THE REPUBLIC OF UGANDA
IN THE HIGH COURT OF UGANDA AT KAMPALA
HIGH COURT CIVIL SUIT NO. 1128 OF 1998
KABANDIZE J.B & 21 OTHERS :::::::::::::::::::::::::::: PLAINTIFFS
KAMPALA CITY COUNCIL AUTHORITY ::::::::::::::::: DEFENDANT
BEFORE: HON. MR. JUSTICE STEPHEN MUSOTA
All the 22 plaintiffs are former employees of the City Council of Kampala with periods of service individually ranging from 6 years to 36 years. The plaintiffs were all employed on Permanent and Pensionable terms.
By a letter dated 4th April 1997 to each of the plaintiffs, their services were terminated and the said letter set forth the arrangements to pay the terminal package in the following terms:
- Three months notice to be paid for in cash with effect from 1st April 1997 as per the employees monthly earning in Council;
- Annual leave entitlement for one year to be paid in cash at the rate of basic pay;
- Transport at shs.2,000/= per kilometer up to home district headquarters by the most direct route and a flat rate of shs.150,000/= from district headquarters to home village;
- Three months basic pay for every year of service rendered to Council for the period of service.
The defendant duly paid the above benefits to each plaintiff. However, all the plaintiffs claim that under the Local Government Act 1997 they were entitled to different and better terminal benefits which included:
- Payment of one year’s gross pay in lieu of notice;
- Payment of pension, prescribed under section 62 (2)(b) of Local Government Act 1997;
- Payment of severance pay equivalent to six months’ basic pay for every completed year of service pursuant to section 62 (2)(d) of Local Government Act, 1997, of which only three months’ pay was received leaving balances of several months’ pay for each plaintiff.
- Payment of shortfall of shs.2,000/= on transport expenses for each plaintiff out of an entitlement of shs.4,000/= per kilometer to home district headquarters prescribed under section 62 (2)(b) of Local Government Act;
- Payment of shortfall shs.150,000/= transport expenses for each plaintiff from district headquarters to home village at the rate prescribed under section 62 (2)(f) of Local Government Act of which only shs.150,000/= was paid and received.
It was also pleaded that as permanent and pensionable employees, the plaintiffs were entitled to continue in service up to retirement age of 60 years and therefore, the premature termination of the plaintiffs’ service by the defendant was in breach of their contracts of employment.
The plaintiffs thus sought the following reliefs:
- A declaration that each plaintiff was entitled to a rightful and proper terminal package under The Local Government Act 1997;
- Interest on (a) above at the rate of 24% per annum from 1st July 1997 till payment in full;
- Compensation for the period between the age of each plaintiff at termination and the retirement age of 60 years;
- General damages for breach of employment as a result of termination before retirement age;
- General damages for inordinate delay in payment and the inconveniences arising from.
On the other hand, in its defence, the defendant admitted the fact that the plaintiffs were employed by it and that their employment was terminated as claimed in the plaint.
The defendant pleaded that each plaintiff was duly paid all that was due to him as terminal benefits and none of them has any legitimate claim against the defendant in that regard.
The defendant also denied that the plaintiffs were entitled to retire at the age of 60 years. Also denied specifically was the claim that the defendant had made deductions from each plaintiff’s package in respect of KCC Employees’ Union to which the plaintiffs as permanent and pensionable employees did not belong.
At the commencement of trial during scheduling conference the following issues were framed:
- Whether Statutory Notice was served onto the defendant;
- Whether the plaintiffs are entitled to the reliefs sought in the plaint.
Because of the long history of this case, issue (a) cannot be handled by this court.
Briefly, the background is as follows. When this case first came up for hearing in the High Court, it was dismissed on the ground that the plaintiffs had not served a Statutory Notice of Intention to Sue as required by the Civil Procedure (Limitation and Miscellaneous Provisions) Act.
The plaintiff appealed to the Court of Appeal where the court held that a Statutory Notice was/is no longer a legal prerequisite; it set aside the judgment of the lower court which had dismissed the suit on this account and directed the High Court to proceed to determine the case on its merits.
Being aggrieved by the decision of the Court of Appeal, the defendant has appealed to the Supreme Court so that it may pronounce itself on the question of legal and constitutional importance relating to statutory notice which were introduced in 1969.
Having delayed to pronounce itself on this question by the Supreme Court it was found prudent for this Court to hear this case on its merits as had been ordered by the Court of Appeal.
It is also important to mention that the defendant body was Kampala City Council at that time which has since changed to become Kampala Capital City Authority. This matter was heard by Justice V.F. Musoke Kibuuka to its end. At the trial the plaintiffs were represented by Mr. Joseph Luswata whereas the defendants were represented by Mr. Nerima Nelson.
This court will only answer issue (ii) since as already analyzed above, issue (i) is awaiting a pronouncement from the Supreme Court. In the interest of justice this court will give its position on issue (ii).
It was the plaintiffs’ contention in the submissions that the reliefs are sought on the basis of Section 61 of The Local Government Act which was the law by the 1st of April 1997, the admitted date of termination of the plaintiffs’ services by the defendant.
Counsel for the plaintiffs argued that the plaintiffs’ case is clearly based on the fact that their termination was contrary to terms and conditions of service.
That terms and conditions of service for public servants are not contained only in staff regulations of a particular department or in Government Standing Orders but are found also in every law that applies to civil servants.
Further that since it is not disputed that the plaintiffs are public servants or that the defendant is a public body, by letters of appointment, all the plaintiffs were permanent and pensionable. Therefore as permanent and pensionable employees, the plaintiffs were entitled to work until they were 60 years within the terms of section 12 (12) of the Pensions Act. That this right forms part of the terms and conditions of their services which was violated by the defendant when their services were terminated before they made 60 years.
On the other hand, the defendant’s counsel asserted that S. 61(2) does not apply in all cases of termination. That it applies only where an employee’s services are terminated contrary to the terms and conditions of service or contrary to the ruling of the Public Service Commission as provided for in S. 60 (3).
Counsel for the defendant also submitted that there is no averment that the plaintiffs’ services were terminated contrary to KCC terms and conditions of service and there is no proof that the KCC staff regulations contravene those prescribed by the Public Service Commission.
I agree with the submission by learned counsel for the plaintiffs that the terms and conditions of service of the defendant’s employees should be read together with the Local Government Act and the Pensions Act.
In the first place, the plaintiffs were Public Servants. According to S. 1 (1) (j)(iv)(b) of the Pensions Act, Public Service is defined as service under the administration of a district or an urban authority.
Urban Authority is defined in section 1(v) (n) of the Pensions Act as including a city. Thus the plaintiffs were employees of a city called Kampala City Council. Having been public servants, the plaintiffs were permanent and pensionable and were supposed to work until they were 60 years within the terms of section 12(12) of the Pensions Act.
However as submitted by counsel for the defendant an employer has a right to terminate an employee so long as the provisions for notice or payment in lieu thereof are paid.
This also applies to the plaintiffs. Whereas it is true that the plaintiffs were supposed to work until they were 60 years, the defendant retained the right to terminate them at will provided the defendant fulfilled the provision of the law by paying them the right terminal benefits.
The main question to answer in this issue is, whether the plaintiffs were paid their lawful and rightful benefits on terminating their contracts.
According to Section 3(2)(3) of the Local Government Act, it provides that;
“The Local Governments in a City shall be
- The city Council”.
This being so Kampala City Council was governed by the Local Government Act which was supposed to be applicable to the plaintiffs. This is confirmed by the appointment letter of the plaintiffs having headed note of CITY COUNCIL OF KAMPALA; meaning that they were employees of the City Council which makes The Local Government Act applicable to its employees.
According to section 61 (1) of the Local Government Act Cap. 243 as amended, the terms and conditions of service of Local Government staff shall conform with those prescribed by the Public Service Commission for the Public Service generally.
Since the plaintiffs worked for a Local Government body and their employer was the City Council, they were therefore governed by the Local Government Act and the terms and conditions in this Act were supposed to be adhered to by the defendant in paying the plaintiffs their benefits. Therefore terminating the plaintiffs before retirement age of 60 years was contrary to the terms and conditions of the Pensions Act.
Section 61(2) of the Local Government Act provides that; Notwithstanding subsection (1) an employee whose services are terminated by the Council contrary to the terms and conditions shall be entitled to the following benefits:
- one year’s gross pay in lieu of notice;
- Pensions in accordance with the Pensions Act;
- Basic salary in lieu of all earned and officially carried forward leave;
- Severance package equivalent to six months’ basic pay for every completed year of service;
- Transport expenses at the rate equivalent to one currency point for every five kilometers from duty station to employee’s home district headquarters;
- Transport expenses at the rate equivalent to fifteen currency points from the home district headquarters.”
In regard to notice, Counsel to the defendant argued that the longest length of notice before termination is six months in the case of a head of department. That this is pursuant to Regulation 7 (1) and none of the plaintiffs testified that he or she was a head of department. I do not agree. As already stated, according to the section 61(1) of the Local Government Act (1997), the terms and conditions of service of Local Government staff shall conform with those prescribed by the Public Service Commission.
In the instant case, the defendant only paid 3 months in lieu of Notice instead of payment of 12 months thus leaving 9 months unpaid and none of the pensions was paid to the plaintiffs as provided by the Local Government Act.
Regarding severance pay, only 3 months was paid instead of 6 months for every completed year of service.
Only half transport from duty station to home district of shs.2,000/= was paid instead of shs.4,000/= per km. For transport from home district to village the plaintiffs received 7 ½ currency points (shs.150,000/=) instead of fifteen currency points. Each individual balance was therefore shs.150,000/=.
The plaintiffs are therefore entitled to the balance of what was due to them and below are the calculations to get the total amount of money due and owing to the plaintiffs from the defendants.
He testified that he did not take leave for 5 years (1991 – 1996) and his evidence was unchallenged. His leave claims falls under item 9(v) of the termination letter. It appears any arrears outstanding the fitness testified that his basic pay was 87,630x5 = shs.438,150/=
He did not take leave for five years and he states that his basic pay was shs.75,204/= this is contested and this would entitle him shs.376,020/=
Leave for 5 years (1991-95) . This would entitle him shs.248,940/=
Leave for 6yrs from 1991-96 basic pay of 49,788/=. This would entitle him to shs.298,728/=.
Leave for 9 years from1988-97. His basic salary is shs.54,157/=. And this would amount to shs.487,413/=.
Leave for 3 years 1981-1983 .his basic pay was shs.40,870/= and this amounts to shs.112,610/=.
Untaken leave for 5 years from1990-94, basic pay of shs.48,803/= and this amounts to shs.244,015/=.
Leave for 7years from 1991-97, basic pay as shs.85,000/= which translates to shs.595,000/=.
He did not take leave for 9years from 1988-97. Basic pay was stated to be more than shs.50,000/= and this amounts to 450,000/=.
The home districts of each of the plaintiffs is stated on the pay slip and the distance is similarly stated on the pay slips.
He testified that the distance is 385kms to his home district of Rukungiri and this is the distance on the pay slips. According to the Act, Kabandize would be entitled to transport package of 383/5x20,000/=1,532,000/=. He testified that he received half as shs766,000/=the figure on the pay slip is shs916,000/= this is as a result of adding his entitlement for transport from home district to home village. He is thus entitled to further shs766,000/=.
He testifies that the distance from Kampala to home district, Rakai is 209kms.going by the formula this claim would be 209/5x20,000=836,000/=.the witness testified that he only got 2,000/=for every km. His entitlement is half of the figure above which is shs418,000/=.
He stated the distance to his home district of Mubende to be 158,kms. 158/5 x 20,000/= he received half of this and is therefore entitled to shs.316,000/= more.
Distance to his home district Mubende is stated to be 158kms. He would have received a total package of shs.632,000/= he received half and thus he is entitled to shs.316,000/=.
Distance to his home district in Mubende is stated to be 158kms. He would have received a total package of shs.632,000/= he received half and thus he is entitled to shs.316,000/=.
He stated the distance to his home district of Kiboga to be 123kms. He would have received a total package of shs.492,000/= he received half. He is entitled to an additional shs.246,000/=.
He stated the distance to his home district of Mpigi, Maddugomba to be 34kms. He would have received a total package of shs.136,000/= he received half and thus entitled to an additional shs.68,000/=.
Witness comes from Mubende and he testified that the distance 158kms. He would have been entitled to shs.632,000/= he received half and must receive shs.316,000/=.
He stated the distance to his home district of Kabale is 430kms. He would have been entitled to shs.1,720,000/= he received half and is entitled to an additional shs.860,000/=.
He stated the distance to his home district of Mukono is 24kms. He would have been entitled to shs.96,000/= he received half and is entitled to an additional shs.48,000/=.
Distance from Kampala to Luwero is 67kms. He would have received shs.268,000/= in total but he received half thus he claims shs.134,000/=.
Distance from Kampala to Kisoro is 430kms. He would have been entitled to shs.1,720,000/=. He received half and is entitled to shs.860,000/=.
Distance from Kampala to Masaka (137kms) he is entitled to shs.548,000/=. He received half and is entitled to an additional shs.274,000/=.
Distance from Kampala to Kiboga is 123kms. He would have been entitled to shs.492,000/= he received half and is entitled to an additional shs.246,000/=.
Distance from Kampala to Lira is 473kms. He would have been entitled to shs.1,388,000/=. He received half and is entitled to an additional shs. 694,000/=.
Distance from Kampala to Kiboga is 123kms. He would have been entitled to shs.492,000/=. He received half and is entitled to an additional shs.246,000/=.
Distance from Kampala to Rakai is 209kms. He would have been entitled to shs.836,000/= he received half and is entitled to an additional shs.418,000/=.
Distance from Kampala to Kitgum is 453kms. He would have been entitled to shs.1,812,000/= he received half and is entitled to an additional shs.906,000/=.
Distance from Kampala to Rukungiri is 383kms. He would have been entitled to shs.1,532,000/= he received half and is entitled to an additional shs.766,000/=.
Distance from Kampala to Masaka is 137kms. He would have been entitled to shs.548,000/= he received half and is entitled to an additional shs.274,000/=.
The total claim per individual will be calculated as follows:
Severance (S) + Notice (N) (which is 1 year’s pay in lieu of Notice) + Transport from duty station to home district equivalent to shs.2,000/= (T1) +Transport from Home District Headquarters to home village (T2) equivalent to a sum of shs.150,000/= + leave where required.
4,905,516/= + 1,875,591/= + 150,000/=
9,464,040/= + 263,890 x 3 = 788,670/= + 316,000/= + 150,000/=
Leave = 438,150/=
Allowance = 1,538,150/=
5,865,912/= + (225,612/= x 3) = 766,836/= + 150,000/=
5,189,079/= + (375,612/= x 3) = 1,126,836/= + 150,000/=
Leave = 244,015/=
Total is shs.7,025,930/=.
5,080,713/= (62,517 x 3) = 187,505 + 246,000/= + 150,000/=
Total is shs.7,352,223/=.
5,868,891/= + (429,471 x 3) = 1,288,413/= + 246,000/= + 150,000/=
Total = shs.7,553,304/=.
5,078,376 + (431,364/= x 3) = 1,294,092 + 316,000/= + 150,000/=+ 248,940/=
5,865,912/= + (375,612/= x 3) = 1,126,836/= + 860,000/= + 150,000/= + 298,728/= (Leave
2.870,400/= + 1,440,0000/= + 1.340,000/= + 150,000/=
Total = 4,594,400/=.
3,384,180/= + (225,612/= x 3) = 676,836/= + 860,000/= + 150,000/= + 122,610/= (Leave)
Total is 5,193,626/=.
3,158,563/= + (375,612/= x 3) = 1,126,836/= + 274,000/= + 150,000/= + 244,015/=
Total = 4,953,414/=.
7,219,584/= + (375,612/= x 3) = 1,126,836/= + 246,000/= + 150,000/=
Total = 8,742,420/=.
5,705,334/= + (698,058/= x 3) = 2,094,174/= + 694,000/= + 150,000/=
4,099,620/= + (480,000/= x 3) = 1,440,000/= + 246,000/= + 150,000/=
Total = 5,935,620/=.
6,542,748/= + (375,612/= x 3) = 1,126,836/= + 418,000/= + 150,000/=
Total = 8,237,584/=.
2,524,131/= + (222,849/= x 3) = 668,547/= + 906,000/= + 150,000/=
Total = 4,248,678/=.
8,943,073/= + (429,471 x 3) = 1,288,413/= + 906,000/= + 766,000/= + 150,000/= + 346,500/= (Leave)
Total = 12, 399,986/=.
1,353,672/= + (375,612/= x 3) = 1,126,836/= + 274,000/= + 150,000/=
Total = 2,904,508/=.
5,848,056/= + 1,440,000/= + 860,000/= + 150,000/= + 450,000/=
Total = 8,748,956/=.
The total claim made against the defendants is shs.143,253,029/=
On the issue of general damages, counsel for the plaintiffs submitted that they are awarded where the loss cannot be quantified. That general damages can compensate a person for any loss caused due to delays in effecting payment at the instance of the defendant and covers all inconvenience.
All the plaintiffs testified that they were retrenched in April 1997 and have demanded for payment of the balance of the rightful benefits since 1998. All the plaintiffs also testified that they came from their respective villages to attend proceedings of the court.
From the evidence on record, I am satisfied that the plaintiffs have been inconvenienced a great deal by the defendant’s award of the wrong terminal benefits.
I also agree with counsel for the plaintiffs’ submission that the plaintiffs would have invested their money if it had all been paid according to the law. I would therefore award general damages of 25 million to be shared equally amongst the plaintiffs.
The award of interest by a court is governed by the provisions of S. 26(2) of the Civil Procedure Act which gives a particular court the discretion to award interest as it deems fit although the discretion has to be exercised judiciously. See; Superior Construction and Engineering Ltd Vs Notay Engineering Industries (Ltd) High Court Civil Suit No. 702 of 1989.
“The basis of an award of interest is that the Defendant has kept the Plaintiff out of money and the Defendant has had to use it himself. So he ought to compensate the Plaintiff.”
In the circumstances therefore, I will award interest at the rate of 8% per annum on General Damages from the date of Judgment till the date of payment in full and the amount awarded to each of the plaintiffs shall carry an interest of 8% per annum from the due date of payment that is on the 1st April 1997 until payment in full. The plaintiffs shall get the costs of this suit.
J U D G E