Modes of termination of contract of employment, Thesis of Labour Law

Download Modes of termination of contract of employment and more Thesis Labour Law in PDF only on Docsity! THE REPUBLIC OF UGANDA IN THE HIGH COURT OF UGANDA AT KAMPALA CIVIL DIVISION CIVIL SUIT No. 107 OF 2013 FLORENCE OTHIENO cizieets:2ts222222iniiiiiin, PLAINTIFF VERSUS UGANDA BROADCASTING COPORATION :::2:::::2::::: DEFENDANT BEFORE: HON.JUSTICE STEPHEN MUSOTA JUDGMENT The plaintiff, Mrs. Florence K. Othieno through her advocates M/s Enoth Mugabi Advocates & Solicitors filed this suit against the defendant Uganda Broadcasting Corporation represented by M/s Kiwanuka & Karugire Advocates for adequate compensation, special and general damages, interest and costs of the suit for unlawful mandatory retirement from her employment. The facts constituting the plaintiff's cause of action arose as follows: a) The plaintiff was employed by the defendant as an accountant on an initial three year contract from 1“ July 2006 subject to renewal at an emolument of 1,000,000/- gross salary per month. b) Following the completion of this initial period in 2009, the plaintiff’s engagement was extended by mutual consent to a further term of five years to 2014 at an emolument of 1,400,000/- gross salary per month. 1 b$] CamScanner c) On 29" November 2011, the plaintiff’s services were terminated following her attainment of mandatory retirement age. d) Upon retirement, the defendant paid the plaintiff end of employment benefits with gratuity emoluments at termination. The money was deposited in the United Bank of Africa but was subsequently held by the bank to discharge the outstanding loan taken, interest and bank charges. e) The plaintiff however averred that the mandatory retirement by the defendant was unlawful and in breach of her engagement. In their written statement of defence, the defendant averred that the renewal of the contract of employment was to be by mutual consent of the parties, one month before its expiry. That upon expiry of the contract of employment between the plaintiff and the defendant in July 2009 the same was not renewed because the plaintiff was nearing retirement. During scheduling, a joint scheduling memorandum was filed in which two issues were framed for determination that: 1. Whether the mandatory retirement of the plaintiff was lawful. 2. Whether the parties were entitled to the reliefs sought. At the hearing, the plaintiff led evidence by way of witness statement sworn by herself while the defendant led evidence through one Paul Kihika, the Managing Director of the defendant. In her statement the plaintiff stated that she was employed on a three year contract of employment which began on 1“ July 2006 to June 2009. That she asked for renewal of her contract on 11" May 2009 and she was retained by the defendant from June 2009 until 1* June 2010 when she was issued with an accreditation of her engagement for the b$] CamScanner a further four years. A mere issuance of an identity card cannot serve as an indicator that the contract was renewed. I didn’t agree with the plaintiff’s claim that this was the case. Issuance of an identity card didn’t amount to a renewal of contract. Although the plaintiff continued working for the defendant, no sufficient evidence was led to prove that her contract was renewed. Be that as it may, even if the contract was renewed, the defendant had a right to terminate the contract upon the plaintiff reaching the mandatory retirement age of 60 years. The plaintiff testified that she was born in 1950 May 3™ and that in 2009 she was 59 years old. The defendant’s staff policy which governed the defendant’s staff including the plaintiff stipulates that the obligatory retirement age is 60 years. However a staff member may opt to retire voluntarily on full benefits at the age of 55 years. Staff may also retire or be retired on medical grounds. Therefore the argument by learned counsel for the plaintiff that the defendant’s policy manual was inapplicable does not hold water. From the available evidence, it is clear that the plaintiff signed a contract exhibit P1. Under Clause 11.0 thereof it clearly states that: “This contract shall BE SUBJECTED TO AND SHALL COMPLY WITH THE PROVISIONS OF THE STAFF RULES AND REGULATIONS as mandated from time to time without prior notice.” Under section 58 (1) of the Employment Act; b$] CamScanner (1) Acontract of service shall not be terminated by an employer unless he or she gives notice to the employee except (GQ) worn n nnn nnn nner nnn nnn nn nnn nnn nnn nnn nnn nnn nn nn nnn nn anne (b) Where the reason of termination, is attainment of retirement age. Unless the contrary is shown, the date of termination is deemed to be in the circumstances when an employee attains normal retirement age. The plaintiff in her submission suggested that the decision to retire her was done by the Board of Directors. She further submitted that the court was never shown or furnished with proof of a decision of the Board of Directors to undertake the effects of exhibit P5. However Dw1 Mr. Paul Kihika testified under cross examination that the discharge was done by the Managing Director because of the powers delegated to him by the board. He further testified that the Managing Director is the overall manager. Management headed by the Managing Director retired the plaintiff on realizing that she was of retirement age pursuant to the powers delegated to the managing director by the board in accordance with the law. Although the plaintiff tried to bring in the issue of legality of the letter of mandatory retirement dated 29" November 2011 “P5”, it is a matter which was never pleaded by the plaintiff in her pleadings. As rightly submitted by learned defence counsel, the defendant was not given opportunity to provide evidence to prove that management had the mandate to carry out the action in exhibit P5. The legality of exhibit P5 was not pleaded in the plaint so it cannot be raised during the hearing. See: O. 6 r 7 of the Civil Procedure Rules. b$] CamScanner I am satisfied that as part of the defendant’s policy, it had a right to mandatorily retire the plaintiff as she had reached and never exceeded the mandatory retirement. I am unable to find that the plaintiff’s mandatory retirement was unfair and unlawful. The plaintiff was retired in accordance with the law. Issue 2: Whether ies are enti he relief ht? (i) Payment in lieu of notice: In his submission, learned counsel for the plaintiff sought payment in lieu of notice of two months’ salary pursuant to Clause 10.1 of exhibit P1. In reply learned counsel for the defendant submitted that under the Employment Act where the reason for termination is retirement age, then there is no requirement of notice. I agree with learned counsel for the defendant that where the reason for termination is attainment of retirement age, there is no requirement of notice. The moment the plaintiff clocked the mandatory retirement age, she was put on notice that anytime from then, she could be retired. This is the exception enacted under S. 58 (2) (d) of the Employment Act. Therefore the prayer for payment in lieu of notice is dismissed. (ii) Payment in respect of leave not taken: The plaintiff in her evidence testified that she did not take two years annual leave and thus she was entitled to payment for untaken leave totaling 2.800.000=. The defendants disputed this claim. b$] CamScanner