The Industrial Court has ruled that National Insurance Corporation (NIC) was right to sack its senior manager, Charles Gidaga, after he declined to be transferred, saying this amounted to gross insurbodination.
However, the same court also found that NIC mishandled the disciplinary process and ordered the company to pay Gidaga four weeks’ net salary for failing to fully comply with the law.
Gidaga joined NIC in May 2008 as a senior Audit Assistant and steadily rose through the ranks. His good performance earned him several promotions until he became Head of Audit and Risk, a position he held after serving in an acting capacity before being confirmed.
On October 23, 2017, NIC informed him that he was being transferred to head the Finance and Accounts department with effect from October 25. Although his salary would increase from Shs 43.55 million to Shs 45.64 million per year, he was given only two days to hand over his work.
Gidaga objected to the transfer, saying the management should first have consulted him and negotiated better pay because he was taking over duties previously handled by a better-paid officer.
He also complained that two days were not enough to complete ongoing audit assignments and requested at least two weeks for handover.
Instead of accepting the transfer, he asked management to withdraw it until his concerns had been addressed.
Management rejected his request, explaining that the transfer was urgent because the previous head of Finance and Accounts had resigned and sensitive work needed to be handed over immediately.
NIC also reminded Gidaga that its Human Resource Manual allowed transfers and that there was no policy requiring salary increases whenever an employee was transferred.
Gidaga still refused to report to his new workstation and later informed management that he had fallen sick and was unable to work. NIC, however, accused him of absconding from duty between October 27 and November 20, 2017.
The disagreement eventually led to disciplinary proceedings, and on December 19, 2017, NIC terminated his employment.
Believing he had been victimised, Gidaga filed a complaint before the KCCA Labour Office, which referred the matter to the Industrial Court in 2018.
In court, he argued that the transfer was unlawful because it was done without consultation, without adequate notice, and without fair compensation.
Gidaga claimed that management used the transfer as an excuse to remove him after he had carried out an audit that exposed problems involving his superiors.
He also maintained that he never absconded from duty because he had informed management through SMS and WhatsApp that he was ill and later submitted medical documents from Uganda Martyrs Hospital Lubaga, Mukwaya General Hospital, and another clinic.
Gidaga asked the court to declare that his dismissal was unlawful and unfair.
He sought more than Shs 590.8 million in compensation for lost salary and gratuity, Shs 17.5 million in unpaid acting allowances, general damages, aggravated damages, punitive damages, interest, and costs.
His lawyers from Okecha Baranyanga & Co. Advocates argued that NIC violated the Employment Act because it failed to tell him exactly why he was being disciplined and denied him a proper opportunity to defend himself.
Regarding his absence from work, the lawyers submitted that Gidaga had genuine medical grounds and had notified management using the quickest available means.
NIC rejected the claims, arguing that Gidaga’s dismissal was both lawful and fair because he refused to obey a lawful management directive.
The company’s lawyer, Moses Opio of Sekabanja & Co. Advocates, told the court that employers have the right to transfer employees under the Human Resource Manual and that Gidaga had demanded an unjustified 60% salary increase before agreeing to move.
Opio further argued that Gidaga failed to provide proper medical certificates within the required time and that the sickness claim was merely an excuse to avoid taking up the new assignment.
He maintained that NIC had already paid Gidaga all his terminal benefits, including salary instead of notice, and therefore no further compensation was due.
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After reviewing the evidence, Justice Linda Lillian Tumusiime-Mugisha agreed that employers have a legal right to transfer employees, provided the transfer does not amount to a demotion or reduction in salary.
“The managerial prerogative involves giving directions on duties to be performed, where and how they should be performed, and to control and discipline employees, and the right to transfer and assign employees from one office or area of operation to another,” she said.
She said that Gidaga’s transfer neither reduced his salary nor lowered his rank.
Justice Tumusiime-Mugisha concluded that his refusal to report to work amounted to deliberate disobedience, saying the medical evidence he presented was inconsistent and insufficient.
“Nothing in the medical reports indicated that his sickness incapacitated him,” Justice Tumusiime-Mugisha said.
She ruled that Gidaga’s refusal to comply with the transfer order amounted to gross insubordination.
However, she faulted the manner in which NIC handled the disciplinary process, saying the notices issued to Gidaga did not clearly state the allegations against him and that there was insufficient evidence showing that he had been informed of his rights during the hearing.
Justice Tumusiime-Mugisha said NIC failed to fully comply with Section 65 of the Employment Act governing disciplinary hearings and for that reason alone, she awarded Gidaga four weeks’ net pay as compensation for procedural impropriety.
