The Industrial Court has ordered Shoprite Checkers Uganda to pay more than Shs 605 million to 14 former employees who lost their jobs when the South African supermarket chain exited Uganda.
Justice Anthony Wabwire Musana ruled that while the workers were not unlawfully dismissed, the court had to intervene because the employees eventually lost their jobs through redundancy after Shoprite shut down operations in Uganda.
The case was filed by Rashid Nyende and 44 other former management employees of Shoprite. They accused the company of abandoning them during the sale of its Ugandan business and refusing to transfer their employment contracts to Carrefour.
The workers were represented by lawyer Salim Waiswa and, later, Patrick Mugalula for some of the claimants.
The dispute began in 2021 when rumours started circulating that Shoprite was preparing to leave Uganda after years of financial troubles and declining business performance.
According to the court, the company later confirmed that it had decided to sell 100% of its assets in Uganda to Majid Al Futtaim Hypermarkets Uganda Ltd, the company operating Carrefour supermarkets.
Shoprite entered Uganda with strong ambitions and opened branches in several shopping malls. However, over time, the chain struggled against competition, high operating costs, and changing consumer spending patterns.
The COVID-19 pandemic worsened the situation. In court filings, Shoprite said its losses had been exacerbated by the Covid-19 pandemic.
On April 14, 2021, some managers at Shoprite formed what they called the Management Ad Hoc Exit Transition Committee to negotiate their future with the company. Rashid Nyende was the chairperson of the committee.
Soon after, Nyende wrote to the commissioner of Labour complaining that the future of management employees had not been made clear. The workers feared that Carrefour would take over Shoprite’s business while leaving them jobless.
On June 7, 2021, lawyers from Bamwite and Kakuba Advocates filed a complaint on behalf of some workers before the Kampala Capital City Authority (KCCA) labour office, accusing Shoprite of unfair termination.
The workers argued that Shoprite should have automatically transferred their jobs to Carrefour under Section 27 of the Employment Act, which deals with the transfer of contracts when a business changes ownership.
In court submissions, Waiswa, their lawyer, argued that the workers had already shown willingness to continue working under Carrefour and therefore Shoprite acted illegally by terminating them instead of transferring their contracts.
He also argued that the company failed to properly notify the commissioner of Labour as required by law.
The employees further accused Shoprite of discrimination. Nyende told the court that Ugandan managers were declared redundant while expatriate managers from South Africa and Zambia were redeployed within the wider Shoprite Group.
Another worker, Damalie Makanza, who had worked at Shoprite since 2004, testified that the company first accepted collective negotiations through the workers’ committee before suddenly demanding individual meetings with employees.
She said Shoprite offered “a non-negotiable severance package of two weeks’ basic salary per completed year of service, capped at five months”.
In court, Shoprite denied this version of events.
The company argued that it had acted in good faith and had informed both workers and the Ministry of Gender, Labour and Social Development about the planned closure.
Shoprite, through its lawyer, Thuraya Nabunya of Tumusiime, Kabega and Co Advocates, said employees had not yet been terminated when they rushed to court because they were still working and receiving salaries.
The company also accused workers of refusing to negotiate individually and instead insisting on being represented by an “unauthorised committee”.
As the case continued, Shoprite ran into more trouble. The Industrial Court ruled that the company was in contempt of court in March 2024 and barred it from participating further in proceedings involving the first 14 claimants.
By 2025, Shoprite had reached settlements with 30 of the 45 workers. That left the claims of the first 14 employees to be decided by the court.
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Justice Musana noted that although the workers feared losing their jobs as early as April 2021, actual termination only happened on September 30, 2021, when Shoprite officially closed operations in Uganda and issued certificates of service showing redundancy as the reason for termination.
He ruled that the employees had filed their complaint too early, before termination had legally occurred.
“In our judgment, the filing of the present claim was premature because it was initiated before termination,” Justice Musana wrote.
Justice Musana also rejected the workers’ argument that their contracts should have automatically moved to Carrefour.
However, he said the court could not ignore the fact that the workers eventually lost their jobs after years of service.
“It cannot be that because of a failed negotiation and a premature litigation, the claimants should be deprived of remedies to which they were entitled on a redundancy termination,” he said.
He said the court was inclined to grant the claimants remedies despite the finding that they were not unlawfully terminated.
“Fairness demands just that,” Justice Musana said.
The court awarded the workers severance pay equal to one month’s salary for every year worked, three months’ notice pay, and repatriation allowances of Shs 500,000 each.
The biggest award went to the eighth claimant, who received Shs 96.9 million. The 14th claimant received Shs 91.1 million, while the fifth claimant got Shs 86.7 million.
Altogether, the court awarded Sh s510.8 million in severance pay, Shs85.6 million in notice pay, and Shs7 million in repatriation costs, bringing the total award to Shs 605.4 million.
Still, the workers lost part of their case.
Justice Musana rejected claims for general damages, punitive damages, and aggravated damages, saying this was a case based on failed negotiation, which later escalated into the filing of a premature action for unfair and unlawful termination.
He also refused to award legal costs against Shoprite because the workers had gone to court before the actual termination happened.
