INTRODUCTION

An employment contract is a contract between an employer and employee in which the terms
and conditions of employment are stated1.An employee is a person who works in the service of
another person under an express or implied contract of hire under which the employer has the
right to control the details of work performance2. An employer is a person who controls and
directs a worker under an express or implied contract of service and pays the workers salary or
wages3.
Termination means the discharge of an employee from an employment at the initiative of the
employer for justifiable reasons other than misconduct, such as, expiry of conduct, attainment of
retirement age4.
There are laws governing employment relationships such as the employment Act 2006, the trade
unions Act cap 223,Workers compensation Act cap 225,National social and security funds cap
222,Local government Act 2006, Pensions Act cap 286 which all provide for the workers rights
and others.
In contracts of employment there are various tests to show that one is an employee and the other
is an employer Multiple test with this the features are the employer has a power of selection, he
or she pays the wages, he or she gets an income tax, the employee gets holiday money together
with pensions. Entrepreneurial test, this is when someone is performing business on his own
account for example they suffer the losses themselves, get the benefits themselves are called
entrepreneurs. Market investigation if the engaged person performs the requirements of
significant capital, suffers the risk depending on how he does the job that person will be an
independent contractor. Control test this is where the employer commands the employee as to

1 Blacks law dictionary eighth edition by Brayan Garnner page 344

2 Black ;aw dictionary eighth edition by Brayan Garnner page 564
3 Blacks law dictionary eighth edition by Brayan Garnner page 565
4Section 2 of the employment Act 2006

the matter in which he shall do his work. Termination of the contract of service is both statutory
and common law as discussed below.
A contract of employment can be terminated by notice in different ways for example through
express provision this is when the parties provide for it at the time of contraction and go on to
write that their contact shall be terminated by a written notice if it is not contrary with the Act. At
common law termination by notice is established in different ways the person terminating needs
to give the other party reasonable notice of their intention to terminate, but if expressed in a
contract of employment that such a contract will be for a certain duration termination by notice is
inapplicable. However at common law the employer the employers right to hire and fire is un
limited in the case of Bholmi v Car and General at the time of Mr. Ansells dismissal the
employer did not know the wrong deeds done by the employer as regards to the contract with
Earls ship building company but latter on the employer company realized them wrong done by
Ansell court observed that where the employer learns of another reason after the termination, the
later can justify the dismissal.
At common law still a party can instead make payment in lieu as a way of ending the
employment contract and once such payment is made and accepted by the employee the contract
is there and then terminated. In the case of Wakiro v Bugishu Cooperative Society (1968) EA
523 the employees contract was terminated and on termination their employer paid both their
salaries and fringe benefits in lieu of notice and it was held that an employee is entitled to be
paid only salary in lieu of notice and cannot be compensated for any other contractual rights and
benefits that he was entitled to. However the case of Lulume v coffee marketing board (1970)
E.A 18,the employee, his wife and children were given allowances like medical and dental
treatment and free housing allowance at termination the employee was given payment in lieu
thereof for only the salary without the benefits they were being given hence this suit. Court held
that the employer is bound to pay the employee not only cash wages but also the cash equivalent
to the benefits that he would have enjoyed during the period of notice.
The employment Act 2006 provides that the agreement between the parties to exclude the
operation of this section shall be of no effect but this shall not prevent an employee from

accepting payment in lieu of notice5. Termination shall be deemed to take place where the
contract of service is ended by the employer with notice thus giving notice is a way of
termination a contract of employment. However the notice is required to be in writing in a
language that an employee can easily understand6 the same Act still provides for periods the
notice can take before termination7 it states, not less than two weeks if the employer has been
employed for not less than six months but not a year, not less than one month if the employee has
been employed for more than twelve months but less than five years, not less than two months if
the employer was employed for five years but less than ten years, not less than three months
where the service is ten years or more.
A contract of employment can be terminated by summary dismissal upon commission of a
repudiatory breach by the employee, under common law an employer had a right to summarily
dismiss an employee guilty of misconduct for example absence from work, resign without
intention to resume work in the future, with that it will be justified for the employer to summarily
dismiss the employee. Konig v Karanjee Naranjee properties8 under the contract between the
two parties the employee was entitled to a local leave following the quarrel between the
employee and the managing director it was not convenient at the time for the employee to take
the leave and thus he stayed away from work thus being summarily dismissed and it was held
that, in cases of involuntary absence it may amount to a repudiatory breach.
Where the employers personal or legal position formed part of the employment relationship with
the employee the death of an employer shall cause the contact of service to terminate one month
from the date of the death unless it is otherwise terminated within that period9. Where an
employer has given notice to an employee to terminate his contract of employment and before
5 Section 58 (5) of the Employment Act 2006
6 Section 58 (2) of the Employment Act 2006
7 Section 58 (3) (a),(b),(c),(d) Employment Act 2006
8 (1968) EA 223
9 Section 29 Employment Act 2006

the termination the employee or the employer dies, this part applies that the contract had been
duly terminated by the employer by notice expiring on the date of the death10.
Bankruptcy or winding up of the employers business shall cause the contract of service of any
employee to terminate one month from the date of the bankruptcy or the winding up order11.
Termination is automatic once the employer runs bankrupt or once the company winds up
because the law of bankruptcy does not allow any person who has been declared bankrupt to
transact in any way or with any one hey are not allowed to employ any one.
Frustration is the prevention or hindering of the attainment of a goal such as contractual
performance12 according to common law frustration terminates the contract of employment the
doctrine of frustration states that the happening of a frustrating event automatically terminates
the contract and discharges the parties from any further obligations of the contract. Examples of
frustrations are accidents (fire and physical) and sickness and destruction of the subject matter in
the case of Taylor v Caldwell13 the defendants let a certain musical hall to the plaintiffs before
the dates of the proposed concerts the hall was accidentally destroyed by fire and the plaintiffs
were claiming for the defendants performance or compensation hence the suit. Court held that
the contract was frustrated; the defendants employees like cleaners, machine men were not able
to work the next day and afterwards after the fire out break thus termination of their contract of
employment.
Attaining the retirement age may terminate the contract of employment, the date of termination
shall unless the contrary be deemed to be in the circumstances when an employee attain the
normal retirement age14 the minimum age of retirement in Uganda being fifty five years, if an
10 Employment law hand book by Peter Walllington fifteenth edition page 937
11 Section 30 (1) of the Employment Act 2006
12 Blacks law dictionary ninth edition by Brayan page 740
13 (1863) 3 B & S 826
14 Section 65 (2) (d) of the Employment Act 2006

employer reaches such an age limit especially when it was expressed in their agreement that at
clocking that age the contract will be terminated the employment contract will come to an end
thus a way of termination.
Inherent inability the contract of employment is a contract of uberimae fidei an employee who
is not capable of performing his job can be dismissed in Doscota v Optolis15 the claimant was
dismissed for failure to keep proper records and the employment tribunal held the dismissal fair
and tha the employer had reasonable grounds to dismiss him.
Conclusively a contract of employment can be terminated as per the above mentioned ways as
long as the employer has a justifiable reason not in contravention with the employment Act and
other Acts in relation to the employment contractual relationships.
REFRENCES

Text books
Blacks law dictionary ninth edition by Brayan
Employment law hand book by Peter Wallington fifteenth edition
Statutes
The Employment Act 2006
Cases
Doscota v Optolis (1977) IRLR 178
Taylor v Caldwell (1863) 3 B & S 826
Konig v Karanjee Naranjee properties (1968) EA 223
Lulume v coffee marketing Board (1970) E.A

15 (1977) IRLR 178