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External Labour Recruitment: Taking Stock Of The Regulatory Environment

dit advocates

Table of Contents

1.0 Introduction

Available data accessed from the Ministry of Gender, Labour and Social Development indicates that Government collected Ugx 7,000,000,000 (Seven Billion) between the period October 2021- May 2022. The said revenue is said to have arose from licences and processing of Job Placements as provided under the Employment (Recruitment of Ugandan migrant workers) Regulations, 2021.

By June 2022, a total of 219 recruitment agencies and 439 foreign recruitment agencies had been licenced by the Ministry and over 300,000 Ugandans had been cumulatively externalised since 2005. The numbers are even bigger in other African Countries. In Kenya for example, the Government is facilitating the increase in Kenyan migrant workers as a Government policy to curb unemployment and increase annual diaspora remittances. This direction appears to have arose from the statistical reporting that Kenya is now earning more foreign exchange from diaspora remittances than each of its major Exports- Coffee, Tea and Horticulture.

This labour externalisation business has received massive negative publicity in the recent past. Several migrants have forwarded several problems to social media with a claim that there is no framework in place to deal with their grievances.

From a Legal and policy framework perspective, Labour migration in Uganda should be guided by the Constitution of Uganda 1995, The Employment Act, the Employment (Recruitment of Ugandan migrant workers) Regulations 2021, the ILO Convention No. 143 on Migrant Workers, and Convention 97 on Migration for Employment and the Inter-Governmental Authority on Development (IGAD) and the Revised Regional Migration Policy Framework. It is prudent for Uganda to consider mapping out the entire destination scope for Ugandan migrant workers and consequently executing Bilateral Labour Agreements (BLA) to enhance protection of Ugandan Migrant Workers.

This article takes stock of the regulatory and Compliance environment relating to labour externalisation.

2.0 The Regulatory Environment in General

Prior to the enactment of the Employment (Recruitment of Ugandan migrant workers) Regulations 2021, the regulatory environment was less stringent in terms of licencing, paper requirements and Capital. The repealed 2005 Regulations were found to be lacking in terms of its failure to provide sufficient fees, detailed processes and stringent penalties for players who fail to comply.

Under the Regulations, the objective of the said law is to to regulate the recruitment and placement of migrant workers by providing a mechanism for regulating the activities of recruitment agencies; and to uphold the dignity and rights of migrant workers by prescribing the appropriate terms and conditions of their employment.

It is expected that these new Regulations will go a long way in improving labour externalization within the larger diaspora policy framework.

3.0 Regulatory and Compliance requirements for External labour recruitment Agencies

3.1 Requirements for Licencing of a Recruitment agency

Effective August 2021, the Licencing requirements for both new and existing labour recruitment companies are as follows;

  1. The recruitment agency must be a Company registered under the Companies Act, 2012 with an authorised share capital of Ugx 50,000,000 (Fifty Million).  Suffice to note that a company that is already incorporated albeit with a lower share capital can always increase its share capital before the Directors choose to engage in this business.
  2. All shareholders and directors of the recruitment agency shall be Ugandans.
  3. Proof of execution of a Bank Guarantee of Ugx 100,000,000 (One Hundred Million)
  4. Proof of payment of a non-refundable application fee
  5. Proof of existence of minimum capital of Ugx 50,000,000 (Fifty Million) and account balance of not less than Ugx 10,000,000 (Ten Million).
  6. Verified financial statements and income tax return for the previous year.
  7. Individual tax returns for all shareholders and directors
  8. Proof of publication of the notice of application in a newspaper of wide circulation
  9. Proof of international connections to confirm the capacity to place migrant workers. This can be proved by attaching job orders and demand letters.
  10. Proof of clearance of Directors, Shareholders and staff from Interpol
  11. Proof of payment of Licence fees of Ugx 2,000,0000 (Two Million)
  12. Bank statements for the Company, Directors and shareholders for the past two years
  13. CVs of the directors, board members and officers employed by the Company.

3.2 Requirements for accreditation of a foreign recruitment agency

A foreign recruitment agency that wishes to recruit Ugandan migrant workers shall do so through a recruitment agency and shall apply to the Uganda Mission responsible for the Country where the foreign recruitment agency is located for accreditation. The said non-transferable accreditation will last for two years but may be renewed upon inspection. Below are the regulatory requirements;

  1.  English translation of documents of incorporation
  2. Valid trading licence or its equivalent
  3. Names and contacts of the foreign recruitment agency
  4. The Labour licence of the agency or its equivalent
  5. Physical address, contacts of the agency and accommodation centres where workers are accommodated upon arrival. The Uganda Mission inspects the office and accommodation centre.
  6. Proof of availability of a complaints handling mechanism including the personnel and office premises.

3.3 Offences and penalties for non-compliance

The new law creates the following offences;

  1. Operating a recruitment agency without a licence issued by the Ministry
  2. Operating a recruitment agency when the Licence is expired, suspended or revoked.
  3. Advertises jobs vacancies without approval from the Ministry
  4. Operating as a pre-departure training institution without accreditation by the Ministry.
  5. Operates as a pre-departure training institution where its accreditation is suspended or revoked.
  6. Obstructing an inspection officer from accessing the premises of a recruitment agency.
  7. Receiving of charging fees in contravention of the Regulations
  8. Misleading Migrant workers on the terms and conditions of service of the employment of a migrant worker.
  9. Substitutes a contract approved by the Ministry with another contract
  10. Opens a branch of the recruitment agency without the approval of the Ministry
  11. Collects fees from a migrant worker but without valid reason fails to deploy the migrant worker

Any person who commits any of the above offences is liable upon conviction to imprisonment not exceeding five years or fine not exceeding 1000 currency points.

4.0 Conclusion

It is undisputable that as a Country, we face a myriad of complaints from Ugandans working abroad. The current advent of video recordings and distribution via whatsap groups and other social media has made publicity of the many work and immigration issues widely spread. These Complaints range from unfair work conditions to utter human rights abuses.

Technically no approach is capable of dealing with the many issues around labour externalization other than policy and regulatory enhancements. As such, it should interest Government and civil society to publicize the current framework with its current safeguards to empower the public as we look forward to improvements.

Innocent Ddamulira - Partner DIT Advocates

Innocent Ddamulira - Partner DIT Advocates

Innocent is a Partner at DIT Advocates. He is a commercial lawyer and head of the Transactions and Corporate advisory department of the firm. Prior to setting up DIT Advocates, Innocent worked with a Leading Law Firm where he advised/represented Government Bodies, Regulators, Financial Institutions and Corporate entities.
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