ADALCI ADVOCATES | EMPLOYMENT LAW ALERT
By Harold Atukwatse | Managing Partner | Adalci Advocates | harold@adalci.co.ug
Executive Summary
After nearly four years of legislative deliberation, the Employment (Amendment) Act, 2025 (the “Amendment Act”) was assented to by President Yoweri Kaguta Museveni and is now law in Uganda, pending the gazetting of its commencement date. The Amendment Act substantially rewrites key provisions of the Employment Act, Cap. 226 and partially amends the Labour Disputes (Arbitration and Settlement) Act, Cap. 227.
This article provides a practitioner-oriented analysis of the key amendments. Uniquely, we situate each amendment within the context of recent decisions of the Industrial Court of Uganda, the Court of Appeal, and the Supreme Court offering an integrated picture of where the law stood before and the direction it is now taking. Our aim is not merely to restate what the Act says, but to help employers and employees understand what these changes mean in practice.
1. The Dismissal Landscape Reimagined: Procedure, Penalties and Remedies
1.1 What the Amendment Act Changes
The Amendment Act introduces a two-tier penalty system for unfair dismissal. Where an employer dismisses an employee without following the prescribed procedural requirements, Labour Officers are now expressly empowered to impose a statutory procedural penalty equivalent to four weeks’ net pay, in addition to any substantive compensation the employee may be entitled to. This is a significant departure from the previous framework, which left the quantum of such penalties largely to judicial discretion.
The Act also clarifies the roles of Labour Officers and the Industrial Court in the dismissal complaints chain. Labour Officers retain complaint-handling powers and may now order execution of their determinations through the Industrial Court hence removing a significant enforcement gap that previously allowed employers to ignore Labour Officer awards with relative impunity.
1.2 What the Courts Have Said
The courts have been active on dismissal law in the period immediately preceding and during the passage of the Amendment Act, and their decisions provide a rich interpretive backdrop.
| Stanbic Bank (Uganda) Limited v. Nassanga Saphinah Kasule Civil Appeal No. 182 of 2021 (Court of Appeal) | |
| Key Facts | A bank employee was dismissed with notice under a contractual clause allowing either party to terminate with the required notice or payment in lieu. The Industrial Court declared the dismissal unlawful and awarded substantial compensation. |
| Holding | The Court of Appeal overturned the Industrial Court, holding that termination with notice under a contractual term is valid even without stated reasons, provided the notice period is observed or payment in lieu made. This is distinct from disciplinary dismissal, which requires reasons and procedure. |
| Relevance | This decision highlights the critical distinction between termination and disciplinary dismissal; a line the Amendment Act now reinforces through its restructured penalty framework. |
| Musimenta v United Bank for Africa [2024] UGIC 53 (Industrial Court) | |
| Key Facts | An employee was dismissed following an exchange of emails that the employer characterised as constituting a hearing. The employee challenged the adequacy of the process. |
| Holding | The Industrial Court held that email exchanges do not constitute a ‘hearing’ within the meaning of section 65 of the Employment Act. A hearing must be oral, especially where serious allegations are made. The employee had not been served with a proper notice of the charges against him. |
| Relevance | This decision directly informs compliance with the new dismissal procedure requirements. Employers must ensure that pre-dismissal hearings are conducted orally, with prior written notice of the specific allegations. |
| Uganda Post Limited v Consolate Mukadisi (2024) Supreme Court of Uganda | |
| Key Facts | An employee brought a claim for wrongful dismissal. The lower courts awarded compensation, but the quantum of damages — particularly whether payment in lieu of notice and general damages could both be awarded — was contested. |
| Holding | The Supreme Court held that payment in lieu of notice and general damages serve different legal purposes and can both be awarded. It granted UGX 150 million for distress, departing from earlier precedents and grounding the award in Article 126(2)(c) of the Constitution, which mandates adequate compensation to victims of wrongs. |
| Relevance | The Amendment Act’s new penalty framework must be read against this judicial backdrop of expanding remedies. Employers facing dismissal claims now face compounded exposure: statutory penalties, compensatory awards, and potentially general damages. |
COMPLIANCE ACTION POINT
Review all disciplinary procedures to ensure they require:
(1) written notice of charges with full particulars.
(2) a formal oral hearing.
(3) documented outcomes.
Email-only processes will not satisfy section 65 of the Employment Act.
2. Workplace Harassment: From Policy to Offence
2.1 What the Amendment Act Changes
The Amendment Act creates a two-pronged statutory framework for workplace conduct. First, every employer is now required to put in place “measures” to prevent sexual harassment and to display those measures conspicuously at the workplace — replacing the narrower and less enforceable provisions of the old section 6(4).
Second, and more significantly, a new section 6A introduces a broad prohibition against workplace intimidation and harassment, covering any written, verbal, or physical conduct that interferes with work or creates an intimidating, hostile, or offensive working environment. The provision expressly criminalises such conduct: contraventions constitute a statutory offence, carrying potential criminal liability for employers and their agents.
The Act provides illustrative examples of prohibited conduct, including public tirades by supervisors, professional insults delivered orally or in writing, threatening emails, withholding of contractual entitlements such as food or accommodation, and conduct that insults an employee’s modesty or dignity.
2.2 Practical Implications: The Criminal Dimension
What distinguishes the new section 6A from previous iterations of harassment law is its criminal character. Prior to the Amendment Act, workplace harassment was primarily a civil and disciplinary matter. Employers could face unfair dismissal claims from employees who resigned due to a hostile environment, but there was no direct criminal exposure for the harassing conduct itself. That has now changed.
Employers must urgently audit their existing workplace conduct policies. A written sexual harassment policy supported by clear reporting channels, investigation procedures, confidentiality safeguards, anti-retaliation protections, and visible workplace notices — is the minimum baseline for compliance. Given the criminal dimension, employers should also consider periodic staff training, a documented complaints register, and clear disciplinary consequences for perpetrators.
EMPLOYER RISK ALERT
Under the new section 6A, a supervisor who sends a threatening email to a subordinate or a manager who publicly insults an employee’s competence may now expose the employer to criminal liability. This is a category shift: harassment is no longer merely an HR concern.
3. Casual Employment: The Six-Month Rule and the ‘Continuous Employment’ Trap
3.1 What the Amendment Act Changes
The new section 34A is one of the most operationally significant changes for employers who rely on flexible labour models. The provision prohibits the engagement of any person as a casual employee for a continuous period exceeding six months. Critically, the Act provides that where an employer lays off a casual employee and then rehires that same person, the periods of employment will be treated as continuous for the purposes of the six-month limit.
This anti-avoidance provision is a direct legislative response to the longstanding practice of ‘rolling’ casual arrangements, in which employers would terminate and re-engage the same workers repeatedly to avoid conferring the employment benefits that attach to regular employment. Under the Amendment Act, such practices will no longer provide a legal escape.
A companion provision, the new section 34B, recognises piecework contracts; arrangements where remuneration is calculated by reference to the amount of work performed rather than time worked. This statutory recognition is important for the gig economy and output-based industries, providing a legal framework for piecework while still locating it within employment law.
3.2 What Exceeding Six Months Means
The Act does not explicitly state that a casual employee automatically becomes a permanent employee upon exceeding six months of continuous engagement. However, the practical and legal risk of continuing beyond the statutory limit is substantial. Such an employee may be entitled to claim the full range of employment benefits, including sick leave, severance, and the procedural protections applicable to dismissal. Employers should treat the six-month threshold as an absolute compliance deadline and build a structured review into every casual engagement.
COMPLIANCE ACTION POINT
Audit all current casual engagements immediately. Where any person has been engaged on a rolling casual basis whether continuously or with gaps and assess whether the cumulative period of engagement exceeds or approaches six months. Take legal advice before any further renewal of such arrangements.
4. Extended Sick Leave: A New Entitlement, A New Exposure
4.1 What the Amendment Act Changes
The Amendment Act significantly expands sick leave entitlements. Under the amended framework, the period of paid sick leave to which an employee is entitled has been extended from two months to six months. This is a near tripling of the previous entitlement and will have direct payroll implications for employers, particularly those in labour-intensive sectors.
The expanded sick leave entitlement also has implications for dismissal. Employers who terminate an employee who is on certified sick leave within the six-month window must now navigate a much wider protected period. Any dismissal during this period is susceptible to challenge as unfair, and employers who cannot demonstrate a legitimate and justifiable reason for the dismissal will face an uphill task in the Industrial Court.
4.2 The Court Decisions Context
| Arnold Olweny Bonaventure v Uganda Civil Aviation Authority 2025 UGIC 95, 9 December 2025 (Industrial Court) | |
| Key Facts | A public sector employee was dismissed following a period of administrative leave during which a criminal investigation was conducted. The DPP ultimately declined to prosecute. The employer proceeded with dismissal after the DPP clearance. |
| Holding | The Industrial Court held that employees acting in good faith including those who have reported wrongdoing are protected from retaliatory termination. Dismissals issued after clearance by the DPP attract heightened scrutiny. The Court awarded general damages equivalent to one year’s salary, capped at UGX 25,957,800, with interest at 17% per annum. |
| Relevance | While this case concerned a whistleblower context, its emphasis on procedural rigour and heightened scrutiny of post-clearance dismissals is directly applicable to dismissals that occur after or during periods of employee incapacity — including extended sick leave. |
5. Breastfeeding and Childcare: A New Employer Obligation
5.1 What the Amendment Act Changes
The new section 56A imposes a positive obligation on every employer to make available, at the workplace, time, space, or a facility for breastfeeding and childcare for children of employees. The Amendment Act is deliberately broad: it does not prescribe a specific standard for the facility, but the obligation is universal and applies to all employers, regardless of size or sector.
This provision reflects Uganda’s commitments under international labour standards, including ILO Convention No. 183 on Maternity Protection, and addresses a longstanding gap in the legal framework for working mothers.
5.2 Practical Steps for Employers
Employers who do not already have a dedicated breastfeeding or childcare space should take the following steps in preparation for the commencement of this provision:
- Designate a private, hygienic, and comfortable space at or near the workplace for breastfeeding.
- Establish a written policy setting out the entitlement and the procedure for accessing it.
- Train line managers and HR staff on the new entitlement to prevent inadvertent interference with it.
- Ensure that employees returning from maternity leave are informed of the new provision.
- Review contracts of employment and staff handbooks to incorporate the entitlement.
6. Migrant Workers and Domestic Workers: Bringing the Invisible into the Framework
The Amendment Act makes a significant symbolic and substantive commitment to extending the Employment Act’s protections to categories of workers who have historically operated at the margins of formal employment law. Domestic workers and casual employees are now expressly included in section 33 of the Employment Act, and the Minister’s regulation-making powers under section 96 are expanded to cover these categories.
Similarly, the Act introduces provisions specifically aimed at strengthening the legal framework governing migrant labour. This is particularly significant in the context of Uganda’s growing role as both a source and destination country for migrant workers in East and Central Africa. The amendments lay the groundwork for sector-specific regulations that may follow, particularly in respect of domestic migrant workers whose employment arrangements have often been wholly informal.
NOTE FOR EMPLOYERS IN THE INFORMAL SECTOR
If your business engages domestic workers, casual labourers, pieceworkers, or migrant employees, you are no longer operating in a legal grey zone. The Amendment Act has expressly brought these categories within the statutory employment framework. Contracts, payroll records, and working conditions must all be reviewed for compliance.
7. The Restructured Labour Dispute Resolution Pathway
7.1 The New Role of Labour Officers
The Amendment Act removes the word “arbitration” from section 12(1)(a) of the Employment Act and repeals sections 2, 3, and 4 of the Labour Disputes (Arbitration and Settlement) Act, Cap. 227. These changes narrow the quasi-judicial mandate of Labour Officers that had, in practice, led to considerable uncertainty about the scope and enforceability of their determinations.
Labour Officers retain important functions: they may receive and determine complaints, order procedural penalties of four weeks’ net pay, grant compensation, and have their orders executed through the Industrial Court. The Industrial Court remains the apex forum for the final resolution of employment disputes.
7.2 Key Procedural Takeaway
The restructuring of the dispute resolution pathway means that employers and employees must now engage more deliberately with the Industrial Court. Employers who previously relied on Labour Officer processes as a softer and less binding form of dispute resolution should recalibrate: Labour Officer determinations are now enforceable through the Industrial Court, and the stakes of engaging in or ignoring those processes are correspondingly higher.
8. Employer Compliance Checklist
The table below summarises the key compliance obligations introduced by the Amendment Act and the timelines we recommend for each.
| Amendment Area | Required Action | Priority |
| Dismissal Procedure | Audit all disciplinary procedures; ensure oral hearings with prior written notice of charges | URGENT |
| Workplace Harassment | Adopt/update harassment policy; display at workplace; train managers | URGENT |
| Casual Employment (6-month cap) | Audit all rolling casual arrangements; regularise or restructure | HIGH |
| Sick Leave (extended to 6 months) | Update employment contracts and HR policies | HIGH |
| Breastfeeding / Childcare Facilities | Designate space; update maternity return policies | MEDIUM |
| Domestic & Migrant Workers | Review contracts and working conditions for compliance | MEDIUM |
| Labour Officer Orders | Update protocols for engaging with Labour Officers; treat orders as enforceable | HIGH |
9. Conclusion
The Employment (Amendment) Act, 2025 is the most consequential overhaul of Uganda’s labour laws since the enactment of the Employment Act in 2006. It does not merely tinker at the margins: it criminalises workplace harassment, caps casual employment, triples sick leave, mandates childcare facilities, and restructures the dispute resolution pathway in ways that will materially affect employment relationships across every sector of the economy.
When read alongside the trajectory of recent court decisions particularly the Supreme Court’s expansion of wrongful dismissal remedies in Uganda Post v Consolate Mukadisi, the Industrial Court’s insistence on rigorous procedural compliance in Musimenta, and the Court of Appeal’s refinement of the termination/dismissal distinction in Stanbic Bank v Kasule, the Amendment Act signals an unmistakable shift in the balance of power in Uganda’s employment relationships, in favour of workers.
For employers, the period between now and the gazetting of the commencement date is a compliance window, not a waiting period. The time to act is now.
About Adalci Advocates — Employment & Labour Practice
Adalci Advocates is a Ugandan law firm with a dedicated Employment and Labour Practice. We advise employers, employees, and trade unions on the full spectrum of employment law matters, including contract drafting, disciplinary processes, redundancy and restructuring, unfair dismissal claims, and Industrial Court proceedings.
For a confidential discussion about how the Employment (Amendment) Act, 2025 affects your organisation, contact us at: info@adalci.co.ug| www.adalci.co.ug
DISCLAIMER: This article is provided for general information purposes only. It does not constitute legal advice and should not be relied upon as such. Readers should seek professional legal advice in respect of their specific circumstances.
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