Industrial Court Orders Kyambogo University to Pay UGX 19 Million in Salary Arrears and Exemplary Damages for Discriminating Against a Long-Serving Kitchen Attendant by Keeping Her on Short Contracts
Industrial Court Orders Kyambogo University to Pay UGX 19 Million in Salary Arrears and Exemplary Damages for Discriminating Against a Long-Serving Kitchen Attendant by Keeping Her on Short-Term Continuous Contracts
Overview
The Industrial Court of Uganda held that a long-serving kitchen attendant kept on rolling short-term contracts was unfairly discriminated against, treated her service as a single continuous period, but found that the non-renewal of her last contract was not an unlawful termination.
FACTS OF THE CASE
The Claimant, Magdalene Atono, was initially employed by Uganda Polytechnic Kyambogo (UPK) as a casual labourer and kitchen attendant on 15 May 2000, earning a monthly wage of UGX 40,000. Following the merger of UPK, the Uganda National Institute of Special Education (UNISE) and the Institute of Teacher Education Kyambogo (ITEK) to establish Kyambogo University in 2003, her employment was transferred to the Respondent.
On 17 March 2004, the University issued the Claimant a temporary appointment for six months, renewable upon application. She subsequently served under successive short-term contracts until November 2009, when the University's Appointments Board appointed her as a Kitchen Attendant for one year under section 50(3) of the Universities and Other Tertiary Institutions Act, 2001, as amended.
In 2007, the Claimant obtained a Certificate in Hotel and Institutional Catering from Kyambogo University. She maintained that she pursued the qualification after staff had been encouraged to upgrade their qualifications during the University's restructuring process. Despite acquiring the certificate and having her achievement acknowledged by the University Secretary, she was not confirmed on permanent terms.
The Claimant alleged that the University treated her differently from colleagues who had initially been engaged on casual terms but were subsequently appointed and confirmed as Kitchen Attendants. She cited Daniel Muhumuza, Najjuma Musisi, Tumwesigye Ben and Christine Achan, who were placed on salary scale M15, whereas she was placed on salary scale M20 under the classification of a group employee.
According to the Claimant, the M20 classification was not provided for under the University's approved salary structure. She argued that the applicable structure classified Kitchen Attendants as support staff on salary scale M15, with an O-Level certificate as the academic requirement. She consequently contended that her placement on M20, coupled with the University's failure to confirm her appointment, resulted in unfair treatment and underpayment.
The Claimant further alleged that the University failed to pay her the salary due under the M15 scale from July 2003 to July 2012, initially claiming UGX 38,272,949 in salary arrears. In an additional witness statement, she revised her claim to UGX 52,540,132, based on the salary she asserted would have been payable by August 2018.
On termination, the Claimant maintained that she had continuously served the University and its predecessor institution for more than twelve years. She argued that the University's decision not to renew her contract was unlawful and that she was entitled to longer notice by virtue of her continuous service.
The University denied liability. It maintained that the Claimant had been employed under successive fixed-term contracts, which she voluntarily accepted, and that her employment lawfully ended when her final contract expired on 31 December 2012. It further argued that acquiring an additional qualification did not automatically entitle her to permanent appointment, which remained subject to the University's recruitment procedures and the Appointments Board's discretion.
The Respondent also maintained that the Claimant was not entitled to benefits reserved for permanent employees, that her remuneration was governed by her contractual terms, and that her NSSF contributions had been duly remitted.
The dispute was initially instituted in the High Court on 24 February 2014 and was subsequently referred to the Industrial Court for determination.
ISSUES FOR DETERMINATION
The parties adopted a joint scheduling memorandum containing the following issues:
Whether the Respondent discriminated against the Claimant.
Whether the Claimant's termination was unlawful.
Whether the Claimant was entitled to salary arrears from July 2003 to July 2012 under salary scale M15 of the University's Terms and Conditions of Service.
Whether the Claimant was entitled to claims relating to unpaid NSSF contributions.
What remedies were available to the parties.
LEGAL REPRESENTATION
For the Claimant Professor John Jean Barya of M/s. Barya, Byamugisha & Co. Advocates.
For the Respondent Mr. Cyrus Baguma of M/s. Kalenge, Bwanika, Kisubi & Co. Advocates.
SUBMISSIONS OF THE PARTIES
Whether the Respondent discriminated against the Claimant
Counsel for the Claimant submitted that the University subjected the Claimant to unlawful discrimination by denying her confirmation on permanent terms while appointing and confirming other employees who, according to the Claimant, possessed qualifications equal to or lower than hers.
Professor Barya relied on sections 6(2) and 6(3) of the Universities and Other Tertiary Institutions (Amendment) Act, 2003, arguing that staff affected by the merger were entitled to an opportunity to upgrade their qualifications and retain their employment under the applicable framework.
Counsel further submitted that the Claimant had complied with the University's encouragement to upgrade by obtaining a Certificate in Hotel and Institutional Catering. He argued that the University's failure to accord her treatment comparable to that of other Kitchen Attendants amounted to discrimination contrary to Article 21 of the Constitution and section 6 of the Employment Act, as cited in the proceedings.
He relied on the evidence of Okello Henry Maxson, a University employee and former Branch Union Secretary, who testified that other employees had been confirmed despite allegedly possessing lower qualifications. Counsel accordingly prayed for a declaration of discrimination and an award of general and exemplary damages.
Counsel for the Respondent submitted that the Claimant had failed to establish discrimination on any of the grounds protected by law. Mr. Baguma argued that the Claimant had not demonstrated that the University's decision was attributable to her sex, race, religion, political opinion, disability, social origin or another legally protected ground.
He further submitted that the University retained discretion to recruit employees who satisfied the prescribed requirements for particular positions. According to Counsel, the Claimant had not been shortlisted for the permanent Kitchen Attendant position advertised in 2012 because she lacked a credit in English, which was stated as a requirement in the advertisement.
Counsel therefore urged the Court to find that the Claimant had failed to discharge the burden of proving discrimination.
Whether the Claimant's termination was unlawful
Counsel for the Claimant submitted that the Claimant's employment should be considered continuous because she had served UPK and, subsequently, Kyambogo University for several years without interruption.
Professor Barya relied on sections 82 and 83 of the Employment Act, arguing that the successive contracts did not extinguish the continuity of her employment. He further submitted that the Claimant was entitled to notice commensurate with her period of service and that the one month's notice provided by the University was insufficient.
Counsel also relied on regulations 39(1) and 39(2) of the Employment Regulations, 2011, arguing that an employee continuously engaged beyond the prescribed period could not indefinitely be denied the rights and benefits associated with employment beyond casual terms.
He accordingly prayed for a declaration that the termination was unlawful.
Counsel for the Respondent submitted that the Claimant's employment was governed by successive fixed-term contracts, each of which was voluntarily accepted and performed. He argued that the last contract expired on 31 December 2012 and that the employment relationship consequently ended lawfully under the provisions of the Employment Act governing expiry of fixed-term contracts.
Counsel further contended that the University was not obliged to renew a contract merely because the Claimant had served under earlier contracts. He maintained that the Claimant had been paid the contractual entitlements due to her and that her claim for salary arrears could not render the expiry of her contract unlawful.
Whether the Claimant was entitled to salary arrears under salary scale M15
Counsel for the Claimant submitted that the University had underpaid the Claimant by placing her on salary scale M20 instead of M15, which applied to Kitchen Attendants under the approved salary structure.
Professor Barya argued that the Claimant was entitled to the difference between the remuneration she received and the salary applicable to the M15 scale. He relied on the treatment of other Kitchen Attendants who had been placed on M15 and submitted that the Claimant should receive salary arrears for the period of underpayment.
Counsel also urged the Court to adopt the revised computation of UGX 52,540,132 contained in the Claimant's additional witness statement.
Counsel for the Respondent submitted that the Claimant's remuneration was governed by the fixed-term contracts she had executed. Relying on National Bank of Kenya Ltd v Pipe Plastic Samkolit (K) Ltd, Counsel argued that courts should not rewrite contracts voluntarily entered into by the parties in the absence of circumstances such as fraud, coercion or undue influence.
He further contended that the University's Terms and Conditions of Service applicable to permanent employees did not automatically entitle the Claimant, who had served under contractual terms, to the salary and benefits associated with permanent employment.
Counsel also objected to the revised salary claim, arguing that the Claimant had ceased working for the University in December 2012 and could not calculate her arrears using a salary applicable in 2018.
Whether the Claimant was entitled to NSSF contributions
Counsel for the Claimant submitted that the University's underpayment of her salary also resulted in underpayment of the statutory contributions due to the National Social Security Fund. He prayed that the University be directed to calculate and remit the correct contributions based on the M15 salary scale.
Counsel relied on section 7(2) of the NSSF Act and the Industrial Court's decision in Aijukye Stanley v Barclays Bank, arguing that NSSF remittances constituted an employee's personal property for social security purposes and could be pursued before the Court.
Counsel for the Respondent submitted that the Claimant's NSSF contributions had been remitted based on her contractual remuneration. The Respondent maintained that the Claimant was not entitled to have contributions recalculated using the M15 salary scale.
Remedies sought
The Claimant sought a declaration of unlawful termination, salary arrears, unpaid NSSF contributions, UGX 10,000,000 in general damages, UGX 20,000,000 in exemplary damages, interest at 25% per annum and costs.
The Respondent opposed the reliefs, submitting that the Claimant's contract had lawfully expired, that the salary claim was partly time-barred, and that the Claimant had failed to prove the basis for general or exemplary damages.
COURT'S FINDINGS
The University's differential treatment was unjustified, although the Court's reasoning on discrimination requires careful reading
The Court considered the Claimant's allegation that she had been treated differently from other Kitchen Attendants who were appointed and confirmed under the University's approved salary structure.
In examining the applicable legal framework, the Court referred to Article 21(3) of the Constitution, section 5(3) of the Employment Act and Article 1 of ILO Convention No. 111. It observed that discrimination in employment ordinarily involves a distinction, exclusion or preference based on a legally protected attribute.
The Court stated;
“Therefore, for unfair treatment to be construed as discrimination, it must be based on the protected attributes prescribed under ILO Convention No. 111, Article 21(3) of the Constitution of Uganda 1995 (as Amended), and Section 5(3) of the Employment Act (supra).”
The Court also considered section 5(4) of the Employment Act, which permits distinctions based on the inherent requirements of a particular job.
It was noted that the University's approved Terms and Conditions of Service, which came into force on 25 January 2005, classified the Kitchen Attendant position as support staff under salary scale M15. The prescribed academic requirement was an O-Level certificate.
The Court observed that the University had relied on the absence of a credit in English to explain why the Claimant was not confirmed. However, that requirement appeared in the recruitment advertisement issued in July 2012 and was not part of the person specification applicable under the structure when the Claimant was admitted to the University's service in November 2009.
The Court held that;
“By 2009, the person specification for the Kitchen Attendant position required an ‘O’ Level certificate and nothing else, and the Claimant possessed this qualification.”
The Court further found that the Respondent had not demonstrated why the Claimant was placed under the classification of a group employee on salary scale M20 instead of being treated as support staff on M15.
It observed;
“Nothing was placed before this court to justify the distinction and differentiation of the Claimant, who possessed the required ‘O’ Level certificate, by placing her under a non-existent categorization of a group employee under salary scale M20 and why she was not confirmed.”
The Court was particularly concerned that other employees initially engaged on casual terms had subsequently been appointed and confirmed under M15, whereas the Claimant was excluded despite possessing the academic qualification required under the applicable structure.
It therefore stated;
“The Appointments Board was bound to follow this structure and apply it uniformly to all staff that qualified for it, unless it had justifiable reason not to do so and none was rendered in the Claimant's case.”
The Court concluded that the Claimant's exclusion was arbitrary and disproportionate and was not shown to serve any legitimate objective.
It was, however, important that the Court distinguished between general unfair treatment and discrimination under the statutory framework. At paragraph 31, the Court stated that the Claimant's unfair treatment did not amount to discrimination as prescribed under section 5(3). Nevertheless, at paragraph 32, the Court concluded that her unjustified exclusion and placement on a non-existent salary classification amounted to unfair discrimination, contrary to section 5(4) of the Employment Act.
The Court accordingly resolved the issue in the Claimant's favour and declared that she had been unfairly discriminated against.
Repeated fixed-term contracts did not prevent the Court from finding continuity of employment
The Court considered whether the Claimant's service under successive fixed-term contracts could be treated as continuous employment for purposes of determining her employment rights.
It examined section 82 of the Employment Act, which defines continuous service and provides for continuity in specified circumstances involving successive employers following a transfer of a business.
The Court also considered earlier decisions concerning successive fixed-term contracts, including Ssenuni Mohamed and Others v Kampala Capital City Authority and Torres Advanced Enterprise Solutions, LLC v George Johnson Ojok and 87 Others.
It observed that the legal character of an employment relationship should not be determined solely by the labels used in appointment letters. The Court adopted a substance-over-form approach, taking into account the actual nature and continuity of the employment relationship.
In applying this approach, the Court noted that the Claimant had performed the same work for the University over several years, while her fixed-term contracts were repeatedly renewed. It found no evidence that her service had been interrupted between her transfer to the Respondent and the expiry of her final contract.
The Court observed;
“No evidence was placed on the record to indicate that this service was ever interrupted from 2003 when she was transferred to the Respondent until the expiry of her last contract on 31/12/2012; therefore, within the meaning of section 82(1), her service for this period constitutes a single period of service with the same employer, the Respondent.”
The Court further expressed concern that maintaining the Claimant on repeatedly renewed short-term contracts had the effect of denying her the rights associated with the University's approved employment structure.
It stated;
“It seems to us that maintaining her on short-term temporary contracts, which were repeatedly renewed for several years, was a means for the Respondent to avoid its obligations towards permanent staff, as provided under the University and Other Tertiary Institutions Act and its own terms and conditions of service.”
The Court therefore held that the Claimant's successive contracts did not, in the circumstances of this case, prevent her service from being treated as continuous employment.
However, the Court distinguished continuity of service from the separate question of whether the non-renewal of the final fixed-term contract was unlawful.
The non-renewal of the final contract was lawful, but the Claimant was entitled to two months' salary in lieu of notice
Although the Court treated the Claimant's service as continuous, it did not find that the non-renewal of her final contract amounted to unlawful termination.
The Court noted that the Claimant's final contract ran from 1 August 2012 to 31 December 2012 and provided for one month's notice or one month's remuneration in lieu of notice.
It considered the established principle that an employer may bring an employment relationship to an end, subject to the applicable contractual and statutory requirements.
The Court referred to Stanbic Bank Uganda Ltd v Asiimwe, in which the Court of Appeal considered an employer's ability to terminate employment upon giving the requisite notice.
The Industrial Court held that the University's notice of non-renewal did not, in itself, constitute unlawful termination. Nevertheless, because the Claimant had served continuously for approximately nine years, the Court found that she was entitled to two months' notice under section 57(3)(c) of the Employment Act rather than the one month provided in her final contract.
The Court concluded;
“In conclusion, we find that the issuance of the notice of non-renewal did not amount to unlawful termination; however, having worked for a period of 9 years, she is awarded 2 months' notice in lieu of termination in accordance with section 57(3)(c).”
Consequently, the Court rejected the Claimant's claim for general damages based on unlawful termination but awarded her two months' salary in lieu of notice.
Salary arrears were limited to the period during which the Claimant was admitted to the University's approved structure
The Court considered the Claimant's claim for salary arrears based on salary scale M15. It found that the University's appointment letter dated 5 November 2009 formally admitted the Claimant to the University's structure under section 50(3) of the Universities and Other Tertiary Institutions Act, 2001, as amended. However, instead of placing her on the M15 scale applicable to Kitchen Attendants, the University classified her as a group employee on M20.
The Court held that the Claimant's salary claim could not be calculated from July 2003, as she had requested. It reasoned that her entitlement to the salary attached to the approved structure arose from 5 November 2009, when she was formally appointed under that structure.
The Court stated;
“Based on the trajectory of her employment, it is clear that her claims for payment of salary based on salary scale M15 can only be construed from 5/11/2009, when she was issued her first contract in accordance with section 50(3) of the University and Other Tertiary Institutions Act on 5/11/2009.”
The Court also rejected the use of the 2018 salary figure in calculating the arrears, noting that the Claimant had ceased working for the University in December 2012 and was only entitled to remuneration for the relevant period of employment.
The Court therefore limited the calculation to the period from November 2009 to December 2012, using the salary applicable to the Claimant's position at the time.
It calculated the arrears as follows;
5 November 2009 to June 2011: UGX 4,955,202.
July 2011 to 31 December 2012: UGX 4,041,750.
The total salary arrears were therefore assessed at UGX 8,996,952, attracting interest at 10% per annum for the period specified in the award.
The Court consequently rejected the Claimant's larger claim for salary arrears and awarded the amount supported by the relevant employment structure and period of service.
The NSSF claim was not established on the available evidence
The Court considered the Claimant's allegation that the University had failed to remit the correct NSSF contributions throughout her employment.
It referred to section 7(2) of the NSSF Act, which imposes statutory obligations on employers concerning registration and contributions, and to the Industrial Court's decision in Aijukye Stanley v Barclays Bank.
The Court noted that there was no evidence on the record establishing that the University had remitted the Claimant's NSSF contributions from the time her employment was transferred to the Respondent or that she had been registered with the Fund for purposes of those remittances.
The Court stated;
“In the circumstances, we had no basis to conclude this issue and believe it a matter the NSSF should be interested in pursuing.”
The Court did not, therefore, grant the Claimant a specific monetary award for the alleged NSSF arrears.
Exemplary damages were justified by the arbitrary and disproportionate treatment
The Court considered whether the University's conduct warranted an award of exemplary damages.
It explained that exemplary damages are punitive rather than compensatory and may be awarded in exceptional circumstances where an employer's conduct demonstrates a gross disregard for an employee's rights.
The Court relied on Bank of Uganda v Betty Tinkamanyire, which it cited in discussing the circumstances in which exemplary damages may be appropriate.
The Court found that the University's placement of the Claimant on a non-existent salary classification, without justification, had resulted in underpayment and denial of confirmation despite her years of service in the same position.
It observed that the treatment was arbitrary and disproportionate, particularly because the University had an approved salary structure that placed Kitchen Attendants on M15.
The Court consequently held that the Claimant's case warranted exemplary damages and ordered the University to pay UGX 10,000,000, together with interest at 10% per annum from the date of the award until payment in full.
The Court did not award the UGX 10,000,000 in general damages sought for unlawful termination because it had already found that the non-renewal of the contract was lawful.
The Claimant was awarded half the costs of the claim
The Court observed that employment disputes often involve an unequal relationship between an employer, who controls the financial resources, and an employee, whose livelihood depends on employment.
It explained that the Court has, in appropriate circumstances, taken a position against awarding costs in a manner that could worsen the financial position of an employee who has lost their means of livelihood.
Nevertheless, it found that the Claimant merited an award of half the costs of the claim.
HOLDING AND FINAL ORDERS
In its award delivered on 27 October 2026, the Industrial Court partially allowed the Claimant's case and made the following orders:
Declaration of unfair discrimination
The Court declared that the Claimant had been unfairly discriminated against, contrary to section 5(4) of the Employment Act.
Salary arrears
The University was ordered to pay the Claimant UGX 8,996,952 in salary arrears for the period from 5 November 2009 to 31 December 2012, with interest at 10% per annum as specified in the award.
Exemplary damages
The University was ordered to pay UGX 10,000,000 in exemplary damages for unfair discrimination, with interest at 10% per annum from the date of the award until payment in full.
Notice pay
The Claimant was awarded two months' salary in lieu of notice.
Costs
The Claimant was awarded half the costs of the claim.
The Court did not award general damages for unlawful termination and did not grant a specific monetary award for the alleged NSSF arrears.
Read the full case below
KEY TAKEAWAYS
Where an employer has approved a salary structure that specifies the job classification, salary scale and academic requirements for a position, it must apply that structure consistently to employees who meet the relevant criteria.
In this case, the Court found that the University had no demonstrated justification for placing the Claimant on a non-existent M20 classification when the Kitchen Attendant position was classified under M15.
Differential treatment must have a legitimate and justifiable basis
The Court found that the University's treatment of the Claimant was not justified by the qualification requirements applicable when she was admitted to the approved structure in 2009. The English credit requirement introduced in the 2012 advertisement could not retrospectively justify her earlier exclusion.
Repeated fixed-term contracts do not automatically defeat continuity of service
The Court examined the substance of the employment relationship, including the Claimant's length of service, the repeated renewal of her contracts, the fact that she continued to perform the same duties, and the absence of any interruption in service.
Continuity of service and unlawful termination are distinct questions
The Court treated the Claimant's service as continuous but did not conclude that the non-renewal of her final fixed-term contract was unlawful.
Instead, it found that the notice issued was insufficient under the applicable statutory notice period and awarded two months' salary in lieu of notice.
Employers should therefore distinguish between the expiry of a fixed-term contract and their separate obligations concerning notice and other statutory entitlements.
Salary arrears must be supported by the applicable structure and relevant period
The Court did not accept the Claimant's entire salary claim. It limited the arrears to the period beginning on 5 November 2009, when she was admitted to the University's approved structure, and rejected the use of a 2018 salary figure to calculate entitlements arising from employment that ended in 2012.
Unjustified employment practices may attract exemplary damages
The Court awarded UGX 10,000,000 in exemplary damages because it considered the University's conduct arbitrary and disproportionate and found that the Claimant had been underpaid and denied confirmation without justification.
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