Pearl Bank Ordered to Pay Shs16 Million for Unfair Termination

The Industrial Court has ordered Pearl Bank, formerly known as PostBank, to compensate a former employee, Ronald Onenchan, a sum of Shs16 million. This ruling comes after the court found Onenchan’s termination from his role as Senior Internal Auditor to be both procedurally and substantively unfair.

The court, in its August 31 ruling, awarded Onenchan Shs13 million for the unfair termination, citing the procedural flaws in the redundancy process. The judges noted that the bank failed to provide adequate prior notice of redundancy, treated the notice as a final decision without meaningful consultation, and did not sufficiently demonstrate that the re-profiled Audit Supervisor role was distinct from Onenchan’s previous position.

An additional Shs3 million was awarded to cover a shortfall in severance and notice payments. The court stated that Onenchan suffered uncertainty and inconvenience due to the manner and timing of his dismissal, which occurred without any fault or misconduct on his part.

Onenchan was initially employed by PostBank in 2015 and later promoted to Senior Internal Auditor. Following a restructuring exercise, his position was re-profiled to Audit Supervisor. Despite applying for the new role, he was unsuccessful in the interview and subsequently declared redundant, with his termination effective May 31, 2021.

Aggrieved by the bank’s actions, Onenchan lodged a claim with the Industrial Court. Pearl Bank had argued that the termination was a result of a necessary institutional review and restructuring aimed at improving efficiency, and that Onenchan was informed of the changes and unsuccessful in his application for the new role. However, the court found the bank’s handling of the redundancy process to be unlawful.

This decision underscores the importance of fair procedures in redundancy and termination processes within financial institutions. https://www.monitor.co.ug/uganda/news/national/pearl-bank-to-pay-shs16m-over-former-employee-s-unfair-termination-5588506