TM 602: LEGAL AND ETHICAL ISSUES

EMPLOYER – EMPLOYEE RELATIONS

Dr. Ernest Tashobya Katwesigye
Email: ernestg2g@[Link]/
ekatwesigye@[Link]
Mobile Number: 0701868903
KEY DEFINITIONS (EMPLOYMENT ACT 2006)
i. “employee” - any person who has entered into a
contract of service or an apprenticeship contract,
including, without limitation

ii. “employer” any person or group of persons, including

a company or corporation, a public, regional or local
authority, a governing body of an unincorporated
association, a partnership,parastatal organisation or
other institution or organisation whatsoever, for whom
an employee works or has worked, or normally worked or
sought to work, under a contract of service, and includes
the heirs, successors, assignees and, transferors of any
person or group of persons for whom an employee
works, has worked, or normally works
KEY DEFINITIONS contd

iii. contract of service” means any contract, whether oral

or in writing, whether express or implied, where a person
agrees in return for remuneration, to work for an
employer and includes a contract of apprenticeship
where a person agrees in return for remuneration, to
work for an employer and includes a contract of
apprenticeship
KEY DEFINITIONS (EMPLOYMENT ACT 2006) contd
iv. “wages” means remuneration or earnings, however
designated or calculated, capable of being expressed in terms
of money and fixed by mutual agreement or by national laws
or regulations, which are payable under an oral or written
contract of service for work done or to be done, or for
services rendered or to be rendered but excluding any
contributions made or to be made by the employer in respect
of his or her employee’s insurance, medical care, welfare,
education, training, invalidity, retirement pension, post-
service gratuity or severance allowance;

v. “casual employee” means a person who works on a daily or

hourly basis where payment of wages is due at the
completion of each day’s work

Question for consideration:

What is the status of a volunteer?
Contracts contrary to the Employment Act

i) Any provision in an agreement, or a contract of service

shall be void where it— (a) excludes or limits the operation
of any provision of this Act to the detriment of the
employee; or
(b) precludes any person from—
(i) presenting a complaint under this Act to a labour officer;
(ii) initiating or enforcing any proceedings under this Act; or
(iii) giving evidence in connection with any such complaints
or proceedings referred to in paragraphs (ii) and (iii) unless
that provision forms part of a written agreement for the
settlement of a dispute that has been approved by a labour
officer as fair and reasonable in all the circumstances.
APPROPRIATE RECRUITMENT PROCESS
Recruitment
Important to do thorough auditable process.
Advertise
Shortlist
Interview
Important to do background checks
Recruit
Probation
Train
Confirm
Continual Appraisal
 Contracts of service
A contract of service may be in writing or made
orally and the two shall have equal force (s25)
A contract of service made with an employee who
is unable to read or understand the language in
which the contract is written shall be attested to,
i.e. signed in the presence of a Magistrate or
Labour Officer, who shall confirm that it has been
made properly
Non attestation cannot be used against the
employee
Terms of employment (s59)
An employee is entitled to receive from his or her employer
notice in writing of the following particulars of employment—
• the full names and addresses of the parties to the contract
of service;
• the date on which employment under the contract began,
specifying the date from which the employee’s period of
continuous service for the purposes of this Act shall
commence;
• the title of the job that the employee is employed to do;
• the place where the employee’s duties
• PLEASE ENSURE THERE IS EVIDENCE THE STAFF RECEIVED
THEM e.g. signing
PROBATION
• The maximum length of a probationary period is six
months, but it may be extended for a further period
of not more than six months with the agreement of
the employee.
• Where there is no communication after probation
period ended, the employee is deemed to have been
confirmed
• An employer shall not employ an employee under a
probationary contract on more than one occasion.
• A contract for a probationary period may be
terminated by either party by giving not less than
fourteen days’ notice .
WAGES

• an employee engaged to work for one day at a time shall be

paid his or her wages at the end of that day;
• an employee paid by the hour, day or week shall be paid his
or her wages at the end of that hour, day or week;
• an employee paid fortnightly or monthly shall be paid at
the end of each fortnight or month; and
• an employee engaged to be paid by the piece of work done
or by results shall be paid at intervals of not more than one
fortnight.
• Where the employee is being housed by the employer, the
employee shall not be required to vacate the premises until
he or she has been paid his or her terminal benefits.
WAGES contd
On the termination of his or her employment in whatever
manner; an employee shall, within seven days from the
date on which the employment terminates be paid his or
her wages and any other remuneration and accrued
benefits to which he or she is entitled.
• Except where it is expressly provided by law, no person
may receive the wages due to any employee on behalf of
that employee without the written permission of the
employee to whom the wages are due. (s44) – You
cannot deduct without their authority
• Wages payable under a contract of employment shall be
assumed to be in respect of a forty eight-hour week in
the absence of an agreement to the contrary and;
• In the absence of a written agreement to the contrary,
hours worked in excess of forty eight hours in any one
week shall be regarded as “overtime hours” for the
purposes of this Part.
Pay Statement
Every employee shall receive with each payment of
his or her wages an itemised pay statement from his
or her employer, in writing, in a form and language
which the employee may reasonably be expected to
understand, which shall set out—
• the amount of every deduction from his or her
wages due at the end of that particular pay period;
• the amount of every deduction from his or her
wages during that pay period and the purpose for
which each such deduction was made; and
• the employee’s net wages payable at the end of
that pay period.
Working Hours

• Maximum working hours for employees – 48 per

week.
• Employer and employee may, agree that the
normal working hours in a week shall be more than
forty eight hours. Still shouldn’t be more than 10
hours a day or 54
• Where the maximum working hours are at least
eight hours per a day, a thirty-minute break shall be
granted each day to the employees
• Where they work beyond eight hours, considered
overtime paid at 1.5 times/2 times.
 Leave Entitlement
Weekly rest – one day a week
• An employee shall not be required to work for an employer
for more than six consecutive days without a day’s rest,
which shall be taken on any day which is customary or as
shall be agreed between the parties

Annual Leave
• An employee entitled to 21 working days paid annual leave
per year (7 days per 4 continuous months worked. Such
employee should have worked for at least 6 months, and
their contract is to work at least 16 hours a week. Any
contract to the contrary null and void.
• An employee is entitled to receive, upon termination of
employment, a holiday with pay proportionate to the
length of service for which he or she has not received such
a holiday, or compensation in lieu of the holiday.
 Leave Entitlement contd
Public Holidays – should be allowed to rest
Leave with pay
• Sick leave (s55)
• An employee who has served for at least one month
is entitled to full sick pay if unable to work for a
month due to sickness or injury
• f at the expiration of the second month the sickness
of the employee still continues, the employer is
entitled to terminate the contract of service on
complying with all the terms of the contract of
service up to the time of termination of
employment.
• Compensation in lieu of the holiday.
Maternity and Paternity Leave
Maternity Leave
• A female employee shall, as a consequence of pregnancy,
have the right to a period of sixty working days leave
from work on full wages hereafter referred to as
“maternity leave”, of which at least four weeks shall
follow the childbirth or miscarriage.

• In the event of sickness arising out of pregnancy or

confinement, affecting either the mother or the baby,
and making the mother’s return to work inadvisable, she
will have at lest eight weeks after child birth to return to
work
• Paternity Leave
• A male employee shall, immediately after the delivery or
miscarriage of a wife, have the right to a period of four
working days’ leave from work yearly
• ion in lieu of the holiday.
Notice (s58)
An employee’s contract shall not be terminated
without notice unless it is summary dismissal, as
follows:
not less than two weeks, where the employee has
been employed for a period of more than six
months but less than one year;
not less than one month, where the employee has
been employed for a period of more than twelve
months, but less than five years;
not less than two months, where the employee
has been employed for period of five ,but less than
ten years; and
not less than three months where the service is ten
years or more
Certificate of Service
• An employee’s contract shall not be terminated without notice
unless it is summary dismissal, as follows:
• not less than two weeks, where the employee has been
employed for a period of more than six months but less than
one year;
• not less than one month, where the employee has been
employed for a period of more than twelve months, but less
than five years;
• not less than two months, where the employee has been
employed for period of five ,but less than ten years; and
• not less than three months where the service is
• Any outstanding period of annual leave to which an employee is
entitled on the termination of the employee’s employment shall
not be included in any period of notice which the employee is
entitled to
• During the notice period, the employee shall be given at least
one-half day off per week for the purpose of seeking new
employment.
Summary dismissal
An employer is entitled to dismiss summarily,
and the dismissal shall be termed justified,
where the employee has, by his or her conduct
indicated that he or she has fundamentally
broken his or her obligations arising under the
contract of service

A dissatisfied employee may file complaint with

Labour office within six months
Termination
 A contract may be terminated by one of the following:
 where the contract of service is ended by the employer with
notice;
 where the contract of service, being a contract for a fixed term
or task, ends with the expiry of the specified term or the
completion of the specified task and is not renewed within a
period of one week from the date of expiry on the same terms
or terms not less favourable to the employee;
 where the contract of service is ended by the employee with or
without notice, as a consequence of unreasonable conduct on
the part of the employer towards the employee; and
 where the contract of service is ended by the employee, in
circumstances where the employee has received notice of
termination of the contract of service from the employer, but
before the expiry of the notice.
IMPORTANT TO SET OUT WHAT AMOUNTS TO INDISCIPLINE IN THE
CONTRACT DOCUMENT
Severance
Death of employeeIn the case of an employee dying
during the term of a contract of service, his or her
heirs or legal representatives shall be entitled to the
wages and any other remuneration due to the
employee at the date of death.
Where any employee dies at his or her work place,
or on the way to his or her place of work, the
employer shall be required to notify the death to the
District labour officer who shall notify the
Commissioner.
Where an employee dies while at work, or while
travelling to his or her place of work, their employer
shall be required to transport the employee’s body
to a place of burial notified by that employee’s next
of kin.
Severance allowance
• an employer shall pay severance allowance where an employee
has been in his or her continuous service for a period of six months
or more and where any of the following situations apply—
• the employee is unfairly dismissed by the employer;
• the employee dies in the service of his or her employer, otherwise
than by an act occasioned by his or her own serious and wilful
misconduct;
• the employee terminates his or her contract because of physical
incapacity not occasioned by his or her own serious and wilful
misconduct;
• the contract is terminated by reason of the death or insolvency of
the employer;
• the contract is terminated by a labour officer following the inability
or refusal of the employer to pay wages
• Severance pay is negotiable between the employer, employee
and/or their representative
• Gratuity is contractual, not a legal requirement
Workers’ Compensation
Governed by the Workers’ Compensation Act Cap
225.
The act defines a worker as any person who
performs services in exchange for remuneration,
other than a person who performs services as an
independent contractor or an apprentice who is
engaged primarily for the purpose of receiving
training. The definition is thus wide to include
among others casual labourers and apprentices
(e.g. persons on internship)
Liability of the employer
An employer is liable to pay workers compensation if
personal injury by accident arises out of and in the
course of one’s employment where the
accident/injury results in permanent incapacity or it
incapacitates the worker for at least three
consecutive days from earning full wages. These are
accidents either during work, or on the way to/from
work. Such liability arises whether or not the
incapacity or death of the worker was due to the
recklessness or negligence of the worker. The
employer is required to report such occurrence to the
labour office of the area. He is expected to present a
report of the circumstances surrounding the
accident/death.
Compensation under the
Workers’ Act
Death (s4)
Where the deceased worker leaves any family
members who are dependent on his or her
earnings, the amount of compensation shall be
a sum equal to sixty times his or her monthly
earnings.
If he/she does not leave any family, the
employer shall meet the medical and burial
costs.
Compensation under the Workers’
Act contd
Permanent total incapacity (s5)

Where the accident results into permanent total

incapacity, the employee is entitled to sixty months’
earnings, unless the contract provides for better
terms. If the incapacity requires the constant care of
another person, the amount of compensation shall
be increased by a quarter
Compensation under the Workers’
Act contd
Permanent partial incapacity
In such a case, the second schedule guides on the
percentage of sixty months’ compensation

Temporary incapacity
Where temporary incapacity, whether total or partial,
results from the injury, the compensation shall be
either a lump sum or periodic payments as the court
may order, having regard to the circumstances in
which the accident took place, the probable duration
of the incapacity of the worker, the injuries suffered
by the worker and the financial consequences for the
worker and his or her dependents
• Adjudicatory role of Labour Office/
Labour Court

Where an employer neglects or refuses to fulfil

the terms of a contract of employment, or where
a complaint or a labour dispute arises as to the
rights or liabilities of either party under a contract
of employment or under this Act, the aggrieved
party may report the matter to a labour officer.
(s12)

Extra caution needed because labour office and

Industrial Court generally tend to favour the
employee
 Question to Ponder

What Ethical Issues arise in the

context of the Employer/Employee
Relationship?
 Psychological Contract
The term 'psychological contract' was first used in the
early 1960s but became more popular following the
economic downturn in the early 1990s.
It has been defined as the perceptions of the two parties,
employee and employer, of what their mutual obligations
are towards each other.
These obligations will often be informal and imprecise:
they may be inferred from actions or from what has
happened in the past, as well as from statements made
by the employer, for example during the recruitment
process or in performance appraisals.
Some obligations may be seen as 'promises' and others as
'expectations.
3/14/2022 30
Psychological Contract Vs Legal Contract
The important thing is that they are believed by the
employee to be part of the relationship with the
employer.
The psychological contract can be distinguished from
the legal contract of employment.
The legal contract will, in many cases, offer only a
limited and uncertain representation of the reality of
the employment relationship
The employee may have contributed little to its terms
beyond accepting them.
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Psychological Contract Vs Legal Contract
The psychological contract on the other hand
looks at the reality of the situation as perceived
by the parties, and may be more influential than
the formal contract in affecting how employees
behave from day to day.
It is the psychological contract that effectively
tells employees what they are required to do in
order to meet their side of the bargain and what
they can expect from their job.

3/14/2022 32
 Effect of the Psychological Cotnract
• It may not - indeed in general it will not - be
strictly enforceable, though courts may be
influenced by a view of the underlying
relationship between employer and employee
• for example, in interpreting the common law
duty to show mutual trust and confidence.
• During the recruitment process, the employer
and interviewee will discuss what they each can
offer in the prospective relationship.
3/14/2022 33
Effect of Psychological Contract contd
If agreement is reached, most employers will
impose a standard form contract, leaving the
detail of the employee's duties to be clarified
"on the job". But some of the initial
statements, no matter how informal and
imprecise, may later be remembered as
promises and give rise to expectations.

3/14/2022 34
Dealing with Psychological Contract
Whether they are incorporated into the parallel
psychological contract will depend on whether
both parties believe that they should be treated
as part of the relationship.
The better organized employers are careful to
document offers to reduce the risk of raising
false expectations followed by disappointment.

3/14/2022 35
 Breach of Psychological Contract
Psychological contract breach may occur if
employees perceive that their firm, or its agents,
have failed to deliver on what they perceive was
promised, or vice versa.
Employees or employers who perceive a breach are
likely to respond negatively.
Responses may occur in the form of reduced loyalty,
commitment, and organizational citizenship
behaviors.

3/14/2022 36
Psychological contracts may also be looked at as
a set of ‘promises’ or ‘expectations’ that are
exchanged between the parties in an
employment relationship.
These parties include employers, managers,
individual employees and their work colleagues.
Unlike formal contracts of employment, they are
often tacit or implicit.
They tend to be invisible, assumed, unspoken,
informal or at best only partially vocalised.
3/14/2022 37
 Question to Ponder

What is the potential effect of

breach of the Psychological Contract
by:
a) The Employer
b) The Employee