Commercial Law Index

This appeal is in relation to whether an order of non-suit was the appropriate order. The appeal originated from an institution of an action against the respondents. The action was centred around an order for damages, due to an unlawful dismissal from employment. The respondent disputed these claims as they contended that the contract was lawfully terminated. 

The courts below granted judgment in favour of the appellant. However, in the Court of Appeal a piece of evidence belonging to the appellant was expunged on the ground that those pleadings did not constitute evidence. An order of non-suit was made by the Court of Appeal. It is that order of non-suit that gave rise to this appeal at the Supreme Court.

The appellant submitted that there was a breach of the fundamental right to fair hearing as the non-suit was instituted before hearing. Furthermore, he claimed to have satisfactorily proved his case for damages on the now expunged evidence and that this was therefore not a case in which an order of non-suit ought to have been made.

This court resolved this issue in the appellant's favour and the judgment of the Court of Appeal was set aside. Accordingly, this appeal was remitted to the Court of Appeal to be heard by a different panel.
 

This was an appeal against the decision of the High Court to decline jurisdiction to determine an issue of wrongful termination and compensation thereof.

The court interpreted the provisions of the Labour Act to differentiate the jurisdiction of the Commission from that of the High Court. The court applied the provisions of art 140 of the Constitution to the effect that the High Court has jurisdiction to enforce every right created by statute unless it is ousted in the Constitution. It was held that the previous court had the power to make the relevant award on the strength of the applicable law, terms of employment and evidence adduced before it. The fact that its jurisdiction is excluded in respect of other reliefs does not entitle the court to decline jurisdiction altogether. The court may hear the whole case but decline to grant the reliefs it is not competent to grant when it delivers its final judgment in the matter. Accordingly, the application was granted, the order of the High Court was set aside and an order was made for the High Court to assume its jurisdiction and determine the matter.

This case considered whether employees who were claiming compensation for loss of employment were ‘permanent employees’ in terms of an employment contract. The case additionally concerns whether the Court of Appeal had misdirected itself with regards to the weight of evidence.

The plaintiffs contended that they were employed by the respondent as permanent employees in terms of an employment contract. The respondent subsequently went into liquidation and the plaintiffs claimed for loss of compensation.

The court held that for a plaintiff to be entitled to benefits as an ex-employee, they should spell out clearly the terms of their employment as contained in their contract of employment and then prove their entitlements under those terms. The plaintiffs assume the burden of persuasion and producing evidence, however, it was clear that they were unable to produce a written agreement which spells out their terms of employment.  The court found that any contract of employment for more than six months which was not in writing was unenforceable.

The plaintiffs had been employed for 10 and 12 years respectively, but failed to obtain letters of appointment. It became apparent that they were only employed for the duration that they were engaged on a particular voyage.

The court found that to be a permanent employee one would need to prove employment through the use of a contract of employment, which was in writing and could be used as evidence to illustrate the terms thereof. In this case, the plaintiffs were only employees when the respondents required their services. Furthermore, the court held that the Court of Appeal had not misdirected itself with regards to the weight of evidence as the plaintiff failed to properly prove their claim.

Appeal dismissed.

The court considered whether the respondent’s witness' statement on oath needed to be amended notwithstanding the amendment of the statement of defence. Further, whether the appellant was properly retired from the service of the second respondent.

The court held that the giving of a written statement on oath is a distinct process from the statement of defence which serves to support the statement of defence but is not part of it. Further, according to the public service rules the compulsory retirement age for all grades in the service shall be sixty years or thirty-five years of pensionable service whichever is earlier. A statement of policy cannot overrule public service rules, especially where such terms are not written in terms of the contract of employment.

The court found that when the respondents were given leave to amend their statement of defence, the amended statement of defence took effect from the date of the original statement of defence. Therefore, it was too late for the appellant to object to the effect that there was no written deposition to support the amended statement of defence. The court also found that the premature retirement was unlawful, null and void thus entitled to reinstatement.

The court accordingly upheld the appeal and awarded costs.
 

This court considered whether the court below erred in stating that the plaintiffs’ action was statute barred, that they erred in their interpretation of s 24 of the Social Security Decree 1972 and finding that the abrogation (doing away with) of the scheme was illegal, and that their order for specific performance should be upheld.    

The plaintiffs were former employees of the defendant. The defendant established a pension scheme in 1976 and abrogated it in 1990. In the premise, the plaintiffs alleged that they were entitled to the payments from the pension.

The court found that in determining the interpretation of s 24 of the Social Security Decree, the court needed to ascertain whether the defendant had abrogated the scheme lawfully. It found that the plaintiffs were adequately informed of the termination of the scheme and that the defendant had lawfully wound up the scheme.

In considering whether the action was statute barred, and if the plaintiffs were entitled to specific performance, the court found that the plaintiffs’ action was instituted 16 years after the scheme was terminated. In the premise, and owing to the fact that the scheme was lawfully terminated, the plaintiffs were not legally competent to accrue a right under the scheme, thus, they were not entitled to claim specific performance.

Therefore, the plaintiffs could neither maintain an action and attempt to enjoy the benefits of the scheme, nor could they compel the defendant to compensate them under an abrogated scheme.

Appeal Upheld.

This was a second appeal by the appellant
against the decision of the Court of Appeal
which ruled that terminal benefits paid to the
respondents were not taxable under Section 19
of the Income Tax Act. The background is that
the respondents were retrenched and awarded
terminal benefits for which they sought from
the appellant the tax due. The appellant
reviewed and presented a sum that was
contested by the respondents and the high court
ruled that the amount given to the former
employees was akin to gratuity which was tax
exempt. The court of appeal agreed with the
trial court hence this appeal.

This case presented the first instance where South African labour courts were called to determine the relationship between a garden leave clause and a post termination restraint of trade clause where a contract of employment contained both. 

The court considered whether the applicant had waived its right to enforce the notice period by terminating the first respondent’s employment with immediate effect and the reasonableness of the duration restraining the commercial activity of the first respondent in the garden leave clause and/or the post termination restraint clause.

The court held that the applicant was entitled to enforce the period of the garden leave and the post termination restraint of trade clause. The court adopted the rule that a garden rule provision should be taken into account when determining the reasonableness of the restraint duration. The court also took into account the seniority of the first respondent that exposed him to confidential knowledge of the applicant’s business and held that the cumulative restraint period of 12 months was reasonable.

Accordingly, the court granted the application and declared that the first respondent’s contract of employment terminated on 30 June 2016 and that he was restrained from disclosing any confidential information or engaging in any commercial activities with competitors until 31 December 2016.

The appellants brought a complaint to the labor officer against the
respondent and sought payments for long service and other leave payments.
The labor officer found for the appellants and the respondent dissatisfied
with the awards filed a notice of appeal and an application for stay. The
respondents successfully applied to High court for execution of orders of the
labor officer and the respondent also successfully applied to the Court of
Appeal which overturned the orders of the High Court hence this appeal.

This was an appeal against dismissal of the appellant’s appeal to the Court of
Appeal. The grounds of the appeal were that, the Court of Appeal erred when it
failed to declare that the dismissal of the appellant from his job was ultra vires,
null and void. That the court erred in upholding the decision not to reinstate the
appellant. That it erred when it found that the Employment Act applied to the
appellant. And that the court erred in the process of awarding damages.

Wilson Nabudere, , while still alive,
successfully sued the Uganda Commercial
Bank Ltd in the High Court for recovery of a
liquidated sum of money, being accumulated
leave allowances which had accrued to him
before he retired from the appellant’s
employment. After his death the respondents
were joined as parties to the case as the
administrators of his estate. The appellant was

dissatisfied with the decision of the trial court
and appealed to the Court of Appeal. By a
majority decision, the appeal was unsuccessful.
Hence this appeal. The court heard the appeal
and found that it had no merit and dismissed it
with costs. The court reserved its reasons for
doing so, which it then proceeded to give. The
background is that the deceased resigned from
the service of the appellant on terms of the
appellants program but his allowances were not
paid.

The plaintiff was praying for grant of his terminal benefits. The plaintiff was employed by the respondent and the respondent contends that the plaintiff was fully paid.

The plaintiff sued the defendant for recovery of unpaid wages arising from wrongful suspension. The defendant counterclaimed.

This was an appeal by the plaintiff in the lower court against the decision of the magistrate’s court in finding that the plaintiff was not injured during the course of employment by the defendant.

The Plaintiff instituted this suit against both
defendants seeking general damages arising out
of a libel and for unlawful and unfair dismissal.

Both defendants denied liability, contending that
the plaintiff was never defamed as alleged or at
all, and that they were justified in the action taken

against the plaintiff. Defendants asserted that the
publication the subject of the suit, was factual, not
malicious and was within their right to publish.
The issues framed were:-
1. Whether the relationship between the
plaintiff and defendant amounted to a
contract of employment.
2. Whether the plaintiff as a freelance
reporter was an employee of the
defendants.
3. Whether the discontinuation of the
plaintiff’s services by the defendants
amounted to lawful termination of the
working relationship between the plaintiff
and defendants.
4. Whether the Notice, Exhibit P1, is
defamatory of the plaintiff.
5. What are the remedies available to the
parties.
On 31.01.07, the defendants published of the
plaintiff, in The New Vision newspaper, his
photograph and, under it in broad print, the
words:-

“NOTICE The above named person Mr.
Hillary Kiirya is no longer a free-lance
Journalist for The New Vision. He is not
authorized to represent The New Vision
in any way or transact any business on
behalf of the company. Whoever deals
with him on matters relating to The New

Vision does so at his/her own risk.
MANAGEMENT
The New Vision: Uganda’s leading
Daily”
This court having appreciated the nature of the
law and the facts of this case finds that the
relationship that existed between the plaintiff and
the defendants is one that was for services and
not of services. The plaintiff offered his services,
as a freelance journalist, of searching for,
preparing and writing newsworthy articles which
he would submit to the defendants.
The answer to the second issue therefore was
that, as a freelance reporter, the plaintiff sold his
services and his articles to the defendants,
amongst others, by way of earning a living. His
relationship with the defendants was not under an
employment contract of services.

The third issue was, whether the discontinuation
of the plaintiff’s services by the defendants,
amounted to, lawful termination of the working
relationship, between the plaintiff and defendants.

It is not denied by the defendants that a working
relationship existed between the plaintiff and The
New Vision newspaper establishment. The
plaintiff was accredited by the newspaper as one
of its freelance reporters. He was issued with an
identity card to that effect. So the public, and
other third parties, dealt with the plaintiff on the

basis that, he was a freelance journalist,
accredited to The New Vision newspaper. By
reason of the relationship, plaintiff had access,
even though at his cost, to the use of the
defendants’ premises and the already stated
facilities.