FILING TIMELINES IN EMPLOYMENT CLAIMS VIZ A VIZ LIMITATION PERIODS: A CASE REVIEW OF NATIONAL BANK OF COMMERCE LTD (IN LIQUIDATION) VERSUS FRED TWINOBUSINGYE, MUTAREMWA FRANK & 59 OTHERS (LABOUR DISPUTE APPEAL NO. 09 OF 2018)

Introduction

Repeatedly, aggrieved employees with valid claims against their employers have failed to get recourse from the Courts of law simply because of taking their time before lodging a complaint before the labour officer or exceeding the limitation period within which their particular claim is supposed to be brought before court. Resultantly, claims that would otherwise be valid are thrown out of court for being time barred!

This blog reviews the case of National Bank of Commerce Ltd (In Liquidation) versus Fred Twinobusingye, Mutaremwa Mark & 59 Others (Labour Dispute Appeal No. 9 of 2020). It offers guidance on timelines regarding lodging of complaints before a labour draws a distinction between limitation period as a bar to an action and a period within which to lodge an action.

 

Brief Facts of the Case

The Respondents who were former employees of the National Bank of Commerce were terminated on 10/10/2012. They filed a representative action vide HCCS No. 22 of 2016 against the Central Bank (Bank of Uganda) and the National Bank of Commerce (In Liquidation) for payment of alleged terminal benefits. The Central Bank raised a preliminary objection to the effect that they were wrongly sued. Court ordered that the Central Bank be struck off the plaint and the respondents continue the suit against the National Bank of Commerce. However, in total disregard of the court order, the respondents decided to proceed against the Central Bank instead, in Labour Complaint No. 11 of 2017. The claim was heard by the labour officer and determined in favour of the respondents. The Central bank being dissatisfied with this decision lodged an appeal in the Industrial Court challenging its inclusion as a party in the matter, having been struck off earlier. The Industrial Court heard the appeal, determined it in favour of Bank of Uganda, and set aside the labour officer’s decision in Labour Complaint No. 11 of 2017. On 16/10/2018, the Respondents filed Labour Dispute No 01 of 2018 against National Bank of Commerce, now having complied with the court’s order to strike off Bank of Uganda as a party to the suit. The suit was determined in favour of the respondents awarding them an amount of Ugx. 2,478,061,806.

The appellant being dissatisfied with the award filed an appeal with prayers that the award is quashed or set aside.

 

Time Period within which to file a claim before the Labour Officer.

One of the grounds of appeal raised was that the award was unlawful as the claim was time barred by Section 71(2) of the Employment Act No. 6 of 2006 which requires labour claims to be filed within 3 months from the date of the cause of action.

The claim arose on 10/10/2012, the date of termination and the claim was filed on 16/10/2018, well over three months as required by Section 71(2) of the Employment Act. The appellant contended that in the absence of either an application for leave to extend time within which to file the labour claim out of time or an indication by the proceedings that the labour officer exercised his discretion to extend the time to file the labour claim, the claim was filed out of time and therefore the resultant award is null and void and should therefore be set aside.

The Industrial court held that Section 71(2) grants the labour officer discretion to entertain a matter that is filed outside the time prescribed under it. In arriving at its decision, the court cited Court of Appeal’s reasoning in John Eric Mugyenyi v Uganda Electricity Generation Co. Ltd (Civil Appeal No. 167 of 2018) here it held that;

 

“Section 71 deals with the minimum period of employment which would entitle one to make a complaint.    … section 71 is not a limitation period for the commencement of any action in a court of law or a court of Judicature… a limitation period is a bar to an action, but Section 71(2) of the Employment Act just prescribes the period within which to lodge a complaint with the labour officer with the rights of the labour officer to allow the complaint outside a period of three months. It does not limit the labour officer as to when to allow the application. It only requires the complainant to justify the filing of the complaint after the period of three months. In this case the labour officer without making notes allowed the complaint to be filed. In any case, he had powers to abridge the time within which to allow the complaint to be filed.”

 

Given this discretion, court held that there need not be record of any application to extend time.

 

Limitation Period in Employment Claims before the Labour Officer.

A ground was raised on whether the labour officer can exercise his discretion beyond the limitation period under Section 3(1) of the Limitation Act, Cap. 80, given he had discretion to hear a suit filed outside the filing period of three months under Section 71(2) of the Employment Act.

The Appellant contended that the cause of action lies in contract or breach thereof. He cited Section 3(1) (e) of the Limitation Act which mandatorily prevents an action  founded on contract from being brought after the expiry of 6 years. The cause of action arose on 16/10/2012 upon termination but the claim was brought on 16/10/2018, exactly 6 years and 6 days, which was beyond the limitation period.

In reply, Counsel for the Respondent submitted that the matter was first brought within time under Civil Suit No. 24 of 2016 and was then referred to the Labour Court and filed as Labour Complaint No. 1 of 2018 stemming from Labour Dispute No. 16 of 2017 and later Labour Dispute Appeal No. 11 of 2017. He contended that none of these suits was a separate fresh suit but each a continuation stemming from the other. He refuted Counsel for the Appellant’s submission that the matter commenced in 2018.

The Industrial Court held that the case against National Bank of Commerce  was not a continuation of Civil Suit No. 24 of 206, the initial case that had been filed in the High Court, because the High Court heard and disposed of the matter and ordered the Respondents to continue the case against NCB(in liquidation). However, in total disobedience of the Order of the High Court, the Respondents decided to file labour compliant No. 11/2017 against Bank of Uganda instead. Complaint No 11/2017 was also  heard and disposed of by the Labour Officer against Bank of Uganda. Bank of Uganda  being dissatisfied with the Labour officers decision, filed an appeal in this court contesting the suit, on the grounds that they were the wrong party to be sued, having been struck off   the plaint in High Court Civil suit 24/2016. This Court maintained that Bank of Uganda were sued in error and set the labour officers decision aside.

In the circumstances, the claim which was filed before the labour officer on 16/10/2018  against NBC ( in liquidation) was a  new claim filed against a singular party NCB( in liquidation) and is not a continuation  of the preceding matters which as already discussed above, were individually heard and determined by the different Courts, including the labour office.  Notably, whereas the labour officer in Labour Claim 11/2017 against Bank of Uganda, awarded the Respondents severance pay of Ugx. 716,374,211/ with interest of 8% per annum from date of termination till payment in full, in the un referenced claim of 2018, against NBC (in liquidation), he made a declaration that the Respondents were unlawfully terminated  and awarded them Ugx 2,478,061,806/- as entitlements under their contracts, he also made an award of interest of 25% per annum until payment in full and costs of the Claim. Clearly, these were different claims against two different defendants.

The Court pointed out that given that the matters brought to the labour officer under Section 71 are founded on contract, the Limitation Act is applicable. Therefore, the labour officer can only exercise the discretion granted to him or her under Section 71(2) beyond three months, but within the limitation period prescribed under Section 3(1) (e) of the Limitation Act.

As a general rule, time starts to run when the suit is filed against the party. In this case, the matter was filed against the Appellant on 16/10/2018, 6 years and 6 days after the cause of action arose on 16/10/2012 therefore making it statute barred.

 

Legal Implications Regarding Timelines in Employment Claims.

1.      There is a distinction between the period prescribed within which to lodge a complaint and a limitation period for the commencement of any action in court, as a bar to an action. While a labour officer has discretion to extend time in the former even without an application to extend time, in the latter, he can only extend time if the claimant pleads disability.

2.      A labour officer has discretion to entertain a labour claim filed out of the three months’ filing period provided for by Section 71(2) of the Employment Act.

3.      Claims brought under Section 71 of the Employment Act are based in contract and therefore the 6 years’ time bar to bringing such claims applies. A labour officer does not have jurisdiction to entertain time barred claims even when he can enlarge time within which to file a complaint before him, at his discretion.

4.      Where a claimant is ordered by Court to proceed against a different party or strike off a party from a claim and proceed against a different party, the suit filed in accordance with the court’s order is a fresh suit and not a continuation of the previous one. Therefore, time starts to run on fling of the fresh suit with a different party.