Government, employers agree on terms for job termination

Government and employers, together with representatives of workers, have agreed on a number of measures to stop arbitrary termination of employment as the Covid-19 pandemic continues to stifle the country’s economic life.

Already, thousands of workers have been rendered redundant as companies and organisations struggle to stay afloat because of dwindling businesses.
The hotel industry, tourism, transport and flower exporters are among the most affected, where thousands of workers have been laid off as companies downsize staffing.

However, other businesses such as factories producing soap, sanitisers, toilet tissues and face masks and other personal protective equipment, are reportedly experiencing growth because their products are used in the prevention measures to combat the Covid-19 pandemic.

Mr Frank Tumwebaze, the minister of Gender, Labour and Social Development, while addressing a press conference at the government-run Uganda Media Centre yesterday, said the Covid-19 pandemic is a temporary occurrence and that both employers and employees should be patient during this period.

“Employers are encouraged/advised to the extent possible, not to terminate employment. In addition, termination of employees will occasion more costs to employers in form of payment of terminal benefits, for instance, payment in lieu of notice, compensation for leave days not taken and severance packages, among others,” Mr Tumwebaze said.

He said termination of employment should only be taken as the last resort after all the available softer options have been exhausted.

However, he said employers who, despite the associated costs and lengthy procedures, opt for termination, should adhere to the laws governing employment in the country.

“Employers should ensure that the process of termination or lay-off are done with a humane face. Workers should be counselled prior to termination or layoff,” Mr Tumwebaze said.

Some of the strategies put in place to mitigate the economic costs on businesses include taking pending annual leave as one of the cost-cutting measures, as well as decongesting workplaces and negotiating/renegotiating wages before considering layoffs or terminations.

Mr Tumwebaze said employers and workers should work together to find win-win solutions through dialogue during this period. He also said where possible, employees should work from home. He said this will not only reduce over-crowding at workplaces and minimise the risks of Covid-19 infection, but will also cut overhead costs for the businesses.

He said the Gender and Labour ministry held tripartite discussions with workers and employers where they agreed to introduce these measures to protect workers from arbitrary termination of employment.
Mr Tumwebaze said the cash-flow deficiencies occasioned by the current lockdown have made it difficult for most employers to meet employee costs, including payment of wages.

As a result, he said, some employers have resorted to instituting employee-cost reduction measures, including pay-cuts and termination.
He also warned those sectors that are not badly affected by the Covid-19 pandemic such as manufacturing, food processing and others not to use the excuse of the pandemic to arbitrarily cut staff wages or lay off workers.

He also said his ministry will handle on a case-by-case basis, complaints raised by part-time workers and other workers who, by the time of the Covid-19 lockdown, had no contracts and were sent home without payment of what was due to them as at the time of the lockdown.

“This includes most especially workers in the private and public education institutions. In line with Section 19 of the Employment Act 2006, all employers should provide returns and statistics on the number of workers whose employment relationships have been affected or are likely to be affected during the Covid-19 pandemic. This information will particularly be useful for policy advice and planning,” he said.

The minister said employees who have running loans with financial institutions are encouraged to take advantage of the directive issued by Bank of Uganda to the financial institutions to reschedule loan repayments, and that commercial banks, on the other hand, are advised not to impose penalties on borrowers who would wish to repay their loans before the end of the loan term.

What Employment Act says on job termination

Notice period.
(1) A contract of service shall not be terminated by an employer unless he or she gives notice to the employee, except—
(a) Where the contract of employment is terminated summarily in accordance with section 69; or
(b) Where the reason for termination is attainment of retirement age.
(2) The notice referred to in this section shall be in writing, and shall be in a form and language that the employee to whom it relates can reasonably be expected to understand.
(3) The notice required to be given by an employer or employee under this section shall be—
(a) not less than two weeks, where the employee has been employed for a period of more than six months but less than one year;
(b) not less than one month, where the employee has been employed for a period of more than twelve months, but less than five years;
(c) Not less than two months, where the employee has been employed for a period of five, but less than 10 years; and
(d) Not less than three months, where the service is 10 years or more.

Termination
(1) Termination shall be deemed to take place in the following instances—
(a) Where the contract of service is ended by the employer with notice;
(b) Where the contract of service, being a contract for a fixed term or task, ends with the expiry of the specified term or the completion of the specified task and is not renewed within a period of one week from the date of expiry on the same terms or terms not less favourable to the employee;
(c) Where the contract of service is ended by the employee with or without notice, as a consequence of unreasonable conduct on the part of the employer towards the employee; and
(d) Where the contract of service is ended by the employee, in circumstances where the employee has received notice of termination of the contract of service from the employer, but before the expiry of the notice.
Collective terminations
(1) Where an employer contemplates terminations of not less than 10 employees over a period of not more than three months for reasons of an economic, technological, structural or similar nature, he or she shall—
(a) Provide the representatives of the labour union, if any, that represent the employees in the undertaking with relevant information, and in good time which shall be a period of at least four weeks before the first of the terminations shall take effect, except where the employer can show that it was not reasonably practicable to comply with such a time-limit having regard to the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations shall be carried out.
(b) Notify the commissioner in writing of the reasons for the terminations, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out.
(2) An employer who acts in breach of this section commits an offence.

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