THE LAW ON CONTINUOUS SERVICE OF EMPLOYMENT IN UGANDA: CASE REVIEW OF GEORGE JOHNSON OJOK & 87 OTHERS VS. TORRES ADVANCED ENTERPRISES SOLUTIONS LLC (LABOUR DISPUTE REFERENCE NO. 024 OF 2015)

 THE LAW ON CONTINUOUS SERVICE OF EMPLOYMENT IN UGANDA: CASE REVIEW OF GEORGE JOHNSON OJOK & 87 OTHERS VS. TORRES ADVANCED ENTERPRISES SOLUTIONS LLC (LABOUR DISPUTE REFERENCE NO. 024 OF 2015)

 

Introduction

The concept of continuous service in employment law is defined under Section 83 of the Employment Act 2006 as an employee’s period of uninterrupted service with the same employer. This includes consecutive periods of employment with two successive employers where the successor has taken over the business of the former employer as receiver, liquidator, personal representative, or heir, or upon transfer of the whole or part of the business. It also includes any week or part of a week in which an employee is employed for sixteen hours or more. Continuity of service has a number of benefits attached to it such as severance allowance, entitlement to wages when absent from work for good cause, annual leave, sick pay, and the right to lodge a complaint against unfair termination.

 Despite the law making provision for continuous service, there is always confusion on the circumstances establishing continuous in light of unique circumstances. The case review of George Ojok & 87 Others v. Torres Advanced Enterprises Solutions Limited deals with a peculiar circumstance involving a transition from one employer to another in the same business, without a business takeover.  

Brief Facts

The Claimants were security guards who under contract were employed by Torres Advanced Enterprises Solutions LLC (the Respondent). Before signing contracts with the respondent, some of them had been employed by the US Defense System LLC before being employed by 3C International Limited (Triple Canopy).

The Claimant’s case was that having been previously employed by 3C International Limited, they transferred their services to the respondent company without breaking their service in employment and that upon being terminated by the respondent, they were entitled to remedies as per their continuous service.  The Respondents case on the other hand was that Torres Advanced Enterprises Solutions LLC is a different company from 3C International Limited, and contracted the claimants as security guards, independent of their former employer and that there was nothing like continuous service.

 

Court’s decision on whether the claimants were in Continuous service between 3C International Limited and Torres Advance Enterprises Solutions LCC.

In reaching its decision, court considered the fact that the claimant’s jobs were not advertised and as such, the claimants did not apply for or do job interviews with the respondent company. It further considered the fact that claimants did not receive any training before or after joining the service of the respondent.

From a letter offer to the respondent company, the claimants were part of the local guards of the United States Embassy at Kampala. The US Department of State, Washington DC, was responsible for engaging qualified entities to provide security services to the Embassy. The letter of offer to the respondent company taking on the claimants provided for a 90 day transitional plan to be made by the respondents and all transitional issues were expected to have been completed by the midnight of 15^th October, 2013. Earlier, a letter from the Embassy to all mission guards informed them about the selection process of identifying a new contractor (who later turned put to be the respondent company) and stated that as part of the transition, wages would not decrease and uninterrupted health coverage would be confirmed as a requirement of the contract.

In a Service Agreement to the claimants from the respondent, it was stated that upon acceptance of the offer of employment, the contract would continue from the initial contract and thus terminal benefits, redundancy benefits or leave days that may have accrued will be carried forward.

Court took cognizance of the fact that the respondent company was a separate entity from Triple Canopy( the claimants’ former employer). Court further took cognizance that the claimants had been engaged under a new contract by the respondent as employer.

Court held the view that ordinarily before transitioning to the respondent company, the former employer (Triple Canopy) would have terminated the services of the claimants. That termination and the terms under which the termination would have occurred would then properly determine the next course of action by the claimants.

On whether failure by a former employer to terminate an employee’s services before they transition to similar employment would establish a continuous relationship

Court taking into consideration Section 83(4) of the Employment Act held that the mere fact of non-termination of employees by the former employer may not necessarily establish a continuous service with the current employer, but it may be a pointer to the same. Where there is no termination of the existing contract between the employees and their former employer, and the successor employer in the same business takes over the employees to do the same job, without informing them about the fate of their previous contracts thus not giving them time to take action before engaging them, there is an inevitable conclusion that the whole or part of the business of the former employer has been transferred to the successive employer.

In the instant case, the claimants having been employed by Triple Canopy were through various communication modes informed of a pending transition to the respondent company without any mention of the ate of their previous contracts. The impression created was that the claimants would be taken over , and they indeed were, by the respondent.

Court therefore held that the claimants were in continuous service between the two entities.

 

Legal Implications.

l Continuous uninterrupted service can be established even with two or more successive employers as long as there are indicators of transfer of whole or part of the business.

l Where a preceding or successive employer does not intend to take on the liability that comes with continuous employment, they must expressly make sure that the services of an employee are terminated prior to transitioning to  the successive employment in a similar business.

l Where an employer does not intend to carry the duties towards employees in continuous service and liabilities accruing therefrom, he/she must ensure that the fate of the employees’ contracts with the previous employer was clearly communicated to them prior to transitioning. This is regardless of whether the new employer offers the employees new contracts or not.

l Employers may need to consider taking into account clear advertisement and recruitment processes coupled with proper training of new employees, especially those previously from similar employment, to mark a new beginning as opposed to a mere transition.