Sure Telecom v Azemchap (Labour Dispute Appeal 8 of 2015) [2015] UGIC 15 (15 July 2015)

Full Case Text

## **THE REPUBLIC OF UGANDA**

## **IN THE INDUSTRIAL COURT OF UGANDA**

# **LABOUR DISPUTE APPEAL NO.008 OF 2015**

**(ARISING FROM K. C. CA CLAIM NO C. B 320 OF 2014)**

**SURE TELECOM APPELLANT**

# **VERSUS**

**BRAIN AZEMCHAP RESPONDENT**

## **BEFORE:**

**u**

**i. I \* ft**

**It**

**I 1 ft \* 11 r i**

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

**2. Hon. lady Justice Tumusiime Lillian Linda Mugisha**

## **PANNELLISTS**

**l. Mr. Ebyau Fidel**

**2. Ms Tukamwesiga Peninnah**

**3. Mr. Habiyalemye Dominic**

#### **AWARD**

# **BACKGROUND**

This is a labour dispute appeal arising from the decision and award of the labour officer stationed at Kampala City Council Authority.

The labour officer entertained the dispute under section 13 and section 93 of the Employment Act.

The appellant was dissatisfied with the decision which was in fevour of the respondent and filed an appeal to this court. Although neither the memorandum of appeal nor the notice of appeal indicates the law under which the appeal was filed , this court is mandated to entertain the appeal under section 94 of the Employment Act.

**1**

## **THE REPUBLIC OF UGANDA**

# **IN THE INDUSTRIAL COURT OF UGANDA**

# **LABOUR DISPUTE APPEAL NO.008 OF 2015**

**(ARISING FROM K. C. CA CLAIM NO C. B 320 OF 2014)**

**SURE TELECOM APPELLANT**

# **VERSUS**

**BRAIN AZEMCHAP RESPONDENT**

## **BEFORE:**

**u • h**

**7 s**

**p**

**,j <• c** i P\* **1. Hon. Chief Judge Asaph Ruhinda Ntengye**

**2. Hon. lady Justice Tumusiime Lillian Linda Mugisha**

## **PANNELLISTS**

**l. Mr. Ebyau Fidel**

**2. Ms Tukamwesiga Peninnah**

**3. Mr. Habiyalemye Dominic**

#### **AWARD**

# **BACKGROUND**

This is a labour dispute appeal arising from the decision and award of the labour officer stationed at Kampala City Council Authority.

The labour officer entertained the dispute under section 13 and section 93 of the Employment Act.

**1**

*f*

# **FACTS**

The respondent was engaged by the appellant as chief consumer officer on 1/6/2013 under a four year contract at a gross salary of \$35,332. On 4/7/2014, on allegations of poor performance the appellant terminated the contract of employment and paid the respondent terminal benefits ofUGSHS261,012,698. Five months later the claimant filed a complaint with the Kampala City Council Labour office claiming that the termination of the contract was unfair.

The labour officer attempted to settle the matter by mediation which failed because according to the award, the parties failed to reach a consensus. Thereafter the labour officer required the parties to make submissions on which she relied to make the award from which this appeal emanates.

# **GROUNDS OF APPEAL**

The following grounds of appeal were the basis of the appeal:

- 1. The labour officer erred in entertaining a complaint filed five months after the date of termination. - 2. The labour officer erred in failing to state the reasons why she accepted to entertain the complaint out of time. - 3. The labour officer erred in failing to consult other employees before deciding that the complaint was well founded. - 4. The labour officer erred in using confidential information given in mediation to make an adjudicatory and binding decision on the parties. - 5. The labour officer erred in failing to examine and assess the conduct and capability of the respondent in respect of the discharge of his employment duties. - 6. The labour officer erred in finding that the evidence justified a finding that the appellant's decision-making process was substantially and/ or pervasively inconsistent. - 7. The labour officer erred in finding that the evidence justified a finding that the appellant's decision making process substantially and materially contributed to the respondent's poor performance. - 8. The labour officer erred in finding that the evidence justified a finding that the appellant's payment making process substantially and materially contributed to the respondent's poor performance.

- 9. The labour officer erred in(finding?) that the evidence justified a finding that the appellant lacked an adequate system for appraising the respondent's performance. - 10. The labour officer erred in finding that the respondent was entitled to any of the remedies or reliefs awarded.

The appellant was represented by Mr. Brian Emrwon of Katende & Sempebwa Advocates and the respondent was represented by Mr. Idot A. of Kampala Associated Advocates. Both counsel agreed( and this court had no objection) that they file and indeed both filed written submissions.

# SUBMISSIONS OF COUNSEL ON GROUNDS 1 AND 2

On the first ground, counsel for the appellant submitted that the labour officer erred in law to have entertained the labour dispute after the time limits stipulated in section 71(2) of the Employment Act which provides " A complaint made under this section shall be made to a labour officer within 3 months of the date of dismissal, or such other later period as the employee shall show to be just and equitable in the circumstances"

Counsel relied on the case of UGANDA REVENUE AUTHORITY VS UGANDA CONSOLIDATED PROPERTIES LIMITED CIVIL APPEAL 31/2000 ( court of appeal)

On the second ground counsel submitted that the labour officer was obliged to give reasons why she had allowed the respondent to present the case after the stipulated time. In his submission the labour officer's discretion had to be exercised judiciously.

I n reply counsel for the respondent submitted that the essence of section 71(2) of the Employment Act 2006 was to give unfettered discretion to a labour officer to determine whether a given case may be entertained even if 3 months have elapsed. He argued that there was no provision in the law requiring the labour officer to give reasons for exercising his discretion to receive the labour complaint after the stipulated time. He contended that had the legislature intended to oblige the labour officer , such obligation would have been expressly included in the law as it is under section 13(2) of the Employment Act.

#### **RESOLUTION OF GROUND 1 AND 2**

It is not disputed that section $71(2)$ of the Employment Act gives a discretion to the labour officer to receive a complaint after 3 months of the dismissal of the employee. The labour officer is expected to exercise this discretion if the employee shows that it is just and equitable in the circumstances.

Nothing in the submission of counsel or in the decision of the labour officer shows that the employee indicated that it was just and equitable for the acceptance of the complaint after 3 months.

The questions for this court are: Was the discretion of the labour officer subject to the submission of the employee as to whether it was just and equitable to accept the complaint outside the 3 months? In other words was the discretion of the labour officer fettered by lack of this submission? Would receipt of the complaint without giving reasons by itself render the decision a nullity?

We agree with the submission of counsel for the appellant that time limits set by statutes are matters of law and not mere technicalities and must be complied with. This position was ably put in the case of UGANDA REVENUE AUTHORITY VS UGANDA CONSOLIDATED PROPERTIES LIMITED(supra).

However, we must add that some exceptions are stipulated under specific legislation. Under the Limitation Act for example, disability is provided as an exception. In the CONSOLIDATED PROPERTIES CASE above mentioned, the court was considering section 17 of the Tax Appeals Tribunal which in our understanding expressly provided for time limits (of 30 days) without provision of a discretion of the court to extend the time.

In the instant appeal, the section of the law that stipulates the time limits is the same section that grants the labour officer a discretion to do away with the time limits if he or she is satisfied that it is just and equitable. In our considered opinion the discretionary power given to the labour officer (or any other Court or Tribunal) by a legal provision in the law lies in the decision taken by exercising such discretion and not in the reasons given for exercising the discretion. The reasons are given to support the discretion but the discretion is not exercised because of the reasons.

In our understanding section 71(2) requires that before the labour officer accepts the complaint he be satisfied that it is just and equitable to do so. Although he ought to give reasons for accepting the complaint outside the time limit , the fact that he does not give reasons by itself does not nullify the proceedings or the decision that is reached.

We think that by accepting the complaint the labour officer exercised her discretion in the circumstances especially considering that the time limit was 3 months and she allowed it after 5 months, a difference of two months which in our view did not constitute inordinate delay. Both ground s one and two fail.

# **RESOLUTION OF GROUND 3**

The third ground of appeal relates to the failure of the labour officer to consult the appellant's employees. The totality of the submission of counsel for the appellant , on this ground as we understood it , was that the respondent's claim was not within the mandate of the labour officer to determine as provided for under section 93 of the Employment Act, and that the labour officer did not comply with section 13 and section74 of the said Act when she failed to independently investigate the respondent's claim by consulting the other employees of the appellant.

Counsel for the respondent in reply, argued that section 93 of the **Employment** Act has a wide interpretation in that **"infringement of any of the rights under this Act " , Infringement of any provisions of this Act" and " breach of the obligations owed under this Act" are** wide and far reaching **phrases that cover express statutory and contractual rights, obligations and all possible breaches there to".**

Section 13 provides

**A labour officer to whom a complaint has been made under this "1. Act shall have power to**

**(a) investigate the complaint and any defense put forward to such complaint and to settle or attempt to settle any complaint made by way of conciliation, arbitration, adjudication, or such other procedure as he or she thinks appropriate and acceptable to the parties to the complaint with the involvement of any labour union at the place of work of the complainant** "

# Section 93 provides

**"(1) Except where the contrary is expressly provided for by this 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.**

**(2) A labour officer shall have jurisdiction to hear and settle by conciliation or mediation a complaint-**

**fa) by any person alleging an infringement of any provisions of this Act or**

# **(b) by either party to a contract ofservice alleging that the other party is in breach of the obligation owed** under **this Act."**

With due respect to counsel for the appellant, we are of the firm view that to confine the interpretation of the above two sections of the law to statutory rights such as a right to annual leave, a right to weekly rest, a right to maternity leave or any other right in this category,constitutes a very narrow interpretation. We think that fair or legal termination of services of an employee is a right of the employee envisaged by the Employment Act.

we therefore hold the view that any complaint alleging unfair or illegal termination of a contract constitutes an allegation that statutory rights under the Employment Act have been breached. Consequently since in the instant case the complaint was unfair termination of the contract of employment such complaint was within section 93 of the said Act.

We agree with the submission of counsel for the respondent that the mode of termination was not the mode envisaged under section 70 of the Employment Act which is "summary dismissal " and which would necessitate the labour officer to consult other employees as provided under section 74 of the Act.

WE do not agree with counsel for the appellant in his submission that the labour officer was obliged under section 13(supra) to investigate the claim and decide whether the claim was genuine or not before settling or attempting to settle the complaint.

**6**

In our understanding, investigation under section 13 of the Employment Act , is only one of the means by which a labour officer may use in the process of settling the complaint. This method only applies once the labour officer is settling the complaint by the means mentioned under the said section other than Adjudication. Ground number 3 therefore also fails.

# **RESOLUTION OF GROUND 4**

In his submission counsel for the appellant contended that the labour officer erred in using confidential information given in mediation to make an adjudicatory and binding decision on the parties. He relied on the COMMERCIAL COURT (MEDIATION PILOT PROJECT) RULES SI 71/2003 , THE JUDICATURE(MEDIATION) RULES SI 10/2013 as well as a textbook by one DR. PETER D'AMRUMENIT. He submitted that information shared during mediation was privileged and the mediator should not use it in imposing adjudicatory pronouncements on the parties.

IN reply, conceding that the principles of law pointed out by the appellant were correct, counsel for the respondent argued that the said principles were not applicable to the peculiar exercise of the powers of a labour officer. He conceded that the judicature (mediation) Rules SI NO. 10/2013 provides a process by which a neutral third party facilitates communication between the parties to a dispute and assists them in reaching a mutually agreed resolution.

He argued that under the Employment Act the labour officer is expressly given power to both conduct mediation and if it fails to equally conduct a hearing from the parties and finally make a decision. He strongly asserted a labour officer was not constrained(as it is with the courts) from handling both mediation and the final determination of matters on their merits.

Under section 13 (1) (a) of the Employment Act(supra), a labour officer is authorized to investigate- a complaint and to "settle or attempt to settle by way of **conciliation, arbitration, adjudication or such other procedure**.......**"**

It seems to us that the power of the labour officer to conciliate, arbitrate or adjudicate over complaints under section 13( 1) (a) above must be exercised with an impartial mind \_without any trace of bias or influence from any quarters. Whereas we agree with counsel for the respondent that the judicature (mediation) rules 2013 apply to civil actions filed in or referred to the High court and any subordinate court, we are of the considered opinion that good practices envisaged in the said rules are very applicable to not only this court but also to labour officers as they exercise their power under the Employment Act.

**r**

We form the opinion that under section13 (l)(a) the labour officer has power to choose either of the four methods of resolving the complaint before him. Whereas he or she could abandon the method of adjudication and engage the parties in arbitration or conciliation once he or she has done this it would be improper to return to adjudication once either of the other two fails. In the same way once the labour officer has engaged the parties in either arbitration or conciliation ,it is improper for him or her to at the same time to engage them in adjudication.

The essence of this principle is that once a matter is under mediation or conciliation the information released by either party to the mediator is in a privileged position and ought not be used to prejudice either of the parties, Thus under the judicature(mediation) rules once mediation fails before a certain judge or registrar such judge or registrar is exonerated from participating in adjudication.

with due respect to counsel for the respondent the contention that under the Employment Act the labour officer is expressly given the power to conduct both mediation and adjudication at the same time when the former fails , is not acceptable to us. The principle of natural justice and fairness demands that once facts and circumstances of a given case are within the knowledge of an arbiter such arbiter then becomes a witness and not a judge.

The labour officer in the matter before us is quoted to have said

"An attempt to have this complaint settled by way of mediation failed

as parties did not reach a consensus. This office therefore requested them to make submissions as well as responses that have been relied on

as well as the law applicable to make a decision"

As already pointed out the labour office under section 13 (l)(a) of the Employment Act, in our understanding, has to choose one of the three methods of resolving the complaint.

Unlike counsel for the respondent, we think it was a travesty of justice for the labour officer having initially attempted to settle the dispute by mediation, to turn to adjudication after failure of mediation. We are in agreement with counsel for the appellant that the ends ofjustice could only be met by the transfer of the dispute to another competent arbiter who could be any other labour officer or even the Industrial court. We think that just as it is with the courts of judicature, a labour officer is constrained from handling both mediation and adjudication at the same time in respect to the same complaint.

Even if the record did not indicate that the labour officer used disclosures and findings in mediation to determine the complaint in adjudication, the fact that mediation proceedings commenced before her and she attempted to settle the dispute through the mediation method , in our view, presupposed that she had all the information about the complaint before adjudication and she was therefore likely to have used it to adjudicate. Consequently the adjudication proceedings were of no legal effect and neither were the orders arising there from. For these reasons ground no. 4 succeeds.

Since this ground disposes of the appeal, we do not find it necessary to discuss the rest of the grounds. We therefore hereby allow the appeal, set aside the orders of the labour officer and order a re trial of the complaint before a labour officer other than the one who engaged the parties in mediation. Each party to bear own costs of this appeal.

## **SIGNED:**

**l. HON. Justice Ruhinda Asaph Ntengye, Chief Judge**

**2. Hon. Lady Justice Tumusiime Linda Lillian Mwesigye**

**PANNELISTS \$ 1. Mr. Ebyau Fidel 2. Ms. Tukamwesiga Peninnah 3. Mr. Habiyalemye Dominic..**

(VAA-**9**

**u** V —