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EMPLOYER/EMPLOYEE RELATIONSHIP
The Employment Act defines an “employee” as a person employed for wages and includes an apprentice
and domestic servant
...

A contract of employment is a contract of service and an employee is someone who works or has worked
under a contract of employment
...
Like most
contracts it need not be in writing, but can be implied from the actions of the parties
...
An employer
who willfully fails to comply with the latter requirement commits an offence
What is a contract of employment?
The key question in determining whether or not a person is an employee is the following - what is a
contract of employment?
A "contract of employment" is also known as a "contract of service"
...
People working under a
"contract for services" are usually contractors or self-employed
...
This is because the terms of the contract can be
express (e
...
written or orally agreed) or implied (e
...
from actual practice)
...

All the general rules of contract apply to contracts of employment
...

b) The name of the employee, the place of engagement, the place of origin of the employee and any
other particulars necessary for his or her identification
...

d) The duration of employment and the method of calculating this duration
...

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f) The condition of repatriation in case of an expatriate employee; and
g) Such other matters as may be prescribed
...

The Employment Act provides that a contract of service means any contract whether oral or in writing,
whether expressed or implied, to employ or to serve as an employee for any period of time, and includes
any contract of apprenticeship
...

Traditionally, employment of independent contractors was used for short-term contracts; such are now
used much more in both long and short-term contracts
...
For instance only employees are entitled to compensation from unfair dismissal,
redundancy pay, maternity leave, leave holidays and resting days etc
...

3) Employees and independent contractors are taxed differently
...

5) Employers are vicariously liable for the negligent actions on their employees carried out in the
course of their employment
...
A person
who works under a contract of service is
•
•
•

an "employee" for payroll purposes, and
an "employee" for employment rights purposes, and
a "worker" for other employment rights purposes
...
e
...
There is no requirement for an employer to put such a person on the payroll;
rather payment may be made on invoice
...

How, then, are these two terms to be distinguished? Traditionally, there are several key tests to identify
an employee, i
...
a person who works under a "contract of service"
...
This implies a right for the employer to give the orders and the
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employee to carry them out
...

The following question is therefore important: who is entitled to give the orders as to how the work
should be done? The greater the amount of control exercised over the details of the work to be done, the
more likely the relationship is to be one of employment
Generally, a self-employed person is told what to do, but not how to do it
...

Even so, it should be noted that the question of control will carry less weight in relation to professional
and skilled employees
DEGREE OF CONTROL TEST
The relationship of employment was traditionally known as the "master and servant" relationship
...
An employee is
therefore subject to a significantly greater degree of control than an independent contractor/self employed
person
...

Generally, a self-employed person is told what to do, but not how to do it
...

Even so, it should be noted that the question of control will carry less weight in relation to professional
and skilled employees
THE MULTIPLE TEST
The complexities of modern employment have ensured that no one factor can be used as a universal
indicator of whether a contract is one of employment or not
...
Vs
...
The issue was whether an ownerdriver of a vehicle used exclusively for the delivery of a company’s ready mixed concrete was engaged
under a contract of service or a contract for services
...
The company had
engaged an independent haulage contractor to deliver the concrete to customers but that contract was
terminated and RMC decided to introduce a scheme whereby concrete was delivered by owner-drivers
working under written contracts
...
In 1965 the company asked the Minister of Social Security for a determination of the
employment
status
of
one
of
the
ownerdrivers,
Mr
Latimer
...


Other facts found were
•
•
•

•

he did not work set hours and had no fixed meal break
the company did not tell him how to drive the truck or what routes to take
the nine owner-drivers in the depot arranged the dates of their own holidays to ensure that only
one driver was away at any time and between them
...

during the busy season the company engaged three or four additional drivers under contracts of
service
...
In summing up MacKenna J
said that Mr Latimer was a “small business man” and not a servant
...

Commentary
In his judgment, MacKenna J considered what is meant by a contract of service
...

(i) The servant agrees that, in consideration of a wage or other remuneration, he will provide his
own work and skill in the performance of some service for his master
...
(iii) The other provisions of the contract are consistent
with
its
being
a
contract
of
service
...
Otherwise there will be no consideration,
and without consideration no contract of any kind can be created
...
Freedom to do a job by one’s own hands or by another’s is
inconsistent with a contract of service, though a limited or occasional power of delegation may
not be…
...
If there is no right of control of any kind then you
will not have a contract of service
...
However, the court did make the important point that a limited right
of delegation was not inconsistent with a contract of service
...
Factors such as ownership of
significant assets, financial risk and the opportunity to profit are not consistent with a contract of
service
...
This is sometimes called the “small
businessman test” and was first articulated in the case of Market Investigations V
...
In deciding that she was in fact an employee the court adopted the multiple
test approach, stating that they were looking to see whether she was on business on her own account,
looking in particular to see whether, she provided her own employment, whether she hired her own
helpers, whether she took any financial risk, and whether she took any responsibility for investment or
management
...

According to the case of Withers V
...

It may be that the different aspects of the contract will be highlighted depending on why the existence of
the contract is being challenged or sought to be established
...

Other Relevant factors in relation to contract of employment
1
...
A question to consider is whether the worker is performing services as a person in
business on their own account
...

The question of whether or not a person is in business on their own account is particularly important
when you are considering the status of professional and skilled employees
...
Whether the `employer' has the power to select and appoint the individuals doing the work?
The fact that the `employer' has the power to select and appoint the individuals to do the work is an
indication of a contract of employment
...
Whether the `employer' has the power to dismiss or suspend the worker
The power of dismissal or suspension indicates a relationship of employment
...

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4
...
Normally
an employee is paid a regular, fixed sum although this is not always the case (e
...
where commission is
payable)
...
On the other hand, payment by the job i
...
in relation to a complete task, may
point away from employment, depending on the other factors / tests
...
Supplier of equipment
If one party to the contract in question supplies the tools, machines or equipment used by the other party,
this points to a contract of employment
...

6
...

The power to direct where the person is to work can also indicate a contract of employment
...
Whether personal service is provided
A person will not normally be an employee if they are entitled to delegate the entire performance of the
work to another person
...
The extent of the obligation to work and mutual obligations
If the contract entitles a person to the full-time services of another, this indicates a contract of
employment
...

The courts have said that it is possible to have a continuing (`global') contract of employment linking up
intermittent periods of employment
...
The court found such
a situation where there was regular course of dealing for years between the parties under which the
`employer' supplied work daily to homeworkers, and collected and paid for finished work
...
These principles are particularly relevant in considering
whether casual workers are employees (see below)
...
Payment of income tax and National Insurance contributions
Where the `employer' deducts income tax and social security contributions under the PAYE system, this
indicates that the parties themselves view their relationship as one of employment
...

An arrangement to pay income tax and social security contributions outside the PAYE system does not,
in itself, indicate that the payee is self-employed
...
The intention of the parties
The intention of the parties as to the contract that they intend to create is a relevant factor to consider but,
as with all other factors, is not conclusive as to the true nature of the contract
...

THE EMPLOYMENT CONTRACT
The new Employment Act, 2006 repealed the whole of the Employment Act Cap
...
In an attempt to
harmonize the Constitution and international labor instruments with Ugandan employment law the new
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Act also specifically provides for forced labor, discrimination in employment, sexual harassment,
paternity leave, discipline and termination, Severance allowance etc
...

Aspects of the Employment Act
Applicability of the Act
The Act applies to all employees employed by an employer under a contract of service as per section 3
(1)
...
Forced labour is defined in section 1 to mean all work or service which is
extracted from any person under the threat of a penalty including the threat of any loss of rights
or privileges and for which that person has not offered himself or herself voluntarily
...
This means, so far as recruitment is concerned, that in general employers may select
their workforce according to any principle they like, or according to none
...

The problem is sufficiently serious for the law to intervene and to prohibit discrimination on certain
grounds, which are regarded irrelevant to someone’s ability to do the job
...
6 (1) places a duty on all parties the minister, a labour officer and the Industrial Court
to seek to promote equality of opportunity, with a view to eliminating any discrimination in employment
...
Sec
...

However under S 6(4) any distinction exclusion or preference in respect of a particular job based on
inherent requirements of that particular job shall not be deemed discrimination
...

Discrimination is a violation of civil rights law defined by unfavorable or unfair treatment of a person or
class of persons in comparison to others who are not members of the protected class because of race, sex,
color, religion, national origin, age, physical/ mental handicap, sexual harassment, sexual orientation or
reprisal for opposition to discriminatory practices
...
This tends to be obvious discrimination, for example, a female
candidate with the best quality experience does not get an interview, but a male candidate with less
qualification does
...

Indirect Discrimination
...
This is less obvious form of discrimination
...
The object is to prevent people from being discouraged from
making complaints because of fear of repercussions at work
...

Discrimination usually consists of one or more of the following
...
This covers harassment based on any of the above
...

- Members of trade unions who are treated less favorably than non-union members
...

Note: An employer may lawfully discriminate in selecting employees for a job where being from a
particular race, sex religion or age is a genuine occupational quality of the job
...

c) Sexual harassment in employment
(1) Directly or indirectly makes a request of that employee for sexual intercourse or any other form
of sexual activity that contains;
(a) An implied or express promise of preferential treatment in employment
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(b) An implied or express promise of detrimental treatment in employment
(c) N implied or express threat about the present or future employment status of the
employee
(2) Uses language whether written or spoken of a sexual nature
(3) Uses visual material of a sexual nature
(4) Shows physical behavior of a sexual nature
which directly or indirectly subjects the employee to behavior that is unwelcome or offensive to that
employee and that either by its nature or repetition has a detrimental effect on that employee’s
employment, job performance of job satisfaction
(2) If an employee is sexually harassed by the employer or the employer’s representative, the
employee can lodge a complaint with the labour officer
(3) Employer’s representative is one employed by the employer who either has authority over the
employee alleging sexual harassment or is in a position of authority over other employees of the work
place of the employee alleging sexual harassment
...

Administration and Jurisdiction
These are provided for under sections 8- 22 of the Employment Act
...

Every district shall have a district labour officer whose duties include:
a) Enforcement of legal provisions relating to work and protection of workers while working
b) Offering technical information and advice to employers, employees concerning the most effective
means of complying with the law
c) Notifying the minister of any defects pr abuses not covered by the law
Powers of Labour officers include:
a) Enter any premises for inspection
b) Enter any premises which he reasonably believes to be liable to inspection
c) Carry out any test, inquiry or examination in order to prove that the law is being followed
d) Close the workplace where there is imminent danger to the health or safety of the workers without
prior approval of the commissioner and inform the commissioner of his actions within 48 hours
e) Order with approval of the commissioner any employer to remedy any defect at the work place
that is a threat to the health or safety of the workers
f) Order with approval of the commissioner that a work place be closed down if there is imminent
danger to the health of safety of the workers
Labour officer’s power to settle grievances section 12
Any aggrieved worker may report his grievance arising out of a contract of employment to a labour
officer who shall the resolve the matter by agreement between the parties
...

Labour officer’s power to prosecute section14
A labour officer may institute civil or criminal proceedings before the industrial Court in respect of any
contravention or alleged contravention of the Act
Labour officers are not supposed to put themselves in positions that involve conflict of interest and they
are not supposed to reveal trade secrets that come into their knowledge while performing their duties
...

The Employment Relationship
Under the Act a “contract of service” means any contract, whether oral or writing, whether express or
implied, where a person agrees in return for remuneration, to work for an employer and includes a
contract of apprenticeship
...

A contract of service may be made orally
...

A contract which was not attested to as provided by the Act shall not prejudice the rights of the employee
and may be enforced at his or her instance
...

Variation or exclusion of provisions of this Act (section 27)
Any contract that excludes any provision of the Act is null and void
...

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Transfer of contract (section 28)
Contracts of service cannot be transferred from one employer to another without the consent of the
employee except where a trade or business is transferred in whole or in part and in that case the contracts
of service of all employees shall automatically be transferred to the transferee
...

Death of Employer (section 29)
Where the employer’s personal or legal position formed the basis of the employment relationship with
the employee, the death of an employer shall cause the contract of service to terminate one month from
the date of the employer’s death unless it is otherwise legally terminated within that period
...
Children under the age of twelve years shall not be employed”
...

Under the Act “light work” means work that is not physically, mentally, and socially injurious to the
child
...
It is illegal
to employ children in employment that is injurious to their health, dangerous or hazardous or otherwise
unsuitable
...
m to 7 a
...

Medical Examinations Section 33
The minister may by regulations, require Persons over the age of 18yrs seeking employment involving
exposure to hazards specified by regulations to undergo medical examination before being engaged by
an employer and at regular intervals thereafter
...

The results of the medical examination shall be kept confidential by the medical practitioner and shall
not be disclosed to any other person other than the person who is the subject of the medical examination
without that person’s consent
...

Recruitment Permit section 38
It is illegal to engage in the business of operating a recruitment agency unless you are in possession of a
valid recruiting permit issued by the Commissioner for labor
...

The permit shall be subject to such conditions as the commissioner may require and may be revoked at
any time for good cause
...
Recruitment agencies are required to submit returns of their operations to the
Commissioner
...

The family of an employee shall also be entitled to be repatriated at the employer’s expense in the event
of the employee’s repatriation or death where the family was brought at the place of employment by the
employer
...

A labor officer may exempt an employer from the obligation to repatriate where he is satisfied that it’s
just and equitable to do so or in case of summary dismissal of an employee for misconduct
...

Duty of the Employer to provide work section 40
It is the duty of the employer to provide work in accordance with the contract of service, during the period
for which the contract is binding and on the number of days equal to the number of working days
expressly or impliedly provided for in the contract except if the contract is frustrated, suspended or
prevented by an act of God, natural calamities or civil strife, the employee has terminated the contract
...

The employer shall pay for wages at the same rate as if the employee had worked in respect of each day
he fails to provide work
...


Entitlement to wages section 41
Wages shall be paid only in legal tender
...
The
minister can provide for partial payment of wages in the form of allowances in kind but in no case shall
payment be in the form of alcoholic beverages or noxious drugs and the value attributed to such allowance
must be fair and reasonable
...

- Absence attributable to a summons to attend a court of law or any other public authority having
power to compel attendance or
- Absence attributable to the death of a member of the family or dependant relative subject to a
maximum of three days absence or any one occasion and a maximum of six days in any one
calendar year
...

An employee is free to spend his wages wherever he desires and the employer cannot compel him to
spend his money in any shops established by the employer
...

Death of an employee section 42
In the event of death any remuneration due to the employee shall be paid by the employer to his or her
heirs or legal representatives
...

Payment of wages section 43
Payment of wages shall take place at the employee’s work place or if working at more than one location
the employer’s premises or where his or her work is administered
...

An agreement made by the employer with regard to the place where or the manner in which or the person
with whom any wages paid to the employee shall be expended is null and void
...

Employees who are housed by the employer shall not vacate the premises until their terminal benefits
have been paid
...

An employee’s wages cannot be paid to any other person without his or her permission except where it
is expressly provided for by the law
...
No deduction
shall be made from the wages of an employee with a view to ensuring a direct or indirect paymentto his
or her employer or the employer’s representative or to any intermediary for the purpose of obtaining or
retaining employment
...

Lawful deductions section 46
The employer is permitted to make the following deductions from the employee’s remuneration;
-

Tax, rate, subscription imposed by law,
contributions to provident or pension fund or scheme established by the employer or some other
person with the consent of the employee,
rent deductions for accommodation provided by the employer where the employee has agreed to
the deduction
and Union dues
...

Not more than two thirds of an employee’s remuneration shall be attached in the event of attachment by
operation of law
...

Repayment section 47
An employer who acts in contravention of the provisions of this part of the Act is liable to repay any
remuneration wrongfully withheld or wrongfully deducted from the employee
...

Every employee shall receive with each payment of wages an itemised pay statement from the employer
in a form and language which an employee can understand setting out the amount of all deductions, the
purpose for the deductions and the net wages payable
...

The Minister may by regulations exclude from the operation of the above section
- persons holding high managerial positions
- persons working in family establishments employing ore than five dependent relatives
Pay calculation section 52
There shall be no deduction of wages on account of an employee not being at work on the weekly rest
day where wages are calculated by reference to a period of one week or more
...

Length of working hours per week section 53
The maximum working hours per week shall be forty eight hours but the employer and employee may
agree that the maximum working hours per week shall not be less than forty eight or that the normal
working hours shall be more than forty eight hours per week
...

There will be a thirty minute break granted to employees for every eight hours worked
...

The minister may after consultation with the Labor Advisory Board regulate the maximum number of
working hours and may by order provide for temporary exceptions in extra-ordinary situations where the
public interest so requires
...
Employees shall also be entitled to a holiday with
full pay on every public holiday during their employment or payment at double rate in lieu of the holiday
...

Upon termination of a contract of employment an employee shall be entitled to their holiday
proportionate to the time worked or compensation in lieu of the holiday
...

However for the employee to be entitled to sick pay they must the employer of their absence and the
reason for it and produce if requested by the employer a written certificate signed by a qualified the
incapacity for work and the duration of the incapacity
...

The employee shall also have the right to return to the job which she held or to a reasonably suitable
alternative on terms and conditions not less favorable than those which applied to her previous job
...


Paternity leave section 57
A male employee shall be entitled to four working days leave with full pay yearly immediately after the
delivery or miscarriage of his wife and shall have the right to return to the job he held before his paternity
leave
...

The notice required shall be:
a) not less than two weeks where the employee has been employed for a period of more than 12
months but less than 5 years
b) not less than one month where the employee has not been
c) not less than two months where the employee has been employed for period of five years but less
than ten years
d) not less than three months where the service is ten years
Written Particulars SECTION 59
An employee is entitled to receive written notice from the employer of the following particulars:
a) full names and addresses of the parties to the contract
b) date on which employment begun
c) title of job employee is employed to do
d) place where employee’s duties are to take place
e) wages employee is entitled to get
f) rate of any overtime payment
g) employee’s normal working hours and the shift of days the work is to be done
h) number of days annual leave to which employee is entitled
i) terms and conditions relating to incapacity for work due to sickness or injury
j) length of notice
Common law terms: The employee’s duties
1) An employee must be willing to give personal service
...

Minister of Pensions and National Insurance already cited above)
2) An employee must obey the lawful orders of the employer, so long as they are within the scope
of the contract, are not illegal and do not place the employee in personal danger (Ottoman Bank
V
...
According to the old English case of Turner V Mason (1845) 14
M&W 112 the general rule is obedience and willful disobedience is ground for dismissal
...
What is reasonable depends on
the job and the qualifications of the employee
...
An
employee who causes his employer loss by breach of this duty may be liable to compensate the
employer (Lister V
...
Ltd (1957) AC 555
...
The employee should serve
the employer’s best interests while working (Secretary of State for Employment V
...
This entails a number of things:
a) The employee must not let his/her interest conflict with those of the employer, so that
although employees may do what they like in their own time in general, during their
employer’s time they should work only on their employers account, and in their own time
should not do any work which involves a conflict with their employer’s interests
...

b) The employee must not make a secret profit out of employment
...
Ansell (1888) Ch D 339)
...
Confidential information is information the employer
believes would be prejudicial if released, and which the employer reasonably believes is
secret, judged by trade practice
...

An employer who wishes to protect his/her business against possible disclosure by an exemployee can do so by means of a restrictive covenant in his contract of employment
...

d) The employee must give the employer the benefit of any inventions made in the course of
employment
...
What
is reason shall depend on the nature of the transgression on the part of the employee, the penalty imposed
by the employer, the procedure followed in imposing the penalty by the employer, the conduct of the
employee and his or her personal circumstances
...
There is no doubt that in such
cases the contract may be terminated in accordance with such provisions if if is not contrary to the
provisions of nay other law
...

8) The contract may be terminated by agreement of the parties but this is also subject to
conditions safeguarding the employee from loss of his/her right to repatriation and other
benefits
9) A contract may be terminated on the application of either party to court
10) A probationary contract may be terminated by either party giving 7 days notice or by
payment of 7 days wages in lieu of notice
...


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On notice the Act provides for the different minimum periods of notice in cases of a contract
of service for an indefinite period
...

The Act provides that the notice to terminate shall be in writing
...
This section thus reserves the right for
summary dismissal
...
However this right can in principle be
displaced by express provisions/terms in a contract of employment
...
This common law principle is expressed in the Employment Act which provides that no notice
of termination shall be required in the case of a contract of service specifically expressed to be for one
period of fixed duration and not renewable
...
A 40 a contract
provided that an employee was to work for an initial period of 3 months after which any subsequent
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period would be terminated by one months notice
...
It was held that the contract could not be terminated by notice
during the first three months
...

Apart from the contracts for a fixed period, the right to terminate a contract of employment is so basic
for the employment relationship that it cannot be easily displaced except where the terms of contract to
that effect are so clear
...

In the English case of McLELLAND Vs NORTHERN IRELAND GENERAL HEALTH BOARD
(1957) 2 AV E
...

This view has received approval in Uganda in the case of LULUME Vs COFFEE MARKETING
BOARD (1970) EA 155, Lulume was employed by the Board as a Labor welfare officer and was
dismissed by payment to him of 3 months notice and no reason for his dismissal was assigned by the
Board
...
On the issue of dismissal it was held that the Board was entitled at any time to terminate
the appointment of nay of its officers
...

In the case of EA AIRWAYS Vs KNIGHT (1975) EA 165 the then court of Appeal for East Africa
expressed the view that permanent employment does not mean employment for life or until retirement
...

However, parties may enter into a contract of employment for life, in such cases the terms of the contract
must clearly express such an intervention
...
The reasons for this
exercise are irrelevant and can not be inquired into
...

However, this right is subject to the requirement that the party wishing to exercise it can only do so after
giving the other reasonable notice of the intention to do so
...
Therefore, under the
common law, a party wishing to terminate a contract of employment shall give reasonable notice of the
intention to do so or pay salary/wages in lieu of the notice
...

In a Tanzanian case of PATEL Vs INTERNATIONAL MOTOR MART (1969) EA 303 it was held
that notice was required even in a probationary contract
...
The Union purported
to dismiss Kafuna without notice and court held that although there was no reference to notice in the
above case, it was to be inferred that termination was to be subject to the requirement of giving notice
...

The length of notice is sometimes specified in the contract or it may be determined from provisions of
the Employment Act or common law
...

An express provision can not provide for a period of notice shorter than that provided for in the Act but
the minimum period do not affect any contractual period longer than provided for in the Act
...

Though the operation of the common law rule of reasonable notice applies in Uganda, it can not be used
in Ugandan courts to arrive at a period of notice shorter than the notice the employee is entitled to under
the Act
...

It is therefore more advantageous for an employee to have the period of notice determined on the basis
of common law
...
On the
other hand, the common law concept is much wider as what is reasonable notice is a question of fact
depending on the circumstances of each particular case
...
In the case of KIRYA Vs EARAILWAYS CORPORATION Kirya had served
for a long period in the defendant company rising from the lower ranks to the position of yard foreman
which he held on permanent and pensionable terms
...

In the Kenyan case of EA RAILWAYS Vs KNIGHT where Knight an expatriate pilot was dismissed
...

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It is important that the notice must be properly given
...
It must
also be clear and specific, as any ambiguity will be interpreted against the person giving it
...
It should be
noted that the duration of notice starts running from the date the notice is communicated to the other
party
...

TERMINATION UPON BREACH
This occurs when an employee has lawfully breached a term in his employment contract
...

A breach is fundamental if it amounts to a repudiation of the contract
...
A breach is fundamental if it deprived the
innocent party of the benefit of the contract and entitles to treat the contract as ended
...
Cases of theft, embezzlement of company funds and bribery normally attract instant
or summary dismissal/ Otherwise most offences by employees such as lateness, absenteeism from duty,
leaving work without permission, fighting at work, failure to carry out lawful orders, reporting for duty
while intoxicated, careless damage to property are normally preceded by warnings and suspension before
dismissal

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