Uganda: Court Orders Udb to Pay Former Worker Shs700 Million

29 September 2020

The Court of Appeal has ordered Uganda Development Bank (UDB) to pay about Shs700m in compensation for salary and damages to its former employee for wrongful termination.

In a unanimous decision, a panel of three judges; Christopher Madrama, Kenneth Kakuru and Geoffrey Kiryabwire dismissed an appeal in which UDB had sought to overturn a decision of the Industrial Court.

The Industrial Court panel of judges had ordered UDB to compensate Ms Florence Mufumba, a former principal internal auditor, for wrongful termination and that she is entitled to salary for 66 months as compensation and relief from paying loan amounts up to the time she would officially retire.

Court records show at the time of sacking, Ms Mufumba was earning a salary of Shs5.5m per month but had three loans which she was servicing.

But the bank appealed against the decision of the Industrial Court, faulting the lower court in making the awards, some of which the bank argued Ms Mufumba did not plead for.

The Court of Appeal judges dismissed the pleadings in which the bank had faulted the Industrial Court for holding that its former employee, whose employment was wrongfully terminated, is entitled to relief from paying loan amounts up to the time she would have officially retired.

In the lead judgment, Justice Madrama ordered the bank to pay Ms Mufumba's contributions to any pension fund worth more than Shs10m and more than Shs2.3m being her salary for July 2011. "The respondent is entitled to pursue her terminal benefits as if she duly retired from service," the judge said.

The court also ordered the bank to pay her outstanding loans as at the date of her termination after paying her salary for 66 months and terminal benefits. Court also ordered the bank to pay Ms Mufumba aggravated damages worth Shs200m as well as legal costs of the suit.

The court also awarded an interest of 18 per cent per year on special damages from the time of termination until payment in full, and an award of 8 per cent per year on aggravated damages from the date of the award by the Industrial Court until payment in full.

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