The Industrial Court has delivered a scathing indictment of FINCA Uganda Limited, ruling that the microfinance institution deliberately subjected a long-serving employee to an impossible performance regime before dismissing him for failing to achieve unrealistic targets.
In a strongly worded 24-page judgment delivered on July 1, 2026, Justice Anthony Wabwire Musana, sitting with panelists Adrine Namara, Susan Nabirye and Michael Matovu, found that FINCA’s Performance Improvement Plan (PIP) was “structurally defective,” unfair and designed in a manner that effectively condemned Recovery Officer Bajunana Gordon to failure.
The court declared the dismissal unlawful and ordered FINCA to pay the former employee more than UGX 51 million in damages and severance, plus interest and legal costs.
The judgment is expected to become one of Uganda’s most significant labour law decisions on performance management after the coming into force of the Employment (Amendment) Act, 2026.
Fifteen Years Ended Over Impossible Target
Bajunana had worked for FINCA for nearly 15 years after joining as an intern in 2004 before rising through several positions, including Credit Officer, Credit Supervisor and eventually Recovery Officer.
His career, however, took a dramatic turn in 2017 when FINCA increased his monthly recovery target for the Fort Portal branch from UGX 30 million to UGX 50 million.
Bajunana argued that the target was impossible to achieve from a single branch and repeatedly requested additional branches to expand his recovery portfolio.
According to court records, FINCA acknowledged his concerns and even promised in writing to assign him the Mbarara and Kabale branches.
Those branches never came.
Instead, the company placed him on successive Performance Improvement Plans before dismissing him in February 2018 for poor performance.
Court Tears Apart FINCA’s Performance System
Justice Musana’s judgment goes far beyond deciding an employment dispute.
It effectively sets out a judicial blueprint for how employers must manage poor performance.
The court found multiple fatal flaws in FINCA’s process.
First, the employer failed to prove how it arrived at the UGX 50 million monthly target.
Secondly, the target never appeared in Bajunana’s employment contract or job description.
Even FINCA’s own witness admitted under cross-examination that headquarters imposed the target unilaterally and could not produce evidence showing Bajunana had agreed to it.
The judge ruled that while employers enjoy managerial discretion, labour law requires that discretion to be exercised fairly.
“The Respondent set a performance target without the Claimant’s input… we would not be persuaded that the Respondent’s unilateral setting of a performance target was a fair labour practice,” the court held.
“Set Him Up to Fail”
Perhaps the most damning finding concerned FINCA’s promise to provide additional branches.
The court found that the institution knew a single Fort Portal branch could not realistically generate the recoveries it demanded.
It nevertheless promised additional branches before reneging on that commitment.
Justice Musana concluded that FINCA had effectively engineered Bajunana’s failure.
“The Respondent had a duty to support the Claimant, as it had promised, but failed to do so and instead placed the Claimant on a PIP. In other words, it set the Claimant up to fail,” the court ruled.
Only One Day to Prepare
The court also faulted FINCA’s disciplinary process.
Evidence showed Bajunana received notice of his performance hearing only one day before it was held.
Industrial Court jurisprudence, the judge noted, requires employees to be given adequate time to prepare a defence.
Granting just 24 hours amounted to procedural unfairness.
The judge consequently found both the substance and procedure of the dismissal unlawful.
New Standard for Performance Improvement Plans
The judgment significantly develops Ugandan employment law by laying down eight mandatory principles governing Performance Improvement Plans.
Among them:
- A PIP must genuinely seek to improve performance rather than facilitate dismissal.
- Employees must participate in developing the plan.
- Targets must be realistic, measurable and achievable.
- Employers must provide resources necessary for improvement.
- Continuous coaching and feedback must be provided.
- Employees must receive a fair disciplinary hearing before dismissal.
The court warned employers against using PIPs merely as paperwork to justify predetermined dismissals.
Instead, they must function as genuine development tools.
Employment Law Clarified
The judgment also clarifies an important legal distinction introduced by the Employment (Amendment) Act, 2026.
Justice Musana observed that Ugandan courts have historically used the terms “termination” and “dismissal” interchangeably.
The amendment now distinguishes the two.
According to the court, dismissal applies where an employee is discharged because of misconduct or poor performance, while termination covers situations such as resignation, redundancy or expiry of contract.
The clarification, the judge said, is crucial because each carries different legal tests.
Heavy Financial Blow
Having found the dismissal unlawful, the court awarded Bajunana:
- UGX 18,018,000 as general damages;
- UGX 15,015,000 as statutory severance pay;
- UGX 18,018,000 as punitive damages;
- Interest of 15% per annum on severance pay until payment in full;
- Taxed costs of the suit.
The court rejected claims for additional compensation under Section 78 of the Employment Act, holding that such awards fall within the jurisdiction of Labour Officers rather than the Industrial Court.
Judge Uses Boxing Analogy
In one of the judgment’s most memorable passages, Justice Musana likened FINCA’s conduct to forcing a boxer into the ring while restrained.
“That approach amounted to shackling the Claimant before entering the ring, leaving him entirely defenceless against a flurry of free-swinging jabs and a final, dismissive uppercut from his employer.”
The court concluded that such conduct represented an abuse of the unequal employer-employee relationship and warranted punitive damages.
It described FINCA’s conduct as an unfair labour practice deserving judicial condemnation.
Wider Implications
Beyond Bajunana’s individual victory, the ruling sends a strong warning to employers across Uganda.
The Industrial Court has effectively declared that performance targets cannot simply be invented by management, imposed without consultation, and later relied upon as grounds for dismissal.
Employers must now demonstrate that performance expectations are contractually grounded, objectively measurable, realistic, supported with adequate resources, and implemented through a transparent appraisal system.
The judgment is likely to influence future disputes involving banks, microfinance institutions and other organisations that rely heavily on aggressive performance targets.
For employers, it signals that a Performance Improvement Plan is no longer merely an internal human resource document—it has become a legally scrutinised process capable of determining whether a dismissal stands or falls before the Industrial Court.
