The Industrial Court has faulted Absa Bank Uganda for unfairly dismissing one of its senior Information Technology engineers after finding that the bank violated his right to a fair disciplinary hearing, even though it had a valid reason to terminate his employment.
In a judgment delivered on Tuesday, Justice Anthony Wabwire Musana ruled that former Data Centre and Networks Engineer Eddy Muleme was dismissed through a procedurally flawed process, ordering the bank to pay him UGX 14.24 million in compensation and additional notice pay.
The court also ordered Absa Bank to continue charging Muleme the preferential 9% staff interest rate on his secured staff loan instead of converting it to higher commercial lending rates following his dismissal.
Muleme, who worked for the bank for more than a decade, was fired in July 2018 after being accused of removing electrical sockets and installations from the bank’s former Hannington Road offices without authorization during the bank’s relocation to Kampala Road.
He insisted throughout the case that the relocation project involved reusing equipment as a cost-saving measure and claimed his innovations saved the bank more than UGX 44 million. According to Muleme, he acted with the knowledge of project supervisors and other senior officials.
Absa Bank maintained that the engineer acted outside his mandate, removed bank property without approval and ignored established project procedures, amounting to gross misconduct.
After reviewing the evidence, the Industrial Court agreed that Muleme had indeed removed the electrical installations without following the bank’s approval process.
The judges noted that Muleme admitted moving between 15 and 25 electrical sockets from the Hannington Road premises and acknowledged that he had not followed the mandatory authorization procedures.
The court also relied on CCTV footage, forensic investigations and testimony from project managers, all of which confirmed that no authorization had been granted for the removal of the sockets.
The judges concluded that the misconduct fundamentally destroyed the trust necessary in an employment relationship and justified dismissal.
However, the court strongly criticized Absa Bank’s disciplinary process, saying it failed to meet the standards of fairness required under Uganda’s Employment Act.
Justice Musana found that the bank withheld witness statements from Muleme before the disciplinary hearing, making it impossible for him to effectively challenge the evidence against him.
The court further held that Absa improperly restricted the role of Muleme’s lawyer, preventing him from actively representing his client during the disciplinary proceedings and reducing him to merely observing the process.
According to the court, those two procedural violations denied Muleme a fair hearing and rendered the dismissal unlawful despite the existence of valid grounds for termination.
The court declared that an employer cannot rely solely on employee misconduct while ignoring the legal safeguards that guarantee fair disciplinary proceedings.
While Muleme sought severance pay, pension benefits, aggravated damages, repayment of more than UGX 304 million in outstanding loans and other compensation, the court rejected most of the claims.
Instead, it awarded him UGX 4.75 million for the procedural unfairness and UGX 9.49 million representing two additional months’ salary in lieu of notice.
In another significant ruling, the court held that Absa Bank could not penalize Muleme by converting his staff mortgage to commercial interest rates after his dismissal. It ordered that the loan should continue attracting the original 9% staff interest rate, saying increasing the rate would unfairly compound the consequences of the unlawful dismissal.
Each party was ordered to bear its own legal costs.
The ruling sends a strong warning to employers that even where an employee is guilty of misconduct, failure to observe due process during disciplinary proceedings can still expose an employer to legal liability and financial penalties.
