INTRODUCTION
After close to 20 years, the Employment Act has been amended. Offences have been re-defined. Monetary penalties have increased by a 1,358% – 1,983 % ranging from 10 million – 14 million Uganda Shillings per occurrence compared to the previous 480 – 960 thousand Uganda Shillings. Prison terms have increased to 5 – 7 years compared to the previous 1 – 2 years.
It is crucial that organizations expressly define the terms on which people provide labour to them and that managers are equipped to manage people within the boundaries set by the law. We advise all organizations to do the below:
a) Review operational and organizational structure as well as consider staffing/labour requirements.
b) Make budgetary adjustments and provisions for compliance.
c) Review and amend existing employment contracts, employment manuals and employment policies and/or draft and implement new employment contracts, employment manuals and employment policies.
d) Conduct an employment compliance audit.
e) Train board of directors, board of director committees and managerial staff on implementation of changes required.
f) Communicate changes to managerial and non-managerial staff as necessary.
Below are highlights of the changes in the law and our advice on actions that need to be taken to comply, assure business continuity and avoid liabilities associated with non-compliance.
1. Casual workers & piece work contracts
It is now prohibited to employ a person as a casual worker for more than 6 months but permitted to have piece work employment contracts for people employed for specific tasks. By way of example, if a person is employed for 3 months, is ‘let go’ for 2 months and is re-employed for 3 months, that person will be deemed to be an employee. Further, the ‘off’ season and ‘on’ season form a continuous employment period when calculating the employment period and for purposes of employment benefits, pension payments, termination and dismissal procedures and severance pay calculation. If contracts are not executed, employment terms will be implied and these may be onerous on the employer.
Compliance Action
i) Identify people who are repeatedly hired and enter into contracts with them defining their relationship and entitlements as well as the commencement date of their employment.
ii) Review work force requirements and make financial provisions for benefits, social security payments and pay-as-you-earn obligations
2. Definition of work places
All places at which a person is found on account of work have been designated as work places for purposes of defining employer and employee obligations. These include permanent & temporary, stationery & mobile, indoor and outdoor work spaces.
Compliance Action
Review all people providing labour to you to ensure that they are all covered by written contracts.
3. Harassment Policy
All employers, regardless of the number of employees, are now required to:
i) have written policies prohibiting all forms of intimidation and harassment, including sexual harassment;
ii) define the prohibited behaviour, reporting and investigation methods and consequences of non-compliance; and
iii) display these policies in a conspicuous place in all work places, considering the definition of work places above.
4. Termination and Dismissal
The amendment has:
a) changed the reasons for redundancy, termination and dismissal;
b) changed the procedure for redundancy, termination and dismissal;
c) more severe consequences of non-compliance;
d) enhanced enforcement of labour officer decisions by making them enforceable as court orders;
e) increased and defined the formula for calculating severance allowances.
As examples:
i) employees now have enhanced/better sick leave protections for employees which increases employer costs related to the duration of sick leave and sick pay;
ii) probation contracts are terminated by 1 month’s instead of 7 days’ notice.
Compliance Action
i) Review and amend existing employment contracts, employment manuals and disciplinary procedures to ensure compliance.
ii) Draft employment contracts & employment manuals if they are non-existent.
iii) Train managerial staff on the new changes and their implementation.
5. Breastfeeding and childcare facilities
Every employer is now required to create space and time, in all work places, for breastfeeding and child care for children aged 3 months to 1 year. Specific instructions on the facilities will be given by the Minister through Regulations but employers must start planning for this and making budgetary adjustments.
Conclusion
Early implementation of our recommended actions will ensure that transition into the new employment regime does not unnecessarily disrupt your organization, is financially budgeted for and the organization’s exposure to non-compliance penalties is reduced. We will continue monitoring developments regarding the amendment and update you. Should you require any assistance with implementing our recommended compliance actions, please do not hesitate to contact us.
BNM Advocates provides legal representation and advisory services to corporate and individual clients in Uganda and beyond.
We desire to grow and integrate impactful legal solutions that drive business and mitigate risks. Our clients include companies within Banking & Finance, Insurance, Communication, Health, Education, Agriculture, Small and Medium Size Enterprises, Real Estate, Transport and Manufacturing sectors. Our team comprises of experienced legal practitioners both within Uganda and beyond. We pride ourselves in building strong relationships with our clients, by providing professional and innovative legal solutions.