Overview and Assessment of the Workers Compensation in Uganda

Introduction

This paper discuses workers’ compensation in Uganda. It addresses the question of whether contracting out, outsourcing and casualization of labour enables employers escape liability for workers’ compensation. Its estimated that in Uganda on average 2,000 cases of work related accidents are reported annually mainly in the areas of construction, factories, security and transport and commercial agriculture. This is amidst few employers providing a safe and healthy working environment for descent work.[1] A recent study by Platform for Labour Action a non-government organisation in Uganda also indicates that a result of accidents workers suffer injuries such as body cuts falling off buildings, electric shock body bangs, being hit by falling objects, car accidents, electric shock, illnesses such tuberculosis and tetanus, animal bites, body pains, eye infections and malaria. Respondent employers also indicated that body cuts were the most common accident in the work place. Despite these statistics a good number of employers do not insure their workers for workers’ compensation purposes. This is partly due to contracting out, outsourcing and casualization of labour amidst the lack of awareness of the legal provisions under the Workers Compensation Act Cap 225. The Act does not define workers’ compensation probably because it’s a common law principle however it has been defined as the system whereby an employer must pay, or provide insurance to pay, the lost wages and medical expenses of an employee who is injured on the job[2] It has three elements accident, injury and benefits.

Workers’ compensation enables the employer not to suffer harm as a result of his employees suffering injury in the course of work. It also cushions the employer against being sued for the injury. This however does not preclude the employee from suing third parties whose negligence contributed to the work injury[3]. Workers compensation provides a safety net for the injured workers.

Overview of workers’ compensation and employers’ liability in Uganda

Uganda’s workers’ compensation is regulated under the Workers Compensation Act which provides for compensation to workers for injuries suffered and scheduled diseases incurred in the course of their employment. It applies to all employment within Uganda with the exception of active members of the armed forces of Uganda. The Act defines a worker as

(i) any person who performs services in exchange for remuneration, other than a person who performs services as an independent contractor; or[4]
(ii) an apprentice who is engaged primarily for the purpose of receiving training in a trade or profession.

Under the Act the employer is liable for personal injury by accident if it arises out of and in the course of a worker’s employment. The employer is not liable in respect of an injury which does not either— result in permanent incapacity; or incapacitate the worker for at least three consecutive days from earning full wages at the work at which he or she was employed.
The course of employment according to the Act covers ;
· acts undertaken by a workers to protect any person on the employer’s premises whom the worker believes to be injured or imperiled,
· acts where worker is injured while protecting the property on the employer’s premises.
· any personal injury by accident arising while the employee is traveling directly to or from his or her place of work for the purpose of employment . However the employee who suffers injury by accident arising while traveling to or from his or her place of work has the onus to show that such travel was directly related to work

It should be noted that compensation is payable whether or not the incapacity or death of the worker was due to the recklessness or negligence of the worker or otherwise. Further any accident arising in the course of employment is presumed to arise out of employment unless the contrary is proved.

The employer therefore under Ugandan law which is based on the common principle therefore has liability / duty to [5] provide a safe working environment and to protect the worker while in the course of employment and in addition
· ‘to pay compensation in accordance with this Act.[6]’ for personal injury by accident which arises out of and in the course of a worker’s employment,
· To pay compensation even where the incapacity or death of the worker was due to the recklessness or negligence of the worker or otherwise’’.
· to prove that the accident or injury did not arise out of employment if the employer is to escape liability.
· to report the accident to the labour Officer
· provide medical facilitation to the worker insure him/herself [7]in respect of any liability which he or she may incur under this Act to any worker employed by him or her.

Where the employer fails to comply with subsection (1) or (2) without reasonable cause, commits an offense and is liable on conviction to a fine not exceeding ten currency points. This is equivalent to Two hundred thousand Uganda shillings ( UGX 200,000)and approximately U$ 60.

An employer who contravenes this section commits an offence and is liable—
(a) on a first conviction to a fine not exceeding ten currency points;
(b) on a second conviction to a fine not exceeding twenty currency points; and
(c) on a third and subsequent convictions, to a fine not exceeding one hundred and fifty currency points or imprisonment not exceeding twelve months or both.

In order to minimise risk the employer is required to insure their workers against risks such as injury while in the course of employment. The purpose of this insurance is not to transfer the liability to compensate the worker to the insurer but rather to protect the employer from the risk. In the event that the employer is deemed liable under the law but their insurer declines to cover the liability, the employer is still liable to pay the attendant compensation. Even in instances of bankruptcy, the employers’ rights against the insurer in relation to liability notwithstanding bankruptcy laws and the winding up of companies, are be transferred to and vest in the worker; [8]Thus even during bankruptcy the employers is protected from risk by insurance.

Emerging trends and workers compensation

A good number of workers are categorised as casual labourers or as sub-contractors. In Uganda 81.5% is categorised self-employed, 73% in agriculture, forestry and fisheries, 9% in trade and 5% in manufacturing.

Employers have adopted strategies of outsourcing to human resource firms and subcontracting out services such as call centre and pay roll management. Casualisation of labour has led to many workers to work in the same workplace for a long period. Since they are casual, they lack documentation to support their claim of employment and in most cases even where they sign contracts since they are categorised as casual the contract expressly provides for non-liability by the employers but also that they are not entitled to any benefits from the company they work for on a casual basis. Although one may argue that the workers’ compensation Act for Uganda was designed during the colonial and post-colonial era and thus no longer addresses the current needs of the workers and employers, such as the factories, small and medium enterprises, self-employees, contracting out and casual labour, in its present form, it still renders the employers liable for workers’ compensation even for the casual and outsourced labourers. This is because they are liable for personal injury by accident of a worker if it arises out of and in the course of a worker’s employment. The Act does not take into consideration the employers’ income, or capital, therefore, even when an accident occurs, and the employer cannot afford to compensate the workers, they remain liable. In some sectors such as small scale welding casual workers come to work with their own tools of trade, and work is paid per product completed, for example, after completion of a window, the worker will be paid for that specific work.

These trends raise the questions of in case of injury in the course of work where is the employers’ liability, who is liable to pay workers compensation. Is it the contracting party or the immediate employer? In such instances if they are a subcontractor the employers are expected to meet the compensation in the event of an accident. Under section 22 of the Workers Compensation Act the liability of the employer is extended to the workers of the subcontractors when it states that;

‘Where a person awards a contract or subcontract to an employer for the execution of any piece of work, that person shall be liable to pay to any worker employed in the execution of the contract or subcontract by the employer any compensation under the Act as if that worker had been directly employed by that person’.

The liability of the employers also extends to the employer who last employed the worker during the period of twenty-four months under section 27(1)(b) is liable to pay the compensation unless that employer proves that the disease was not contracted while the worker was in his employment.[9]

Conclusion

Uganda Workers Compensation Act provides for liability of employers any accident arising in the course of employment unless the contrary is proved. It requires employers to insurer their workers against such risks. A good number of employers still do not cushion themselves against such risks due to lack of awareness of the law. Some employers also adopt strategies of outsourcing firms and subcontracting out services and casualization of labour. However, these strategies do not remove the liability of the employers for injuries suffered by any workers in the course of their employment under Ugandan law.

[1] Uganda Second National Development Plan 2015/16 – 2019/20 (NDP11) Draft 3rd March 2015 Government of Uganda , National Planning Authority
[2] http://legal-dictionary.thefreedictionary.com/Workers’+Compensation
[3] http://legal-dictionary.thefreedictionary.com/Workers%27+Compensation
[4] Section 1
[5] Under Section 3
[6] Section 3(1)
[7] Section 18
[8] Section 20
[9] Section 29