COVID-19: What employers and business owners should know

COMMENT | Onyango Owor | It is no news that COVID-19 has rapidly spread across the world with the World Health Organization reporting more than 130,885 deaths globally.   In these unprecedented times, how you protect yourself and your business from the legal implication of a virus with no vaccine should be a priority.

The total cost of the Pandemic on the global economy is currently estimated by the UN trade and development agency to be $1 trillion and this figure is likely to raise. The devastating effect of the coronavirus can be seen in the global aviation industry where IATA  predicts that about 25 million jobs could be at risk.  Alexandre de Juniac in his remarks at the IATA media briefing on Covid19 on 14^th April 2020 states that “If airlines lose one job another 24 disappear somewhere in the value chain”.

In Uganda, the Pandemic has caused the government to order a countrywide lockdown and although no study has been done on the economic impact of this action, many businesses are set to shed off jobs as their incomes reduced. As businesses prepare for the post-COVID-19 era, CEOs and entrepreneurs must minimize exposure to litigation by observing and taking deliberate actions to comply with the law as they restructure their business and operations.

There is no doubt that COVID-19 related litigation will soon be commonplace around the world. One of the first such cases on the African continent is the South African case of exparte Van Heerden decided on 27^th March 2020 where the applicant approached the High court of South Africa on an urgent basis for an order that he be exempted from traveling restrictions to allow him to bury his grandfather in another part of the country. The presiding judge dismissed the application stating that authorizing the applicant to travel would be to break the lockdown regulations which apply to everyone within the country and besides that no matter how careful and diligent the applicant would conduct himself, he could expose others to unnecessary risk. Many COVID-19 related cases could be filed both against governments and private businesses soon.

The Ministry of Gender, Labour and Social Development on the 20^th March 2020 issued guidelines that are enlightening on employer/ employee relationships and how to keep workplaces safe in the context of COVID-19.

The ministry encourages retention of employees who are on monthly payments, since termination at this stage may become costly in terms of payment of terminal benefits.

However, the majority of employers in the private sector in Ugandan are in the informal and SME sectors which largely depend on daily incomes to sustain their operations. These businesses may find it very difficult to sustain operations without income for over a month. Such companies will be forced to cut costs to survive and laying off employees may be one of the cost-cutting measures to take. In the end, the decision on whether to retain employees or not is a business decision that individual CEOs and business owners will have to take.

Should a business decides to terminate their employee’s contracts, then it must do so within the confines of the law.  The employment Act and individual employment contracts will normally provide for how employment contracts are to be terminated. Employers must adhere to these provisions in case of termination.

Special attention must be given to payment of terminal benefits which may include payments in lieu of notice, severance packages, accrued leave, gratuity, outstanding NSSF contributions and repatriation costs where applicable. In case the employer is laying off over 10 employees within three months, then they must do so while complying with the section 81 of the Employment Act which requires such an employer to notify the commissioner at the Ministry of Labor in writing giving reasons for the termination, the number, and categories of workers likely to be affected and the period over which the termination is likely to be carried out. In the case of unionized workers, the employer should review the provisions of any existing collective bargaining agreements before terminating employment contracts.  Employers may also choose not to renew existing contracts that are coming to an end or cease non-essential operations.