Can You Sue a Ghost? Corporate Personality, Labour Law, and The Case of Oringo v Dede Farming Tractors (U) Ltd [2025] UGIC 47

🔹 Introduction

In the recent decision of Oringo John v Dede Farming Tractors (U) Ltd [2025] UGIC 47, the Industrial Court of Uganda was faced with an unusual, yet increasingly relevant, legal question in employment law: can a person enforce a labour claim against an employer that disputes its own existence? At the heart of this case were two compelling legal questions; the doctrine of corporate personality and the validity of a contract of employment.

The judgment unpacks the tension between classical company law and the evolving principles of labour law. This post delves into the facts, the key legal arguments, and the implications of the Court’s decision for practitioners, employers, and employees.

 

🔹 Background to the Case

Mr. Oringo John was hired as a Workshop Manager by an entity styled “Dede Farming Tractors (U) Ltd” on 12 December 2019 at a salary of UGX 2,000,000 per month. However, from September 2020, his salary payments ceased. He lodged a complaint with the District Labour Officer and eventually sued the Respondent in the Industrial Court for UGX 39 million in salary arrears.

The Respondent raised a dramatic preliminary objection asserting that it was not a registered legal entity, and therefore could not be sued. In addition, it denied the existence of a valid employment contract and alleged that the Claimant had absconded from duty.

🔹 Corporate Personality and Labour Law

Traditionally, under corporate law, only a legally incorporated entity can sue or be sued. This doctrine stems from Salomon v Salomon [1897] AC 22, which affirms that a company has a separate legal personality from its shareholders or directors.

Relying on this, the Respondent cited Fort Hall Bakery Supply Co. v Wangoe [1959] EA 474 to argue that Dede Farming Tractors (U) Ltd, being unregistered, could not be sued. However, the Court dismissed this argument.

 

Justice Wabwire Musana held that the doctrine of corporate personality has limited application in employment disputes. Section 2 of the Employment Act provides an expansive definition of an “employer,” which includes not only companies but also partnerships, unincorporated associations, and “any person or group of persons” for whom an individual works.

The Court emphasized substance over form, focusing on the factual existence of an employment relationship rather than the technical status of incorporation. The evidence showed that the Claimant worked for the Respondent, received partial payments, and had a contract signed by the Respondent’s director.

Thus, the Court concluded that the Respondent could not escape liability by claiming it lacked legal existence. In employment disputes, the realities of the work relationship prevail.

 

🔹 Validity of the Employment Contract

The Respondent further contended that no valid employment contract existed. Again, the Court rejected this claim.

Justice Musana explained that employment contracts are not governed by the same rigid principles as commercial contracts. Quoting Kyobutungi v NIC General Insurance Co. [2024] UGIC 48 and Kenya Shoe & Leather Workers Union v Falcon Tanners [2013] KEELRC 558, the Court highlighted that employment contracts are typically presented as take-it-or-leave-it offers — not negotiated agreements.

Thus, doctrines like freedom of contract, capacity to contract, and privity are interpreted in a worker-sensitive way under labour law. An employee’s limited bargaining power and the power imbalance inherent in employment relationships justify this flexible approach.

In this case, the Court found overwhelming evidence of an employment relationship, including an appointment letter and witness testimony. As such, the employment contract was upheld as valid and enforceable.

 

🔹 Key Takeaways from the Judgment

1. Employment law emphasizes substance over form — even unregistered employers can be held liable.

2. Corporate personality is not an absolute shield in labour law.

3. Contracts of employment are treated differently from ordinary commercial contracts.

4. Employees benefit from a purposive interpretation of the law that protects their rights.

 

This judgment confirms that employers, regardless of incorporation status — cannot avoid their labour obligations.

 

🔹 Conclusion

The decision in Oringo John v Dede Farming Tractors (U) Ltd is a progressive affirmation of labour rights. It underlines that employment relationships are governed by fairness, not formalism. For employees, it’s a reassurance that the law will look at the *realities* of work. For employers, it’s a warning that informal operations will not protect them from accountability.