Post Bank Uganda now Pearl Bank has suffered a crushing defeat in the Industrial Court after judges dismissed the bank’s appeal and upheld a ruling that its former Credit Manager, Paul Ndhego, was unlawfully and unfairly dismissed, accusing the financial institution of pursuing a contradictory and fundamentally flawed disciplinary process.
In a landmark judgment delivered on June 5, 2026, Justice Anthony Wabwire Musana and a panel of Industrial Court members upheld an earlier Labour Officer’s decision awarding Ndhego more than Shs78 million in compensation and benefits following his controversial dismissal in 2017.
The ruling tears apart PostBank’s allegations that Ndhego was responsible for failures in multi-million-shilling agricultural lending schemes in Kapchorwa and Koboko, finding that the bank failed to prove any misconduct and instead attempted to make one employee the scapegoat for losses largely caused by natural disasters.
At the heart of the dispute were allegations that Ndhego, who served as Manager Credit Agricultural Loans, had approved excessive financing beyond the bank’s 75 percent lending threshold, failed to monitor agricultural loan projects and improperly allowed a private company, Kato Eco Farming Limited (KEFL), access to farmers’ loan funds.
However, after re-evaluating years of evidence, witness testimony, loan records, call reports and internal investigations, the Industrial Court concluded that PostBank’s accusations simply did not stand up to scrutiny.
The judges found that the bank had failed to establish that farmers were financed at 100 percent as alleged. Instead, evidence showed the financing structure complied substantially with policy requirements and that approval of such loans rested with branch-level structures rather than Ndhego alone.
The court further found that PostBank’s own records contradicted claims that Ndhego neglected his duties.
Evidence showed that he conducted multiple field visits, participated in monitoring exercises, filed reports, raised concerns with senior management and repeatedly warned about challenges affecting the projects.
Rather than finding negligence, the court found a paper trail demonstrating active oversight and managerial involvement.
The judgment paints a picture of a manager who continuously alerted the bank to problems while management failed to act on those warnings.
Perhaps most damaging for PostBank was the court’s finding regarding the true cause of the loan scheme failures.
The judges noted that the bank itself had previously blamed floods, drought, pest infestations, crop diseases and other weather-related catastrophes for the collapse of the agricultural projects.
The court highlighted evidence showing that PostBank had sought compensation from insurers and guarantors on the basis that natural calamities caused the losses.
Having done so, the judges said, the bank could not then turn around and accuse its employee of causing the same losses through misconduct.
In one of the strongest passages of the judgment, the court described the bank’s conduct as “duplicity.”
The judges observed that PostBank was simultaneously pursuing insurance claims based on weather-related losses while attempting to dismiss an employee for allegedly causing those same losses.
According to the court, the two positions were impossible to reconcile.
“The foundation of labour justice and fair disciplinary proceedings in our jurisdiction rests on the genuineness of the employer’s belief, not the duplicity we have observed here,” the judges stated.
The court also found serious procedural defects in the dismissal process.
Judges ruled that Ndhego’s suspension exceeded the period permitted by law and that he was never properly informed of the precise allegations against him.
The bank was faulted for failing to disclose the investigation report upon which disciplinary proceedings were based, effectively forcing the employee to defend himself without knowing the full case against him.
The Industrial Court said this amounted to ambushing the employee and violated basic principles of natural justice and fair hearing.
In another significant finding, the court emphasized that employers must provide detailed charges, adequate preparation time and access to evidence before conducting disciplinary hearings.
Failure to do so, the court ruled, renders dismissals unlawful regardless of any substantive allegations.
The judgment also revisited a recurring issue in Ugandan employment law by distinguishing between “termination” and “dismissal.”
While the Labour Officer had referred to Ndhego’s removal as termination, the Industrial Court clarified that the case involved dismissal because the allegations related to misconduct.
Despite correcting the legal characterization, the court maintained that the outcome remained unchanged because PostBank had failed both the procedural and substantive tests required to justify dismissal.
The appeal was consequently dismissed in its entirety.
The court confirmed all remedies awarded by the Labour Officer, including severance pay, compensation, notice pay and damages, totaling approximately Shs78.9 million.
PostBank was also ordered to pay the costs of the appeal.
The ruling marks yet another legal setback for the bank in disputes arising from the controversial agricultural lending schemes and sends a powerful warning to employers about the dangers of conducting disciplinary proceedings without solid evidence or a consistent factual basis.
For employers across Uganda, the judgment reinforces a growing judicial trend requiring genuine, evidence-based reasons for dismissal and strict compliance with procedural fairness.
For PostBank, however, the decision represents a costly and highly public judicial condemnation of a disciplinary process the court found was built on contradictions, unsupported accusations and a failure to treat an employee fairly.
