The Minimum Wage Bill 2013

What is Minimum Wage?
Minimum wage is the lowest amount a worker can be legally paid for his/her work. Most countries have a nation-wide minimum wage that all workers must be paid.

President’s views
President Museveni has consistently cautioned trade unions against intimidating investors over workers’ minimum wage and unionisation.
The President has asked the unions to encourage more investment to create more employment opportunities.
“The MPs and trade unions should attract investors and not chase them away. Workers MPs should help me attract factories and stop those slogans of minimum wage…”

What does Vision 2040 say about job creation
Uganda has a big challenge of a labour force that is largely unemployed. Despite this huge unemployed labour force, the Ugandan economy has a big shortage of appropriately skilled workers which means that the education system has failed to tailor its outputs to the needs of the economy.

The result has been a large number of unemployed youth who are becoming a social and economic threat. The failure to match the skills needed in the economy creates a gap in the human capital which is critical for economic and social transformation.

Vision 2040 says Uganda with its low wage; natural-resource will develop labour-intensive industries, creating much needed jobs. Labour-intensive manufacturing industries not only offer the potential to absorb surplus labour from the rural subsistence sector, but the development of such industries can also pave the way through continuous upgrading to higher value added industries.

How workers benefit from the Bill Lack of a minimum wage has often resulted into a lot of exploitation of the Ugandan workers. If the Bill is passed into law, the productivity of workers is expected to increase and rural-urban migration will be checked. NOTU Chairman said the long-held argument that fixing a minimum wage would scare away investors and shrink employment opportunities for Ugandans is mere propaganda.

According to MP Rwakajara, a minimum wage commensurate with the cost of living would assist workers cope with the current difficult financial situation and go a long way to improve the general welfare of Ugandan workers and their families.

Unemployment figures
As the world celebrates Labour Day today, latest government figures on the state of unemployment and poverty in the country indicate that at least 8.4 million Ugandans are stuck in abject poverty and many remain unemployed.

Statistics from the labour department show that out of the 400,000 students who graduate from various tertiary institutions across the country each year, only 8,000 have a chance of being gainfully employed.

Figures from Finance ministry
It is estimated that about 480,000 students leave the education system per annum and some 36,000 with university degrees. It is however estimated that over two million literate youths are jobless and a further two million are underemployed. Only 20% (80,000) of the school leavers get jobs.

Workplaces
It is estimated that there are over 1,000,000 workplaces in Uganda as per the definition in this Act. The Occupational Safety and Health (Workplace Registration Fees) Rules, 2009 Statutory Instrument – S.I 2009 No 48, spells out the amount of fees to be paid by individual workplaces depending on the nature of work, level of risk they pose or the number of workers they are employing.

Occupational safety issues
The International Labour Organisation (ILO) estimates that two million women and men die as a result of occupational accidents and work-related diseases each year. In Uganda for example fire outbreaks at workplaces, collapse of buildings; road accidents have claimed a number of lives and destroyed properties worth billions of shillings.

Poor working conditions
Currently Uganda’s labour productivity is the lowest in East Africa due to poor working conditions as one of the factors identified by Social Development Sector Investment Plan II 2011/12 to 2015/16. It is also interesting to note that the value added per worker in Uganda is 68% lower than that in India and 96% lower than that in China.

Facts about the Bill

Shs10m fine
Employer who fail to comply faces a fine of Shs10 million and hefty compensation fees to the affected workers.

Shs6,000 per month
Uganda last set a minimum wage of Shs6,000 per month in 1984 during Milton Obote II regime. The decree has remained in force to this day.

75,000/= per month
The Minimum Wage Advisory Council in 1995 recommended a Shs75,000 minimum monthly wage for unskilled workers, which has never been implemented.

250,000/= a month
The draft Bill proposes that the Minimum Wage be put at Shs250,000 but also ensure that the minimum wage is set on a sector-by- sector basis.

* The Draft Bill proposes a Minimum Wage Board. That the Board should have representatives from different sectors –Employers, Workers, Ministry of Finance, Ministry of Labour, Specialised Government institutions like National Planning Authority

* Rwakajara Bill proposes that every two years, the board should sit and review the minimum wage depending on the market forces of demand and supply.

* The draft Bill has a section for terms and conditions of employment and provides safeguards in the relationship between the employer and the employee.

WHAT THEY SAY ABOUT THE BILL

Arinaitwe Rwakajara (Workers)
In order to curb exploitation of workers and employees in the private sector, there is need to have a comprehensive and updated legislation setting out a mechanism for the establishment of a minimum wage and conditions of employment, which take into account the uniqueness of each sector of the economy and a mechanism which allows employers and employees to be represented and heard during the process leading to establishment of wages as well as prescribing heavy penalties for non-compliance. To combat corruption at the work place, the workers must be paid well.

Theopista Nabulya Ssentongo (Workers)
The government should support the new Minimum Wage Bill to stop the exploitation of workers. Minimum wage cannot discourage investors; in fact the lack of it should be a concern to the government because some fake investors come and enjoy free taxes and disappear. The government must also ensure that the labour laws are implemented. The Unions Act, 2006 and the Employment Act 2006 have not been implemented yet the workers are suffering.

James Mbahimba (NRM, Kasese Municipality)
The investors in Uganda are exploiting the work force. What happens today is that someone advertises a job without telling you how much you will get. And because people are looking for jobs, they are given appointments on unclear conditions. It is our responsibility as government to ensure that workers in Uganda get a minimum wage. I have seen people with families, earning Shs50,000 only. That is aiding corruption; someone earning Shs50,000 will eventually run away with company property.

Mwesigwa Rukutana, State Minister for Labour
“We never wanted to jump into fixing the minimum wage and scare away investors and the already existing jobs. If you fix a minimum wage and there are no jobs, then you have a law that will remain on paper because the employers and employees will reject it. But we have embarked on the process of constituting a minimum wage board which will tell the government whether Uganda is now ready for fixing the minimum wage and which sectors should embrace it first.”

Paul Mwiru, FDC, Jinja East
The plight of the workers has not been addressed by the existing legal regime. Whereas the country promotes investors, the plight of the workers has been auctioned to the extent that they are paid between Shs60,000 and Shs120,000. When you look at the conditions of the workers vis-à-vis the cost of living, the cost of the commodities and the standard of living, it is not actually possible that these workers can lead a meaningful life under these circumstances.

Usher Wilson Owere, General NOTU Chairman
“We wanted minimum wage like yesterday. Uganda cannot move alone when the rest of the countries in East African Community have put in place a minimum wage to protect their workers. How can government promote prosperity for all without a minimum wage in place? The NRM government must walk the talk otherwise even the Vision 2040 is doomed without the minimum wage. We are going to lobby all the stakeholders including MPs to ensure that the Bill is passed into law.”