Employment Law Alert: “Am I fired or not?” The law on constructive dismissals in Uganda

Background:

It is a curious thing for an employee to resign or otherwise terminate his/her employment with their employer and thereafter be deemed to have been unlawfully terminated/dismissed by his/her employer. This is exactly what is entailed by the phrase constructive dismissal and its alternatives such as constructive discharge.

There are instances whereby an employer makes working conditions so unbearable or out rightly impossible that the employee is left with no option but to quit. This is what is legally known as constructive dismissal. The conduct of the employer must not be trivial or a mere heated exchanged expected in the ordinary course of dealing, but it must be substantial, illegal or serious as to go to the root of the contract between the employee and the employer.

The Law:

The Employment Act 2006 (hereinafter “the Act”) under Section 65(1) delineates what amounts to ‘termination of employment’. Specifically, Section 65(1)(c), provides for termination of a contract of employment by an employee with or without notice as a consequence of unreasonable conduct on the part of an employer towards the employee.

Put another way, in a legal context, constructive dismissal takes place where an employer acts so unreasonably that any employee would, when faced with the same treatment resign.

The law in section 65 (2) (c) treats the termination as having taken place on the date when the employee ceased to work for the employer. There have been a number of instances of judicial recognition of this principle of constructive dismissal both at the level of the High Court and at the Industrial Court which are briefly discussed hereunder:

HIGH COURT CASE:

Sejjusa vs Attorney General [Misc Cause No. 176 of 2015]:

In brief, this was a matter for Judicial Review. The Applicant, General David Sejjusa having served in the Uganda People’s Defense Forces (UPDF) for 34 years applied in December 2014 for retirement but had received no formal response as required by law 90 days after the same. On the other hand, following his request for retirement, the UPDF stopped paying his salary, allowances and other benefits, withdrew his uniforms and guns and stopped giving the applicant any formal work. The applicant sought an order of court compelling the UPDF to formally discharge him from the UPDF. The High Court, in finding that the Applicant had been constructively discharged in that case held that:

“Constructive Discharge exists in Common Law as has been evidenced by the various cases cited by Counsel for the Applicant. And according to Black’s Law Dictionary, 9th Edition, Constructive Discharge is defined as termination of employment brought about by making the employees working conditions so intolerable that the employee feels compelled to quit.” It is applicable in Uganda since it exists at Common Law, according to Section 14 of the Judicature Act, which gives the sources of Law in Uganda to include Common Law (see section 14(2) of the Judicature Act).

Please note that this case is peculiar because it was not determined on the basis of Employment law but of Common law. This is because the Employment Act 2006, the principal employment legislation in Uganda does not apply to UPDF officers, save for civilian employees.

INDUSTRIAL COURT CASES:

Nyakabwa Abwooli vs Security 2000 Limited Labour dispute Claim No. 108 of 2014:

In this case, Nyakabwa was an employee of the Respondent holding the position of administration manager. However, during his employment and with no notice or explanation to Mr. Nyakabwa, the Respondent removed office files from Nyakabwa and gave them to other workers. It was the argument for the Claimant that he was left without any work whereas the company/Respondent argued that they had merely reassigned work for better management. In resolving the case and finding that there was indeed constructive dismissal, the Industrial Court held as follows:

“It is our considered opinion that in order for the conduct of the employer to be deemed unreasonable within the meaning of section 65(1) (c) above, such conduct must be illegal, injurious to the employee, and make it impossible for the employee to continue working. The conduct of the employer must amount to a serious breach and not a minor or trivial incident and the employee must act in response to such breach not for any other unconnected reason and act in a reasonable time. What might be a serious or major breach in one case may not be necessarily major in another case and so each case must be decided on its particular facts.”

The court continued to hold that: “In the instant case we find that on 14/2/2008 the respondent removed files relating to the job of training from the claimant. We also find that in the circumstances these files constituted instruments of the job of training for which the claimant was employed. The respondent did not provide an alternative deployment to the claimant and she was in an angry mood. We think that the fact of the claimant leaving his job was in response to the unilateral removal of the instruments of his office and giving them to other employees rendering him jobless.”

Mbiika Dennis vs Centenary Bank Labour Dispute Claim No. 23 of 2014:

In this matter, the Claimant an employee of the Respondent bank, resigned from employment with the Respondent bank. There had been some complaints by the claimant’s supervisor in respect to work place issues. In order to resolve these issues, the Respondent rejected the Claimant’s resignation notice and advised him to report to the Chief Manager (presumably to address the earlier complaints of abscondment and loan malpractices). Thereafter, the Claimant, who upon giving notice of resignation had gone on leave, was dismissed. It was his contention that he resigned due to the conduct of the Respondent and was in effect a constructive dismissal. Amongst the conduct complained about by the Claimant as leading to his resignation was the refusal to give him leave.

The Court held that:

“As already intimated above, leave within a calendar year is an entitlement to an employee. This means whether any organization has a leave roster or leave plan or not, an employee will have his leave during a calendar year.
It is the duty of the employer to put a system in place that ensures that each employee takes leave in a given calendar year and the absence or weakness of such a system does not at all affect the entitlement of the employee to his leave.

…. Following our decision in Nyakabwa J. Abwooli Vs Security 2000 Limited (supra) we form the opinion that failure to grant leave to the applicant within the 2011 calendar year made the respondent guilty of conduct that went to the root of the contract and therefore entitled the claimant to terminate the contract under section 65 (1)(c) of the Employment Act by resignation which necessarily was not voluntary and therefore constituted constructive dismissal. Since this alone has resolved the first issue, we shall not go into other reasons for resignation which included unlawful alienation of annual and paternity leave, unlawful breach of whistleblowers rights, suspicious non-performing loan file assignments, constant torture and verbal abuse at the workplace, deliberate refusal to appraise the claimant and others.”

Conclusion:

The doctrine of constructive dismissal is one that has garnered judicial recognition in Uganda in addition to its express inclusion in the Employment Act 2006. It is therefore incumbent on employers to ensure that they treat their employees respectfully and in accordance with the law.

We note that the Industrial Court has typically treated these constructive dismissals as unlawful dismissals. The orders for constructive dismissals have come with other associated awards ordinarily given to people who are unfairly dismissed. This poses both a reputational and financial risk to an organisation. Employers need to take note.

In a nutshell, the basic takeaways here are:

1. An employee is deemed to be constructively dismissed if his/her employer undertakes either a single unilateral act that breaches an essential term of employment or a series of acts that when taken together show that an employer no longer intends to be bound to the contract of employment.

2. The conduct of the employer must be unreasonable, illegal, injurious to the employee and/or make it impossible for the employee to continue working for the employer and it should not be trivial.

3. A constructive dismissal is deemed to be an unfair dismissal under the law.

If you have questions or require more information, please reach out to Patrick.

This Employment law alert provides general information only. It is not intended to provide advice with respect to any specific set of facts, nor is it intended to advise on all developments in the law.