Uganda Industrial Court: Fixed-Term Service Deemed Continuous Employment, Unlawful Underpa

On October 27, 2026, the Industrial Court of Uganda ruled in Magdalene Atono v Kyambogo University that long-term fixed-term service constituted continuous employment, finding that an unlawful and arbitrary re-categorisation by Kyambogo University led to discriminatory underpayment and arrears for Magdalene Atono.

This decision is highly significant for employers and employees in Uganda, particularly those operating under successive fixed-term contracts. It clarifies that the mere use of fixed-term contracts does not automatically negate the existence of continuous employment, especially when such arrangements are prolonged. The ruling reinforces protections against arbitrary re-categorisation and discriminatory practices that lead to underpayment, highlighting the court's willingness to look beyond the form of employment contracts to the substantive nature of the employment relationship. This has implications for employee benefits, termination rights, and fair remuneration.

The Industrial Court of Uganda, established under the Labour Disputes (Arbitration and Settlement) Act, 2006, has jurisdiction over labour disputes. This case likely draws upon principles enshrined in the Employment Act, 2006, which defines "continuous service" and prohibits discrimination in employment. The concept of "continuous employment" is crucial for determining entitlements such as severance pay, notice periods, and other benefits that accrue over time. The court's finding on "unlawful, arbitrary re-categorisation" and "discriminatory underpayment" suggests a violation of fair labour practices and potentially the principle of equal pay for work of equal value, which are fundamental tenets of Ugandan labour law.

The key parties are Magdalene Atono, the employee, and Kyambogo University, the employer. The Industrial Court of Uganda was the adjudicating body.

Employers, especially institutions that frequently use fixed-term contracts, must review their employment practices to ensure that successive fixed-term engagements do not inadvertently create continuous employment relationships without corresponding benefits and protections. Legal practitioners should advise clients on the risks associated with arbitrary re-categorisation of employees and the potential for claims of discriminatory underpayment. This ruling serves as a strong reminder that the substance of the employment relationship, rather than merely its contractual form, will be scrutinised by the Industrial Court, necessitating careful compliance with labour laws regarding continuous service, fair treatment, and non-discrimination.