A Kampala microfinance bank to pay sh60m over dismissed employee

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The Industrial Court has ordered UGAFODE Microfinance Limited to pay its former database administrator shillings 60 million in compensation for unlawful dismissal.

In a decision delivered on March 9, 2026, Anthony Wabwire Musana, sitting with panelists Adrine Namara, Susan Nabirye and Michael Mato, awarded the compensation to Peter Clever Katende after the court found that he had been unlawfully terminated from employment.

On July 3, 2023, a labour officer at Kampala Capital City Authority, Wilson Jingo, had ordered UGAFODE Microfinance Limited to pay shillings 42 million in compensation for unlawful termination, equivalent to three months’ salary. The company later appealed the decision before the Industrial Court of Uganda.

Management of UGAFODE Microfinance Limited argued that Peter Clever Katende had breached the company’s policies. However, the court upheld the shillings 42 million award as compensation and severance pay.

“The orders of Jingo, the labour officer, issued in labour dispute number KCCA/CEN/308/2022, issued on July 3, 2023, is confirmed with one modification. The appellant Uganda Microfinance Limited shall pay the respondent (Katende) the sum of shillings 18 million in general damages,” Justice Musana said.

General damages of shillings 18 million were awarded in addition to the shillings 42 million previously granted as compensation and severance pay.

The company alleged that Katende failed to restore the database auditing security features on its core banking system following its reinstallation on January 22, 2022. According to management, this was in violation of the organisation’s ICT policy and procedures, as well as his signed job description and the human resource policies.

Consequently, Katende was invited to a disciplinary hearing at the company’s head office on April 27, 2022, where the disciplinary committee reviewed the allegations against him.

Katende joined UGAFODE Microfinance Limited on February 20, 2019, and was terminated on April 29, 2022. His last salary was sh6m.

The Industrial Court of Uganda agreed with the labour officer at Kampala Capital City Authority, stating that UGAFODE Microfinance Limited had unfairly terminated Peter Clever Katende from employment.

“Beyond the inconvenience of his termination, the respondent (UGAFODE Microfinance Limited) did not present evidence of a diminution in his employability. Therefore, we think that an award of shillings 18 million representing three months' salary, would suffice in general damages,” Justice Musana said.

The court further noted that UGAFODE Microfinance Limited had no justification to dismiss Katende from employment, ruling that the dismissal was both unfair and unlawful and that he was entitled to damages.