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UGANDA’S MINIMUM WAGES BILL, 2013

AN ANALYSIS, PART I

By Caroline Nalule

March 2014

For Parliament Watch Uganda

Legal Analyses of Bill Series

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Introduction

Uganda is a member of the International Labour Organisation (ILO) and is therefore bound

by its Constitution that seeks to promote and protect the rights of workers, among which is

the provision of an adequate living wage1. The ILO has pronounced itself on this issue in a

number of its Conventions and Recommendations, such as the Minimum Wage-Fixing

Machinery Convention, 1928 (No. 26); Minimum Wage-Fixing Machinery Recommendation,

1928 (No. 30); Protection of Wages Convention, 1949 (No. 95); Protection of Wages

Recommendation, 1949 (No. 85); Minimum Wage-Fixing Machinery (Agriculture)

Convention, 1951 (No. 99); Minimum Wage-Fixing Machinery (Agriculture)

Recommendation, 1951 (No. 89); Minimum Wage Fixing Convention, 1970 (No. 131); and

the Minimum Wage Fixing Machinery Recommendation, 1970 (No. 135). Of these Uganda

has only ratified Conventions No. 26 and No. 95, leaving out the latter Conventions that

tend to be broader and more elaborate than the earlier Conventions. Nevertheless, Uganda

is also bound by its other international human rights law obligations that deal with the

aspect of adequate wages or remuneration to a worker. Article 23 (3) of the Universal

Declaration for Human Rights stipulates “Everyone who works has the right to just and

favourable remuneration ensuring for himself and his family an existence worthy of human

dignity”. Article 7 (b) of the International Covenant on Economic, Social and Cultural Rights

(ICESCR) which similarly provides for “the right of everyone to … fair wages and equal

remuneration for work of equal value without distinction of any kind…”, is legally binding on

Uganda2. The African Charter on Human and Peoples’ Rights also binds Uganda to promote

and protect the right, of every individual, “to work under equitable and satisfactory

conditions, and shall receive equal pay for equal work”.3 While not providing specific

guarantees, the Constitution of Uganda provides that “Parliament shall enact laws…to

ensure equal payment for equal work without discrimination…”4.

By ratifying ILO instrument No. 26, Uganda undertook, inter alia, to “create or maintain

machinery whereby minimum rates of wages can be fixed for workers employed in certain

of the trades of parts of trades (in particular in home working trades) in which no

arrangements exist for the effective regulation of wages by collective agreement or

otherwise and wages are exceptionally low”.5 In attempt to fulfil its obligations with regards

to workers’ wages, Uganda enacted The Minimum Wages Advisory Boards and Wages

Councils Act, Cap. 221, Laws of Uganda, (hereinafter ‘the law’ or ‘the Act’) which is still the

current law in force although whether it is operational or not is certainly a matter for

debate. The Minimum Wages Bill, 2013 (hereinafter, ‘the Bill’) seeks to address the

shortcomings in the current law by repealing and replacing it.

1 Preamble, Constitution of the ILO as amended. 2 Uganda ratified the ICESCR on January 21, 1987. 3 Article 15, African Charter on Human and Peoples’ Rights ratified by Uganda in 1986. 4 Article 40 (1) (b), Constitution of the Republic of Uganda, 1995 as amended. 5 Article 1.1, ILO Convention No. 26.

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Before embarking on a critique of the Minimum Wages Bill, it is worth noting that the

critique is based largely on the text of the Bill; as well as international standards and

circumstances pertaining in Uganda. My research has revealed that matters of minimum

wage are peculiar to each country’s circumstances and so solutions should as much as

possible be drawn from local or national experiences and input and not merely copied from

other countries’ experiences.

Remarkable Improvements in the Bill

1. Streamlining Minimum Wage-Fixing Machinery: The Bill sets up the Minimum Wages

Board which is set up to fix wages for a given sector as the Minister considers

appropriate (Clause 4 (1) of the Bill). The board is a simpler and more manageable

machinery than what pertains under the current law which sets up both Minimum

Wages Advisory Boards and Wages Councils. As noted in the Memorandum to the

Bill, the current structure is cumbersome and not easy to maintain, hence affecting

its effectiveness. (Research into the efficacy of the current set-up might come in

useful to determine what advantages might be in have a multi-level wage fixing

machinery, and whether this might have contributed to the ineffectiveness of the

law).

2. Participation and involvement of social partners in the decision-making processes: All

ILO wage-fixing machinery standards emphasise the importance of involving social

partners, specifically the employers and workers concerned or their representative

organisations, in the decision making processes. This includes consulting them on the

type of machinery to be established (Article 3.2 (1) of Convention No. 26); making

them part of the machinery that fixes minimum wages (Article 3.2 (2) of Convention

No. 26); and also consulting them during the process of collecting views on the

minimum wage. The current Bill includes the social partners as members of the

board (Clause 4 (2) of the Bill) and also involves them in the consultative process for

fixing the minimum wage and other conditions of employment (Clause 8 (4 & 5) of

the Bill). This is an improvement from the current law which did not decisively

provide for the participation of the social partners hence breaching Uganda’s

undertakings under ILO Convention No.26.

3. Sector and occupational coverage: Although ILO Convention No. 26 is limited to

trades which include manufacture and commerce, hence being restrictive in its

coverage of workers, the Bill seems to go beyond this restriction. Much as it does not

specify an expansive list of sectors or workers covered, non-mention could be

interpreted as being applicable to all workers and sectors save those explicitly

mentioned in Clause 2, i.e. members of the UPDF or police force, public officers and

persons in the employ of government. The fact that the Minister may appoint a

minimum wage board for a given sector (Clause 4 (1) of the Bill) could mean that any

and all sectors could be covered by the Bill. This is a provision that is not limiting,

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thus creating much leeway for general coverage and can easily be put to good use by

workers particularly those in vulnerable situations. Considering that Uganda has not

ratified ILO Convention No. 131, the Bill seems to make remarkable progress in

regard to sector or occupational coverage.

4. Consultative as opposed to investigatory process: While the board’s procedure for

getting views from the public under the current law seems intimidating with persons

being compelled to attend the board and act as witnesses, the language and process

in the Bill is more friendly and less intimidating. The language of the ILO standards is

one of ‘consultations’ and the process of soliciting views should not be compulsory

for attendees save in exceptional circumstances, which I believe are covered by

Clause 8 (6) whereby some persons may be summoned before the board.

5. Shifting decision-making from President to Cabinet: Although the power to finally fix

the minimum wage still rests with the Executive, there is some noteworthy progress

in the sense that it is the Cabinet and not the President that finally approves of the

minimum wage (Clause 10 of the Bill). Under the Act, the power to approve of the

minimum wage vests in the President (Section 6 (5) & (6) of the Act) and there is

evidence that this has proven not to be advantageous to workers in the past as the

President has to-date refused to approve a minimum wage recommended by the

Minimum Wages Advisory Board in 1997!6 This is only a slight improvement

especially if the Cabinet is more beholden to the President than to promoting

national interests.

6. Resurrecting minimum wage in Uganda: Apparently minimum wage is Uganda was

last set in 19847 and since then many changes have occurred rendering any set

wages obsolete. If the Bill is passed, it shall resurrect the debate in minimum wage

and actually set the ball rolling for workers to earn “a wage adequate to maintain a

reasonable standard of life as this is understood in their time and country”8.

Areas of Concern in the Minimum Wages Bill, 2013

A. General Issues

1) The Short title of the Bill: I find the short title of the Bill to be quite misleading: one

gets the impression that the Minimum Wages Bill fixes the minimum wage (i.e.

minimum wage fixing by statute) and yet the Bill is about ways of fixing the minimum

wage (i.e. minimum wage-fixing machinery or system). There is need, therefore, to

get a more accurate title that truly reflects the contents of the Bill.

2) The drafting is quite poor and incoherent: There are several clauses in the Bill that

seem to be incomplete or simply not drafted properly e.g. Cl. 4 (8); Cl. 15 lacks a sub-

6 See Martin Wandera & Mohammed Mwamadzingo ‘Uganda: Minimum Wages or Minimizing Wages?’ in Labour Education No. 128 (2002) pp. 90-93 available at http://labordoc.ilo.org/record/355913?ln=en 7 Ibid. 8 ILO General Survey of the Reports concerning Wages Convention (No. 95) and the Protection of Wages Recommendation (No. 85), 1949, International Labour Conference, 91st Session, Geneva 2003.

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clause (2) and yet it is referred to in the following sub-clause (3) which then does not

make much sense; Cl. 16 (1) refers to a minimum wage becoming enforceable in

respect of any employee, and yet the paragraphs under it seem to refer to the

employer (there ‘s need to clarify the object of the clause); the words ‘employer’ and

‘employee’ are used interchangeably in both singular and plural form (e.g. under Cl.

12) which is not advisable in legislative drafting. The same applies to use of wage: is

it minimum wages or minimum wage? There is need for consistency. More examples

of incoherence and inconsistency shall be pointed out as we look at specific sections

of the Bill. There should be coherence and consistency in the use of either plural or

singular when referring to the object. A general reading through the Bill gives the

impression of incoherence making it appear like a rough draft of the draft. The

draftsperson(s) should re-draft the Bill to ensure coherence, non-ambiguity and

proper grammar and sentence construction. There are quite a number of

misspellings and grammatical mistakes that should be corrected.

3) Lack of emphasis on collective bargaining as a way of fixing minimum wage(s): It has

been emphasised that ‘minimum wage regulation is clearly of secondary importance

compared with collective bargaining or other methods of wage determination’9, it

would therefore be expected that the Bill places some emphasis on this as well.

Collective bargaining is only mentioned in Cl. 12 (3) as a way in which the employee

may negotiate. Though collective bargaining usually most effective in countries with

strong Trade Unions such as the Nordic countries, in Uganda where unions may be

considerably weak (I base this judgment on the fact that there is not so much by way

of promotion and protection of wages of workers in Uganda although Trade Unions

have been in existence for a long time. I nonetheless stand to be corrected), if

collective bargaining is included as a stand-alone section in the Bill, it might be a way

of encouraging and boosting the work of the Trade Unions. In case there is another

law in place in Uganda where collective bargaining is specially covered then the Bill

should contain the necessary cross-references.

4) Consultations on drafting the Bill: As I read through the Bill I wonder whether there

were adequate consultations done with the representative of employers and

workers, as well as independent experts as to the contents of the Bill before it was

drafted. These should be encouraged before the Bill is passed into law as it is not

only the democratic thing to do, but is also in keeping with Uganda’s obligations

under the ILO standards.

Caroline Nalule is an advocate of the Courts of Judicature in Uganda, and a human rights specialist,

currently undertaking her PhD in law at the University of the Witwatersrand, Johannesburg. She is a

contributor to Parliament Watch Uganda.

9 Gerald Starr Minimum Wage Fixing (Geneva, ILO 1981) p. 14; ILO General Survey of the Reports on the Minimum Wage Fixing Machinery Conventions and Recommendations (Geneva, ILO 1992) P. 25, para 97.