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Bajunana Gordon v Finca Uganda Limited (Labour Dispute Reference 7 of 2019)

Industrial Court · [2026] UGIC 67 · 2026 Application Granted AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute claim from dismissal for poor performance, arising from Labour Dispute Complaint No. 027 of 2018
Decision
Claimant's dismissal declared unfair and unlawful; awarded general damages, severance pay, punitive damages, and costs

Observed later treatment

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Holding

Held that the dismissal was unfair and unlawful. The employer unilaterally imposed an unrealistic recovery target of UGX 50,000,000 per month, not contained in the claimant's job description or contract, and subsequently placed him on a Performance Improvement Plan (PIP) without his substantive participation. Although the employer acknowledged the target was unattainable and promised additional branches, it failed to provide them. The PIP was structurally defective and failed to comply with SMART criteria, particularly attainability. The court found the appraisal system was a sham and the employer set the claimant up to fail, breaching the duty of mutual trust and confidence. Additionally, the employer provided only 24 hours' notice for the performance hearing, constituting procedural unfairness. The claimant was awarded general damages, severance pay, punitive damages, and costs.

Outcome

Claimant's dismissal declared unfair and unlawful; awarded general damages, severance pay, punitive damages, and costs

Facts

The Claimant was employed by the Respondent for approximately 15 years, serving in various capacities including intern, Accounts Relations Officer, Credit Officer, Credit Supervisor, and finally Recovery Officer. In January 2017, the Respondent unilaterally increased his monthly loan recovery target for Fort Portal Branch from UGX 30,000,000 to UGX 50,000,000. The Claimant repeatedly requested additional branches to meet this target, citing the limited recovery area at Fort Portal. The employer acknowledged this concern and in September 2017 promised to allocate two additional branches (Mbarara and Kabale), but failed to do so. The Claimant was placed on two successive Performance Improvement Plans (PIPs) from July to December 2017 after receiving warning letters. He attended a performance hearing on 2 February 2018, having received only 24 hours' notice, and was terminated on 17 February 2018 for poor performance due to failure to meet the UGX 50,000,000 monthly target. The Claimant had previously been demoted in 2010 for poor performance but had performed satisfactorily in other roles, particularly at Masaka Branch where he earned awards.

Issues

  1. Whether the termination of the claimant's employment by the Respondent was unfair and unlawful?
  2. What remedies are available to the parties?

Orders

  • A declaration is hereby made that the Respondent's dismissal of the Claimant from his employment as a Recovery Officer was unfair, wrongful, and unlawful.
  • The Claimant is awarded general damages in the sum of UGX 18,018,000.
  • The Claimant is awarded statutory severance pay in the sum of UGX 15,015,000, calculated at one month's salary for each of his 15 completed years of service. Interest shall accrue on the award of Severance Pay at the rate of 15% per annum from the date of this award until payment in full.
  • The Claimant is awarded punitive damages in the sum of UGX 18,018,000.
  • The Claimant's head of claim for compensatory awards under Section 78 of the Employment Act is hereby dismissed.
  • The Claimant shall have costs of this claim.

Rules and key headnotes

Dismissal — Distinction Between Termination and Dismissal — Performance-Based Discharge
Under the Employment (Amendment) Act 2026, dismissal is the discharge of an employee at the employer's initiative on grounds of abscondment, forged documents, adverse behaviour, or grounds in the contract, whereas termination includes discharge by notice, end of fixed term, constructive dismissal, resignation, redundancy, or sickness. Discharge for misconduct or poor performance is classified as dismissal; discharge not due to the employee's fault is termination.
Dismissal for Poor Performance — Procedural and Substantive Fairness Requirements
A dismissal for poor performance must satisfy both procedural fairness (notice in writing, sufficient time to prepare, statement of allegations, explanation of rights to respond, be accompanied, cross-examine, and produce witnesses before an impartial committee) and substantive fairness (employer must prove valid, fair reason grounding the dismissal in verifiable breach). The employer bears the statutory burden of proving reasons for dismissal and must demonstrate the alleged poor performance at a disciplinary hearing to a reasonable degree.
Performance Improvement Plans (PIPs) — Legal Requirements and Validity
A legally valid PIP must be a genuine, developmental tool with corrective intent, not a pretext for dismissal. It must be based on verifiable, objective evidence of underperformance; involve face-to-face preparation; include substantive employee participation and mutual formulation; adhere to SMART criteria (Specific, Measurable, Attainable/Relevant, Timely); provide reasonable time and resources for improvement; include continuous feedback and periodic reviews; clearly state consequences; and guarantee the employee's right to a fair hearing before any dismissal. A PIP imposed unilaterally without employee participation or containing unattainable targets is structurally defective and cannot generate a lawful basis for dismissal.
Performance Management — Appraisal Systems — Requirement of Fairness and Objectivity
Performance management and appraisal must emphasize fairness, objectivity, and consistency. Performance standards must be reasonable, understandable, verifiable, measurable, equitable, and achievable. The appraisal process must be conducted within a defined policy framework ensuring the employee's substantive participation. An appraisal system built around structurally impossible, unagreed targets while withholding promised support is a sham framework violating natural justice.
Employer's Duty — Mutual Trust and Confidence — Provision of Resources
An employer owes a duty of mutual trust and confidence to employees. Where an employer promises to provide additional resources or support to enable an employee to meet performance targets, failure to provide that support while proceeding to dismiss the employee for failing to meet those targets breaches the duty of mutual trust and constitutes setting the employee up to fail. Such conduct does not satisfy the requirement of fairness in labour practice.
Remedies — General Damages for Unfair Dismissal
General damages are awardable in employment disputes for unfair dismissal to compensate non-pecuniary losses such as emotional distress, injured feelings, reputational harm, and mental anguish. They are awarded in addition to statutory remedies such as notice pay and severance. The award is discretionary, guided by factors including age, status, length of service, manner of dismissal, disruption of career prospects, employability, and earnings, but should not double the employee's fixed income. The principle of restitutio in integrum applies.
Remedies — Punitive Damages — When Awardable in Employment Disputes
Punitive damages are awardable in employment disputes with restraint and only in exceptional cases to punish, deter, and express the court's outrage at the defendant's egregious, high-handed, malicious, vindictive, or oppressive conduct. They are appropriate where the employer's conduct presents an affront to the principles of labour justice, such as deliberately subjecting an employee to PIP conditions the employer knew would lead to dismissal while withholding promised support. Such conduct constitutes an unfair labour practice warranting punitive damages.

Legislation cited (18)

Cases cited (29)

Full judgment

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Bajunana Gordon v Finca Uganda Limited (Labour Dispute Reference 7 of 2019) [2026] UGIC 67 (1 July 2026)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.