Covid-19 and Employment: What Employers, Business Owners Should Know

By 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 corona virus can be seen on 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 14th 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 country wide 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 reduce.

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 common place around the world.


One of the first such case on the African continent, is the south African case of exparte Van Heerden decided on 27th March 2020 where the applicant approached the High court of South Africa on an urgent basis for an order that he be exempted from travelling restrictions to allow him 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 in addition 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 in the near future.

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

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

However, 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 in order to survive and laying off employees maybe 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 decide 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 a three months’ period, 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 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.

The ministry of labour further guided that employers should provide training of workers on preventive measures for Covid-19, provide protective equipment and treatment of affected workers. Employers have a statutory obligation to ensure that their work places are safe and to take every precaution necessary for the protection of their employees at the work place and during the execution of their duties.

In the context of Covid-19, every employer must ensure that employees have protective gear, can travel safely to and from their places of employment and are given training and guidelines on how to execute their assignments safely.

There is a possibility that employees who contract Covid-19 in the course of their employment will sue their employers if such employers have not taken reasonable measures to maintain a safe and healthy workplace.

Of course reasonable measures will vary depending the nature of exposure in different industries. It is important to note that information about transmission of Covid-19 is evolving day by day and employers must ardently follow guidelines that are being issued by the ministry of health, WHO, Center for Disease Control and the Infectious Diseases institute of Makerere University among others.

The websites of ministry of health, CDC and the World Health Organization are regularly updated and provide authoritative information on how the virus is transmitted and work place safety guidelines.

Employers in industries such as banking, hospitality, media and health sectors where employees are exposed to a higher risk of contracting of Covid-19 should review their insurance covers to ensure that their employers are covered under the different policies or change to insurance companies that are willing to cover their employees against Covid-19.

Employers should also seek clarity about the extent of their insurance covers where an employee is working from home.

Where an employer wishes to retain employees at work during the lockdown period, the employer should educate them about the dangers posed to their health by their continued presence at the workplace and how to prevent contraction of the virus.

The employer must not assume that employees already have this information. In other words, the employer should obtain the informed consent of their employees in continuation of work especially for assignments with a high likelihood of contracting the virus.

Should an employee contract Covid-19 in the course of employment, it should be the responsibility of the employer to ensure that such an employee is treated.

The employer also has the obligation to immediately notify the ministry of health about such occurrence.

Where an employee or independent contractor refuses to work because of fear of exposure to Covid-19, the employer should immediately investigate this through an interview and find out details of the employee’s fears.

They should ascertain if the fears are realistic or even justified. The employee should then be notified, in writing, of measures that will be taken to mitigate chances of contracting the virus, if they choose to return to work.

Such measures must be informed by the ministry of health, WHO and CDC best practices and guidelines.

If an employee falls under the category that is prone to contracting the virus, for example older adults, people who are immunocompromised, and persons with severe underlying medical conditions like diabetes, heart or lung disease, then the employer must not force them to work in an environment that can have them easily contract the virus neither should they unlawfully terminate their contracts as this could expose the employer to adverse litigation.

In the event that the employers would wish to retain all company employees while still in an uncertain financial situation, they could explore a number of options like negotiated suspensions of the contracts for a defined period, pay cuts and a taking of statutory leave during the lockdown period.

In all, both employers and employees must recognize that Covid-19 has created a situation where contracts may be frustrated and therefore necessitating termination, however, such terminations must be done lawfully.

Where an employer doubts the legality of their actions, they should consult a lawyer for guidance and professional advice.

The author is a partner at Onyango & Company Advocates.   

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