FINCA Uganda will have to pay Gordon Bujanana, its former employee, Shs 51 million, whom it unfairly dismissed after placing him on an unfair Performance Improvement Plan (PIP), the Industrial Court has ordered.
Justice Anthony Wabwire Musana ruled that Bajunana had been “set up to fail” after the microfinance institution imposed a monthly loan recovery target of Shs 50 million without his agreement and later failed to provide the additional branches it had promised would help him achieve it.
Bajunana joined FINCA as an intern in 2004 and steadily rose through the ranks over nearly 15 years. He served as an Accounts Relations Officer, Credit Officer, Credit Supervisor, and later Recovery Officer, earning several awards for outstanding performance, especially while serving at the Masaka branch.
His problems began in January 2017 when FINCA increased his monthly recovery target for the Fort Portal branch from Shs 30 million to Shs 50 million.
Bajunana told the court that the target was impossible to achieve from a single branch. He repeatedly asked management to allocate him additional branches so he could increase recoveries.
Management acknowledged his concerns and even promised in writing that he would be given the Mbarara and Kabale branches. However, the promise was never fulfilled before he was dismissed for poor performance in February 2018.
He testified that the Shs 50 million target was never included in either his employment contract or his job description.
During cross-examination, Bujanana admitted that he had earlier been demoted because of poor performance and that he had been placed on two Performance Improvement Plans (PIPs) in 2017 before his dismissal.
However, he maintained that the final target imposed on him was unrealistic and unattainable.
In court, FINCA’s Training and Staff Development manager, Sarah Ekirapa, testified that Bajunana had consistently performed poorly throughout his employment, resulting in warnings, performance evaluations, performance hearings and two Performance Improvement Plans.
She insisted that despite receiving support from supervisors, he failed to improve and was therefore lawfully dismissed.
Under cross-examination, however, Ekirapa acknowledged that Bajunana’s job description did not contain a monthly recovery target of Shs 50 million.
She also admitted that the target had been set by FINCA and that she could not produce any evidence showing that Bajunana had agreed to it.
She further conceded that Bajunana had requested additional branches, that management accepted the request in writing, but never allocated the promised branches before dismissing him.
Bajunana, represented by lawyer Maxim Mutabingwa, argued that the dismissal was unlawful because it was based on a recovery target that was never part of his contract and which had been imposed unilaterally by FINCA.
He submitted that FINCA itself admitted the target was difficult to achieve when it promised to allocate additional branches but later failed to honour that promise.
He further argued that the company’s appraisal process was unfair and amounted to “a sham.”
But FINCA’s lawyer Richard Bwayo from Nangwala, Rezida and Company Advocates, defended the dismissal, arguing that Bajunana had a long history of poor performance, had received repeated warnings, undergone performance hearings, and failed two Performance Improvement Plans.
He maintained that FINCA complied with the Employment Act by notifying Bajunana of his shortcomings, according him a hearing, and dismissing him only after he failed to improve.
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Justice Musana rejected FINCA’s arguments after closely examining how the Performance Improvement Plan had been implemented.
He explained that a lawful Performance Improvement Plan 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 such a plan must involve the employee, be based on fair performance appraisals, set realistic and measurable targets, provide coaching and support, and clearly explain the consequences of failure.
The court found that FINCA failed on nearly all those requirements.
“We are not satisfied that there was evidence of a performance appraisal pre-PIP. [FINCA’s] evidence does not demonstrate a fair appraisal system, and we would find that it did not act fairly.”
He also criticised FINCA for imposing the target without Bajunana’s participation, saying FINCA’s unilateral setting of a performance target was not a fair labour practice.
Justice Musana said FINCA had a duty to support Bujanana, as it had promised, but failed to do so and instead placed him on a PIP. He said the organisation has set Bujanana up to fail.
“Because the underlying PIP was structurally defective and fundamentally unfair, it could not generate a lawful, contractually sound basis for dismissal,” he said.
He therefore declared Buanana’s dismissal on account of failing to meet an unachievable, unsupported PIP target was unfair and unlawful.
Using the analogy of boxing, Justice Musana said FINCA had tied Bujanana’s hands and then let him into the boxing ring, “leaving him entirely defenceless against a flurry of free-swinging jabs and a final, dismissive uppercut from his employer.”
In the end, he awarded Bajunana Shs 18 million in general damages, Shs 15 million as statutory severance pay, and another Shs 18 million in punitive damages. This brings the total monetary reward to Shs 51 million at an interest of 15% per year.
