I want to understand something. If I have a three-year contract with a company but it is not renewed on expiry can I sue the company for failing to renew my contract without giving any reason? I have an excellent performance record and good conduct. Why would the company not renew my contract? Norman Betungura
Most times, employers decide on the nature and duration of employment contracts they offer their employees.
The decision is done in consideration of various reasons ranging from the nature of the service the staff is being employed to perform or lifetime of the product or service on the market.
However, sometimes the owner or employer not being sure if their organisation will be a going concern (in financial distress) for a long time, they employ staff on contract.
This is common with business startups but also common in case of projects that have a defined lifetime, such as road construction, among others. The solution is to offer short term contracts to employees, which may be renewed when need arises, to minimise the exposure of costly staff layoffs.
What you have to bear in mind is that your employer has a right to terminate your employment contract anytime as long as he or she follows the law by giving appropriate notice or payment in lieu as provided in the contract termination clauses.
In your particular case, if your contact expires and the employer does not communicate to you in writing that your contract will not be renewed, it implies that your contract has been legally extended or renewed on the original terms.
Otherwise, the company reserves the right to renew or not to renew a contract.
Head Human Resource
NMG - Uganda