'An employee cannot escape the disciplinary process by tendering a resignation or a retirement ‘with immediate effect.’ There exists nothing like ‘resignation with immediate effect’, Affirms COA Kenya

Introduction

In Uganda, notice periods play a central role in the lawful termination of employment. The Employment Act, Cap 226 — particularly Sections 57 & 64 — sets out the requirement that either party to a contract of service must give notice before terminating employment, unless termination is for just cause. This statutory obligation ensures fairness, allows both parties to prepare for separation, and protects employees from abrupt loss of livelihood.

Ugandan courts have consistently reaffirmed that termination without adequate notice, or without payment in lieu of notice, amounts to unlawful termination. In Bank of Uganda V Betty Tinkamanyire SCCA No. 12 of 2007, the Supreme Court emphasized that an employer who terminates employment without following due process, including giving the required notice, acts unlawfully and must compensate the employee accordingly.

Similarly, in Stanbic Bank (U) Limited Vs Constant R. Okou, Court of Appeal Civil Appeal No. 60 of 2020, The Court of Appeal held that the Termination of the employee through the payment in lieu of notice but without issuing the requisite notice under the Employment Act rendered the termination wrongful as it was in breach of a mandatory statutory requirement to issue notice.

More recently, in the case of Stanbic Bank (Uganda) Limited vs Nassanga Saphinah Kasule, Court of Appeal; Civil Appeal No. 182 of 2021, Justice Christopher Gashirabake, JJA, highlighted that the employer's compliance with the notice period, as outlined in section 57 of the Employment Act, Cap 226, or the employment contract, is sufficient grounds for termination. The court emphasized that the famous Article 4 of the Termination of Employment Convention No.158 of 1982 which provides for valid reason for termination employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking establishment or service is not applicable unless incorporated into the Employment Act.

The court clarified that, in cases where notice is not provided, the payment in lieu of notice is required, as established by law and the terms of the contract. The court referenced the concept that payment in lieu of notice can be viewed as the ordinary giving of notice accompanied by a waiver of service by the employer.

The court further held that a disciplinary hearing is only required in cases where an employer contemplates dismissal on grounds of misconduct or poor performance.

Stanbic Bank (U) Limited v Okou R. Constant (Supra) the Court of Appeal upheld the Industrial Court's decision, ruling that the termination was wrongful. It clarified that Section 58 mandates actual notice unless the employee consents to payment in lieu. Unilateral payment in lieu does not cure the defect, as it effectively amounts to a summary termination under Section 69, which requires justification (e.g., gross misconduct). The court distinguished this from pre-2006 law (e.g., Barclays Bank of Uganda v Godfrey Mubiru SCCA No. 1 of 1998), noting the current Act's stricter protections.

While in Donald Wangi v People Performance Group Ltd (Jinja Labour Dispute No. 0023 of 2022) [2023] UGIC 79, the Industrial Court found summary dismissal without notice or hearing under Sections 58, 65, and 66 wrongful, awarding compensation for the notice period. The claimant successfully argued that abrupt termination violated statutory protections, reinforcing that non-compliance with notice renders termination unlawful.

While most judicial decisions in Uganda focus on employers’ obligations, together with the Employment Act of Uganda leans in favor of the employee. Most likely because the Act’s underlying purpose is to protect employees, given the principle of control and master-servant theory typically exercised by employers. Even so, instances where employees attempt to resign “with immediate effect,” particularly during ongoing disciplinary proceedings, are often viewed as an attempt to exit employment with dignity or to pre-empt the outcome of disciplinary action.

Interestingly, the Court of Appeal of Kenya in the case of Chege v Timsales Limited [2025] KECA 1660 (KLR) was recently faced with such a rare occurrence. In that case, the Court held that there is no concept of resignation with immediate effect when disciplinary proceedings are underway, unless the employer expressly waives the notice period. The Court emphasized that both parties must adhere to the contractual and statutory notice obligations, underscoring the mutual nature of employment relations and the need for procedural fairness even upon exit.

This comparative development raises important reflections for Ugandan employment law, particularly regarding the reciprocal enforcement of notice periods and the limits of unilateral resignation amidst disciplinary action.

Facts

The appellant, Peter Njuguna Chege, was an employee of Timsales Limited and a member of the Kenya Building, Construction, Timber & Furniture Industries Employees’ Union. In July 2018, employees of the respondent demanded delayed salaries and were subsequently locked out on allegations of participating in an unprotected strike and absconding from duty.

The union challenged the lockout in Nairobi ELRC Cause No. 1282 of 2018, but the claim was dismissed, and the court directed the respondent to proceed with disciplinary action against the employees.

Following this, on 1st July 2019, the respondent issued show cause notices to the affected employees. However, the appellant purported to retire with immediate effect via a letter dated 30th June 2019, claiming entitlement to retire at age 47 under Clause 18 of the Collective Bargaining Agreement (CBA).

The respondent declined to accept the notice, maintaining that disciplinary proceedings were already underway.

The appellant sued in ELRC Cause No. 58 of 2019, alleging violation of his labour rights and seeking payment of retirement benefits, gratuity, and accrued leave. The ELRC dismissed the claim, prompting this appeal.

Issues

1. Whether the appellant’s retirement notice was valid and effective in law.

2. Whether the respondent acted unlawfully in continuing disciplinary proceedings after the purported retirement.

3. Whether the appellant was entitled to retirement benefits, gratuity, or compensation for alleged violation of labour rights.

Legal Representation

• For the Appellant, Mr. Magata

• For the Respondent, Mr. Muli

Submissions

Appellant’s Submissions

Argued that resignation or retirement is a unilateral act not requiring employer approval.

Cited Edwin Beiti Kipchumba v National Bank of Kenya Ltd [2018] eKLR, asserting that a notice of termination need not be accepted to be effective.

Claimed that having reached 52 years, he was entitled to retire under the CBA.

Alleged violation of Articles 28, 41, and 43 of the Constitution for denial of retirement benefits and dignity in labour.

Sought Kshs. 516,805 in gratuity and leave pay and Kshs. 1,500,000 in constitutional damages.

Respondent’s Submissions

Denied receiving a valid retirement notice, arguing it was backdated and in bad faith, intended to evade an ongoing disciplinary process.

Cited Eckla Jesang Kirop & 3 Others v Kenya Ports Authority [2015] eKLR, emphasizing the employer’s right to discipline employees for misconduct.

Argued that allowing such conduct would encourage indiscipline and undermine lawful disciplinary control.

Maintained that the appellant’s rights were not violated, as he was accorded fair hearing but failed to attend the proceedings.

Court’s Findings

The Court (Warsame, Mativo & Gachoka, JJA) upheld the trial court’s decision, reasoning as follows,

1. On the validity of the retirement notice

   The Court held that the appellant’s letter dated 30th June 2019 could not amount to a lawful retirement since it was issued after disciplinary proceedings had commenced and took effect immediately, without any notice.

“An employee cannot escape the disciplinary process by tendering a resignation or a retirement ‘with immediate effect.’ There exists nothing like ‘resignation with immediate effect’ in the employment context unless the employer waives the notice period.”

The Court emphasized that where a CBA or contract is silent on notice, Section 35 of the Employment Act, 2007 applies, requiring a reasonable notice period consistent with the pay cycle.

2. On evading disciplinary process

   The Court agreed that the purported retirement was a deliberate attempt to evade disciplinary proceedings.

“An employee’s retirement notice aimed at evading a disciplinary process is unacceptable… such a notice can be lawfully disregarded if it is a tactic to escape disciplinary proceedings.” (Mahanadi Coalfields Ltd v Rabindranath Choubey [2020] 18 SCC 71, Supreme Court of India).

3. On fair hearing and employer’s prerogative

   The Court reaffirmed that the employer had lawfully initiated disciplinary action by issuing show cause letters in compliance with Section 41 of the Employment Act, which guarantees an employee the right to be heard.

   
   

4. On reliefs sought

   The Court found no basis for granting retirement benefits or constitutional damages since the appellant authored his own termination by failing to attend the disciplinary hearing.

“Allowing the retirement notice to stand amounts to sanctioning and rewarding misconduct.”

Holding

The Court of Appeal dismissed the appeal with costs, affirming that:

1. The appellant’s retirement notice was invalid, having been tendered to avoid disciplinary proceedings.

2. Resignation or retirement with immediate effect is legally untenable unless the employer waives the notice period.

3. The appellant was not entitled to retirement benefits or constitutional damages.

Conclusion

The jurisprudence emerging from both Ugandan and Kenyan courts shows a consistent and evolving theme: the sanctity of notice in employment termination. While Ugandan law, through the Employment Act, Cap 226, has traditionally emphasized notice obligations as a safeguard for employees against arbitrary or abrupt termination by employers, the Kenyan Court of Appeal’s recent decision in Chege v Timsales Limited [2025] KECA 1660 (KLR) expands this understanding to affirm the reciprocal nature of notice requirements within employment relationships.

The Kenyan court’s holding that “there exists nothing like resignation with immediate effect unless the employer waives the notice period” reflects an important legal doctrine: the employment contract binds both parties to principles of fairness, mutual respect, and procedural propriety. An employee cannot use resignation to evade accountability or to short-circuit a pending disciplinary process — just as an employer cannot bypass statutory notice and procedural fairness in dismissing a worker.

For Uganda, where the law and judicial interpretation have largely evolved to protect employees from the superior bargaining power of employers, this comparative development is instructive. It highlights that employment law is not merely about shielding one side from exploitation but about maintaining the balance in mutual obligations.

Section 57 of the Employment Act and the accompanying jurisprudence, including Bank of Uganda v Betty Tinkamanyire, Stanbic Bank (U) Ltd v Okou R. Constant, and Stanbic Bank (U) Ltd v Nassanga Saphinah Kasule, firmly anchor the duty of notice in employer conduct. However, as employment relations mature and become more contractual and rights-based, there is increasing recognition that employees, too, must act in good faith and in accordance with the law when exiting employment.

Moreover, the principle that “notice is the bridge between employment and lawful separation” must apply with equal force to both parties. The protection of employees does not absolve them from the duty of fairness, honesty, and compliance with contractual or statutory notice requirements.

Therefore, while Uganda’s Employment Act and constitutional framework, particularly Article 21, guaranteeing equality before the law, continue to prioritize protection of employees, the lessons from Chege v Timsales Limited remind us that equality in the workplace must translate into equal accountability. Employers must not terminate without lawful notice or hearing, and employees must not resign or retire with immediate effect to evade discipline.

As Uganda’s labour jurisprudence continues to evolve, the integration of this reciprocal understanding will enhance procedural fairness, reinforce workplace integrity, and align the law with the broader constitutional promise of equality before the law for both employer and employee alike.

By

Waboga David

Key Takeaways

1. No “Immediate” Resignation or Retirement

   An employee cannot resign or retire “with immediate effect” unless the employer expressly waives the notice requirement.

2. Disciplinary Proceedings Take Precedence

   Employees cannot use resignation or retirement to avoid disciplinary accountability once proceedings have begun.

3. Employer’s Right to Discipline

   Employers retain disciplinary jurisdiction over employees until a lawful termination or retirement notice takes effect.

4. Notice Is Mandatory

   Even where a CBA is silent, Section 35 of the Employment Act mandates notice before employment termination.

5. No Reward for Misconduct

   Courts will not validate resignations or retirements that are strategically used to sanitize gross misconduct.

6. Affirmation of Due Process

   The Court reinforced that fairness requires notice, hearing, and due process—not avoidance through backdated letters.

Read the full decision below

Chege v Timsales Limited (Civil Appeal 29of2020) 2025KECA1660(KLR) (21October2025) (Judgme.

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