Introduction The Industrial Case of Akonye v Libya Oils (Labour Dispute Claim 82 of 2014) [2019] UGIC 44 (19 July 2019) is an interesting example of how the notion of probationary contracts can be contested in the Ugandan labour law context. Probationary contracts are contracts of service that are used by employers to test the suitability of new hires before confirming permanent employment. However, there are some legal requirements and limitations that apply to such contracts, as stipulated by the Employment Act 2006 and interpreted by the Industrial Court of Uganda.
According to section 2 of the Employment Act 2006, a probationary contract means a contract of service that:
is in writing;
expressly states that it is for a probationary period; and
does not exceed six months or such longer period as may be agreed upon by the parties.
The Act also provides that an employer may not place the same worker twice under probation, and that a probationary contract may be terminated by either party after giving at least 14 days’ notice or by the employer after paying seven days’ wages in lieu of notice.
The case of Akonye David v Libya Oil revolved around the dispute of the claimant's termination of employment. Akonye David alleged that his termination was unlawful, while Libya Oil contended that it was justified due to his poor performance and other failures. The Industrial Court of Uganda, in its judgment on 19 July 2019, addressed key issues surrounding the employment contract type, the legality of termination, and remedies available to the claimant.
Facts Akonye David was employed by Libya Oil as a sales and marketing manager on a permanent basis. He was terminated after eight months of service without a hearing, which prompted his claim of unlawful termination.
Issues The primary issues examined by the court were:
Whether the claimant was employed under a probationary contract or a permanent contract.
Whether the claimant’s employment was unlawfully terminated.
Whether the claimant was entitled to the remedies sought.
Holding:
1. Probationary vs. Permanent Contract: The Industrial Court of Uganda determined that the claimant was employed under a permanent contract, not a probationary one. The court's decision was based on the definition of a probationary contract under the Employment Act 2006, which requires written documentation expressly stating the probationary period. The claimant's appointment letter stated permanent employment and did not mention probation. The court found the claimant was recruited on 01/08/2013 and not 15/08/2013, as claimed by Libya Oil. Therefore, his eight months of service exceeded the maximum probationary period allowed by law.
2. Unlawful Termination: The court found that the claimant's employment was unlawfully terminated. It applied principles of natural justice and fair hearing, stating that the employee must receive reasons for termination and an opportunity to defend themselves. Libya Oil failed to comply with these requirements by not providing valid reasons, notice, or a hearing. Additionally, Libya Oil did not follow its disciplinary policy and presented no evidence to support claims of poor performance or other failures.
3. Entitlement to Remedies: The claimant was awarded damages for unlawful termination (equivalent to six months' salary), general damages for breach of contract, and the violation of constitutional rights. The court granted interest on the damages at a rate of 25% per annum from the date of judgment. Special damages for loss of income and benefits were denied due to insufficient evidence. Reinstatement was also denied due to the breakdown of trust.
Right to Explanation: Before termination, employers are required to explain the reasons for considering termination to ensure transparency in the process.
Persuasive Precedent: The court referenced the Kenyan case of Agnes Yahuma Digo vs PJ Petroleum Equipment Limited Industrial cause Number 2049 of 2011[2011] LLR 182(ICK) Ndolo J, which is the effect that
“an employee serving his probationary period has legitimate expectation that the employer will communicate on his status before the expiry of the probation period. If there is no communication at the expiry of the probation period and the employee continues working for the employer, the employer is estopped from re-opening up the issue of probation at a later stage and the presumption is made that the employee was confirmed upon expiry of his probation period."
Possible Grounds for Challenging Termination: Employees may challenge the termination of their probationary contract under various circumstances, including inadequate notice or payment, lack of reason and fair hearing, unlawful reasons, or breach of contract terms.
Conclusion.
The case of Akonye David v. Libya Oil sheds light on the interpretation of probationary contracts, the significance of following legal procedures in termination, and the remedies available to employees. It serves as a valuable resource for both employers and employees in Uganda, highlighting the legal framework governing probationary contracts and the importance of adhering to the law when terminating employment It reinforces the need for clarity in employment contracts, specifically in distinguishing between probationary and permanent contracts, ensuring that written agreements explicitly state the probationary nature when applicable. The case also reaffirms the right to a fair hearing and the duty of employers to provide valid reasons for termination, promoting transparency and fairness in the employment termination process.
Moreover, it highlights the potential legal remedies available to employees facing unjust or unlawful termination, providing a guide for those seeking justice in similar situations. The judgment in this case reaffirms the significance of the Industrial Court in Uganda as the ultimate authority for resolving employment disputes.
By Waboga David
Disclaimer:
The information provided in this article is for general informational purposes only. It is not intended as legal advice or a substitute for professional legal counsel. Laws and regulations can change, and the legal interpretation of cases may vary. Therefore, it is essential to consult with a qualified legal professional or labor expert to obtain accurate, up-to-date advice and guidance on specific legal issues or cases. The author and the platform do not accept any liability for actions taken based on the information presented in this article. Readers are encouraged to seek legal counsel for their unique circumstances and to rely on authoritative sources for legal information
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