What you need to know:
- As the world celebrates the International Labour Day, the government says 7 out of every 10 employed Ugandans are working without contracts and job security, with firms preferring the “illegal” arrangement to avoid tax and other mandatory liabilities.
Seven in every 10 employed Ugandans are working without a written contract, the government has said, making them vulnerable to labour rights abuses and job insecurity.
Ms Betty Amongi, the Gender and Labour minister, said an increasing number of mainly private sector employers, prefer to subcontract, outsource or hire individuals without formal documentation to reduce operational costs.
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The “illegal” arrangement, she noted, helps companies get labour without reflecting the individuals as employees on payroll which clothes them against the responsibility to remit pension contributions and Pay As You Earn (PAYE) tax or provide treatment or compensation to a worker injured in the line of duty.
“Many employers in industrial parks do not give employees written employment contracts, resulting in a lack of job security and union representation and yet it is a legal requirement in Uganda for the employer to provide an employment contract for each employee. In practice, just 30 percent of employees are engaged with a written contract,” Ms Amongi said.
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She made the comments on Wednesday, but a final version of her speech at the maiden annual national labour conference held in Kampala was shared with us yesterday to correct inaccuracies in our reporting from the event about unemployment statistics in the country (see clarification on page 2).
The minister noted that she discovered during on-site fact-finding trips to workplaces that majority of workers did not know their rights and obligations, including safe working environment requirement, and those aware were often afraid to speak for fear of losing their jobs.
“Some employers resort to subcontracting and outsourcing services or hire workers temporarily to avoid responsibilities of compensating injured workers and dodging contributing to National Social Security Fund (NSSF) for employees,” Ms Amongi said.
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Labour rights activists seized on the Cabinet minister’s acknowledgment on the eve of Uganda joining the rest of the world to observe the annual International Labour Day, as evidence of the government’s inaction on workers’ plight.
The theme for this year’s national event to be marked in the eastern Namutumba District is “promoting positive work culture and ethics: A Prerequisite for increased investment, employment opportunities and household incomes”.
It is mandatory under the Employment Act, 2006 for employers to sign written contracts with new hires and remit monthly contributions under the revised National Social Security Fund (NSSF) Act even if the employer has one employee.
Minister Amongi was unavailable last evening to explain what she, as the line minister, or the government as a whole is doing to crack the whip on errant employers.
The National Organisation of Trade Unions (Notu) Chairman General, Mr Usher Owere, in a rejoinder yesterday proposed that a separate ministry be created to address labour issues that are overshadowed in the Gender, Labour and Social Development docket by priorities about gender and minority groups’ issues.
“Labour issues are not a priority in the ministry, the emphasis is put on other departments like women, youth, children and people with disability issues,” he said, “The labour force is the engine of the country [and the] government should revise to create an independent ministry to handle labour issues.”
He flagged the lack of an “independent budget” as a limitation in better enforcement of the country’s labour laws.
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In the alternative, Mr Owere, suggested that labour matters should be moved and domiciled under the Ministry of Public Service, which handles hiring, promotion, reprimand and remunerations of public sector workers.
Ms Margaret Rwabushaija, who represents workers in the 11th Parliament,linked the state of affairs where labour rights drown in a sea of no-contract jobs to desperations of jobless Ugandans willing to clutch on any employment in the wake of pandemic disruptions to the labour market and economy.
“We should remember that people lost jobs due to Covid-19, people are rushing to grab any job opportunity. As leaders we shall continue to sensitise workers to understand the roles of a contract,” she said.
The Member of Parliament added: “Many workers are not aware of why they need NSSF, job security and other rights. We have started following up on a number of companies that are hiring employees as casual labourers.”
We were unable to speak to Federation of Uganda Employers for an explanation on the practice, as reported by minister Amongi, of companies preferring to hire workers on temporary arrangements and often without a contract.
In her comments last week, the minister noted that 1.3 million out of 11.3 million citizens who constitute Uganda’s “labour force” are “unemployed” and nearly nine in even 10 jobbed individuals work in the informal sector where pay is half of remuneration for formal sector workers.
There are up to 23.5 million Ugandans, aged 15 to 64, considered the “working population” in a country Ms Amongi said had a 9.2 percent “national unemployment rate”.
The unemployment rate for youth, under Uganda’s law defines as citizens aged 18 to 30, is higher at 13.3 percent.