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Govt Tightens Grip On External Labour Companies

Titled “The Employment (Recruitment of Ugandan migrant workers) Regulations 2021 Statutory Instrument 47 of 2021”, the regulation aims at among others revoking the Employment (Recruitment of Ugandan migrant Workers Abroad) Regulations, 2005, Statutory Instrument 62 of 2005, upholding the dignity and rights of migrant workers by prescribing the appropriate terms and conditions of their employment and providing mechanisms for regulating activities of companies and their agents.
The new regulations
The Ministry of Gender, Labour and Social Development seeks to tighten its grip on external labour export companies in fresh regulations for the recruitment of Ugandan migrant workers.  

Titled “The Employment (Recruitment of Ugandan migrant workers) Regulations 2021 Statutory Instrument 47 of 2021”, the regulation aims at among others revoking the Employment (Recruitment of Ugandan migrant Workers Abroad) Regulations, 2005, Statutory Instrument 62 of 2005, upholding the dignity and rights of migrant workers by prescribing the appropriate terms and conditions of their employment and providing mechanisms for regulating activities of companies and their agents.

The new regulations indicate that all shareholders and directors of a recruitment company in Uganda must be Ugandans contrary to the previous regulations, which only required half of them to be Ugandans. According to the proposal, the companies will also be required to have a minimum authorised capital of Shillings 50 million and a bank guarantee of Shillings 100 million up from  Shillings 10 million and shillings 50 million respectively provided for in the 2005 regulations.  

An additional requirement is prescribed for new companies to prove that they have a bank account balance of not less than Shillings 10 million while those in existence have to also submit to the Gender ministry verified financial statements, income tax returns for the preceding one year and an account balance of not less than 10 million Shillings. 

Also, companies must apply for a license or renewal of the license by among others paying fees of Shillings 2 million. The application must include names and nationality of employees, directors and shareholders, their biodata, dates of employment, their tax returns for the preceding one year and clearance from the Criminal Investigations Directorate. 

The ministry will revoke, suspend or cancel licenses of companies whose directors, shareholders and employees have a criminal record, or breach the regulations three times within a period of two years. Each licence is valid for two years.

The ministry has also revised the penalty upwards, whereby an individual who operates a recruitment company without a license or when its license is suspended or cancelled shall on conviction serve a jail term not exceeding 5 years or pay a fine not exceeding Shillings 200,000. The 2005 regulations prescribed a penalty of three months for any offence that is committed. 

The offences include among others exploiting migrant workers, withholding salaries of workers without justifiable reasons,  collecting fees from Ugandan migrant workers without valid license or failure to deploy migrant workers within 120 days after they have been cleared by the ministry, opens premises without a valid license and obstructs or attempts to obstructs an official from inspecting the company premises.

The ministry will also revoke the license of a company that fails to deploy migrant workers within 120 days of the clearance from the ministry. Migrant workers will not pay more than Shillings 20,000 for the administration costs and will pay placement fees approved by the ministry to cover the trade or skill testing, medical examination and inoculation, acquisition of a passport and required visa and the notarization of documents.

Ronnie Mukundane, the Spokesperson of Uganda Association for External Recruitment Agencies-UAERA, says that the over 200 labour export companies are seeking an engagement with the gender ministry over the proposed regulations.

Mukundane says the regulations took effect on August 6 but new companies have failed to acquire licenses. Though he does not disclose how many new companies have attempted to submit applications, Mukundane says the ministry is silent on why the companies have not been granted or not granted licenses yet the regulations provide for 45 days within, which the ministry must approve or reject applications.

He adds that the requirement of new and existing companies having a minimum capital of Shillings 50 million and a bank guarantee of 100 million Shillings is very high. "Government should have consulted us before putting in place the new regulations," he adds, "these regulations will make it more expensive to recruit and deploy migrant workers because  even the pre-departure training period has also been increased from  7 days to 14 days."

Mukundane explains further that while the government set 1,100 USD as the maximum amount for placement fees charged per migrant worker in the 2014 bilateral arrangements, the figure is much higher than before because of the travel requirements during the COVID-19 pandemic. "Government needs to revise this figure to 2,500 USD because companies spend over 1,000USD on air tickets, COVID-19 tests, medical examination and quarantine and another 1,000 USD for training, acquiring passports, certificates of good conduct among other items," he adds.

  For instance, in 2014, Mukundane says the air tickets to most of the Middle Eastern cities cost an average of 300 USD and passports cost Shillings 150,000. However, the prices for both items have since doubled.  Apart from the financial implications, Mukundane says the new regulations could discourage foreign partners from investing in new companies due to the high costs involved in acquiring a license and training the migrant workers among others.

He says an average of 300 to 500 Ugandan migrant workers left the country for work abroad between January to May this year. They went mainly to Saudi Arabia, United Arab Emirates-UAE and Oman. In August alone, 13,000 Ugandans, mainly domestic workers left for work in mainly the Middle East.  He says that the regulations are timely for the protection of migrant workers especially when they meet challenges such as sustaining injuries or even dying abroad.  He, however, insists on the need for the government to meet the labour companies to reach a consensus on how to meet requirements in the new regulations.

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