Mufumba ran to the Industrial Court over wrongful dismissal from Uganda Development Bank in 2011 where she was working as the Principal Internal Auditor. She argued she had been dismissed while on leave and was not given any reason for her dismissal. The judges of the industrial court agreed with her that she was dismissed wrongfully.
Uganda Development Bank
whose loan is guaranteed by the employer to be recovered from their salary but
is wrongfully dismissed from their job, is not liable to pay the loan, the court
The Court of
Appeal upheld an earlier ruling by the Industrial Court in the case of Florence
Mufumba vs Uganda Development Bank that one is entitled to relief of the loan that
was supposed to be recovered from their salary up to the time of their retirement.
Mufumba ran to the Industrial Court over wrongful dismissal from Uganda Development
Bank in 2011 where she was working as the Principal Internal Auditor. She argued
she had been dismissed while on leave and was not given any reason for her
dismissal. The judges
of the industrial court agreed with her that she was dismissed wrongfully.
the contentious issues were the two loans that she had been advanced to by the
bank, which happened to be her employer. The first
was a housing loan of 102 million Shillings to be recovered in 15 years and ten
of which would fall when she is retired.
to this loan, therefore, she would only be entitled to relief from the respondent
(UDB) for only the value of deductions from her salary up to the time, she would
have officially retired,” ruled Justice Asaph Ruhinda and Linda Tumusiime in 2014.
She also had
been given a 25-million Shillings car loan but this would be recovered in its
entirety before retirement. On this one,
the judges said; “Should any of the loans have been intended to be wholly
covered by the salary and any other emoluments of the claimant, then, she would
be entitled to relief in the whole sum of the loan.”
Uganda Development Bank appealed the decision in 2015. But, from the appellant court; justices Keneth Kakuru, Geoffrey Kiryabwire and Christopher Madrama
industrial court ruling, stating that Mufumba is not liable to pay the loan where it's repayment depended on her being employed at UDB.
If there is
any loan amount that was to be repaid when the employee was already in retirement,
however, the employee must pay that because they are expected to find
alternatives sources of income.
UDB is also expected to pay Mufumba severance allowance amounting to 83 million Shillings, general
damages totalling 150 million Shillings and aggravated damages calculated at 200 million Shillings.
is one to watch by employers who guarantee loans for their employees. Any
dismissal regarded wrongful before they finish paying loans guaranteed by the
employer and that their repayment depends on the employee having a job, means the employer pays the loan. Wrongful
dismissal includes where the employee is not given reasons for the dismissal or
termination, the court said.