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An employment contract is also known as a contract of service and this has been defined under

S.2 of the Employment Act of 2006 to mean any contract; oral or in writing, express or implied,

where a person agrees in return for remuneration to work for an employer and includes a contract

of apprenticeship. It is therefore imperative to note that a contract between an employer and

employee must be regulated by the Act unless the variation is in the favour of the employee as

stipulated under S. 27 of the Employment Act.

Owing to the fact that it is a contract and the authoritative submissions of court in CARLILL V

CARBOLIC SMOKE BALL COMPANY (1893) 1 QB 256, there must be offer, acceptance and

consideration. A contract of employment, often called a service agreement embodies general

contractual principles. For example the equivalent of offer and acceptance in contract law is the

hiring of the employee whereby as soon as the employee is recruited, then it can rightly be

argued that an offer has been made by the employer and the employee accepted it and at the same

time giving consideration in form of service or skill offered and the law on dismissal is based on

breach of contract*

Some of the key features of a contract of employment do include the following as discussed


1. The parties to the contract. Under S.59 (1)(a) of the Employment Act, an employment

contract should clearly state who are the parties to a contract. This is in line with the

doctrine of privity of contract which provides that only parties to a contract can sue or

enforce their rights or claim damages under the contract as was observed in DUNLOP

PNEUMATIC TYRE CO V SELFRIDGE (1915) where agreement for resale price

maintenance was unenforceable as a matter of privity. Therefore this will allow the
employee and employer to know what rights each party possesses in case of any breach

of contract*
2. The job title or description as stipulated under S.59(1)(C). This defines the relationship

between the employee and the employer because it gives the employee a road map of the

activities he is supposed to undertake and also enables the employer to enlist their

expectations from him since it has been held in CHARDWICK V PIONEER PRIVATE

TELEPHONE LTD (1941) 1 ALL ER 522 that a contract of service comprises some

degree of control by the master. The job description also avoids liability on the part of the

employee especially when acting within the scope of his employment as seen in the case

of MUWONGE V ATTORNEY GENERAL (1967) EA 17 where court stated that an act

may be done in the course of the servants employment so as to make his master liable

even though it is done contrary to the orders of the master. On the other hand, it also

avoids liability on the part of the employer especially if the employee acts outside the

scope of his authority*

3. The mode of termination should also be provided for in the employment contract. Notice

should be provided before termination and this takes into account the length of time

served, position served, the pay and the nature of work. This is because in default of

notice of a specified period, the employee is entitle to receive pay in lieu of notice and

even where no period for notice is stipulated compensation will still be awarded

depending on the nature and duration of employment as stated in BARCLAYS BANK V

MUBIRU GODFREY [1998-2000] HCB 16*

Under S.66 of the Employment Act, there should also be a provision for a fair hearing before

termination is considered. This is to enable the employee in case he is accused of doing

something wrong to be in position to en know the accusations before him and prepare and
prepare a defence accordingly as emphasized in RIDGE V BALDWIN where it was held that

the the principles of natural justice that is procedural fairness require a fair hearing to be

given to an accused person*

Under S.96(1) of the Employment Act, the employment contract should also provide for

summary dismissal in certain instances. This dismissal is without notice but for it to be

justified, the breach of the employee must be a serious one to amount to an employees

obligation under the contract of employment such as disobedience of lawful orders,

misconduct, incompetence or neglect of duty as observed in JOHN ELATU V UGANDA

AIRLINES (1984) HCB. Hence this is supposed to prevent gross misconduct on the part of

the employee which may be detrimental to the employer*

Lastly, the contract should provide for a salary or wage for the employee in legal tender

through any mode of payment such as through the bank, postal order or direct payment to the

employees bank account as stipulated under SECTION 41(1), (2) and SECTION 59(1)(e) of

the Employment Act 2006. A provision for deduction especially in terms of taxes, pension

fund, rent and accommodation should be added upon consent of the employee as required by

S46 of the Employment Act. This is aimed at alerting the employee of the salary he is entitled

to at all times even though he is absent from work unless the contract has an express term

stating otherwise and the burden is on the employer to prove such a term as per Justice


Conclusively, a contract of employment should include the above features to establish a

formal relationship between the employer and employee and their respective responsibilities

so as to promote the principle of natural justice and good working conditions as required by

ARTICLE 40 of the 1995 Constitution of the Republic of Uganda*