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THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF
UGANDA AT KAMPALA
(COMMERCIAL COURT
DIVISION)
HCT-00-CC-CS-0332 OF 2004
WILSON WANYAMA ::::::::::::::::::::::::::::::::
PLAINTIFF
VERSUS
DEVELOPMENT & MANAGEMENT ]
CONSULTANTS INTERNATIONAL ]
::::::::::::::::: DEFENDANT
BEFORE: THE HONOURABLE
MR. JUSTICE YOROKAMU BAMWINE
J U D G M E N
T:
The plaintiff’s claim against the defendant is for
special, general and punitive damages for unlawful termination of employment,
interest and costs of the suit. He alleges that in February 2001 he entered
into an oral contract of employment with the defendant
and that this contract
was for a duration of six years. The defendant denies existence of any such
contract. The defendant contends,
however, that he was engaged as a casual
worker, subject to availability of work from time to time.
At the
scheduling stage the parties agreed:
1. That the plaintiff was employed by
the defendant.
2. That the plaintiff’s employment with the defendant
was summarily terminated.
There are four issues for determination:
1. What
was the nature of the plaintiff’s employment with the
defendant?
2. Whether the termination of the plaintiff’s employment
with the defendant was lawful.
3. Whether the plaintiff is entitled to the
reliefs sought.
4. Whether the defendant is entitled to the remedies set out
in the counterclaim.
As a general principle, offers of appointment in
this country are required to be in writing. Thus under S.11 (1) of the
Employment
Act, Cap. 219, a contract of service for six months or more, or for a
number of working days totaling six months or more, shall be
made in
writing.
There may of course be instances like the instant one where
parties co-exist in an undefined relationship. At the end of the day,
the Court
must define for them the nature of that relationship.
In the instant
case, the parties agree that there existed some form of an employment
relationship between them. The plaintiff contends
that it was for a fixed
period of 6 years while the defendant says that it was a casual employment.
From available literature, there
are two main factors which identify a casual
employee. First, he is not employed for more than twenty four hours at a time,
and
secondly, his contract provides for payment at the end of each day. See:
THE RIGHTS OF AN EMPLOYEE IN KENYA by Okech Owiti, at
page 15.
I have
considered the plaintiff’s evidence on this point vis-à-vis that of
the defendant. The plaintiff’s story
is that he was employed by the
defendant in August 2001 as a Business Development Manager and that the contract
was to run for six
years. He claims that at the time of termination, the
employer was organizing a formal agreement but so far he had only issued an
identity card, P. Exh. 1. According to him, his duties involved marketing,
planning and liaison. That he was getting a gross pay
of Shs.750,000-. He has
tendered in evidence two pay slips, P. Exh. 11. The defence version is that the
Plaintiff was offered a
temporary appointment to do with town running, messenger
tasks of sorts. That the organization used to pay him whenever it had money.
The defendant’s Managing Director had this to say:
“As consultants, we work on contracts. Whenever we got money from an assignment, we shared the little from it. He was not a permanent employee of the organization.”
He disputes both the identity
card and the two pay slips presented by the plaintiff as evidence of their
relationship.
From the above, the evidence on record supports existence
of an oral contract of employment. In any case, both counsel for the plaintiff
and for the defendant do agree that the plaintiff was employed by the defendant.
It is the terms of the contract which are of course
in dispute. The law is that
where a term of contract has not been expressed, a Court will undertake to imply
it where it is necessary
to give effect to the intentions of the
parties.
I have considered the issue of the impugned identity card, P.
Exh. 1. The date of issue is given as 13/8/2001 and the expiry date
as
12/8/2006. It bears a signature said to be the Managing Director’s, one
Dr. Sam Katabaazi.
For his part, Dr. Katabaazi denied knowledge of any
such identity card. He said that they could not have issued him an identity
card
when he was not on appointment. But he admitted that the company issued
identity cards to employees, especially consultants, and
that he was the one
signing those cards on behalf of the organization. He did not say how he
expected the plaintiff to carry out
the organization’s messenger like
errands without any form of identification. On being shown P. Exh. 1, he
said:
“I never signed this card. I’m seeing it first time. It bears a signature which is not mine. I never authorized its issuance.”
Clearly, this is where the problem lies.
The plaintiff says the signature thereon is Dr. Katabaazi’s. Dr.
Katabaazi denies
it. Neither party made an attempt to offer expert evidence to
confirm or destroy the assertion.
I have also addressed my mind to the
evidence of both parties, especially an agreement between them, D. Exh. 1,
concerning a motor
vehicle, No. UAD 850A. In the agreement, the plaintiff is
therein described throughout as an employee of the defendant. Dr. Katabaazi
does not deny execution of that agreement. If anything, the defence claim for
Shs.2,000,000- is based on this agreement. In the
agreement, the parties agreed
that the payment would be recovered from the employee’s monthly salary and
that the payment would
be in 24 monthly instalments of Shs.150,000- each. By
implication, the defendant expected to recover the cost of the car from the
plaintiff’s monthly earnings.
I have considered all this evidence
and come to the conclusion that it cannot be true, as Dr. Katabaazi claims, that
the first time
he saw the identity card was when it was shown to him in Court.
In the Written Statement of Defence, WSD in response to the plaintiff’s
averment in the plaint that the defendant had issued an identity card to him, it
states:
“(a). ..............................
(b). That the plaintiff was only issued with an identity card for identification purposes and not as a contract of employment for a fixed term. The expiration date on the identity card therefore does not in any way relate to a contractual period or expiration thereof.”
In
view of this averment in the defendant’s own WSD, I have not found DW1
Katabaazi to have been a truthful witness on this
point. The system of
pleadings, held the Supreme Court in INTERFREIGHT FORWARDERS (U) LTD –VS-
EADB [1994-95] HCB 54, is necessary
in litigation. It operates to define and
deliver with clarity and precision the real matters in controversy between the
parties
upon which they can prepare and present their respective cases and upon
which the Court will be called to adjucate between them.
A party is expected
and is bound to prove the case as alleged by him and as covered in the issues
framed. He will not be allowed
at the trial to change his case or set up a case
inconsistent with what he alleged in his pleadings except by way of amendment of
pleadings. The defendant did not apply to amend its WSD at any stage of the
proceedings to retract the hitherto admitted issuance
of the identity
card.
From what I have already stated above, Dr. Katabaazi’s
evidence regarding the identity card is inconsistent with the defendant’s
defence on it as per its WSD. In the absence of an expert’s evidence to
tilt the balance in the defendant’s favour,
Court is inclined to accept
the plaintiff’s evidence that the card was issued by the
defendant.
At the hearing, in an attempt to show that the pay slips (P.
Exh. 11) are a forgery, Dr. Katabaazi undertook to produce a typical
pay slip
issued by the defendant. He did not do so. The re-payment schedule produced by
the defendant as evidence that Shs.150,000-
was being recovered from him monthly
shows that Shs.150,000- was recovered from the plaintiff on 23/7/2002. The
impugned pay slip
indicates so as well.
Accordingly, Court accepts the
plaintiff evidence that he was earning Shs.750,000- per month. In all these
circumstances, Court is
satisfied that there was an oral contract of employment
between the parties. Under this oral contract, the plaintiff’s salary
per
month was Shs.750,000-.
I so find.
As to whether the termination
of this oral contract of employment was lawful, I have already held that the
terms of the contract were
never reduced in writing. In law, once an employee
alleges unfair dismissal, it becomes incumbent upon the employer to show that
the dismissal was fair.
In the instant case, the parties had been
together between August 2001 and May 2003, a period of about one year and nine
months.
It was in my view fair for the plaintiff to expect the defendant to
give him a sound reason for the termination of the relationship.
In
matters of this nature, Courts invariably come into the picture after the event,
that is, after the dismissal, when an employee
is complaining that he was
removed from the job for a reason which did not justify such action.
The
general position is that a master may terminate the contract with his servant
any time for any reason or even for no reason at
all. See: OKORI –VS-
UEB [1981] HCB 52. Where the contract has been reduced in writing, the
parties are bound by its terms. In otherwords, the employee will expect to
be
dismissed in accordance with the procedure agreed upon by the parties. No such
terms exist in this case.
According to the plaintiff, he was attending a
meeting with KCC as part of his normal duties when his boss Sam Katabaazi called
him.
He asked him whether he had received some funds from a sister organization
to the defendant based in Arua. The witness (the plaintiff)
said no. He went
to see him (the boss) and upon reaching there he was interrogated by the police
and later arrested. It is the
plaintiff’s evidence that although he was
not an employee of the Arua based organization, he had had some dealings with
one
Moses Jurua whom he had requested at personal level to lend him some money.
He had lent him some Shs.2,380,000- in two instalments
of Shs.1,080,000 and
Shs.1,300,000- respectively. The Shs.1,080,000- was transferred to his
(plaintiff’s account) at Nile
Bank. It is his evidence that he was
supposed to pay it back and that he did pay it back through Western Union at
Nile Bank.
From the evidence, it is these an authorized borrowings on the
part of the plaintiff and one Jurua which sparked off the controversy
between
the parties. According to DW1 Katabaazi, the defendant’s concern was that
the plaintiff had been given money by Mr.
Jurua for delivery to the defendant
and he never did so. He, Jurua, was the Project Manager in Arua in a sister
organization to
the defendant in which the witness, Dr. Katabaazi, also had a
hand. Police detained the plaintiff for a day or so and he was then
bailed out.
The matter never went to Court. The next thing he saw was a letter from the
plaintiff’s lawyers warning that plaintiff
was in the process of filing a
suit for unlawful dismissal.
For his part, PW2 Jurua denied the alleged
borrowing of funds from him by the plaintiff. According to him, the Arua office
experienced
some shortage of operational funds one time. They borrowed from the
defendant company in Kampala. Since the plaintiff had been
introduced to him as
an employee of sorts in the organization, he (Jurua) started channeling the
refunds through the plaintiff for
on ward transmission to the defendant. In the
end, he learnt that the funds were instead going to the plaintiff’s
personal
account in Nile Bank.
From the evidence, whether the deal
between the plaintiff and Jurua was genuine or not, the defendant thought that
it was a fishy
one. Indeed, Jurua has denied ever lending money to the
plaintiff as alleged by him. A contract of employment is based on confidential
relationship between the employer and the employee. Where the personal
confidence has ceased, the Court will not enforce the contract.
True the
plaintiff has not been subjected to the criminal law of the land. There is
therefore no conclusive evidence of embezzlement.
The position in civil
proceedings for wrongful dismissal is, however, that where a servant is guilty
of a gross breach of good faith,
his employer is entitled to dismiss him for
dishonesty. Thus it was held in SINCLAIR –VS- NEIGHBOUR [1967] 2 QB
279 that even though the plaintiff’s conduct might not have been
dishonest, it was nevertheless conduct of such a grave and weighty
character as
to undermine the relationship of confidence which should exist between master
and servant. Accordingly, Court upheld
the defendant’s dismissal of the
plaintiff as justified. The plaintiff had in that case borrowed money from his
employer,
with knowledge that the employer would not approve of the borrowing
and had repaid it into the till the following day.
Applying the same
principle to the instant case, Court is satisfied that even if the borrowing
from Jurua may have been honest, for
as long as it involved the company funds
and Dr. Katabaazi’s approval had not been sought, he was entitled to treat
it as a
case of embezzlement of the company funds. Court is also satisfied that
as a result of transactions between the plaintiff and Jurua,
the matter was
reported to police and the plaintiff was arrested. He was later sent packing.
Court is satisfied that the borrowing
undermined, and/or was capable of
undermining the trust relationship between the plaintiff and the defendant. It
is that conduct
of the plaintiff that resulted in the termination of the oral
contract of employment. The defendant was in these circumstances justified
to
terminate the relationship. There was therefore nothing unlawful about it. I
so hold.
As to whether the plaintiff is entitled to the remedies sought,
his first prayer is for special damages of Shs.29,250,000- being salary
for the
unexpired period of the contract, that is, from 12/05/2003 to 12/08/2006. I
have already made a finding that the contract
was presumably for a fixed period,
judging by the identity card issued to the plaintiff by the defendant. However,
the terms were
never reduced in writing. It is not known whether if they had
been reduced to writing the parties intended to make provision for
termination
prior to expiry of the fixed period or whether they intended that either party
be at liberty to terminate the contract
upon a just cause. The law is that in
the event of a wrongful termination by the employer, if the former course had
been adopted,
the plaintiff would have been entitled to recover as damages, the
equivalent of remuneration for the balance of the contract period.
If they had
adopted the latter course, he would be entitled to recover as damages, the
equivalent of remuneration for the period
stipulated in the contract for notice.
In view of the Court’s finding that the defendant was justified to
terminate the plaintiff’s
services, implying that it was justified to
terminate his services in a summary manner whereby he could be dismissed without
notice
and/or a right to be heard first, Court is satisfied that he is not
entitled to anything beyond what had accrued to him during the
period of
employment with the defendant. His claim for Shs.29,250,000- is therefore
baseless. It is dismissed.
As regards the claim for Shs.1,850,000-,
there is evidence that he paid it through the police. There is also evidence
that he paid
it in an attempt to settle the matter with the defendant out of
Court. In consideration of that payment, the defendant opted not
to pursue the
criminal case against him. By his own admission, the plaintiff had borrowed
funds from Jurua. Jurua has denied the
fact of borrowing. He says this was
company money. The amount admitted by the plaintiff is Shs.2,380,000-. The
amount paid by
him through police assistance was Shs.1,850,000-, less than the
amount which the defendant was demanding from him. Taking it, as
I must, that
this was payment in response to the defendant’s claim against him, Court
is unable to make an order that it be
refunded to him. It was payment in
acknowledgment of a debt.
All in all, Court is of the opinion that the
plaintiff was entitled, under the oral contract of employment, to payments that
he had
worked for. He has not made any claim for any unsettled payments.
Therefore, he has no sustainable claim against the defendant.
I so
hold.
As to whether the defendants are entitled to the reliefs claimed in
the counterclaim, it has prayed for Shs.2,950,000- being the alleged
outstanding
balance on the embezzled funds and Shs.2,000,000- which is still outstanding
against the plaintiff on the car loan scheme.
From the evidence, the
defendant maintained that the plaintiff had embezzled Shs.4,800,000-. However,
the defendant’s evidence
regarding that amount is, to say the least,
wanting. Evidence in support of the claim for Shs.4.8m is sketchy. However,
from the
plaintiff’s own evidence, the total amount he had so far received
from Jurua was Shs.2,380,000-. Jurua has denied ever extending
a personal loan
to him, implying that all the money allegedly borrowed from Jurua was the
defendant’s money. I believe it
was.
Plaintiff has adduced
photocopies of alleged remittances of funds to Jurua, P. Exh. V. The first is
dated 28/2/2003 for Shs.300,000-.
The second is a clear replica of the first.
In otherwords, the plaintiff has attempted to account for Shs.600,000- using the
very
copies of the same document. The 3rd is a remittance
purportedly made in June, to be exact 18/6/2003. By then he had already, been
sacked. The 4th is dated 3/3/2003 for Shs.300,000-. Court is not
convinced that the payments related to funds now claimed by the defendant from
the plaintiff. If the plaintiff so wishes, he can recover it from Jurua as
money had and received. As for the defendant, however,
it s clear to me that
after the payment of Shs.1,850,000- through the police, a balance of
Shs.530,000- is still due and owing from
the plaintiff to make it a total of
Shs.2,380,000- which the plaintiff admits to have borrowed from Jurua. This
amount, that is,
Shs.2,380,000- is decreed to the defendant in the place of the
Shs.4,800,000- claimed by them. Given that out of this amount Shs.1,850,000-
has already been paid to the defendant, there shall be an order for the payment
of the balance in the sum of Shs.530,000- to the
counter – claimant. I
order so.
As to the balance of Shs.2,000,000- on the car loan, the
plaintiff has not denied this indebtedness to the defendant. He took the
vehicle, it had not been fully paid for and Shs.2,000,000- is still owing on it.
I would decree this amount to the counter-claimant
and I do so. The two amounts
put together shall attract interest of 20% per annum from the date of filing the
counter claim (21/6/2004)
till payment in full.
As regards general
damages and costs, I note that the defendant was responsible for the uncertain
state of affairs regarding the nature
of the plaintiff’s employment with
it. It was within its means to appoint the plaintiff on probationary terms or
any other
terms or else tell him when the going was still good that he had no
place in the organization.
It earns no credit for keeping him in suspense
for close to two years. While the usual result is that the loser pays the
winner’s
costs, in the circumstances of this case I have seen no
justification for an award of general damages or costs to the counter –
claimant on the counter-claim or in the main suit. I therefore make no order as
to damages. I order that each party bears its own
costs.
In the result,
the plaintiff’s suit against the defendant is dismissed with an order that
each party bears its own costs.
The defendant’s claim in the
counter-claim is allowed in part. A sum of Shs.2,530,000- is decreed to the
counter-claimant as
special damages as the balance on the car-loan scheme and
the plaintiff’s un authorized borrowing. The decretal amount shall
earn
interest at the rate of 20% per annum from the date of filing the counter-claim
till payment in full.
I so order.
Yorokamu Bamwine
J
U D G E
9/5/2006
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