The Industrial Court has ruled that Picfare Company Limited unlawfully dismissed a former employee and ordered the company to pay him UGX 9.9 million in compensation and severance benefits, together with interest and legal costs.
In a judgment delivered on July 13, 2026, Head Judge Justice Linda Lillian Tumusiime Mugisha, together with panelists Rose Gidongo, Beatrice Aciro Okeny and Charles Wacha Angulo, found that the dismissal of Niyibaho Sylvester was both procedurally and substantively unlawful because the company failed to accord him a fair hearing before terminating his employment.
Niyibaho, who worked as a Stores Assistant at Picfare from August 2013 until September 2017, challenged his dismissal after he was accused of negligence following the disappearance of 14 cartons of pens valued at UGX 5.25 million from the company’s warehouse.
According to court records, the missing products prompted the company to report the matter to police, leading to Niyibaho’s arrest and detention at Jinja Road Police Station for three days. After securing police bond and returning to work, he was informed that his employment would be terminated.
He later filed a complaint before the Labour Office after mediation efforts failed, resulting in the matter being referred to the Industrial Court.
During the proceedings, Niyibaho maintained that he had no involvement in the theft and argued that he was dismissed without being given an opportunity to defend himself. He further told court that criminal charges brought against him were eventually dismissed for want of prosecution after the complainant failed to pursue the case.
Picfare defended its decision, arguing that the employee had previously received verbal and written warnings over negligence, poor performance and insubordination. The company maintained that his failure to safeguard company property justified his dismissal and contended that he had already received his terminal benefits as full and final settlement.
However, the court found that although the company relied on allegations of negligence, it failed to conduct an internal disciplinary hearing as required under the Employment Act.
The judges observed that while employers are entitled to investigate suspected misconduct and even involve the police, they are still legally required to notify employees of the allegations against them and allow them to respond before any dismissal is effected.
The court also questioned the company’s reliance on warning letters issued more than a year before the theft incident, noting that there was no evidence of any disciplinary proceedings related to the alleged misconduct.
“It is therefore our finding that the Claimant’s dismissal was both substantively and procedurally unlawful,” the court held.
The judges awarded Niyibaho UGX 2.4 million as severance allowance, equivalent to one month’s salary for each of his four years of service, and UGX 7.5 million in general damages for the mental anguish arising from his unlawful dismissal and arrest.
The court further ordered that interest at eight percent per annum be paid on the severance allowance from the date of dismissal and on the general damages from the date of the judgment until full payment is made.
Picfare was also directed to meet the costs of the suit after the court found that its actions, including initiating criminal proceedings that were later abandoned and dismissing the employee without following due process, justified an award of costs.
The ruling reinforces the legal requirement that employers must observe both procedural fairness and substantive justification before dismissing employees accused of misconduct, regardless of whether criminal investigations are underway.
English 