The Industrial Court has ordered Uganda Martyrs University (UMU), Nkozi, to pay a former employee, Vincent Oyo, Shs8.014 million in general damages for delaying payment of his gratuity and terminal benefits for nearly six years after his employment ended.
The court, presided over by Justice Anthony Wabwire Musana, ruled that the university violated the Employment Act by failing to pay Oyo his accrued terminal benefits within the statutory seven-day period following the termination of his employment.
In an award delivered on November 3, 2026, the court further ordered the university to pay interest at 10 per cent per annum on the general damages until the amount is fully settled. However, each party was directed to meet its own legal costs.
Oyo had sued the university after his employment contract expired on April 30, 2016, accusing the institution of withholding his gratuity despite acknowledging its obligation to pay him.
According to court records, Oyo had been employed by the university from June 1, 2014, although he told the court that he had served the institution for more than 12 years. The university’s Human Resource Manual provided for gratuity upon the expiry of his contract.
The university’s Chief Finance Officer initially computed his gratuity at Shs15.908 million, an amount subsequently acknowledged by the institution in correspondence dated September 2015.
However, despite the commitment to pay, the money remained outstanding, prompting Oyo to instruct lawyers to demand payment and later seek intervention from the Mpigi District Labour Office.
The mediation process failed, forcing him to file a labour dispute before the Industrial Court on April 11, 2019.
The university denied liability, arguing that Oyo had failed to complete the required clearance and handover procedures and had retained university property, which delayed the processing of his gratuity.
It also told the court that following a demand from Oyo’s lawyers in May 2017, it prepared a payment schedule and issued a cheque of Shs5 million as the first instalment within 10 days.
However, the cheque was reportedly rejected after Oyo requested that the payment be made directly to him rather than through his lawyers.
The university maintained that it had never refused to pay the gratuity but was awaiting completion of the clearance process and proper payment instructions. It also disputed the amount claimed, arguing that Oyo was only entitled to the net amount after tax.
The court, however, found that the university had acknowledged its obligation to pay the gratuity but failed to settle the outstanding amount until December 19, 2022, approximately six years after his employment ended.
By that time, the court had already entered judgment on admission in Oyo’s favour for Shs11.247 million in gratuity on December 19, 2022, leaving the issues of general damages and interest for determination.
In considering the outstanding claims, Justice Musana rejected the university’s argument that the delay was caused by Oyo’s failure to complete clearance procedures or his change of payment instructions.
The court relied on Section 42(6) of the Employment Act, which requires employers to pay employees their wages, other remuneration and accrued benefits within seven days after termination of employment.
Justice Musana observed that the statutory obligation was mandatory and could not be made conditional upon an employee completing internal clearance procedures.
“The employer must comply with that duty within seven days of termination, and that is not subject to the employee completing clearance procedures,” the judge ruled.
The court added that the university’s eventual payment of the principal gratuity amount did not erase the prejudice Oyo suffered from being denied access to his money for several years.
In awarding general damages, the court considered Oyo’s length of service, age and the circumstances surrounding the delayed payment.
Court records indicate that Oyo was 51 years old when he filed the labour dispute and is now approximately 56. He was earning a monthly salary of Shs1.335 million when his employment ended.
The court reasoned that, having served the institution for more than 12 years and approaching retirement age, Oyo’s prospects of securing alternative employment were likely to be limited.
It further observed that the prolonged uncertainty and inability to access his terminal benefits had caused him considerable inconvenience, anxiety and mental distress.
Consequently, the court assessed general damages at the equivalent of six months’ salary, amounting to Shs8.014 million.
On legal costs, the court declined to award either party costs, observing that Oyo had not demonstrated that the university engaged in frivolous, vexatious, abusive or unreasonable conduct during the proceedings to justify such an order.
The award was delivered electronically on November 3, 2026, with the university represented by Solomon Baleese Kisambira of Ajju, Baleese and Bazirake Advocates, while Oyo was represented by Alex Timothy Akena of SKAAR Advocates.
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