Oyergio & Another v FINCA Uganda Limited (MDI) (Civil Suit 12 of 2010) [2023] UGHC 358 (21 February 2023)

Full Case Text

## THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT LIRA **CIVIL SUIT NO. 012 OF 2010**

### 1. OYERGIO GUILLON

#### <table> 2. ALELE STEPHEN ....................................

#### **VERSUS**

#### FINCA- UGANDA LIMITED (MDI)....................................

#### **BEFORE HON. JUSTICE ALEX MACKAY AJIJI**

#### **JUDGMENT**

### **BACKGROUND**

The plaintiffs were employed by the defendant company in the period ranging from 2007-2009 and 2005 to 2009 respectively. Their services were terminated by the defendant but prior to their termination, the plaintiffs had taken loan facilities from the defendant. By the time of their termination, the loan facilities were/had not yet been serviced fully.

It is the plaintiffs' assertion that they were unlawfully terminated and the 2nd plaintiff averred that he wasn't paid his terminal benefits upon termination.

The plaintiffs also alleged that their original academic documents are/were illegally withheld by the defendant.

The defendant in its written statement of defence alleges that the plaintiffs were employed by it and overtime, their performance deteriorated. It called them for various meetings to sort out the performance issues and the fraud allegations in respect of the $2nd$ plaintiff. When the explanations by the plaintiffs were not satisfactory, the defendant decided to terminate their services.

The plaintiff filed their submissions as early as the 19th day of November, 2019, however there is no record of submissions by the defendant on record.

I have had the benefit of looking at the pleadings of each party and I have duly considered them.

At scheduling, the following issues were agreed upon to wit;

1) Whether the plaintiffs were unlawfully terminated from their employment by the defendant

- 2) Whether the plaintiff's academic documents were wrongfully withheld by the defendant after termination of the plaintiffs employment - 3) What remedies are available to the parties?

The plaintiffs were represented by M/S J. ADAR & CO ADVOCATES and the defendant was represented by M/S Sewadda & Co Advocates.

## **DETERMINATION**

1. Whether the plaintiffs were unlawfully terminated from their employment by the defendant.

The employment act defines termination of employment as meaning the discharge of an employee from an employment at the initiative of the employer for justifiable reasons other than misconduct, such as, expiry of contract, attainment of retirement age, etc;

**Termination** is further explained by section 65;

Section 65 of the Employment Act provides

## "Termination:

- Termination shall be deemed to take place in the following instances:-1. - a. Where the contract of service is ended by the employer with notice; - b. Where the contract of service, being a contract for a fixed term or task, ends with the expiry of the specified term or the completion of the specified task and is not renewed within a period of one week from the date of expiry on the same terms or terms not less favorable to the employee; - c. Where the contract of service is ended by the employee with or without notice, as a consequence of unreasonable conduct on the part of the employer towards the employee; and - 2. The date of termination shall, unless the contrary is stated, be deemed to be - In the circumstances governed by subsection (1)(a), the date of expiry of the notice a. given."

- b. In the circumstances governed by subsection (1)(b), the date of expiry of the fixed term or completion of the task. - c. In the circumstances governed by subsection $(1)(c)$ , or subsection $(1)(d)$ , the date when the employee ceases to work for the employer; and - d. In the circumstances when an employee attains normal retirement age.

The above section outlines the situations when the relationship between the employer and the employees is said to have been terminated. The question whether or not such termination has been fair or unlawful can only be determined by looking at whether or not Section 66, and 68 of the **Employment Act** have been complied with.

# Section 66 of the Employment Act provides

# Notification and hearing before termination:

- 1. Notwithstanding any other provision of this Part, an employer shall, before reaching a decision to dismiss an employee, on the grounds of misconduct or poor performance, explain to the employee, in a language the employee may be reasonably expected to understand, the reason for which the employer is considering dismissal and the employee is entitled to have another person of his or her choice present during this explanation. - 2. Notwithstanding any other provision of this Part, an employer shall, before reaching any decision to dismiss an employee, hear and consider any representations which the employee on the grounds of misconduct or poor performance, and the person, if any chosen by the employee under subsection (1) may make. - 3. The employer shall give the employee and the person, if any, chosen under subsection (1) a reasonable time within which to prepare the representations referred to in subsection (2). - 4. Irrespective of whether any dismissal which is a summary dismissal is justified, or whether the dismissal of the employee is fair, an employer who fails to comply with this section is liable to pay the employee a sum equivalent to four weeks net pay.

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- 5. A complaint alleging a failure on the part of the employer to comply with this section may be joined with any complaint alleging unjustified summary dismissal or unfair dismissal, and may be made to a labour officer by an employee who has been dismissed, and the labour officer shall have power to order payment of the sum mentioned in subsection (4) in addition to making an order in respect of any other award or decision reached in respect of the dismissal. - 6. A complaint under subsection (5) shall be made within three months after the date of dismissal.

The above section obliges an employer before dismissing or terminating an employee where such employee has committed a misconduct, to prefer charges against him or her, give him or her time to prepare to defend himself or herself before an impartial tribunal and allow him or her to be accompanied by a person of his or her choice to the hearing.

It was the plaintiffs' submissions that the defendant breached section 12.1 (d) of the defendant's human resource management manual for failure to disclose the decision of the committee and how it arrived at the same. They further aver that the invitation letter served on the 1st plaintiff did not contain details of the allegations made against him and neither was he given a copy of the proceedings of the Management Disciplinary Committee. It was also the 2nd plaintiffs' submissions that he was not given sufficient time to prepare for the hearing and that the particulars of fraud as levelled against him were not indicated in the invitation letter. The plaintiffs' submitted that those acts by the defendant contravened the right to a fair hearing as enshrined under article 42 of the Constitution of the Republic of Uganda 1995 as amended.

The plaintiffs relied on a number of cases including Macfoy v United Africa Co Ltd [1961] 3 ALL ER 1169 and Juma & Others v Attorney General [2003]2 EA 461.

The defendant alleges that the plaintiffs were accorded a fair hearing and that all the principles of natural justice were followed

The question left to be answered then is, did the defendant follow the principles laid out under section 66 & 68 of the employment act before it terminated the services of the plaintiffs? If the

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answer is yes, then the termination was lawful, but if the answer is no, then the termination was unlawful.

The 1st plaintiff was made to appear before the Branch Disciplinary Committee when his performance deteriorated. This served as a warning of sorts. However when his performance did not improve, the defendant on the 6th of August 2009, summoned the 1st plaintiff to a Management Disciplinary Committee meeting whereupon a decision was reached to terminate his services.

On the 21st of September 2009, the 2nd plaintiff was invited to attend a Management Disciplinary Committee meeting to be held on the 23rd of September, 2009. On the 22nd day of September 2009, the said 2nd plaintiff wrote back to the human resource manager of the defendant his statement of defence against the fraud allegations. If the details of the fraud were not communicated to the $2nd$ plaintiff, how come he had his reply/ defence ready the following day. I looked at the said defence which was exhibited and it was a detailed one covering all aspects of the fraud that he claims he knew nothing about. He also attended the meeting. The purpose of the said meeting was to give the $2^{nd}$ plaintiff the fair hearing that he alleges was not given.

In Uganda, the rules of natural justice are embedded in the Constitution under Articles, 28, 42 and 44 which guarantee every person a right to a fair hearing before an administrative body. The case of Ojangole Patricia & 4 Others vs. Attorney General H. C. M. C No. 303 of 2013, underscores the application of the rules of natural justice. Citing Halsbury's Laws of England 5th Edition 2010 *Vol. 61 para 639*, it is stated that;

"The rule that no person shall be condemned unless that person has been given prior notice of the allegations against him/her and a fair opportunity to be heard (the audi alteram partem rule) is a fundamental principle of justice. This rule has been refined and adopted to govern the proceedings of bodies other than judicial tribunals; and a duty to act in conformity with the rule has been imposed by the common law on administrative bodies not required by statute or contract, to conduct themselves in a manner analogous to courts."(see Johnas Tweyambe & Anor v AG & Anor MC 395 of 2019).

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From the foregoing, it is evident that by the defendant inviting the plaintiffs to the various meetings, it was giving them an opportunity to be heard and it is thus inconceivable that the plaintiffs can claim that the principles of fair hearing were not adhered to.

The defendant duly followed the law before terminating the services of the plaintiffs.

I therefore answer this issue in the negative.

## 2. Whether the plaintiffs' academic documents were wrongfully withheld by the defendant after termination of the plaintiffs employment

The plaintiffs as employees of the defendant enjoyed some benefits which the ordinary citizenry would not enjoy in as far as obtaining loan facilities from the defendant is concerned. They agree and admit that prior to their termination they were enjoying loan facilities.

Clause 2 of the loan agreement stipulated, "The employee covenants with FINCA to submit Academic transcript, as collateral for the loan received."(Collateral has been submitted before the loan is disbursed).

The plaintiffs on their own volition, entered into a loan agreement with the defendant and the only collateral that was demanded of them as employees was the submission of their academic transcripts. The defendant could not make the plaintiffs to undergo the rigorous loan process and yet it was their employer. The return of the transcripts was dependent upon the plaintiffs fully satisfying their loan obligations. This however never materialized as the plaintiffs were terminated before they could fully repay their loan obligations. Would the defendant deny the plaintiffs their transcripts had they fully satisfied their loan obligations? The answer is no.

Therefore, the plaintiffs cannot turn around and demand their transcripts before accomplishing their end of the bargain. This act of approbation and reprobation cannot be condoned by this court.

In Nehawu Obo V. N Tumana Vs Commission for Conciliation, Mediation and Arbitration & others Case No. PI 15/08 court ruled against the act of approbate and reprobate, as follows;

"The doctrine is based upon the principle that no person can be allowed to take up two positions inconsistent with one another, or as it is commonly expressed to blow hot and cold, to approbate *and reprobate ………………………………………………………………………………………………*

This court will not deter the contracting capacity of adult individuals. If the act complained of was entered into freely and with the consent of all parties, courts will only enforce the same but will not challenge or try to alter it.

... if there is one thing more than another which public policy requires, it is that men of full age and competence and understanding shall have the utmost liberty in contracting and their contracts when entered into freely and voluntarily shall be held enforceable by the courts of Justice." See Simon Tendo Kabenge v Mineral Access Systems Uganda Ltd H. C. C. C. S No.275/2011.

Therefore the submission by the plaintiffs' counsel that the defendants holding onto the academic transcripts of the plaintiffs is illegal is unfounded and misconceived. I haven't come across a law that forbids or prohibits the same.

I answer this issue in the negative.

## 3. What remedies are available to the parties?

Since the first two issues are answered in the negative, I will make the following orders;

- 1) The defendant is ordered to issue certificates of service to the plaintiffs upon request such that they can ably find alternative employment. - 2) The defendant will hand over all documents in its custody to the plaintiffs upon the plaintiffs fully satisfying their loan obligations with it. - 3) The defendant should unblock the plaintiffs account numbers such that the plaintiffs can be able to transact using the same. - 4) Special, general and exemplary damages are denied as I have not found any circumstances to warrant the same.

5) Each party should bear its costs.

I so order.

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Dated and delivered at Lira this ....................................

vorin

**ALEX MACKAY AJIJI JUDGE**

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