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Ugandan employers once needed only a calculator and the employment contract to estimate their liability for wrongful dismissal: pay in lieu of notice, any accrued benefits, and little more. Today, that certainty has evaporated. A line of decisions from the courts has expanded damages for wrongful dismissal far beyond the orthodox common law limits articulated in Addis v Gramophone Co. The result is a jurisprudence so inconsistent that advising both employer and employee on the consequences of wrongful dismissal has become guesswork. This legal ambiguity has fueled a surge in employment litigation, driven by employees pursuing large payouts and employers fighting to protect their financial viability.
The common law anchor
Addis settled three propositions that dominated common law thinking for nearly a century:
(a) Damages for wrongful dismissal are confined to losses flowing from the breach of contract (usually salary for the notice period and contractual benefits);
(b) No award is made for injured feelings, loss of reputation, or the manner of dismissal;
(c) Future or speculative earnings are irrecoverable.
The House of Lords in England has repeatedly reaffirmed Addis, most recently in Johnson v Unisys [2003] and Edwards v Chesterfield Royal Hospital NHS Trust [2012]. Jurisdictions that wished to recognise non-pecuniary loss did so by legislation (e.g., the UK's Employment Rights Act 1996). Uganda has no equivalent statute, leaving the common-law position intact, at least in theory.
The first cracks
Uganda's initial loyalty to Addis is clear in Esso Standard v Semu Amanu Opio (Court of Appeal 1993) and URA v Wanume David Kitamirike (Supreme Court 2004): both limited recovery to contractual sums. Even when the Supreme Court in Bank of Uganda v Betty Tinkamanyire (2010) upheld aggravated damages, it did so narrowly, stressing the employer's "degrading and callous" conduct and still pegging compensatory damages to the notice period. The decision cited Ghana Cocoa Board v Agbettoh only to condemn unconstitutional conduct, not to rewrite the measure of contractual damages.
A jurisprudential swerve
The real divergence began with the Supreme Court in Stanbic Bank Uganda v Kiyemba Mutale, (2015). Despite earlier fidelity to Addis, the Court upheld large general and exemplary damages for defamation and "unfair" dismissal, relying on Article 126(2)(c) of the Constitution, which mandates courts to grant adequate compensation to victims of wrongs. The judgment did not analyse Addis or justify its non-application.
That approach was replicated by the Supreme Court, without deeper reasoning, in Omunyokol Akol Johnson v Attorney-General (2018). The Court awarded 26 years' salary, plus general damages, for an unlawful dismissal of a Foreign Service Officer, again invoking Article 126(2)(c) but not engaging with Addis.
The Supreme Court in Stanbic Bank Uganda Ltd v Asiimwe (2020) specifically cited Addis v Gramophone and reaffirmed the common law position. The Court held that where payment in lieu of notice is made, no further general damages are awardable for wrongful dismissal.
The Court of Appeal in Standard Chartered Bank v Grace Tibihikira Makoko (2023) relying on Kiyemba Mutale and Omunyokol, awarded UGX 500 million in general damages, well above notice pay, for distress and reputational harm. Even this was lucky as counsel for the respondent had asked the court for damages measured as a percentage of the Bank's revenue contributed to by the employee. Once more, Addis went unmentioned; the earlier which had squarely re-affirmed Addis, was distinguished in a single paragraph without analysis.
Finally, in Uganda Post v Consolate Mukadisi, (2024), the Supreme Court held that payment in lieu of notice and general damages "serve different purposes" and awarded UGX 150 million for distress. The Court cited Article 126(2)(c) and its power under Article 132(4) to depart from its own precedents, mentioning Asiimwe only to say it would not follow it. Addis was ignored altogether.
Constitutional justification and its weakness
Proponents of expansive damages lean heavily on Article 126(2)(c), that empowers the court to award adequate compensation to the victims of wrongs. Yet the article opens with the phrase "Subject to the law," a rider the Supreme Court itself has treated as limiting in Kasirye, Byaruhanga & Co Advocates v Uganda Development Bank (2008). There, the Court held that Article 126(2)(e) (substantive justice without undue regard to technicalities) cannot trump statutory procedure. If procedural rules are law, so too is the common law incorporated by the Judicature Act. Using Article 126 to override Addis therefore demands a principled explanation, precisely what the recent cases lack.
Consequences
This oscillation, Asiimwe adhering to Addis, then Kiyemba Mutale, Omunyokol, Makoko, and Mukadisi abandoning it, has produced a patchwork that frustrates both employers and employees. Exposure ranges from three months' notice pay to multimillion-shilling awards for distress, with no clear yardstick.
The uncertainty hampers cross-border business in the East African Community, where Kenyan and Tanzanian courts continue to hew closely to common-law limits unless statute dictates otherwise.
The path back to coherence
A lower court is not bound by a decision of a superior court given in ignorance of the law. (Young v Bristol Aeroplane Co). Decisions that depart from Addis without confronting it, or without reconciling conflicting Supreme Court precedent, fit that description. The Industrial Court handling claims for non-pecuniary loss can lawfully choose the Asiimwe/Addis line and decline to follow Makoko, Omunyokol, or Mukadisi as being contrary to the law. Until the Supreme Court provides a fully reasoned reconsideration of Addis considering Article 126, prudence and principle alike favour the orthodox rule.
East African Community disparities: Challenges for cross-border business
The inconsistency in Uganda's damages regime is amplified by divergent approaches in Tanzania and Kenya, complicating employment practices in the EAC.
In Tanzania, recently amended labour laws cap unfair dismissal remedies at 6–24 months' remuneration, depending on procedural or substantive unfairness (e.g., discrimination). Cases like Mary Alphonse v Dar es Salaam City Council awarded reinstatement or up to 12 months' wages, reflecting a statutory framework that includes non-pecuniary losses, unlike Addis. The new limitations provide predictability but allow broader remedies than Uganda's Asiimwe or England's common law.
In Kenya, the law permits up to 12 months' gross salary for unfair dismissal, as seen in Kenya Ports Authority v Edward Mwalimu, where the Court of Appeal upheld damages for procedural unfairness and distress. Kenya's statutory approach diverges from Addis by compensating non-pecuniary harm within a clear cap, offering more certainty than Uganda's variable awards but less structure than Tanzania's tiered system.
Uganda's split between Asiimwe (notice period pay) and now leading Makoko, Kiyemba Mutale/Omunyokol, and Mukadisi (unlimited general damages) creates a volatile regime. Unlike Tanzania's capped remedies or Kenya's 12-month limit, Uganda's reliance on judicial discretion under Article 126(2)(c) yields unpredictable outcomes.
Implications for EAC business:
Multinational employers must navigate Uganda's complex and sometimes unpredictable approach, Tanzania's tiered caps (6–24 months), and Kenya's 12-month cap, requiring country-specific termination policies. This increases legal and administrative costs, undermining EAC integration.
Unpredictable liabilities in Uganda, contrasted with Tanzania's structured remedies and Kenya's moderate caps, may hamper cross-border investment. Businesses face heightened risk in Uganda, where awards are unpredictable and uncapped.
The EAC Treaty promotes labour law harmonisation, but divergent remedies hinder progress. Adopting a regional framework, like Tanzania's capped model, could standardise liabilities, fostering a predictable business environment.
Conclusion
Recent court decisions continue to propel Uganda's unprincipled drift from the orthodox common law limits prescribed in Addis, awarding expansive general damages for non-pecuniary loss without reconciling those awards with established authority such as Asiimwe. This inconsistency undermines legal certainty, leaving both employers and employees to navigate a landscape in which potential liability can range from notice pay to multimillion-shilling awards for distress.
Regionally, Uganda's unpredictability sits uneasily alongside Tanzania's tiered statutory caps and Kenya's twelve-month ceiling, thereby complicating East African Community business operations, inflating compliance costs, and discouraging cross-border investment. Until a clear statutory framework is enacted, Ugandan courts should adhere to Addis and Asiimwe or at least furnish principled reasons when departing from them, while EAC policymakers ought to prioritise harmonised labour laws to foster a stable and predictable commercial environment.
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