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11. Labor Policies and Practices

Over seventy percent of Ugandans derive their livelihoods from agriculture.  Formal employment remains low, as do skill and education levels. With figures ranging from five to 80 percent, youth unemployment statistics in Uganda can vary significantly depending on the source and definition of employment.  However, there is consensus that Uganda’s young population faces major unemployment, underemployment, and overwhelming informal employment.

Statistics on the number of foreign/migrant workers are not publicly available.  There are acute shortages of skilled and specialized laborers, especially in the trades.

While there are no explicit provisions requiring the hiring of nationals, there are broad standards requiring investors to contribute to the creation of local employment.  The Petroleum Exploration, Development, and Production Act of 2013 and the Petroleum Refining, Conversion, Transmission, and Midstream Storage Act of 2013 both require investors to contribute to the development of a skilled local workforce.  Foreign nationals must obtain a work permit from the Ministry of Internal Affairs.

Ugandan labor laws specify procedures for termination of employment and for termination payments.  Depending on the employee’s duration of employment, employers are required to notify an employee two weeks to three months prior to the termination date.  Employees terminated without notice are entitled to severance wages. Ugandan law only differentiates between termination with notice (or payment in lieu of notice) and summary dismissal (termination without notice).  Summary dismissal applies when the employee fundamentally violates his/her terms of employment. Uganda does not provide unemployment insurance or any other social safety net programs for terminated workers.

Current law requires employers to contribute ten percent of an employee’s gross salary to the National Social Security Fund (NSSF).  The Uganda Retirement Benefits Regulatory Authority Act of 2011, which provides a framework for the establishment and management of retirement benefits schemes for both the public and private sectors, has created an enabling environment for liberalization of the pension sector.

The Employment Act of 2006 does not allow waivers of labor laws for foreign investors.

Ugandan law allows workers, except members of the armed forces, to form and join independent unions, bargain collectively, and conduct legal strikes.  The National Organization of Trade Unions (NOTU) has 20 member unions. Its rival, the Central Organization of Free Trade Unions (COFTU), also has 20 union members.  Union officials estimate that nearly half of employees in the formal sector belong to unions. In 2014, the Government of Uganda created the Industrial Court (IC) to arbitrate labor disputes.

Uganda ratified all eight ILO fundamental conventions enshrining labor and other economic rights and partially adopted these conventions into the 1995 Constitution, which stipulates and protects a wide range of economic rights.

Despite these legal protections, many Ugandans work in unsafe environments due to poor enforcement and the limited scope of the labor laws.  Labor laws do not protect domestic, agricultural, and informal sector workers.

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The Lessons of 1989: Freedom and Our Future