Hiring Your First Employee? Read This Contract Checklist First.

Congratulations. You have reached the "Good Problem" stage. You are too busy to do everything yourself. You need help. You need a Sales Assistant, a Manager, or a Driver.

So, you call your cousin’s friend, or you post on Twitter. You find a sharp young guy named John. You shake hands. You agree on "500k a month." He starts Monday. Stop!

You have just walked into a minefield. In Uganda, a "handshake deal" works... until it doesn't. Until John steals your client list. Or until you have to fire John, and he runs straight to the Labour Office claiming "Unfair Dismissal."

Suddenly, you are paying him 6 months of salary in damages because you didn't have a piece of paper.

Hiring is the biggest step you will take this year. Do not do it on "vibes." Here is the 5-Point Contract Checklist every Ugandan SME needs to read before letting anyone start work.

If you hire a "Shop Manager," what does that mean? Do they clean the floor? Do they post on TikTok? Do they handle cash? Your contract must have a specific Job Description (JD) with a clause showing duties, for instance "Duties include A, B, and C. The Employee may also be required to perform other reasonable duties as assigned by the Employer." That last sentence saves you when you need them to run an errand.

In Uganda, once you hire someone permanently, firing them is hard. You need hearings, warnings, and evidence. But during Probation, it is much easier.

Every contract must state a probation period (usually 3 or 6 months). "The first 3 months of employment shall be a probationary period. During this time, either party may terminate the contract with [X] days' notice." This matters because should John turn out to be lazy in Week 2, you can let him go without a legal battle.

You offer 1 Million shillings. John expects 1 Million in his pocket. But the law says you must deduct NSSF (5%) and PAYE (Tax). When John gets 800k, he thinks you are robbing him. In the contract, be crystal clear. State the Gross Salary. For instance, "The Gross Monthly Salary is UGX 1,000,000. This is subject to statutory deductions (NSSF, PAYE) as required by Ugandan Law."

Sit the new hire down and calculate the "Take Home" pay before they sign. Manage expectations.

You spent 3 years building your supplier list in China. You spent months training your team on your special recipe. What stops John from quitting, crossing the street, and opening a copycat shop with your data? Add a Non-Disclosure (Confidentiality) Clause. It reads something like, "The Employee agrees not to disclose any trade secrets, client lists, or financial data to third parties during or after employment."

Nobody hires someone planning to fire them. But marriages end, and so do jobs. If you don't agree on how to break up, the breakup will be expensive, so define the Notice Period. Include a clause that says, "After the probation period, this contract may be terminated by either party giving [1 Month] written notice or paying [1 Month] salary in lieu of notice."

A contract isn't about mistrust. It's about clarity. It protects you (the business owner) from lawsuits. But it also protects the employee (ensuring they get paid on time).