Topic: Jurisdiction of the Industrial Court where Labour Dispute is subject to Arbitration.
Date of Judgment: 25 June 2024
Case Number/Citation: Labour Dispute Reference 1 of 2021, 2024 UGIC 7
Court: Industrial Court of Uganda at Mbale
Judge: Hon. Justice Linda Lillian Tumusime Mugisha, Ag. Head Judge
Panelists:
- Hon. Charles Wacha Angulo
- Hon. Harriet Mugambwa Nganzi
- Ms. Rose Gidongo
Summary Facts of the Case
The Claimant, Opio John Emmanuel, was employed by Teso Cooperative Union, the respondent, as its Production and Marketing Officer from 18 August 2019 until his termination on 31 July 2022.
He filed a claim against the respondent for unlawful termination with the Labour Officer who referred the dispute to the Industrial Court.
At a pre-session hearing, the respondent raised a preliminary point of law, arguing that the matter was improperly before the Industrial Court because it should have been referred to arbitration as provided under Section 73 of the Cooperative Societies Act and the Respondent’s byelaws.
Legal Issues Before the Court
- Whether the Industrial Court had jurisdiction to entertain the claim which, according to the respondent, should have been resolved by arbitration.
The Decision of the Court
The Court held that it had no jurisdiction to hear the case, agreeing with the respondent’s argument that the dispute should have been referred to arbitration under Section 73 (1) of the Cooperative Societies Act and the Respondent’s bye-laws.
Section 73 (1) of the Cooperative Societies Act mandates Arbitration for disputes involving members, employees, officers, or past officers of the society.
It provides that:
” (1) If any dispute touching the business of a registered society arises—
(a) among members, past members and persons claiming through members, past members and deceased members; or
(b) between a member, past member or person claiming through a member, past member or deceased member, and the society, its committee or any officer of the society; or
(c) between the society or its committee and any officer or past officer of the society; or
(d) between the society and any other registered society,
the dispute shall be referred to an arbitrator or arbitrators for decision.“
The Court also held that the Labour Disputes (Arbitration and Settlement) Act (LADASA) under its Section 6 supports this proposition.
It provides that:
“Where there are any arrangements for settlement by conciliation or arbitration in a trade or industry, between a labour union and one or more employers, or between one or more employers’ organizations, the Labour Officer shall not refer the matter to the Industrial Court but shall ensure the parties follow the procedure for settling the dispute laid out in the conciliation or arbitration agreement, which may apply to the dispute.”
In arriving at this decision, the Court acknowledged the claimant’s argument regarding the procedural requirements of Order 9 Rule 3 of the Civil Procedure Rules that when challenging the jurisdiction of the Court, an Applicant must give notice of 15 days of their intention to seek the Court’s leave to declare that it has no jurisdiction over the subject matter of the claim before it.
However, it relied on Article 126(2) (e) of the Constitution of Uganda which enjoins courts to resolve disputes based on substance and not give undue regard to technicalities to hold that the matter before it raised a substantive jurisdictional issue that it needed to address.
Key Quote: “It is also glaringly clear that the Labour Officer entertained the Complaint before him in total disregard to Section 6 of the LADASA, and yet the terms of the contract of employment enjoined him to abide by the dispute and settlement procedures as agreed by the parties under the contract. In this case he did not refer the dispute for arbitration yet the contract indicated that it should be as provided under Section 73 of the Cooperatives Societies Act and Clause 55 of the Respondent’s bye-laws. In the circumstances, we conclude that the preliminary objection that this Court lacks jurisdiction to entertain, hear, and determine the instant case, because it is the subject of an arbitration agreement, has merit.” – Justice Linda Lillian Tumusime Mugisha.
Law Applied by the Court:
- Section 73 of the Cooperative Societies Act
- Section 6 of the Labour Disputes (Arbitration and Settlement) Act (LADASA)
- Section 5(1) of the Arbitration and Conciliation Act (ACA)
- Order 9 Rule 3 of the Civil Procedure Rules
Counsel on Record
For the Claimant: Mr. Daniel Okalebo of M/s Okurut, Okalebo, Outeke & Co. Advocates
For the Respondent: Mr. Simon Opolot holding brief for Mr. Samuel Isodo of M/s Isodo & Co. Advocates
Conclusion
This case demonstrates the Jurisdiction of the Industrial Court in disputes involving cooperative societies. – They must be referred to arbitration as mandated by the Cooperative Societies Act.
It highlights the importance of adhering to agreed dispute resolution mechanisms before seeking redress in Court.
