KAMPALA, Uganda | Allen Kagina, the Executive Director of the Uganda National Roads Authority (UNRA), has formally written to the government, demanding compensation for the agency’s 1,577 employees following the decision to dissolve UNRA and transfer its responsibilities to the Ministry of Works and Transport. Kagina’s letter stresses adherence to the Employment Act, 2006, particularly sections 87 and 89, which govern the entitlement to severance pay when an employer terminates the employment of staff due to redundancy.

Kagina’s demand is based on a severance package formula approved by the UNRA Board in 2021, stipulating three months’ salary for each year of service, resulting in an estimated total compensation of UGX 196 billion. According to Kagina, this formula is in line with the Employment Act, which requires the employer to negotiate severance pay with employees or their representatives when a termination arises from redundancy.

However, the government’s assessment differs significantly, with the Ministry of Public Service proposing a total package ranging from UGX 11 billion to UGX 46 billion. The Deputy Solicitor General, Pius Perry Biribonwoha, representing the Attorney General’s position, has argued against the entitlement to severance benefits, citing the provisions of the Public Service Standing Orders. He contends that since the dissolution of UNRA does not meet the legal definition of redundancy under section 81 of the Employment Act, no severance pay is warranted. Biribonwoha reasons that the affected employees are not being laid off but are instead expected to transition into equivalent roles under the Ministry of Works and Transport.

Kagina, however, has challenged this interpretation, asserting that the termination of employment resulting from the dissolution of UNRA should qualify as redundancy under the Employment Act. She has highlighted section 87(2), which defines redundancy as the loss of employment due to the employer’s reorganization or operational requirements. Kagina argues that this situation falls squarely within that definition and thus requires compliance with the legal provisions on severance.

Parliament’s Physical Infrastructure Committee, chaired by Hon. Dan Kimosho, has taken a keen interest in the issue. The committee has noted discrepancies in the compensation estimates provided, with figures ranging from as low as UGX 11 billion to the UGX 196 billion calculated by UNRA. The committee has called for further dialogue between the government and UNRA staff, emphasizing the need to resolve the matter in accordance with the Employment Act’s requirements.

This case brings to light the legal complexities surrounding the dissolution of public entities and the interpretation of redundancy under Ugandan labor law. The final decision on compensation will be closely monitored, as it may set a precedent for future government restructuring efforts and the application of severance pay provisions under the Employment Act.