The Industrial Court has dealt a major blow to FINCA Uganda Limited after ruling that the microfinance institution unfairly dismissed a long-serving employee by placing him under an unrealistic Performance Improvement Plan (PIP) that was designed to make him fail.
In a landmark 24-page judgment delivered on July 1, 2026, Justice Anthony Wabwire Musana, together with panelists Adrine Namara, Susan Nabirye, and Michael Matovu, declared the dismissal of former Recovery Officer Bajunana Gordon unlawful and ordered FINCA to pay him more than UGX 51 million in damages and severance, plus interest and legal costs.
The ruling is being viewed as one of Uganda’s most significant labour law decisions since the Employment (Amendment) Act, 2026 came into force.
15-Year Career Ends in Controversy
Bajunana joined FINCA Uganda as an intern in 2004 before steadily rising through the ranks to become a Recovery Officer.
However, his career took a dramatic turn in 2017 when the company reportedly increased his monthly recovery target for the Fort Portal branch from UGX 30 million to UGX 50 million.
According to court records, Bajunana repeatedly informed management that the target could not realistically be achieved from a single branch and requested additional branches to expand his recovery portfolio.
FINCA reportedly agreed in writing to allocate him the Mbarara and Kabale branches, but the promise was never fulfilled.
Instead, the company placed him on successive Performance Improvement Plans before dismissing him in February 2018 for poor performance.
Court: FINCA Set Employee Up to Fail
In a strongly worded judgment, Justice Musana found that FINCA’s performance management system was fundamentally flawed.
The court ruled that the company failed to explain how it arrived at the UGX 50 million monthly target and admitted there was no evidence that Bajunana had agreed to it.
The target also did not appear in his employment contract or official job description.
The judge held that although employers have the right to set performance expectations, those targets must be fair, realistic, and developed with employee participation.
The court further found that FINCA knowingly failed to provide the additional branches it had promised, making it virtually impossible for Bajunana to meet the targets imposed on him.
Justice Musana concluded that the institution had effectively “set the claimant up to fail.”
One-Day Notice Deemed Unfair
The court also criticized FINCA’s disciplinary process after finding that Bajunana was given only one day’s notice before appearing for a disciplinary hearing.
According to the judgment, employees must be given sufficient time to prepare a defence, and providing just 24 hours amounted to procedural unfairness.
The Industrial Court therefore ruled that both the disciplinary process and the dismissal itself were unlawful.
New Standards for Performance Improvement Plans
The judgment establishes important legal principles governing the use of Performance Improvement Plans in Uganda.
Among the standards outlined by the court are:
- Performance Improvement Plans must genuinely aim to improve employee performance rather than facilitate dismissal.
- Employees should participate in setting performance targets.
- Targets must be realistic, measurable, and achievable.
- Employers must provide the resources necessary for employees to succeed.
- Continuous coaching, monitoring, and feedback should be provided throughout the process.
- Employees are entitled to a fair disciplinary hearing before dismissal.
The court warned employers against using Performance Improvement Plans as a mere procedural tool to justify predetermined dismissals.
FINCA Ordered to Pay Over UGX 51 Million
Following the ruling, the Industrial Court awarded Bajunana:
- UGX 18,018,000 in general damages.
- UGX 15,015,000 as statutory severance pay.
- UGX 18,018,000 in punitive damages.
- Interest at 15% per annum on severance pay until full payment.
- Legal costs of the suit.
The court, however, declined to award additional compensation under Section 78 of the Employment Act, stating that such claims fall under the jurisdiction of Labour Officers.
Landmark Decision for Employers
The judgment is expected to reshape how employers across Uganda manage employee performance and dismissals.
The Industrial Court made it clear that performance targets cannot be imposed arbitrarily without consultation or contractual backing and later used as grounds for dismissal.
Legal observers say the ruling is likely to influence future employment disputes, particularly within banks, microfinance institutions, and other organizations that rely heavily on performance-based targets.
