News
FINCA ordered to pay former employee sh51m for unfair dismissal
Bajunana sued Finca after he was dismissed from his position as Recovery Officer on February 17, 2018, following allegations of poor performance.
Justice Anthony Wabwire Musana, sitting with panellists Adrine Namara, Susan Nabirye and Michael Matovu, held that Finca subjected Bajunana to an unfair performance improvement process based on an unrealistic recovery target before dismissing him for poor performance.
By: Barbra Kabahumuza, Journalist @New Vision
KAMPALA - The Industrial Court has ordered Finca Uganda Limited to pay its former Recovery Officer, Gordon Bajunana, over sh51m after finding that the microfinance institution unfairly and unlawfully dismissed him over poor performance.
Justice Anthony Wabwire Musana, sitting with panellists Adrine Namara, Susan Nabirye and Michael Matovu, held that Finca subjected Bajunana to an unfair performance improvement process based on an unrealistic recovery target before dismissing him for poor performance.
The court declared that Bajunana’s dismissal was unfair, wrongful and unlawful, and awarded him;
▪️sh18,018,000 in general damages
▪️sh15,015,000 in statutory severance pay and
▪️sh18,018,000 in punitive damages and costs of the suit.
The severance pay will also attract interest at 15% per annum from the date of the judgment until payment in full.
Back ground
Bajunana sued Finca after he was dismissed from his position as Recovery Officer on February 17, 2018, following allegations of poor performance.
He told the court that he joined Finca as an intern in 2004 and worked for nearly 15 years in different positions, including Accounts Relations Officer and Recovery Officer.
During his service, he said he received several awards as a best-performing officer, particularly after improving the performance of the Masaka branch.
According to Bajunana, his troubles began in January 2017 when Finca increased his monthly recovery target for the Fort Portal branch from sh 30m to sh 50m.
He argued that the target was impossible to achieve from a single branch and repeatedly requested management to allocate him additional branches, a request the company accepted but never implemented.
He maintained that sh50m target was never part of his employment contract or job description and that dismissing him for failing to achieve it was unlawful.
Finca denied wrongdoing, arguing that Bajunana had consistently performed poorly throughout his employment despite receiving warnings, performance evaluations, a demotion, two Performance Improvement Plans (PIPs) and a performance hearing before his dismissal.
The company maintained that the recovery target was reasonable, that Bajunana had been assigned to Bundibugyo branch in addition to Fort Portal, and that he had already been paid all his terminal benefits, including salary, payment in lieu of notice, leave pay and retirement benefits.
Justice Musana held that although employers have managerial powers to set performance targets, those targets must be fair, reasonable, achievable and supported by a transparent performance appraisal system.
He told the court that he joined Finca as an intern in 2004 and worked for nearly 15 years in different positions, including Accounts Relations Officer and Recovery Officer.
During his service, he said he received several awards as a best-performing officer, particularly after improving the performance of the Masaka branch.
According to Bajunana, his troubles began in January 2017 when Finca increased his monthly recovery target for the Fort Portal branch from sh 30m to sh 50m.
He argued that the target was impossible to achieve from a single branch and repeatedly requested management to allocate him additional branches, a request the company accepted but never implemented.
He maintained that sh50m target was never part of his employment contract or job description and that dismissing him for failing to achieve it was unlawful.
Finca denied wrongdoing, arguing that Bajunana had consistently performed poorly throughout his employment despite receiving warnings, performance evaluations, a demotion, two Performance Improvement Plans (PIPs) and a performance hearing before his dismissal.
The company maintained that the recovery target was reasonable, that Bajunana had been assigned to Bundibugyo branch in addition to Fort Portal, and that he had already been paid all his terminal benefits, including salary, payment in lieu of notice, leave pay and retirement benefits.
Justice Musana held that although employers have managerial powers to set performance targets, those targets must be fair, reasonable, achievable and supported by a transparent performance appraisal system.
The judge found that Finca failed to produce evidence showing how sh50m monthly recovery target had been determined or that Bajunana had participated in setting or agreeing to it.
The court also noted that Bajunana’s job description did not contain the monthly recovery target relied upon to dismiss him.
Justice Musana further found that although Finca acknowledged that Bajunana needed additional branches to meet the target and even promised in writing to allocate him Mbarara and Kabale branches, the company never fulfilled that promise before dismissing him.
According to the court, placing an employee on a Performance Improvement Plan without providing the promised support amounted to setting him up to fail.
The court also found procedural unfairness after establishing that Bajunana was effectively given only one day to prepare for his final performance hearing, contrary to the requirements of fair labour practice.
Justice Musana ruled that the Performance Improvement Plan itself was fundamentally defective because it was imposed unilaterally, lacked employee participation and was built on unrealistic performance expectations.
“An appraisal system built around a structurally impossible, unagreed target while withholding promised structural support is a sham framework that violates natural justice,” the judge stated.
In assessing compensation, the court considered Bajunana’s nearly 15 years of service, his age, career prospects and the reputational damage arising from being dismissed for poor performance.
“The Respondent set an unattainable target, promised support by way of additional branches, withheld that support and subsequently dismissed the claimant for poor performance. That amounted to shackling the claimant before entering the ring,” the judge observed.
The court dismissed Bajunana’s claim for compensation under Section 78 of the Employment Act but ordered Finca to pay the costs of the case.
The court also noted that Bajunana’s job description did not contain the monthly recovery target relied upon to dismiss him.
Justice Musana further found that although Finca acknowledged that Bajunana needed additional branches to meet the target and even promised in writing to allocate him Mbarara and Kabale branches, the company never fulfilled that promise before dismissing him.
According to the court, placing an employee on a Performance Improvement Plan without providing the promised support amounted to setting him up to fail.
The court also found procedural unfairness after establishing that Bajunana was effectively given only one day to prepare for his final performance hearing, contrary to the requirements of fair labour practice.
Justice Musana ruled that the Performance Improvement Plan itself was fundamentally defective because it was imposed unilaterally, lacked employee participation and was built on unrealistic performance expectations.
“An appraisal system built around a structurally impossible, unagreed target while withholding promised structural support is a sham framework that violates natural justice,” the judge stated.
In assessing compensation, the court considered Bajunana’s nearly 15 years of service, his age, career prospects and the reputational damage arising from being dismissed for poor performance.
“The Respondent set an unattainable target, promised support by way of additional branches, withheld that support and subsequently dismissed the claimant for poor performance. That amounted to shackling the claimant before entering the ring,” the judge observed.
The court dismissed Bajunana’s claim for compensation under Section 78 of the Employment Act but ordered Finca to pay the costs of the case.