendant and even when he made an appeal against his dismissal, the appeal was rejected, also without a hearing. In response, the 2nd defendant justified the dismissal as done in compliance with the provisions of the law, the 2nd defendant's Human Resource Management Manual (HRMM) and the plaintiff's employment contract. It was argued for the 2nd defendant that the plaintiff having been dismissed during his probationary period and in view of the provision under section 67(1) of the Employment Act 2006 **[now section 66(1) of the Employment Act Cap 226]** and clauses 4 and 6 of the plaintiff's employment contract with the 2nd defendant, the plaintiff was not entitled to notification and a hearing prior to dismissal.

[26] The plaintiff herein has used the terms unlawful dismissal and wrongful dismissal interchangeably. I should point out that although claims of wrongful dismissal were available under common law, the Employment Act does not make provision for wrongful dismissal. Rather it provides for unfair and unlawful dismissal. In *Richard Ndemerweki v MTN (U) LTD LDA 101 of 2014*, the Industrial Court, while answering the issue as to whether there is a distinction between a claim based on wrongful dismissal and unlawful dismissal, relied on the definition in the Black's Law Dictionary of the term "wrongful" to mean "characterized by unfairness or injustice, contrary to the law"; and "unlawful" to mean "not authorized by law, illegal, criminally punishable". The Court concluded that there was no apparent difference between unlawful and wrongful dismissal as, in the end, both contravene the law. On appeal in the same case vide *MTN (U) LTD v Richard Ndemerweki CACA No. 291 of 2016*, although the ground as to whether the Industrial Court had erred in finding that there was no distinction between wrongful and unlawful dismissal was abandoned and was thus not determined by the Court of Appeal, the Court relied on the definition of wrongful dismissal according to Halsbury's Laws of England, 4th Edition volume 16 paragraph 302 for the definition of wrongful dismissal as a dismissal in breach of the relevant provisions in the contract of employment relating to the expiration of the term for which the employee is engaged.

[27] As indicated above, however, the Employment Act appears to dwell on unlawful or unfair dismissal. From the relevant provisions of the Act, this appears to cover situations where termination of a contract or dismissal of an employee is effected in violation of the law, mainly the Employment Act Cap 226, the Labour Disputes (Arbitration and Settlement) Act Cap 227, among others. It also covers situations where the dismissal is done in breach of an employment contract or in violation of the law generally or public policy. An example is where the dismissal is based on grounds of discrimination, retaliation or ill-motive. As such, the use of the term wrongful dismissal in the alternative by the plaintiff can be safely ignored.

[28] On the case before me, it was claimed by the plaintiff that he was not given notice and a hearing as required under section 66 of the Employment Act [**now section 65 of the Employment Act Cap 226**]. In reply, the 2nd defendant made two arguments. One is that, because the plaintiff was serving a probationary contract, he was not entitled to the notice and hearing envisaged under section 66 (now section 65 of Cap 226). His contract could be terminated summarily in accordance with section 67(1) [now section 66(1) of Cap 226]. The second argument is that, despite the above legal position, the plaintiff was still given fair and just treatment since his matter was fully investigated before action was taken by the 2nd defendant.

[29] Regarding the first argument as set out above, it is necessary to ascertain whether the contract given to the plaintiff by the 2nd defendant was a probationary contract or not. I have before stated that it ought to be understood that there is a difference between a probationary contract within the meaning of section 2 of the Employment Act on the one hand, and a contract containing a clause for a probationary period. See: *Mark E. Kamanzi v National Drug Authority & Another (Misc. Application No. 138 of 2021) 2022 UGHCCD 26 (10 March 2022)*. Under section 2 of the Employment Act, a "probationary contract" means "a contract of employment, which is not of more than six months' duration, is in writing and expressly states that it is for a probationary period". As such, including a term as to probation in a full term or fixed contract does not make a contract a probationary one. The probationary period only becomes part of the contract. Also see *Mauda Atuzarirwe v URSB, HCMC No. 249 of 2013* and *Ben Rhaieim Aimen v Granda Hotels (U) Ltd, Industrial Court Labour Appeal No. 002 of 2023*.

[30] On the case before me, the contract in issue (on record as PE4) was neither a full term nor a fixed term contract. For avoidance of doubt, I will set out the relevant parts of the contract;

# *"Appointment as Officer in the Customs Department*

*I am pleased to inform you that the Management of Uganda Revenue Authority (URA) has offered you appointment as Customs Officer (Grade One) in the customs Department on the following conditions of service;*

#### *1. Effective Date of Appointment*

*The effective date of appointment shall be 15th August 2018.*

## *3. Conditions of Service*

*The terms of your appointment will be bound and interpreted in conformity with the Human Resource Management Manual (HRMM) and any other policies on Human Resources as may be introduced by the Authority ….*

#### *4. Probation*

*You will serve a probationary period of six months with effect from your reporting date. Your confirmation in service of the Authority shall be subject to a satisfactory performance appraisal report or any other Assessment that the Authority will deem necessary for assessing your suitability for confirmation into the services of the Authority or a combination of any of the conditions mentioned under this clause.*

*Failure to meet any one or a combination of the criteria mentioned above may lead to termination of your employment contract.*

*…*

### *6. Termination of Employment*

#### *6.1 Dismissal without notice*

*The Authority reserves the right to dismiss you from service without notice or payment in lieu of notice, if at any one time you:*

*(i) Are found with invalid academic documentation and/or unfavourable employment background checks (where applicable). If found culpable, this shall lead to automatic dismissal …"*

[31] The above contract was, in my considered view, a probationary contract; first because it was neither a fixed term nor a full term contract. Secondly, it expressly provided that it was for the probationary period of six months and also set out conditions to be met if the employee was to be confirmed in the employment of the 2nd defendant. Thirdly, the contract made provision for termination upon occurrence of certain circumstances. Lastly and specifically, it made provision for termination without notice where the plaintiff was *"found with invalid academic documentation and/or unfavourable employment background checks (where applicable) …"*.

[32] In this case, employment background checks were applicable and were conducted as part of the terms of the contract and in accordance with the 2nd defendant's Human Resource Management Manual. This, in my view, is a further recognition that the contract was a probationary one that could be terminated without notice if the envisaged circumstance occurred. The term as to termination without notice was therefore in accordance with both the law (section 66(1) of Cap 226) and the contract in issue (PE4). Accordingly, termination of the plaintiff's probationary contract was neither unlawful nor unfair since it was envisaged both under the law and on the terms of the contract.

[33] It was argued for the plaintiff that given the non-derogable nature of the right to a fair hearing, the provisions of Articles 28 and 44(c) of the Constitution take precedence over the provision under section 66(1) of the Employment Act Cap 226. Counsel argued that, as such, the failure to give the plaintiff a fair hearing would still make his dismissal unlawful. While I fully agree that the right to a fair hearing is sacrosanct and non-derogable, I need to point out that the full application of the right to a fair hearing under Article 28 of the Constitution is triggered in the case of proceedings before a court or tribunal established by law. Article 28(1) of the Constitution provides that *"In the determination of civil rights and obligations or any criminal charge, a person shall be entitled to a fair, speedy and public hearing before an independent and impartial court or tribunal established by law."*

[34] It should be understood that when making a decision over termination of an employee's contract, the 2nd defendant was making a management or administrative decision and was not acting as a court or tribunal established by law. It was simply executing its duties as a public body. The constitutional provision that is applicable to the execution of functions by public or administrative bodies is Article 42 of the Constitution. It provides that any person appearing before any administrative official or body has a right to be treated justly and fairly and shall have a right to apply to a court of law in respect of any administrative decision taken against him or her. I have also expressed the view that the term "appearing" as used in article 42 of the Constitution is not restricted to physical appearance. It may include 'appearance' by making representations, or by having one's matter being considered by a public body. A decision can therefore be properly reached by a public body without the presence of the affected party. What is of cardinal importance is that such a decision must be just and fair, in compliance with Article 42 of the Constitution.

[35] In law, for a decision to be fair and just, it must comply with the principles of natural justice. However, in order to comply with the rules of natural justice, the public body does not always have to call the affected party for a hearing. It would suffice that the public body draws the facts (the raw materials of the impending decision) to the affected party for their input or at least their awareness over the impending decision. The requirement under natural justice is that the person accused should know the nature of the accusation made against them; he/she should be given an opportunity to state his/her case; and the tribunal or public body should act in good faith. See: *Byrne v. Kinematograph Renters Society Ltd [1958]1 WLR 762*.

[36] Upon the above premises, my finding is that the mere fact that the plaintiff herein was not called to physically appear before any committee or body of the 2nd defendant does not imply that he was not given an opportunity to be heard. Evidence indicates that he was called on phone and asked about the allegation. This was followed by some email communication over the matter. The plaintiff was then called to office and was asked to make a statement; which he did. The plaintiff agrees with this evidence. Indeed, a copy of email exchanges on record as PE5 contains the plaintiff's explanation over the matter in issue. It also contains a reply by the investigating officer (DW1) raising some questions. The plaintiff does not provide evidence of answers to those questions. Evidence further indicates that the 2nd defendant's Compliance and Audit Unit made its investigations and eventually made a report which is on record as DE4. In view of such evidence, I am unable to agree that the plaintiff was not given an ample opportunity to respond to the allegations. In my considered view, the plaintiff was given an opportunity to be heard and was given fair and just treatment by the 2nd defendant while his matter was being considered. The principles of natural justice were therefore observed by the 2nd defendant on the case before the Court.

[37] In an earlier case of *Barbra Awidi Michelle v Uganda Revenue Authority HCMC No. 322 of 2021,* a case that had considerable similarity on the issue of termination of a contract during the probationary period, I took a different view from the one I have taken herein. In that case, I found that the respondent (who is the current 2nd defendant) had not observed the principles of natural justice and had acted with procedural impropriety. The significant distinction between the two cases is that in the *Barbra Awidi* case, the applicant's contract was terminated on disciplinary grounds in breach of the procedure set out by the respondent's Human Resource Management Manual. In the present case, the plaintiff's termination was on grounds of qualification or suitability for employment. The plaintiff's contract expressly stated that if the plaintiff was *"found with invalid academic documentation and/or unfavourable employment background checks (where applicable)"* the 2nd defendant had a right to terminate the contract without notice. As such, the disciplinary procedural requirements under the 2nd defendant's Human Resource and Management Manual were not applicable to this mode of termination. A court of law is duty bound to exercise a lot of restraint before imposing onto an employer a worker whose qualification or suitability is in issue. This is what significantly distinguishes the facts and circumstances of this case from the *Barbra Awidi* case.

[38] My finding finding herein above also caters for the plaintiff's claim that he was not given a fair hearing in regard to his appeal. There was no requirement that the plaintiff had to appear physically before the 2nd defendant's Staff Appeals Committee. The plaintiff made representations that were considered by the committee which returned a negative verdict. I do not find a failure on the part of the 2nd defendant in observing the principles of natural justice.

[39] All in all, on Issue 1, my finding is that the plaintiff has not proved on a balance of probabilities that his dismissal by the 2nd defendant was unlawful or unfair. In answer to Issue 1, therefore, the plaintiff was lawfully dismissed by the 2nd defendant.

*Issue 2: Whether the 1st defendant is liable for the plaintiff's loss of earnings at the 2nd Defendant?*

[40] The case for the plaintiff is that his dismissal by the 2nd defendant was occasioned by the information that was supplied by the 1st defendant's managing director to the 2nd defendant. It is asserted by the plaintiff that the information was false and injurious to him. For the 1st defendant, it is stated that the information was formally requested for by the 2nd defendant as part of its recruitment process. This was corroborated by the 2nd defendant who asserted that employment background checks were part of their recruitment process, including post-employment background checks like the present one. It was shown in evidence that this requirement was part of the terms of the contract of which the plaintiff was aware.

[41] It was further shown in evidence that all the plaintiff's three former employers were contacted. While the two earlier employers gave favourable background information, the latest employer (the 1st defendant) pointed out three issues, namely; that one worker of the 1st defendant had disappeared with company money under the plaintiff's watch as the operations manager; secondly that the plaintiff had levied corkage charges onto clients and not remitted the money; and thirdly that the plaintiff upon being reprimanded by the 1st defendant's management, resigned without notice.

[42] In my view, given that the information supplied by the 1st defendant was sought by the 2nd defendant formally, the real question for determining liability on the part of the 1st defendant (the provider of the information) is not whether the information was true or not. Rather it would be whether the information was knowingly false or malicious or made with ill-motive. This is because, the question as to whether the information was true or false is subjective. It is possible that while the 1st defendant's management was convinced that the information was correct, the plaintiff on his part believed it was untrue. Since the plaintiff had already left the 1st defendant's employment, there was no objective measure or opportunity for the two parties to agree on that position.

[43] Assuming the 1st defendant's management, in good faith, believed that the information provided was true and correct, they could not have been expected to withhold the same when approached by another employer. It would be the absence of good faith (thus the presence of mala fide) that would be actionable against the provider of information that is considered to be injurious. It is for this reason that in order to succeed in an action against the 1st defendant, the plaintiff had to plead and prove existence of malice, bad faith or ill-motive on the part of the 1st defendant. In absence of such plea and evidence, I am unable to find any liability against the 1st defendant on account of the information provided to the 2nd defendant.

[44] Specifically on the question of liability based on loss of earnings by the plaintiff, in view of the findings under issue 1 above, the plaintiff would not be entitled to any loss of earnings. As already pointed out, the plaintiff's contract was only probationary with no full or fixed term. Even if I had found differently under issue 1, there would have been no basis for calculation of lost earnings which are supposed to be pleaded and proved as special damages. See: *Robert Cuossens v Attorney General (SCCA No. 8 of 1999) 2000 UGSC 2 (2 March 2000)*. In answer to issue 2, therefore, the 1st defendant is not liable for for the plaintiff's loss of earnings at the 2nd Defendant or for any other claims under the suit.

# *Issue 3: What remedies are available to the parties?*

[45] In view of the findings under issues 1 and 2, the plaintiff's suit has failed and is accordingly dismissed. Regarding costs of the suit, under Section 27 of the Civil Procedure Act, costs follow the event unless the court upon good cause determines otherwise. On the present facts, it is apparent that the plaintiff lost a job and the institution of this suit was a legitimate pursuit of his rights. It would be highly punitive against him in such a state of affairs to award costs against him. It is thus ordered that each party bears their own costs of the suit.

It is so ordered.

# *Dated, signed and delivered by email this 14th day of April, 2025.*

**Boniface Wamala JUDGE**