Growing job losses worrying citizens
Redundancies. Layoffs. Hardly a week passes before hearing of layoffs or redundancies as a result of coronavirus. As the spread of Covid-19 pandemic continues, it leaves behind a huge wave of economic devastation in the country. At the onset of this pandemic, several employers rushed to layoff staff while others found safety in instituting pay cuts in order to remain afloat.
According to Uganda Bureau of Statistics latest survey on the impact of Covid-19 on businesses, 84.9 per cent of establishments in the manufacturing sector reported that support staff were the most affected in terms of job losses.
Uganda Manufacturers Association (UMA) executive director Daniel Birungi recently explained that the lockdowns instituted across the world meant delivery of several externally sourced raw materials and items of machinery was delayed beyond the anticipated timelines.
Due to reduced demand, the manufacturing sector also experienced a significant decline in cash flow. Covid-19 effects reduced the manufacturing industry’s production capacity by at least 40 per cent and their sales’ revenues by between 50 per cent and 65 per cent according to UMA.
The Ministry of Gender, Labour and Social Development has also shown that 2,727 employees have been affected by Covid-19.
These job losses are a stark reminder that government’s recent Shs4.7 trillion stimulus package is taking longer than expected to have the anticipated effect. In the Budget for 2020/2021, Shs130b was allocated to creating jobs for persons affected by Covid-19.
Some 998 employees had their contracts terminated, 951 were sent on unpaid leave, 129 were suspended, 26 were re-designated as part time staff while another 623 had their salaries cut. To help mitigate job losses, decision-makers must take jobless people into account in policies aimed at addressing Covid-19 economic disruptions. Currently, many policy recommendations predate the pandemic, and are rendered unsuitable.
Staff redundancy should be done in agreement within contractual and labour law obligations to ensure that the business does not open itself up to legal challenges that may be expensive to defend.
Employers must fulfil the attendant obligations to their employees upon termination of employment. These include the payment of any wages due at the time the employment relationship ends. The employee may equally be entitled to a payment of outstanding leave days, gratuity and severance pay if applicable.
But before effecting staff redundant programmes during this crisis, companies must consider the potential reputational risk especially the loss of credibility with the remaining employees and other stakeholders. If government does not move fast enough to shield the jobless.
