A Termination Letter Disguised as a Dismissal Is Unlawful, and Failure to Follow Internal HR Manuals Can, in Itself, Render a Dismissal Unlawful. Industrial Court Rules.

Coram

Hon. Mr. Justice Anthony Wabwire Musana (Presiding) Panelists: Hon. Can Amos Lapenga, Hon. Emmanuel Bigirimana & Dr. Oling Dawn Kerjew

FACTS

The Claimant, Akullu Agnes Omara, was appointed as a Midwifery Technician at Lira University on 2 January 2017 and was confirmed in employment on 22 May 2017.

In 2019, both Lira University and Soroti University advertised a study opportunity to upgrade from a diploma to a Bachelor of Science in Midwifery. The Claimant applied to Soroti University, where she was admitted on government sponsorship. Lira University admitted her only as a private student.

Upon receiving admission from Soroti University on 2 February 2019, the Claimant applied for study leave with pay through the Hospital Director of Lira University, who verbally approved her request. The University Secretary subsequently delayed formal approval.

Her written application for study leave with pay was returned, marked with the comment, "Who will fill your vacancy without funds. The saying goes you cannot eat your cake and have it," amounting to a rejection. A second application for reconsideration was similarly denied.

The Claimant then applied for her annual leave, which was granted from 8 September to 8 October 2019. After the annual leave expired, she did not return to work and continued attending Soroti University.

On 4 November 2019, the Clinical Supervisor notified the University Secretary of the Claimant's absence for over 21 days. On 18 November 2019, the University Secretary issued a show-cause notice requiring the Claimant to explain why her salary should not be withheld and why she should not be summarily dismissed for abscondment.

The Claimant requested to attend an in-person meeting, which was held on 22 November 2019. The minutes of that meeting disclosed no formal decision by the Vice Chancellor on the allegation of abscondment.

On 2 December 2019, the University Secretary issued a notice of termination of the Claimant's employment, citing two months' notice commencing 3 December 2019, with payment of full salary throughout the notice period. The termination letter itself gave no stated reason for termination.

ISSUES FOR DETERMINATION

At the scheduling conference held on 13 February 2023, the following issues were agreed upon and framed for determination.

1. Whether the Claimant's termination was lawful.

2. What remedies, if any, are available to the parties.

SUBMISSIONS

Claimant's Submissions

Counsel for the Claimant submitted that the termination was unlawful on the following grounds: the Claimant was already on study leave when she was terminated, and was not given any reason for termination.

She was denied a fair hearing, contrary to Section 66 (now Section 65) of the Employment Act, Cap. 226, she was not given a chance to defend herself or to have representation. The Respondent had not discharged its burden of proving abscondment. Relying on Section 75(b) (now Section 74(b)) of the Employment Act, Counsel argued that taking or proposing to take leave to which an employee is entitled cannot constitute a fair reason for dismissal.

Respondent's Submissions

Counsel for the Respondent submitted that under the Lira University Human Resource Management Manual 2017 (HRMM), the Claimant's act of proceeding to study without approved study leave amounted to abscondment from duty, a recognised mode of exit from public service under the Public Service Standing Orders 2021. The Claimant had failed to prove that she was granted study leave, with or without pay, in the absence of a bonding agreement issued by the Vice Chancellor. The Claimant was accorded a fair hearing at the meeting of 22 November 2019. On the question of remedies, Counsel invoked Section (A-n) subsection 20 of the Public Service Standing Orders, which provides that an officer who abandons duty forfeits all rights and privileges attached to the office.

Claimant's Rejoinder

In rejoinder, Counsel maintained that the Claimant's name was included on the leave booking document prepared by the Clinical Supervisor and approved by the Dean of the Faculty of Health Sciences, evidencing that leave without pay had been granted.

The Claimant did not abscond from duty. That she was unlawfully terminated without being afforded a fair hearing as required by law.

LEGAL REPRESENTATION

For the Claimant, Mr. Emmanuel Egaru OmiatMr. Innocent OkunyEgaru & Co. Advocates

For the Respondents, Mr. Geofrey KakonaMr. Geofrey Joel KwotekKakona & Kwotek Advocates

COURT'S FINDINGS

Distinguishing Termination from Dismissal

The Court referenced the authority of Postbank Uganda Ltd v Esther Mututta Ssenoga (CACA 794 of 2023), which confirms that termination is a broad umbrella concept, while dismissal is a fault-based subset of termination governed by Section 65 of the Employment Act. The Court held that a dismissal disguised as a no-fault termination with notice remains subject to dismissal procedures.

Even though the termination letter (CEXH5) gave no stated reason, the Court interrogated the totality of circumstances. The Respondent's pleadings, witness evidence, and written submissions all unequivocally attributed the Claimant's separation to abscondment, a form of misconduct. Applying the law of admissions (Mugisha v G4S Security Limited [2024] UGIC 67), the Court concluded that

"It is impossible to accept any other hypothesis than that the Respondent terminated the Claimant for abscondment."

Accordingly, the termination was characterised as a "disguised dismissal," a fault-based action that fell to be assessed under Section 65 of the Employment Act. This approach was consistent with the Court's earlier decision in Kangave Mustafa v Pride Microfinance Limited (MDI) [2025] UGIC 63.

Procedural Fairness

The Court examined whether the Claimant was accorded a fair hearing in compliance with Section 65 of the Employment Act and the Respondent's own internal disciplinary framework under the HRMM 2017.

The standard for a lawful disciplinary process was set out with reference to Musoke J. in Ebiju v Umeme Ltd [2015] UGHCCD 15:

"Notice of allegations against the plaintiff was served on him, and sufficient time allowed for the plaintiff to prepare a defence. The notice should set out clearly what the allegations against the plaintiff and his rights at the hearing, where such rights would include the right to respond to the allegations against him orally and or in writing, the right to be accompanied to the hearing and the right to cross-examine the defendant's witness or call witnesses of his own. The plaintiff should be given a chance to appear and present his case before an impartial committee in charge of disciplinary issues of the defendant."

The Court found that while a show-cause notice was issued and a meeting held on 22 November 2019, the disciplinary process was subsequently abandoned without any communicated outcome or decision. The Respondent then issued a termination letter on 2 December 2019 that bore no connection to the 22 November meeting.

The Court held that;

"What started as a disciplinary process culminated in termination with notice. We therefore accept Mr. Egaru's submission that the Claimant's termination was unlawful but not for the reason Counsel proposes."

The Court further found that the Respondent had not only failed to conduct a formal hearing as required under Section 65(4) of the Employment Act but had also breached its own elaborate internal disciplinary procedures under the HRMM. Citing Musimenta v United Bank for Africa [2024] UGIC 53, the Court held that failure to follow internal disciplinary procedures independently renders a dismissal unlawful.

The Court further relied on Nakanwagi v Opportunity Bank Uganda Limited [2024] UGIC 77, where abandoning a disciplinary process and terminating with payment in lieu of notice was found to constitute an unlawful practice that;

"Because the Respondent did not follow procedure and disguised the Claimant's dismissal as a termination with notice, we must fetter the Respondent's right to terminate the Claimant. We find that it was an unlawful disguised dismissal."

On Substantive Fairness

Notwithstanding the procedural defects, the Court found that the reason for dismissal, abscondment, was substantively justified.

Under Regulation 7.13 of the HRMM, permission to study and study leave are only valid upon written authorisation from the Vice Chancellor, completion of a bonding agreement, and registration in the leave record. The Court found no evidence that the Claimant had received written authorisation to study at Soroti University before she began her course. Moreover, the Claimant's own letter of 14 August 2019 admitted that her application for study leave had been denied:

"The Claimant had, by her letter dated the 9th of August 2019, admitted that her application for study had been denied. The law of admissions requires that we look no further."

The Court held that abscondment constitutes a fundamental breach of the employment contract. Citing the South African authority of Smit v Workmen's Compensation Commissioner (1979) (1) SA 51, the Court observed that the primary obligation of an employee is to place their personal services at the disposal of the employer, an obligation the Claimant breached by absconding. The Court concluded that;

"We must now come to the inextricable and unescapable conclusion that there was justifiable reason for her dismissal. In other words, there was substantive fairness in the circumstances of the present case."

Procedural Unfairness + Substantive Fairness

The Court applied its settled principle from Mugisa v Equity Bank Uganda Limited [2023] UGIC 62 that a lawful dismissal must be both procedurally and substantively fair; neither element can save the other:

"Substantive fairness or justification alone cannot sanitise procedural defects."

The Claimant's dismissal was accordingly declared unlawful solely on account of procedural unfairness, notwithstanding the substantive justification for her removal.

HOLDING

The Court made the following final orders;

Issue 1: Lawfulness of Termination

The Claimant's termination was an unlawful disguised dismissal. It was procedurally unfair because;

(i) no formal hearing compliant with Section 65 of the Employment Act was held; and

(ii) the Respondent abandoned its own internal disciplinary process without communicating an outcome before issuing a termination notice.

The dismissal was, however, substantively fair, the Claimant had absconded from duty without authorised study leave, which constituted a clear employment infraction.

Issue 2: Remedies

 It is declared that the Claimant was unfairly dismissed from employment with the Respondent.

The Respondent is ordered to pay the Claimant UGX 1,915,797/= (One Million Nine Hundred Fifteen Thousand Seven Hundred Ninety-Seven Shillings), being four weeks' net pay under Section 65(4) of the Employment Act.

The declaration of reinstatement was denied. The employment relationship, having been severed for approximately seven years and having been destroyed by the Claimant's abscondment, is not capable of restoration.

Salary Arrears, General, Punitive and Exemplary Damages, and Interest were all denied. The Court held that misconduct cannot confer a benefit on the employee and that any award beyond the statutory fine would constitute a reward for misconduct.

All other claims for relief and remedies failed.

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Akullu Agnes Omara v Chairperson University Council Lira University and Another 2026 UGIC .

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KEY TAKEAWAYS

The "Disguised Dismissal" Doctrine

A termination letter that gives no reason does not necessarily protect an employer. Where the totality of the record, pleadings, witness statements, submissions, reveals a fault-based reason (such as abscondment or misconduct), the Court will characterise the action as a dismissal, regardless of how it is formally labelled. Employers who frame fault-based separations as "notice terminations" face the full procedural requirements of Section 65 of the Employment Act.

Procedural Fairness Is Non-Negotiable

Substantive justification, no matter how compelling, cannot cure procedural defects. Employers must: (i) issue a formal written notice of allegations; (ii) afford the employee sufficient time to prepare a response; (iii) convene a disciplinary hearing before an impartial panel; (iv) allow the employee the right to be accompanied and to call or challenge witnesses; and (v) communicate a formal decision before any dismissal.

Abandoning a Disciplinary Process Is an Unfair Labour Practice

Where an employer initiates a disciplinary process, including issuing a show-cause notice and holding a meeting, it must see that process through to a communicated conclusion. Abandoning the process and substituting a termination letter is independently unlawful, irrespective of the validity of the underlying reason for action.

Employers Must Follow Their Own Internal Procedures

An employer's Human Resources Manual or disciplinary policy constitutes an irreducible minimum labour standard binding on the employer. Failure to follow internal procedures, even where statutory procedures are otherwise satisfied, can independently invalidate a dismissal.

Study Leave Must Be Expressly Authorised

For public and statutory institutions, verbal or implied approval of study leave is insufficient. Under the Lira University HRMM, valid study leave required written authorisation from the Vice Chancellor, completion of a bonding agreement, and registration in the leave record. Employees who proceed to study without such formal authorisation do so at their own risk and may be liable for disciplinary action, including dismissal.

Misconduct Limits the Remedy

Where a dismissal is procedurally unfair but substantively justified, the employee's remedies are curtailed. The Court will not award reinstatement, salary arrears, general, punitive or exemplary damages where the employee is found to have committed a substantive employment infraction. The maximum award in such circumstances is the statutory penalty of four weeks' net pay under Section 65(4) of the Employment Act.

Reinstatement in Cases of Sustained Absence

Where an employment relationship has been severed for a prolonged period (here, approximately seven years), there is no demonstrable willingness on the part of the employer to reinstate the employee, and the employee's own conduct destroyed the trust relationship, the Industrial Court will not order reinstatement under Section 70(6) of the Employment Act.