Uganda Employment Law: The Essential Guide for Foreign Businesses

Uganda holds great promise for investors.

With key industries like agriculture, agro-processing, oil, gas, mining, and manufacturing, Uganda is naturally rich, making it an attractive investment destination. Before expanding into the country, learn more about how the labour law shapes opportunities for development in Uganda.

Uganda's Labour Law

Employment Contracts in Uganda

Oral and written contracts

A contract of service can be made orally unless the Employment Act 2006 or another law requires it to be in writing. Unless the Act says otherwise, the same rules apply to oral and written contracts.

Attestation

If an employee cannot read or understand the language of their contract, the contract must be attested. This means a magistrate or labour officer prepares a written document confirming the contract. Before doing so, they must:

1. Check that the employee agreed freely, without coercion, undue influence, misrepresentation, or mistake.
2. Make sure the contract complies with the Act.
3. Be satisfied that the employee understands the terms before giving final agreement.

The magistrate or labour officer gives a copy of the attestation document to both the employer and the employee, and keeps the original.

If a contract should have been attested but was not, the employee can still enforce it. The missing attestation does not harm the employee’s rights in any way.

Transfer of contract in Uganda

A contract of service cannot be moved to another employer without the employee’s consent. The exception is where a business is transferred in whole or in part. In that case, all employees’ contracts pass automatically to the new owner, with their rights and obligations intact. Continuity of service is not interrupted.

Inability to pay wages

If an employer cannot or will not pay wages, a labour officer must declare the contract terminated when an employee applies. This does not affect any rights the employee has already accrued under the Act, the contract, or other laws.

Employment of children

Children under 12 cannot be employed in any business, undertaking, or workplace. Children under 14 can only do light work, supervised by an adult over 18, that does not affect their education. An employer must stop employing a child under 14 once a labour officer notifies them in writing that the work is not light work.

No child may do work that is harmful to health, dangerous, hazardous, or otherwise unsuitable, and the employer must stop once notified in writing by a labour officer. No child may be employed between 7 p.m. and 7 a.m.

Anyone, including a labour union or employers’ organisation, can complain to a labour officer about a breach. Anyone aggrieved by a labour officer’s decision can appeal to the Industrial Court.

Medical examinations

The Minister may make regulations requiring people over 18 who are seeking work involving specified hazards to undergo a medical examination before being engaged and at regular intervals afterwards.

The examination must be carried out by a qualified medical practitioner and certified by a district medical officer in the presence of a labour officer. The results are confidential and cannot be disclosed to anyone other than the person examined without that person’s consent.

Notification of vacancies

Every employer must notify the district labour officer of any employment vacancy whenever it arises. The Minister may exempt specified categories of employers.

Departure from Uganda

An employee cannot be required to accompany their employer outside Uganda without their consent, unless the contract expressly says so.

Migrant workers in Uganda

No one is permitted to organise the clandestine movement of migrants for employment into, through, or out of Uganda, or assist an organisation that does so.

No one may knowingly employ a person who is unlawfully present in Uganda.

Breaching these rules is an offence.

Recruitment permit in Uganda

No one may run a recruitment agency, whether personally or through agents or messengers, without a valid recruiting permit from the Commissioner.

The Commissioner may attach conditions to a permit and revoke it at any time for good cause. The rule does not apply to recruitment of domestic servants or for non-manual labour, and it does not restrict official labour exchanges run by or with the approval of the Commissioner.

Repatriation

An employee recruited from a place more than 100 kilometres from their home has the right to be repatriated to the place of engagement at the employer’s expense when:

1. The period of service in the contract expires.
2. The contract ends because of the employee’s sickness or accident.
3. The contract ends by agreement, unless the contract says otherwise in writing.
4. The contract is terminated by order of a labour officer, the Industrial Court, or any other court.

If the employer brought the employee’s family to the place of employment, the family must also be repatriated at the employer’s expense if the employee is repatriated or dies.

An employee with at least ten years of service must be repatriated at the employer’s expense regardless of where they were recruited.

Employer of Record (EOR) in Uganda: how it helps

An employer of record (EOR) in Uganda provides support in many important ways: expansion into the country without entity registration, employee onboarding, legally compliant procedures and modes of operation, payroll, and employee benefits administration among many others.

Africa HR Solutions has been providing recognised and trusted EOR services in Africa for over 15 years. To find out how we can best help you during your expansion to Uganda, speak with one of our EOR and payroll experts today.

Payment of wages in Uganda

Wages are paid at the employee’s place of work or, if they work at several locations, at the employer’s premises from which the work is administered. Payment must not take place in premises licensed for alcohol or in places of amusement, unless the employee works there. An employer cannot dictate where, how, or with whom an employee spends their wages.

Unless there is a prior written agreement otherwise, wages are paid:

1. At the end of the day, for employees engaged one day at a time.
2. At the end of the hour, day, or week, for employees paid by those periods.
3. At the end of each fortnight or month, for employees paid on that basis.
4. At intervals of no more than a fortnight, for piece work or payment by results.

An employee housed by the employer cannot be required to leave until they have been paid their terminal benefits. On termination, however it happens, wages, other remuneration, and accrued benefits must be paid within seven days.

Payment of wages to another person in Uganda

No one may receive an employee’s wages on their behalf without the employee’s written permission, unless the law expressly provides otherwise.

Prohibition on certain deductions in Uganda

Remuneration must be paid directly to the employee unless the law permits otherwise.

No deduction may be made to pass money to the employer, their representative, or an intermediary in return for obtaining or keeping a job. Employers must provide the equipment, tools, and materials needed for the job and cannot charge employees for them.

Permitted deductions in Uganda

The only permitted deductions are:

1. Taxes, rates, subscriptions, or contributions imposed by law.
2. Contributions to a provident or pension fund, where the employee has given prior written consent.
3. Reasonable rent or accommodation charges, where the employee has agreed.
4. Union dues.

Employers cannot deduct the cost of protective gear or tools they provide. Attachment of wages by operation of law is allowed, but it cannot exceed two-thirds of the remuneration due for that pay period.

Weekly rest in Uganda

An employee cannot be required to work more than six consecutive days without a day's rest, taken on the customary day or one agreed between the parties. The Minister may exclude persons in high managerial positions and family establishments employing no more than five dependent relatives.

Pay calculation in Uganda

Employees paid by a period of a week or more cannot have wages deducted for not working on the weekly rest day. Unless agreed otherwise, wages are assumed to cover a 48-hour week, and, absent a written agreement, hours beyond that are overtime.

Working hours in Uganda

The maximum working hours in Uganda is 48 hours a week.

The parties may agree to longer normal hours, but not beyond 10 hours a day or 56 hours a week.

Shift workers may exceed these limits if the average over three weeks stays within them.

Where the working day is at least eight hours, a 30-minute daily break is required. The Minister may regulate maximum hours and allow temporary exceptions in extraordinary situations where the public interest requires.

Overtime pay in Uganda

Unless agreed otherwise in writing, hours beyond eight a day or 48 a week are paid at 1.5 times the normal hourly rate, or double on gazetted public holidays.

Annual leave and public holidays in Uganda

Employees with at least 6 months' continuous service who normally work 16 hours or more a week are entitled to 7 days' paid leave for each 4 months of continuous service, taken at a time agreed between the parties.

They also receive a paid day off for each public holiday, or a paid day off in lieu if they work it. No day in lieu is due if they are paid at least double for working that day. Any agreement to give up annual leave is void.

On termination, the employee receives proportionate leave or payment in lieu.

Sick pay in Uganda

Employees with at least one month's service who normally work 16 hours or more a week receive full wages and contractual benefits for the first month of sickness or injury.

If the sickness continues at the end of the second month, the employer may terminate the contract in line with its terms.

The employee must notify the employer as soon as reasonably practicable and provide a medical certificate on request, at intervals of at least one week. The employer may require a certificate from a different practitioner but must cover the fees and transport costs.

Maternity leave in Uganda

A female employee is entitled to 60 working days' leave on full wages, with at least 4 weeks after childbirth or miscarriage.

She may return to her previous job, or a reasonably suitable alternative on terms no less favourable.

If pregnancy-related sickness makes returning inadvisable, the right to return extends to 8 weeks after the birth or miscarriage. She must give at least 7 days' notice of her return, or less if reasonable, in writing if the employer asks. The employer may request a medical certificate from a qualified practitioner or midwife.

Paternity leave in Uganda

A male employee is entitled to 4 working days' paid leave each year, immediately after the delivery or miscarriage of his wife, and may return to his previous job.

Notice periods in Uganda

An employer must give written notice, in a form and language the employee can reasonably understand, unless dismissing summarily or because of retirement age. The minimum notice, which also applies to employees, is:

1. 2 weeks, for more than 6 months but less than one year of service
2. 1 month, for more than 12 months but less than 5 years
3. 2 months, for 5 years but less than 10
4. 3 months, for 10 years or more

If the pay period is longer than the notice period, notice must equal the pay period. These rules cannot be excluded, though an employee may accept payment in lieu of notice. Outstanding annual leave cannot be counted as part of the notice period. During notice, the employee must receive at least half a day off each week to look for new work.

Suspension in Uganda

An employer conducting an inquiry that may reveal grounds for dismissal can suspend the employee on half pay. The suspension cannot exceed 4 weeks or the length of the inquiry, whichever is shorter.

Complaint by employee

An employee who thinks a disciplinary penalty or half-pay suspension was unjustified can complain to a labour officer, orally or in writing, within four weeks. The labour officer investigates, consults any union in the business, and first tries to settle the matter by mediation.

Unless the employer has withdrawn the penalty or paid the suspended wages, the labour officer decides whether the penalty or suspension was reasonable and gives written reasons to both parties.

Termination in Uganda

Termination is deemed to take place when:

1. The employer ends the contract with notice.
2. A fixed-term or task contract ends and is not renewed within one week on the same or better terms.
3. The employee ends the contract, with or without notice, because of the employer’s unreasonable conduct.
4. The employee leaves during a notice period given by the employer.

The termination date is the date the notice expires, the date the fixed term or task ends, or the date the employee stops working for the employer. Reaching normal retirement age is also covered.

Notification and hearing before termination

Before dismissing an employee for misconduct or poor performance, the employer must explain the reasons in a language the employee understands.

The employee may have another person of their choice present.

The employer must then hear and consider the employee’s representations, and those of the chosen person, and allow reasonable time to prepare them.

An employer who fails to do this must pay 4 weeks’ net pay, whether or not the dismissal was otherwise justified or fair. The employee can join this complaint to a complaint of unjustified or unfair dismissal and must bring it to a labour officer within 3 months of dismissal.

Probationary contracts

The hearing requirement does not apply to the end of a probationary contract.

Probation lasts up to 6 months, extendable by up to 6 months with the employee’s agreement, and an employee can be placed on probation only once by an employer. Either party can terminate with 14 days’ notice, or the employer can pay 7 days’ wages in lieu.

Proof of reason for termination

The employer must prove the reason for dismissal.

If it fails to do so, the dismissal is deemed unfair. The reason must be something the employer genuinely believed to exist at the time, and which caused the dismissal.

The certificate of reasons given to the employee is taken into account.

Summary termination

Summary termination means dismissal without notice, or with less notice than the employee is entitled to. It is not permitted except where the employee’s conduct shows a fundamental breach of their obligations under the contract, in which case the dismissal is justified.

Complaint to labour officer in cases of summary dismissal

An employee who believes they were summarily dismissed without justification can complain to a labour officer within 6 months. The labour officer first seeks mediation, then decides whether the dismissal was justified, having regard to the Code of Discipline.

If it was not, the employer must pay:

1. The net wages the employee would have earned during the notice period.
2. A proportion of any wages due for work already done.
3. Any other losses arising between dismissal and the end of the notice period.

This right is in addition to the right to complain of unfair dismissal, other statutory rights, and any union agreement. In unfair dismissal complaints, the employee must prove that a dismissal occurred, and the employer must justify the grounds.

Unfair termination

An employee with at least 13 weeks’ continuous service can complain of unfair termination to a labour officer within three months of dismissal, or later if the employee shows it is just and equitable. Employees dismissed under a probationary contract cannot make this complaint. The right is in addition to any union agreement rights.

If a court finds the dismissal unfair, it may order reinstatement or compensation. It must require reinstatement or re-employment unless:

1. The employee does not want it.
2. A continued relationship would be intolerable.
3. It is not reasonably practicable.
4. The dismissal was unfair only because the employer did not follow proper procedure.

Severance Allowance in Uganda

An employer must pay severance allowance to an employee with at least 6 months’ continuous service in these situations:

1. The employee is unfairly dismissed
2. The employee dies in service, unless the death was caused by their own serious and wilful misconduct
3. The employee terminates the contract because of physical incapacity not caused by their own serious and wilful misconduct
4. The contract ends because of the employer’s death or insolvency
5. A labour officer terminates the contract because the employer cannot or will not pay wages
6. Other circumstances set by the Minister in regulations

No severance allowance is payable where the employee:

1. Is summarily dismissed with justification
2. Is dismissed but unreasonably refuses an offer of re-employment at the same place of work on terms and pay no less favourable
3. Abandons the job or is absent without leave for more than three days with no explanation

It is also not payable where:

1. The employer is a partnership that dissolves, and the employee either joins one or more of the partners immediately or unreasonably refuses an offer on less favourable terms
2. The employer dies, and the employee either joins the employer’s personal representative, spouse, or heir immediately or unreasonably refuses an offer on less favourable terms
3. The terminated contract is a probationary contract

Where an employee accepts employment after a partnership dissolves, there is no break in continuity of service, and the new employer or employers take on all the employee’s rights, including severance allowance, from the earlier period.

Calculation of severance allowance

The amount is negotiable between the employer and the workers or their union.

Bonus & Other Payments in Uganda

Any gratuity, bonus, or other payment made on cessation of employment, beyond what the Labour Act provides, is taken into account and deducted from the severance allowance due. Otherwise, severance allowance is in addition to the employee’s other rights, and is subject to the same set-off, compensation, or counterclaim rights as wages.

Payment of severance allowance

Severance allowance is paid on cessation of employment, or on the grant of leave pending cessation, whichever comes first.

For a deceased employee, it is paid to the surviving spouse within 30 days of the employer being told of the death.

If there is no spouse, it is paid to another adult dependent relative, or to the guardian of a minor dependent relative, as the labour officer decides.

Failure to pay severance allowance

An employer who wilfully and without good cause fails to pay severance allowance on time commits an offence.

The fine is twice the amount of severance allowance payable, paid to the same person and in the same way as the allowance.