Court orders standards body to pay five ex-employees terminal benefits, damages

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The Industrial Court has ordered the Uganda National Bureau of Standards (UNBS) to compensate three of its former employees who retired upon attaining the mandatory retirement age in 2020.

The judgment, delivered by Justice Linda Lillian Mugisha, concerns former staff members Mark Kayongo, Eng. John Okumu, Dr David Kahyul, Dr Abdull Ndifuna and Dentons Kaviri, who all retired between May and December 2020 upon reaching retirement age.

The dispute arose after the employees challenged the manner in which their terminal benefits and gratuity were computed, arguing that UNBS failed to factor in their enhanced salary structure following changes in their employment terms between 2017 and 2018.

The court on May 11, 2026, ordered UNBS to pay interest at 10% per annum on the terminal benefits already paid in September 2024, from the date of the award until full payment is made. It also awarded each claimant general damages equivalent to three months’ salary, also attracting interest at 10% per annum.

The claimants are also seeking payment of shillings 357.7 million in outstanding retirement benefits and gratuity, calculated on the basis of their enhanced salaries. They also sought interest at 25 per cent per annum, general damages, and costs of the suit.

“An award of interest of 10 % per annum on the sums paid as terminal benefits in September 2024 under the settlement agreements from the date of this award until payment full. An award of general damages of three months’ salary each at an interest rate of 10% per annum from the date of this award until payment in full," Justice Mugisha said.

On 27 September 2022, the matter was reported to the senior labour officer in Wakiso district, who later referred it to court after mediation efforts failed due to the non-attendance of the UNBS.

UNBS response

On its part, UNBS denied the claim, arguing that the salary enhancements were introduced in three phases as allowances for sustainability reasons and were not intended to form part of gross pay for purposes of calculating terminal benefits.

It was contended that, although benefits were initially paid at a rate of 15% during the conversion, UNBS agreed to pay the remaining 10% difference. They further maintained that the enhancements were only consolidated into salary for the purpose of annual gratuity computation from July 2019 onwards.

According to court records, UNBS argued that there existed a dispute regarding the interpretation of “gross salary” and that the claimants were therefore not entitled to any further payments, interest, or damages, and asked for the dismissal of the claim with costs.