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27 Mar 2020
BY Phillip Karugaba
ENSight

 


Uganda: legal implications of coronavirus (COVID-19)

As the country grapples with the coronavirus (COVID-19), various directives are being issued by different authorities. It is incumbent on the authorities that the measures are issued within the law. Enterprises that endeavour to observe these measures or wish to take their own measures also need to ensure that their actions are within the law. There are many legal issues to bear in mind. We set out key issues below.

The Public Health Act (Cap. 281)

Under this Act, the Minister of Health is empowered to take measures to combat the spread of an infectious disease. So far, four statutory instruments have been published to implement various measures announced by Presidential Directive over the last few days. These statutory instruments have been detailed in separate ENSight available here.

The Public Health Act offers an old but fairly robust legal framework for government to implement the announced measures to combat the spread of COVID-19 in Uganda.

Local government authorities are empowered to enforce such regulations and may make their own.

The Judiciary

On 19 March 2020, the Chief Justice, referencing Presidential Directives, issued guidelines suspending court hearings for 32 days from 20 March 2020. Filing of written submissions is permitted. Where possible, judgments and rulings may be issued to parties online or via email. Execution proceedings were suspended, save where attachment had taken place.

Urgent civil matters may be heard upon application to court. Taking of plea in serious matters and bail applications may also be heard. Only the applicant and his or her lawyer, or in the case of bail application, the sureties, will be allowed in court.

Judicial officers and staff will continue to be on duty, but no open court appearances will take place.

The guidelines are silent on observance of time limits for filing of process and it is assumed that the time limits will therefore continue to apply. However we expect that where a time limit is missed, an application to set aside any consequent action and permit late filing will readily be allowed when courts resume.

Financial obligations to lenders

On 20 March 2020, the Bank of Uganda announced that it would:

  • intervene in the foreign exchange market to minimise volatility from global financial markets;
  • provide exceptional liquidity assistance for up to one year for financial institutions, supervised by the Bank of Uganda, who may require it;
  • waive limitations on the restructuring of credit facilities at financial institutions that may be at risk of going into distress due to the pandemic; and
  • engage mobile network operators and commercial banks to reduce fees on mobile money transactions and other digital payments, and to increase daily transaction amounts for mobile money transactions.

Borrowing arrangements should be reviewed and discussions with lenders initiated as necessary. Business should have a strategy and plan as to tide over during this period.

Various clauses in financing agreements should be studied and their implications understood during this period, especially default clauses, interest rates, force majeure, amortisation, and permitted financial ratios to mention but a few.

Options available include renegotiation of facilities, short term borrowing or filing for provisional administration or insolvency.

Communications

On 22 March 2020, the Uganda Communications Commission issued a stern warning to persons engaging in creating, initiating the transmission of, circulating, and/or forwarding, fake stories and misinformation using communication facilities, service or applications. The following offences are relevant:

Data Protection and Privacy Act, 2019

Under the Data Protection and Privacy Act, 2019, it is an offence to unlawfully obtain, disclose or procure the disclosure to another person of personal data held or processed by a data collector, data controller or data processor. This would catch persons who disclose, on social media or anywhere else, the personal details of patients or persons suspected of having or persons testing for COVID-19 or any such related persons.

Penal Code (Cap. 120)

Under the Penal Code, a person who does any negligent act, which is and which he or she knows or has reason to believe to be likely to spread the infection of any disease dangerous to life, commits an offence and is liable to imprisonment for seven years.

Immigration

Following the closure of all border points, we expect that no entry visas will be issued for the duration of the closure. We expect other services such as issue of and renewal of work permits to be as usual.

Restrictions on physical visits to immigration offices may impact issue of documents and stamping of passports with work permits.

Uganda Registration Services Bureau (“URSB”)

URSB handles IP registration, business registration, civil registration, civil marriages and insolvency. URSB has issued a circular advising of online filings for business and civil registrations. It has also advised of a new process to receive documents. Documents are to be left at a designated desk. SMS alerts will be sent to confirm receipt of documents and also to notify of any queries or when work is complete

Other offices

We anticipate government offices such as the Lands Registry to follow suit with restrictions on public attendance. However, as these offices do not have online options, disruption in service is expected.

 

Employment

On 20 March 2020, the Minister of Labour issued a statement advising that COVID-19 should not disrupt the employer-employee relations. The Minister advised consultation with the Ministry before any measures are taken with respect to termination of employees. The Minister recommended that employees be encouraged to take leave with or without pay upon agreement. Where termination of staff is inevitable, the Minister recommended that this be done with a humane face, with payment of all dues, counselling and a commitment to re-engage once business returns to normal.

All labour externalisation from Uganda was banned.

Occupational Safety and Health Act, 2006

Employers are under an obligation to provide a safe working environment. This includes taking the necessary preventive measures to combat COVID-19. Employers should therefore provide the recommended sanitation measures depending on the levels of exposure and potential risks.

Employers should also put in place stay/work at home policies where possible and provide the necessary technological and financial support to make this work ie, provision of telecommunications/internet options, purchase of data/voice bundles etc.

It will be a violation of the employer’s obligations under the Occupational Safety and Health Act to permit a person suspected of having COVID-19 to work.

Following the ban on public transport, employers of staff using public transport are under an obligation to provide their staff an alternative transport as part of ensuring employee safety to and from work.

Employment Act, 2006

The Employment Act also provides that an employee who has completed at least three-months continuous service and is absent from work for reasons attributable to the occurrence of exceptional events preventing the employee from reaching his or her place of work or from working, is entitled to receive wages as though he or she had not been absent from work and had fully performed his or her duties under his or her contract of service. The employee’s wages are not to be subjected to deduction, by reason of the absence. The Act does not limit how long this should continue.

Offering annual leave to employees and treating the shutdown period as leave is a humane option. This may be applicable for employees of businesses or enterprises that have been closed, such as places of entertainment, bars, nightclubs, schools and churches, or where a scale-down of employees is required.

A declaration of redundancy and termination is a second option where an employer is either closed or facing reduction in business. The company would be required to provide the employee with notice of the termination indicating redundancy as the reason and pay to the employee their entitlements under the Act. The employees will be entitled to accrued salary, payment for accrued leave not taken, payment in lieu of notice in case the company does not intend for the employees to continue working during the notice period, in some cases severance pay may also apply. Severance pay, where applicable should be agreed between employer and employee. Absent an agreement, based on recent court decisions, we recommend one month’s pay for each year of service.

Unpaid leave can only be done with the consent of the employee. Under the Act, an employer is under obligation to provide work for the employee except where performance is suspended due to interruptions to the employers business by, an act of God or natural calamities, economic or technological reasons which result into a shortage of work beyond the employer’s control. This exception is limited to a maximum of 15 days in any six-month period and the employer is still required to pay the employee for the days on which they fail to provide work.

For an employee who is quarantined for whatever reason, such as recent travel, if such employee can work at home, this should not affect their work status. If the quarantined employee is unable to work due to ill health, the absence from work should be counted as sick leave.

For independent contractors, consideration may be given on compassionate grounds to affording financial support to deserving persons to enable them either perform their obligations or otherwise have some resources over a shutdown period.

Sick leave entitlements apply once an employee is actually sick. Employers should review the sick leave periods permitted in their company policies and consider extending it in these exceptional circumstances.

Salaries may not be reduced unless in agreement with the employee.

Contracts

Contracts should be reviewed to establish if they contain any force majeure clauses and if these can be implemented. Careful consideration should be given to any specific timing and notice requirements.

Not all contracts contain such clauses and they cannot be relied upon in all cases. If this happens to be the case, it is important that other remedial or mitigation steps are explored at an early stage. For instance, contract variations and appropriate extensions etc. by mutual consent.

In the absence of an express force majeure provision, parties may be able to rely upon the doctrine of frustration. Under the Contracts Act, 2010, where a contract becomes impossible to perform and where a party cannot show that the other party assumed the risk of impossibility, the parties to the contract will be discharged from the further performance of the contract. The doctrine of frustration is not available if the contract contains an express force majeure provision, since the provision will be regarded as the agreed allocation of risk between the parties.

Tax

On 20 March 2020, the Uganda Revenue Authority (“URA”) issued a notice encouraging the public to use its online services and restrict visits to its offices. URA’s online services are quite efficient and for routine matters such as filing tax returns, obtaining assessments and paying taxes, no disruption is expected.

An exemption of VAT and excise duty was announced for manufacturers of sanitiser. A legal instrument is expected to be published.

The government has not otherwise made any announcements at all for general tax relief and tax payers are expected to comply with their tax obligations.

URA has however announced measures relaxing timelines for filings. The brief is available here.

Landlords and tenants

A letter circulating on social media, purportedly from H.E. the President and purportedly waiving rent obligations of tenants, is fake news. This is not among the Covid-19 control measures announced by the government and is unlikely to become one.

The pandemic will likely have an adverse effect on the ability of tenants to pay rent, for instance, businesses or enterprises that have been closed, such places of entertainment, bars, nightclubs churches and schools. In the absence of force majeure provisions, frustration will need to be proved for tenants to be absolved of potential breaches.

Landlords will need to be careful about making promises and representations to tenants during this time, as those may be relied upon.

Data protection

Businesses that will be looking to collect personal information such as the health status of an individual, dates of travel, test results, information about family members and persons with whom they have been in contact will be considered sensitive personal data under the Data Protection and Privacy Act, 2019. This legislation is fairly recent and will be put to a baptism of fire.

Care should be taken that such data is only collected, used, stored and processed with the express consent of the data subject.

Health data should only be used and processed by a health care provider or by a person subject to the obligation of professional secrecy under any law. It is possible for this requirement to be met if it is necessary for reasons of public interest in the area of public health.

Guidance:

  • only collect personal data with the express consent of data subjects;
  • appropriate security measures should be put in place in respect of the storage or processing of such data.

Price controls

Uganda does not have any consumer protection, price control or competition laws to protect the citizens from price hikes arising from unconscionable conduct and restrictive trade practices.

Should the need arise, we expect that such conduct will be condemned by the authorities.

For more information, please contact:

Phillip Karugaba

Head of ENSafrica Advocates | Uganda

pkarugaba@ENSafrica.com

+256 772 785 332

 

COVID-19, also known as the Coronavirus, is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) that was declared a pandemic by the World Health Organization on 11 March 2020. The disease has since been reported in over 190 countries.

No information provided herein may in any way be construed as legal advice from ENSafrica and/or any of its personnel. Professional advice must be sought from ENSafrica before any action is taken based on the information provided herein, and consent must be obtained from ENSafrica before the information provided herein is reproduced in any way. ENSafrica disclaims any responsibility for positions taken without due consultation and/or information reproduced without due consent, and no person shall have any claim of any nature whatsoever arising out of, or in connection with, the information provided herein against ENSafrica and/or any of its personnel. Any values, such as currency (and their indicators), and/or dates provided herein are indicative and for information purposes only, and ENSafrica does not warrant the correctness, completeness or accuracy of the information provided herein in any way.