LEGAL ALERT: Key insights on the Employment (Amendment) Act 2026

Published By Nare |  May 7, 2026

The President assented to the Employment (Amendment) Act, 2026 at the end of April 2026. The commencement date is pending gazetting. This is an amendment of the Employment Act, Cap 226 (the Principal Act) and, by cross-reference the Labour Disputes (Arbitration and Settlement) Act, Cap 227.

The Employment Amendment Act introduces significant changes,among others, in the areas of breastfeeding and child care; special categories of employees to include casual and domestic workers; sick leave; severance; the definition of a workplace; the regulation of recruitment agencies; and clearly defined distinctions between termination of employment and dismissal.

Summary of the key Amendments and their impact on Employer– Employee relations

1. Key Definitions

• Commissioner- means the Commissioner for Labour in the Ministry responsible for labour.

• Domestic worker – is a person engaged in domestic work within an employment relationship and not on occasional basis. The impact is that any person engaged in work within, or for a household or households is classified as a domestic worker and an employee under the Act.

• Work place- defined to mean a place of work including a temporary place such as a civil engineering site, an open -air place, road oil refinery, a mobile place such as a seat of a tractor, excavator, ship and a place where a worker is found as a consequence of his or her work.

Impact

The Act streamlines the meaning of a work place to include other spaces/places where employees are found as a result of their work whether the said places are mobile, permanent or of a temporary nature. This calls for Employers to adhere to occupational health and safety requirements across the different places of work.

2. Dismissal from Employment, Termination of Employment and Summary Dismissal

The Amendment Act introduces a clear distinction among dismissal, termination and summary dismissal from employment. The changes ensure clarity on the use/applicability of the three terminologies, as opposed to the Principal Act, where they were interchangeably referred to.

Dismissal from Employment (Section 64A) is the discharge of an employee from employment at the initiative of his or her Employer on any of the grounds listed below:

1. Abscondment from duty for a consecutive period of more than 30 days.
2. Presentation of forged documents or lack of required qualifications at the time of recruitment.
3. Conduct of employee outside or inside of employment that may have an adverse effect on the business of the Employer.
4. Any other ground specified in the contract of employment.

The impact 

• The grounds for dismissal of an employee have been narrowed. Additionally, if the Employer is contemplating dismissal of an Employee on any other ground other than those mentioned in a-c above, the same ought to have been indicated in the contract of employment.

Termination of Employment

Termination is dealt with under Section 64 of the Act. In addition to the existing modes of termination under the Principal Act, the following have been introduced as modes of termination:

• Redundancy of an employee. 

Impact

Before invoking this mode of termination, the employer is required to prove that he/she /it has ceased operations or, due to reorganization of work, the employer requires fewer employees.

• Sickness of an employee which lasts more than six (6) months and renders the employee unable to perform his/ her duties. The employer is required to seek an opinion of the medical doctor on the employee’s condition before terminating on medical grounds.

• Where continuous employment of an employee may lead to breach of a statutory obligation.

Summary Dismissal

The Amendment specifically provides for summary dismissal under Section 68. Summary dismissal is permitted where the employee’s conduct amounts to a fundamental breach of his or her contractual obligations. It arises where an employer dismisses an employee without notice or with less notice than the employee is entitled to under the law or employment contract.

3. Wrongful dismissal versus unfair dismissal

The Amendment introduces a statutory distinction between unfair dismissal and wrongful dismissal.

Unfair dismissal (Section 65A) is where an employer dismisses an employee for any reason other than the reasons specified in section 64 A. 

Wrongful dismissal on the other hand is where an employer dismisses an employee without fulfilling his or her contractual obligations under the employment contract. Among other factors to be considered by Court or labor officer in ascertaining whether the Employer fulfilled the terms and conditions of employment contract include:

• The terms and conditions of employment and disciplinary code set out in schedule 2 to the Act.
• Procedure followed by the employer in reaching a decision to dismiss the employee.
• Communication of the decision to dismiss the employee and handling of the appeal against the decision.
• Conduct and capability of the employee up to the time of dismissal.
• Previous conduct of the employer while handling the situation that led to dismissal.

Further, under Section 67, where the Employer does not state reasons for dismissing an employee, such dismissal is deemed wrongful.

4. Disciplinary processes

Notification and hearing before dismissal S.65

Unlike the Principal Act, which made the said notification and hearing mandatory only in cases of dismissal on grounds of misconduct and poor performance, the amendment makes it mandatory for the employer to notify an employee before reaching a decision to dismiss him/ her for whatever reason, in a language the employee understands, of the reasons the employer is considering dismissal.

The Amendment also introduces a period of five (5) working days to enable an employee prepare their representations/defence to the reasons advanced by the employer for the dismissal.

Failure by an employer to comply with this provision entitles an employee to payment of four weeks’ net pay, on the order of a labour officer.

5. Breast feeding and childcare facilities

This Act under S56A mandates every employer to make available at the workplace– time, space or facility for breast feeding and child care for children of employees aged between 3 to 6 months. 

6. Sick Leave (S.54)

• The sick leave period entitling an employee to full payment of wages and all benefits under the contract has been increased from one month to two months’ absence from work for reasons of sickness/ injury. Section 54 (1) (a)

• The Act under S. 54 (aa) also introduces half pay of employee’s wages for the subsequent four months if the sickness of the employee continues upon expiry of the two -month period of sick leave.

• The Employer may terminate the employee’s contract on medical grounds if the sickness continues upon expiry of the 6 month period. However, the Employer must obtain an opinion from a medical doctor relating to the medical condition of the employee.

7. Probationary contracts

• Under the Amendment, where the Employer fails to extend a probationary contract upon expiry but continues to pay the Employee, the probationary contract shall be deemed confirmed.

• Payment in lieu of termination notice for probationary contracts has been increased from 7 days’ wages to one month’s wages.

8. Complaints to Labor Officer (S.70)

• The period for lodging a complaint to a Labor Officer by employee shall be within 3 months or such later period if the employee demonstrates just and equitable reasons for the extension.

• An employee on a probationary contract is prohibited from lodging a complaint to the Labor Officer under this section.

9. Roles and powers of Labor officers

• The Employment (Amendment) Act 2026 restructures the dispute resolution role of Labor Officers. In the Principal Act, labor Officers were clothed with powers to handle disputes through Arbitration, conciliation, adjudication and mediation. In the Amendment, the word “arbitration” is repealed.
• The basic compensatory order by a Labor Officer for an Employee who has been unfairly dismissed from employment has been revised from 4 weeks’ wages to 8 weeks’ wages. S.77

10. Collective terminations (S.80)

• Under S.80 (1) (b), there is an introduction of 30 days’ notice to the Commissioner for labor informing him / her of reasons of the collective termination., the number and the categories of workers likely to be affected. Previously, the Principal Act was silent on the notice period for the Commissioner.

11. Severance Allowance (S.86)

• The amendment introduces additional circumstances where severance allowance must be paid by the Employer. These include:

• Where the Employer terminates the contract of employment due to the Employee’s physical incapacity.
• Where the position of the employee is declared redundant.
• Where the employer refuses to pay wages of the employee and the contract of employment is terminated by a labor officer in accordance with S. 30 (10 of the Act.

• The Amendment also removes payment of severance allowance where the contract of employment is terminated by reason of death or insolvency of the Employer.

• The rate of severance is now clearly stated as one month’s wages for each year worked by the employee. Previously, there was no defined rate in the Principal Act. The employer and employee would negotiate a rate and indicate it in the HR manual or employment contract.

12. Sexual Harassment, Intimidation, and Workplace Harassment  

• The Employment (Amendment) Act 2026 widens the framework for sexual harassment. Previously, only Employers with over 25 employees were required to have a sexual harassment policy in place. Under the new law, all employers are mandated to put measures in place to prevent sexual harassment and display the same in a conspicuous place.

• The Act also introduces a prohibition against workplace intimidation and harassment under s. 6A. An employer or employer’s agent is prohibited from intimidating/harassing an employee at the workplace. The intimidation may be verbal, physical or even written and also includes behavior that interferes with work and creates an intimidating, hostile or offensive working environment.

• Some practical examples of the prohibited conduct include: degrading public tirades by a supervisor or colleague; insults relating to an employee’s personal or professional competence, threatening or insulting comments, whether made orally, in writing, or by email. Withholding food or other contractual necessities and conduct that insults the modesty of an employee.

• Contravention of S.6A constitutes an offence. The import of this is that it may not only be dealt with internally through HR procedures but also criminally.

13. Special categories of employees to include casual workers and domestic workers

• The Act amends S.33 by adding domestic workers and casual employees to the categories of workers addressed in that provision.

• In addition, under S.96, the Amendment Act expands the minister’s powers to make regulations for domestic workers and casual workers.

• Under the new section 34 A, an employer is prohibited from employing a person as a casual employee for a continuous period exceeding six months.

• The Amendment Act further emphasizes that where an employer lays off a casual employee and later rehires that employee, the casual employment will be treated as continuous.

The impact of this change is that employers in the habit of repeated or rolling casual engagements as temporary breaks will not avoid the statutory six-month limitation.

14. Piecework contracts

The Act introduces a new section 34B which recognizes piecework contracts. Piecework is defined as work where an employee is paid by reference to the amount of work completed.

This new change acknowledges work arrangements in which remuneration is pegged to output rather than time worked.

15. Migrant workers

• The Employment (Amendment) Act, 2026 introduces a new Part IXA to regulate the employment of migrant workers in Uganda. This introduction is crucial for employers who recruit or engage non-citizen employees.

• Under the new framework, the Minister may by notice published in the gazette, declare certain jobs that migrant workers shall not be offered. Under such circumstances, the National Citizenship and Immigration Board may not issue an entry permit to a migrant worker who has been offered employment in a prohibited job unless the migrant worker holds an exemption certificate issued by the commissioner responsible for employment services.

Impact

This places a compliance burden on employers to confirm, before recruitment, whether the role in question has been declared restricted and whether an exemption certificate is required. 

Employers are encouraged to review their migrant worker engagement processes, confirm whether any roles have been gazetted or restricted and ensure that exemption certificates are obtained where required before offers of employment are made or work permit applications are pursued

• Certain categories of persons are exempted from the provisions of part IXA. These include persons covered by diplomatic privileges, non-citizens employed by prescribed organizations, workers permitted under the East African common market framework or any applicable treaty or agreement, and any other person exempted by the Minister.

16. Recruitment agencies

The Employment Amendment Act 2026 introduces the regulation of recruitment agencies under Part IVA. The key introductions under this part include:

• All recruitment agencies must obtain a license from the Minister responsible for Labor but on the recommendation of the Commissioner responsible for employment services. The license shall be for a period of two years and renewable.
• Recruitment agency not to recruit a person without a job order. The Job order must be approved by the Commissioner responsible for employment services.
• Recruitment agency has the obligation to:

• Orient a person who intends to work in Uganda or abroad on policies, terms and conditions of employment, and their expected duties before they sign a contract of employment.
• Ensure the employment contract signed by the person being recruited is witnessed by a next of kin.  
• Assume full responsibility for claims that may arise in connection with the use of the license.
• Keep and maintain a record of persons being recruited, as well as their next of kin.
• Ensure that a person who intends to be employed abroad is trained by a pre- departure training institution.
• Ensure that for any person recruited to work abroad, the employment contract has a repatriation clause mandating the employee to be repatriated at the expense of the employer upon expiry of the employment contract, upon termination of the contract by reason of the inability of the employee to perform the contract, upon termination of the contract by agreement of the parties, and upon the death of the employee.

IMPLICATIONS FOR THE EMPLOYERS AND PRACTICAL RECOMMENDATIONS

Following the several changes and new introductions in the Employment (Amendment) Act, 2026, Employers are advised to conduct an immediate review of their internal Human Resource toolkits including; the Human Resource Policies, existing employment contracts, and  the disciplinary codes so as to comply with the Disciplinary Code in Schedule 2 of the Employment Act and any other internal polices impacted by the Amendment, to align with the new legal framework and ensure regulatory compliance.

A timely update/ revision of policies and employment contracts will mitigate on financial and legal risks/ exposure to the employer.

Disclaimer

This alert is intended to provide general legal information and should not be treated as a substitute for professional legal advice.