The ruling also declared unlawful the salary deductions made from officers without their free, informed and documented consent, and found that Exodus SACCO had been operating its financial services without the licence required under the Tier 4 Microfinance Institutions and Money Lenders Act. The decision stems from a human rights application filed by human rights lawyer Steven Kalali against the Attorney General and Exodus SACCO under Article 50 of the Constitution.
Kalali argued that since the passing out of the 19th intake of police recruits at Kabalye Police Training School in 2015, thousands of newly recruited officers had been automatically enrolled into Exodus SACCO without their free, express or written consent. He also contended that monthly deductions ranging between Shs20,000 and Shs50,000 had been made directly from their salaries without authorization and that officers were never given a meaningful opportunity to opt out.
He further challenged the legality of the SACCO’s operations, arguing that it had accepted members’ deposits and issued loans for years without obtaining the licence required under the Tier 4 Microfinance Institutions and Money Lenders Act, 2016. The Attorney General denied responsibility for the salary deductions and maintained that the government had no knowledge of any violation of police officers’ rights. Exodus SACCO insisted that membership was voluntary, arguing that its by-laws require members to submit formal applications before joining.
The SACCO also said it had been audited and regulated and had already begun the process of obtaining the necessary licence from the Bank of Uganda. In his judgment delivered on Wednesday, Acting Civil Division Judge Bonny Isaac Teko first dismissed preliminary objections raised by Exodus SACCO. The cooperative had argued that disputes involving its members should be resolved through arbitration under the Co-operative Societies Act and that no cause of action had been disclosed against the Attorney General.
Justice Teko ruled that constitutional rights enforcement proceedings cannot be ousted by ordinary legislation because the case concerned alleged violations of fundamental rights rather than the internal affairs of a cooperative society. He also found that the Attorney General was a proper party to the suit because the government, as the employer of police officers, has a constitutional duty to respect, protect and promote the rights of its employees.
On the substantive issues, the judge held that Article 29(1)(e) of the Constitution guarantees every Ugandan, including serving police officers, the right to freedom of association, which includes both the freedom to join and the freedom not to join an association. The court found that Exodus SACCO failed to produce documentary evidence showing that officers recruited from the 2015 intake onwards had voluntarily applied for membership as required by its own by-laws.
Although the SACCO maintained that members had signed application and salary deduction forms, it failed to produce even a single signed application despite being granted an opportunity to file additional evidence. Justice Teko also relied on findings of Parliament’s Committee on Defence and Internal Affairs, which documented complaints from police officers alleging they had been compelled to join the cooperative. While acknowledging objections raised against the committee report, the judge held that it constituted an official record of a public inquiry and could properly be considered.
The court concluded that automatically enrolling newly graduated police officers into the SACCO without proof of voluntary applications did not meet the constitutional requirement for free and informed consent. On salary deductions, the court held that deductions made without documented consent amounted to an unlawful reduction of officers’ remuneration contrary to Article 158(1) of the Constitution. Justice Teko noted inconsistencies between the amounts officers allegedly authorized for deduction and the amounts actually deducted from their salaries.
“The 2nd Respondent, Exodus SACCO, has not proved that the monthly salary deductions made from the affected officers’ salaries were made with their free, informed and documented consent,” the judge ruled. The court further held that Exodus SACCO had operated its financial services business for a substantial period without obtaining the licence required under the Tier 4 Microfinance Institutions and Money Lenders Act.
Justice Teko rejected arguments that registration as a cooperative exempted it from licensing requirements, holding that accepting deposits and issuing loans required a separate financial services licence. The court declared that all serving police officers have the constitutional right to freely decide whether to join Exodus SACCO or any other association. It also declared that compulsory recruitment of police officers from the 2015 intake onwards without their free, express and documented consent violated their constitutional rights.
Justice Teko gave Exodus SACCO six months to regularize the membership of all affected officers by allowing them to choose whether to remain members or exit the cooperative without penalty while retaining access to their accumulated savings and dividends. The SACCO must also finalize its pending licence application with the Bank of Uganda within the same period or cease accepting new deposits and issuing new loans until licensed, although it may continue servicing existing loans and accounts.
The court further directed the Registrar of Co-operatives to audit Exodus SACCO’s membership records and accounts relating to police officers recruited from the 2015 intake onwards and submit a report to the High Court within nine months. The Attorney General was also ordered to issue guidance to the Uganda Police Force and Exodus SACCO to ensure that no police officer is enrolled into the cooperative or subjected to salary deductions without documented, free and informed consent. Costs of the application were awarded to Kalali. Speaking to Uganda Radio Network after the judgment, Kalali welcomed the ruling.
The ruling follows recommendations made by Parliament’s Committee on Defence and Internal Affairs in February 2024 directing Exodus SACCO to stop mandatory salary deductions from police personnel. The committee, then chaired by Wilson Kajwengye, found that the cooperative was violating the Co-operative Societies Act by denying officers the option of voluntary savings. Kalali has previously challenged government on constitutional rights. In 2018, he sued over the denial of voting rights to prisoners and Ugandans living in the diaspora. In 2020, the High Court ruled in his favour and directed the government and the Electoral Commission to ensure that prisoners and Ugandans abroad can participate in future general elections, a directive that has yet to be implemented-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
