Wakilii

Odong v Airtel Uganda Limted (Labour Dispute Reference 210 of 2018)

Industrial Court · [2023] UGIC 24 · 2023 Termination Declared Unlawful AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Labour dispute reference arising from LD No. 143/2018 challenging termination of employment
Decision
Claimant's termination declared unlawful; awarded general damages, severance allowance, and loan repayment liability transferred to employer

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the claimant's termination was unlawful. A Performance Improvement Plan must be fair, reasonable, consistent, and objective. The employer must prove deficient performance and provide adequate support to the employee. Where external factors beyond the employee's control affect performance, it is unreasonable to expect 100% achievement of targets. The PIP process was substantively and procedurally flawed: the employer failed to prove the claimant's performance deficiency was due to lack of capacity rather than external market disruptions caused by UCC directives, failed to provide adequate support, and terminated the claimant without a fair hearing. The termination was declared unlawful.

Outcome

Claimant's termination declared unlawful; awarded general damages, severance allowance, and loan repayment liability transferred to employer

Facts

The claimant was employed by the respondent as Regional Business Manager for Northern Uganda on 1 February 2016 and confirmed on permanent basis on 11 April 2017. In January 2018, he was placed on a Performance Improvement Plan requiring 100% achievement of all targets. In February 2018, the Uganda Communications Commission issued directives affecting all telecom companies, which significantly impacted sales in the Northern region. On 20 April 2018, the claimant was invited to a feedback review session where he was handed a termination letter dated 19 April 2018 for poor performance. The respondent also issued him a recommendation letter stating his performance was satisfactory. The claimant had an outstanding loan of UGX 40,000,000 with DFCU Bank secured on his salary.

Issues

  1. Whether the termination of the claimant's employment by the Respondent was illegal?
  2. What are the available remedies?

Orders

  • Declaration that the Claimant's termination from employment by the Respondent was unlawful, unfair and discriminatory.
  • Claim for salary arrears and future earnings denied.
  • Claim for payment in lieu of leave denied.
  • Respondent ordered to pay the outstanding loan balance of UGX 40,000,000 with interest.
  • General damages of UGX 40,000,000 awarded.
  • Punitive damages denied.
  • Gratuity denied.
  • Severance allowance of UGX 12,351,000 awarded.
  • Interest at 10% per annum on all pecuniary awards from date of filing until payment in full.
  • No order as to costs.

Rules and key headnotes

Performance Improvement Plans — Requirements for Fairness and Objectivity
A Performance Improvement Plan must be fair, reasonable, consistent, and objective. It must explain the deficient performance requiring correction, provide specific and achievable expectations following SMART guidelines (Specific, Measurable, Attainable, Relevant, and Timely), develop an action plan with reasonable timelines, describe available resources including coaching or training, allow for objective periodic performance review, and notify the consequences of continued deficient performance.
Performance Appraisal — Requirement for Employee Participation
Performance appraisal must involve active participation of the employee. A credible performance appraisal process must evidently be participatory. A comment made by a supervisor without the participation of an employee cannot pass for performance appraisal. Where there is disagreement between an employee and their supervisor on the verdict of a performance appraisal, the disagreement must be documented to show that the appraisal did indeed take place.
Termination for Poor Performance — Burden of Proof and Reasonableness
Where an employer terminates an employee for poor performance, the employer must prove that the non-performance is due to the employee's lack of capacity or negligence. The test of reasonableness must be applied before an employee can be faulted for non-performance. It is unreasonable to expect an employee to achieve 100% performance targets where extraneous factors beyond the employee's control affect the market model and business environment.
Performance Improvement Plans — Employer's Duty to Support
A Performance Improvement Plan is a corrective action tool intended to assist the employee to improve performance, not as a veil or conduit to dismiss an employee. The employer must be seen to make every effort to assist and not fail or frustrate the employee in pursuit of improving performance. Where the employee fails to meet the PIP, the employee must be given an opportunity to explain through a fair hearing before taking disciplinary action including termination.
Unlawful Termination — Liability for Salary-Secured Loans
Where a loan is secured on the salary earnings of an employee and the employer unlawfully terminates the employment, making the employee liable to pay the loan from sources not envisaged at the time of entering into the salary loan agreement, any failure of the employee to service the loan is a foreseeable and necessary consequence of the unlawful termination. The liability shifts to the employer.
Retirement Benefits — Protection from Execution
Under section 70 of the Uganda Retirement Benefits Regulatory Authority Act 2011, where a judgment or order against a member of a retirement benefits scheme is made, no execution or attachment or process of any nature shall be issued in respect of the contributions or funds of the member. An employer's undertaking to pay an employee's terminal benefits towards loan repayment cannot stand.
Leave Entitlement — Burden of Proof for Untaken Leave
Although an employee is entitled to leave as of right under section 54 of the Employment Act, the employer reserves managerial prerogative to determine when leave should be taken. For an employee to succeed in a claim for leave pay upon termination, the employee must prove that he or she applied for leave and it was denied by the employer.

Legislation cited (18)

Cases cited (13)

  • Samuel Cedric Maniala v Airtel (U) Ltd (Labour Dispute No. 209 of 2018)
  • Okello Nymlord v Rift Valley Railway (U) Ltd (HCCS No. 195 of 2009)
  • Bank of Uganda vs. Joseph Kibuuka and others
  • DFCU v Donna Kamuli (Civil Appeal No. 121 of 2016)
  • Hilda Musinguzi v Stanbic Bank (U) Ltd (SCCA No. 005 of 2016)
  • Jane Wairimu Machira Vs Mugo Waweru and Associates ELRC Cause No. 621 of 2012
  • John Retemo Ondieki vs Islamic Relief World widew, RLRC, cause No. 1422 of 2012
  • Tamale Musisi Rita v Airtel Uganda Limited (LDR No. 183 of 2017)
  • Martin Imakit v Vivo Energy (U) Ltd (LDC No. 034 of 2017)
  • Stanbic Bank v Twinomuhangi (Labour Dispute Appeal No. 21 of 2020)
  • Stanbic Bank (U) Limited v R. Constant (CA No. 60 of 2020)
  • Irene Rebecca Nassuna v Equity Bank (LDC No. 06 of 2014)
  • Blanche Byarugaba Kaira v Africa Field Epidemiology Network (LDR No. 131 of 2018)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Odong_v_Airtel_Uganda_Limted_(Labour_Dispute_Reference_210_of_2018)_[2023]_UGIC_24_(24_October_2023)
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.