The Industrial Court has ordered FINCA Uganda to pay more than Shs51 million to its former Recovery Officer, Bajunana Gordon, after finding that the microfinance institution unfairly and unlawfully dismissed him over unrealistic performance targets.
In a judgment delivered electronically on July 1, 2026, the court ruled that FINCA Uganda imposed an unattainable monthly loan recovery target on Bajunana, failed to provide the support it had promised to help him achieve the target, and later dismissed him for poor performance.
Bajunana had worked for FINCA Uganda for nearly 15 years, having joined the institution as an intern in 2004 before rising through several positions, including Accounts Relations Officer, Supervisor and eventually Recovery Officer. During his employment, he served in several branches, including Masaka, Mbarara, Kabale and Fort Portal.
Court heard that in 2017, FINCA Uganda increased Bajunana’s monthly recovery target for the Fort Portal branch from Shs30 million to Shs50 million. He argued that the target was impossible to achieve because he was responsible for only one branch whose loan portfolio could not generate such recoveries.
The former employee told the court that he repeatedly asked management to assign him additional branches to enable him to meet the new target. Internal correspondence presented before court showed that FINCA Uganda acknowledged his concerns and promised to allocate him the Mbarara and Kabale branches. However, the promise was never fulfilled.
Instead, Bajunana was placed on successive Performance Improvement Plans (PIPs), subjected to disciplinary proceedings and eventually dismissed in February 2018 for allegedly failing to meet the recovery target.
He challenged the dismissal before the Industrial Court, arguing that the Shs50 million target had been imposed unilaterally, was not contained in his employment contract or job description, and was therefore unfair. He also sought severance pay, damages and other employment benefits.
FINCA Uganda defended its decision, maintaining that Bajunana had a history of poor performance despite receiving warnings, performance evaluations, coaching and opportunities to improve through Performance Improvement Plans. The institution argued that the recovery target was reasonable and based on the Fort Portal branch’s loan portfolio.
However, the Industrial Court disagreed.
The judges held that although employers have the managerial prerogative to set performance targets, such targets must be fair, reasonable, measurable and agreed upon through a transparent performance appraisal process.
The court found that FINCA Uganda failed to prove how the Shs50 million monthly target had been determined or that Bajunana had agreed to it. It also noted that the target was not part of his job description.
According to the judgment, the institution further undermined its own case by acknowledging that additional branches were necessary for Bajunana to achieve the target, yet it failed to provide the promised support before dismissing him.
The court ruled that the Performance Improvement Plan was fundamentally defective because it lacked employee participation, realistic objectives and adequate support, contrary to principles of fair labour practice.
It also found procedural flaws in the disciplinary process after establishing that Bajunana was given only about 24 hours to prepare for his final performance hearing, denying him sufficient time to defend himself.
The judges concluded that FINCA Uganda had effectively set the employee up for failure by imposing an unrealistic target while withholding the resources needed to achieve it.
“The Respondent unfairly dismissed the Claimant by setting an unachievable recovery target and withholding the promised branch support needed to meet it,” the court held.
As a result, the Industrial Court declared Bajunana’s dismissal unfair, wrongful and unlawful.
The court ordered FINCA Uganda to pay him Shs18.018 million in general damages for the emotional distress and reputational harm arising from the unlawful dismissal.
It further ordered the institution to pay Shs15.015 million in statutory severance pay, equivalent to one month’s salary for each of his 15 completed years of service, with interest at 15 percent per annum from the date of judgment until payment in full.
The court also awarded Shs18.018 million in punitive damages, holding that FINCA Uganda’s conduct amounted to an unfair labour practice after it imposed an unattainable performance target, promised additional operational support, failed to honour that commitment and then dismissed the employee for failing to meet the target.
In addition, FINCA Uganda was ordered to pay Bajunana’s taxed legal costs.
The judgment reinforces the principle that employers must implement fair and transparent performance management systems and cannot rely on unrealistic or unsupported performance targets as grounds for dismissing employees.
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