Post Bank Uganda (since renamed Pearl Bank) has been ordered to pay a former branch manager Shs 61 million for unfairly and unlawfully dismissing him after he was placed on a performance improvement plan (PIP) with targets that the court said were unrealistic.
Dickson Sanyu, who managed the bank’s Kabale branch, had sued the bank after he was sacked in August 2021 for poor performance.
He told the court the bank set targets he could never have met, especially since he was also recovering from Covid-19 at the time.
Sanyu joined Post Bank in September 2015 as a Business Growth Manager. He worked hard and was rewarded with a salary increase, eventually earning Shs 4.2 million a month. In December 2020, the bank promoted him to branch manager of its Kabale branch.
In November 2020, after an evaluation, Sanyu’s performance was rated as good, but his fortunes changed fast in 2021.
On March 1, 2021, Post Bank issued Sanyu a performance notification, telling him his work in January and February had been unsatisfactory.
He was placed on what is called a Performance Improvement Plan (PIP), which is meant to help struggling workers get back on track.
But according to the court, the targets set for Sanyu under this PIP were unfair. His targets were quadrupled relative to prior years and were imposed unilaterally in February 2021 without his participation.
For instance, Sanyu was required to ensure that loan sales grow from Shs 1.36 billion to Shs 1.991 billion. By April 2021, he had sold only 51 out of 153 required loans. By July, of an agreed target of 222 loans, he had managed just 44.
In addition, Post Bank’s own rules required performance targets to be set in the first week of January, but Sanyu only received his 2021 targets in February, a full month late.
Then came Covid-19 with its strict lockdown measures.
To make matters worse, Sanyu contracted Covid-19 right in the middle of his PIP review period. The bank never adjusted his targets or gave him more time to recover before judging his performance.
“Dismissing an employee for failing to meet inflated PIP targets while actively recovering from a documented, severe illness, without adjusting metrics or extending the evaluation period, negates substantive fairness,” said Justice Anthony Wabwire Musana.
On July 28, 2021, Post Bank invited Sanyu to a disciplinary hearing over his performance for the second quarter of the year. Twelve days later, on August 18, 2021, the bank terminated his employment, paying him two months’ salary instead of notice.
Sanyu appealed the decision, but the bank turned him down. He then took his case to court, arguing that his sacking was both procedurally and substantively unfair.
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At first, Justice Musana agreed that Post Bank had followed correct procedure by giving Sanyu written notice and a hearing before firing him.
However, he said this was not enough on its own. Under the law, he said, an employer must also prove that the reason for dismissal was fair and justified. This is called substantive fairness.
Justice Musana explained that a PIP must be a “genuine, developmental tool designed to help an employee succeed, rather than a bureaucratic checkbox or a veil used to engineer a termination.”
He said Sanyu was never properly involved in setting his targets and was given no coaching, training or extra support to help him hit the inflated numbers.
There was also a dispute over a staff loan Sanyu had taken from the bank. After his sacking, Post Bank raised the interest rate on his loan from 10% to 16%.
Justice Musana ruled that this was unfair and ordered the rate reverted to 10%, since the increase only added to the hardship of a worker who had already lost his job unlawfully.
In the end, the court awarded Sanyu a severance allowance of Shs 25.9 million, general damages of Shs 25.3 million for the emotional distress and reputational harm he suffered, and aggravated damages of Shs 10 million because the bank had, in the court’s words, set him up to fail. Altogether, Sanyu’s total award comes to Shs 61 million.
Post Bank was also ordered to pay the costs of the case.
Justice Musana dismissed some of Sanyu’s other claims, including his request for four weeks of unpaid wages and recovery of his outstanding loan balance, saying he had not provided enough proof, such as bank statements, to support these claims.
Post Bank had argued throughout the case that Sanyu’s dismissal was lawful and that it had simply enforced its own performance policies.
The bank’s lawyer, Blair Kalivayo, told the court that Covid-19 was not a valid excuse since Sanyu had performed well in similar conditions in late 2020.
But Justice Musana disagreed, noting that the bank could not simply ignore a global pandemic and a personal Covid-19 diagnosis while demanding four times more work from an employee than before.
