Abstract: The study discusses structural adjustment, the psychological contract and discretionary cooperation of labour in Uganda by investigating the response of labour (agent) and organizations (principal) to structural adjustment programs (SAPs). The study notes that SAPs could adversely affect and cripple organizations beyond repair. The author suggests that one measure might be for the government to intervene in terms of subsidizing the minimum wage and to consider public expenditure as complementary to private expenditure particularly since most of the institutions and the environment required for supporting market forces are not in place in Uganda.