Important Procedures to Follow Under Reduction of Work Force

By Dagnachew Tesfaye


This brief article will look into the reduction of workforce as envisaged by the Labour Proclamation 1156/2019( hereafter the Labour Proclamation) and Reduction of Work Force Directive No.43/2013(hereafter the Directive). The Directive is a registered directive at the Federal Attorney General’s portal. An attempt to elaborate what reduction of work force means and the procedure of implementing the reduction will be looked in detail. A brief conclusion shall follow.

“Reduction of Workforce” has been defined in the Labour Proclamation as termination of workforce of an undertaking affecting a number of workers representing at least ten percent of the number of workers employed or, in the case where the number of workers employed in an undertaking is between twenty and fifty, termination of at least five employees over a continuous period of not less than ten days.

The expression “number of workers” will have the meaning of the average number of the workers employed by an employer concerned within the twelve months preceding the date when the employer took measures of reduction of workers.

Good causes that justify reduction are stated under Article 28(3). The first one involves any event which entails direct and permanent cessation of the worker’s activities in part or in whole resulting in the necessity of a terminating a contract of employment. The second good cause involves decrease in sales of goods or services. Without prejudice to the provisions of Article 18 (5) and (6) i.e. ( full or partial suspension, due to force majeure, of the activities of the employer for a period of not less than 10 consecutive days; or financial problems, not attributable to the fault of the employer, that requires the suspension of the activities of the employer for not less than 10 consecutive days) fall in demand for the products or services of the employer resulting in the reduction of the volume of the work or profit of the undertaking and thereby requiring termination of a contract of employment. The third and last good cause involves the acquiring of new technology. A decision to alter work methods or introduce new technology with a view to raise productivity, is a good cause that justifies reduction of work force.

The general procedure set forth in the Labour Proclamation is that whenever a reduction of workforce takes place, the employer shall conduct consultation with a Trade Union or workers’ representatives. However, under the Directive, whenever there is no trade union or existing workers’ representative, the workers shall select their representatives using a selection workers’ committee. Those elected worker’s representatives should obtain majority vote of the workers.

Then the employer shall notify the trade union or workers’ representative in WRITING 30 days prior to implementation of the reduction. The content of the letter shall be reasons for the reduction of work force, how many workers will be affected, which positions are affected, how long the reduction lasts and the criteria for the implementing the reduction.

The employer and workers representative or trade unions shall be holding discussion on the reduction or seeking other options available given the status of the employer that can avoid reduction of workers. Such discussion has a time limit. And it should last within 30 days.

The discussion should enable to release those involved in the reduction with pension, if the option is available. If the employer has new positions opened, then so long as those reduced are compatible, the reduced workers will get priority.

In case of comparable skill and rate of productivity, the workers to be affected first by the reduction shall be in the following order: a) Those having the shortest length of service in the Undertaking; b) Those having fewer dependents; c)The reduction shall affected first workers except those that are listed under (d) up to (e) of this Sub-Article; d) Those employees with disability; e) Those who sustained employment injury in the Undertaking; f) Workers’ representatives; and g) Expectant mothers and mothers within four months post-natal.

Before, implementing the reduction, the employer shall NOTIFY in writing to the Ministry of Labour and Social Affairs office the reasons for the reduction of work force, how many workers will be affected, how many workers are working in the enterprise, which positions are affected, how long the reduction lasts and the criteria for the implementing the reduction.

There are exceptions. The procedure laid down in the Labour Proclamation shall not apply to the reduction of workers due to normal decrease in the volume of a construction work. Successive completion of the construction work gurantees lawful reduction of work force. However reduction of workforce cannot happen if the reduction affects workers employed for parts of the work before the work for which they are employed is completed. Here “construction work” includes the construction, renovation, upgrading, maintenance and repair of a buildings, roads, rail-way lines, dams and bridges, installation of machinery and similar works.

To sum up, reduction of workforce should follow the Labour Proclamation 1156/2019 and its implementation directive Directive No 43/2013. The employer should give in writing an invitation for the workers’ representatives for discussion and the Ministry details about the reduction of workforce. The workers should have their representatives assigned to discuss the reduction of work force with the employer. The employer should initiate the procedure 30 days prior to implementing the reduction and the result of the discussion should last within the 30 days.

Major Aspects of the New Foster Family Law: the Case of Ethiopia

By Dagnachew Tesfaye, Founder and Partner at DMLO



The Ministry of Women, Children and Youth Affairs (MoWCYA) has come out with a registered directive Directive No 48/2020 namely Directive on Foster Family and Domestic Adoption Services. In this brief article, an attempt shall be made to see what foster care child support looks like only. Domestic adoption process and procedure shall be dealt in another article.

General Provisions

The preamble says foster care is introduced in this directive to fulfill the promise of the government. The government promised to support vulnerable children locally. Foster care is one of the local support programs. The directive declares that it generates its powers from the ratified Child Right Convention and African Charter on the Rights and Welfare of the Child. Thus, before indulging into the details of the Directive, it is important to see the definitions given to foster family care, who a vulnerable child is and who are the institutions to implement the foster care directives.

The scope of the Directive is to apply on appropriate Federal Government institutions and charity organizations authorize to perform foster and adoption services as per the Federal Government. Based on this directive, regions and city administration may prepare their own directive taking in to account their context.


‘Foster family Care’ is one of alternative to providing support and care to children lost their family or vulnerable children. It is a ‘temporary alternative program’. Foster family care can be either for short or long period. The responsibility of the foster family shall be to properly raise the foster child by fulfilling the basic necessity. The support and care cover the psychological and physical health of the child. These responsibility must be completed until the child is re-unified with their biological parents or placed to other permanent alternative program.

‘Vulnerable Child’ is a child whose survival and development is jeopardize by certain circumstances and therefore in need of alternative care services. Those includes: a. Abandoned Children; b. Single or double orphan; c. Non-orphan whose parents are unable to support the child due to illness, physical disability and mental impairment; d. Street children; e. Children living in orphanage; f. Abandon children due to their biological parents displacement; g. Children who are not getting support from their biological parents due to economical deprivation; and h. Children neglected by their biological parents.

‘Institution’ means a government or charity organizations which have an authority and license from federal government to perform domestic adoption and foster care service.

Registration and Eligibility

The first thing to do is registration. Registration at the institution as an interested foster family. The institutions shall have responsibility to prepare registration form to be filled by potential families. The registration must also include the foster family needs, including age, gender, health status and other conditions of the child.

The registered foster care family should fulfill eligibility requirements. The registered foster family must have Ethiopian nationality and solely reside in Ethiopia permanently. They should be above 25 years of age. Unless and otherwise there is no option, the child must only be given to married persons. Priority shall be given to a family who reside in the area where the foster child resides. Family must duly approve their willingness by written consent to foster the child. Family shall have sufficient economical capacity to raise the child. Foster family should be a person who has not convicted by a court of competent jurisdiction for offenses related children. Family must have medical certificate that enables them to raises the child.

Home Study

After making sure that the eligibility requirements are fulfilled, before the concerned authority placed the child to foster family, a home study shall be done. The concerned organ shall assess the foster family by attending home visits to acknowledge their psycho-social and economic conditions in accordance with the check list.

Evidences Concerning the Foster Family

The foster family should produce Ethiopian nationality identification card, birth certificate, medical certificate, police clearance certificate, marriage certificate and income evidences. Medical certificate should confirms they are completely free from transferable or uncured deceased so as to confirm their health capability to properly raise child.

Evidences Concerning the Child

Once the status of the foster family is assessed and completed, then the status of the child shall follow. General information of the child namely gender, age, language, religion (for a child capable of expressing himself/herself), place of birth and other related information, residential address of the child, birth certificate of the child, family status of the child (abandon, single or double orphan) and other related status shall be organized. The child physical, mental, psychological and health status, educational status of a child, economical status of a child, (for example acquiring property through inherits or grant) shall also be identified. If the child is found abandoned, name and address of the person who found the child, date, place and other related information’s must be organized.


Training to the foster family shall be given by the government organ or the institution. Such training mainly consists of proper upbringing and securing children right and other related subjects.

Matching, Attachment and Bonding

The next step is matching. After organizing the evidences of both the foster family and the child, the INSTITUTION shall made matching the child with suitable family.

Then creating attachment and bonding shall follow. Matching and bonding involves introducing physically the child with the foster family, the biological children of the foster family with the child, taking the child to the village of the foster family so as to allow him to be adapt with the community shall be done.

Foster Care Agreement

Once the bonding activity is carried out, legally binding agreement shall be made between the institution and the foster family. If an agreement is signed between the charity institution and the foster family, the concerned governmental institution shall also sign as a witness. After the agreement is concluded, in order to protect economic and social rights of the child, the foster family may present its petition of guardianship to the competent court of law.

Support and Follow up

After the placement is done, the concerned institution shall provide continuous support and follow up to ensure the right and welfare of the child is reasonably maintained.


Transition of foster care service to other alternatives may be implemented. If the biological parents exist while the child is given to the foster family and if the biological parents are capable of raising their child, reunification with biological parents shall be performed by foster care institution.

Termination of Agreement
If the foster family commit child labor, physical or psychological violence, sexual harassment, or any exploitation has been committed by a family member or by others, then if such incidents confirmed by the concerned institution, without the prejudice of legal liability, the contract will be terminated.


To sum up, the MoWCYA has come out for the first time with binding details of foster care implementation procedure. From the registration of interested foster family to required assessments and documents, to signing a foster care contract agreement has been stated under Directive 48/2020. It is a commendable act in the right direction. Publicly announcing of the Directive and effectively implementing the Directive for the benefit of the vulnerable children are equally important steps.

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The 1960’s Commercial Code vis-a-vis the New Commercial Code

By Hami Bogale, Legal Assistant at DMLO


This article will focus on the planned change to the 1960 Commercial Code of Ethiopia. In the new Commercial Code, although commerce has existed since the ancient times, there has been more advancement with new technologies. This Commercial Code would set a groundwork for the enlargement of the economic sector of the country and would made new advancements and for the country to get closer to the fastest innovations and advancements of the world.

Reasons for Amendments
The 1960 Commercial Code should be amended because of reasons including the establishment of new companies, formation of new jobs, be competitive in the arena of the global world make vague provision clear and understandable and constitute or establish virtual companies, digital banking system.

The Commercial Code of Ethiopia was first introduced in the early of 1960’s. This Commercial Code constitutes articles that are related with commerce and business. But Ethiopia needs up-to-date and developed rule of law to progress with the rest of the world. The recent regime after implementing the constitution, there were encounters to review certain laws of the land. The Commercial Code was one of the laws that were revised by legal scolars. There were strong recommendations and suggestions from different legal advocates and also from different sector of companies that are established in the country, which the Commercial Code seems to be backward for the modern time. The new Commercial Code will have significant modifications and also introduces new technological advancements in the country.

New Changes
Under the new Commercial Code there are numerous changes suggested with regards to the Ethiopian economic development. The new Commercial Code has innovative commercial structures that were not included in the previous Commercial Code. The 1960’s Commercial Code miss out some important issues which were seen in the life insurance, the description of insurance and insurance strategy against unforeseen accidents. These was not efficiently stipulated under the 1960 Commercial Code. There should have been a clear explanation about unexpected accidents. Elements of accidents should have been cleared.

Company law such as private limited companies (PLC) has been intensely aggregating in our country but there seems to be some difficulties with the articles of the Commercial Code that govern this specific companies. Specifically the articles that are related with mandatory legal requirement, capital, limited liability of members needed some amendment.

The new Commercial Code has come up with the following resolutions and new introductions. The introduction of Individual PLC. This new type of organization permits that one person can establish a company. The previous code only permits minimum of two person to establish a private limited company. The new Commercial Code states that board of directors can manage a PLC and the board members may be outsiders or shareholders. Business owners can use their business as collateral. Business owners can use their business as a collateral to ask for loan from banks. In the previous Commercial Code articles of association was a mandatory requirement for establishment of a share company and PLC. Under the new Commercial Code, articles of association are no longer a mandatory task to fulfill establishment of shareholding companies.

The 1960’s Commercial Code of Ethiopia has governed the commerce sector of the country for over 50 years. The 1960’s Code was first introduced in the reign of the Emperor Haileselase. This generates an obvious difficulty to the modern day commerce and business. As companies generally are increasing with number and recent technologies, they need an up to date law that governs them which goes in parallel with the modern introduced innovations. As a result there were several demands on the side of the legal scholars and also startup companies that the 1960’s Commercial Code is regressive for the current time. After several attempts, the new Commercial Code was presented. This new code consists of many changes from the previous code and also introduced new features to the procedure of the commerce in the country. This starts new advancements in the sector of commerce and it would be a great advantage for new companies to emerge in the country since the law has introduced different kinds of policies.

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Important Issues on Persons Deceased Abroad: Transport, Burial and Inheritance

By Mahlet Mesganaw

The Ethiopian Ministry of Foreign Affairs ( hereafter MoFA) on its Registered Directive No 523/2013 (hereafter the Directive) has provided the procedure how bodies of those who deceased abroad will be brought to Ethiopian or buried where they passed away and how inheritance issues are resolved.

The Directive states details on the requirements to be fulfilled to send deceased bodies for burial to Ethiopia from abroad. The requirements are include the applicant who is seeking the service has to apply, fill the form and provide necessary documentations. Full name of the deceased, passport number and his/her nationality, residence or work address(if known) and where the deceased body is found. Full name, phone number, valid passport copy or Woreda Id/Kebele Id of the relative or proxy or concerned party who wish to transport the deceased body to Ethiopia. Also a support letter attesting being relative;-if there is no relative or proxy or concerned party, the Ethiopian Consulate shall appoint a person from its staff to follow up the matter or follow up the rules of procedure of the country where the deceased has died, to finally transport the body for burial in Ethiopia. Evidence should be brought to the Consulate by the relative or successor of the deceased as to being the successor of the deceased. And costs and expenses for transport of the deceased shall be borne by the relatives of the deceased. If the relatives cannot cover the costs, then the employer of the deceased shall cover the expenses. If this cannot happen, then a call for support for Ethiopian Community or Ngo’s or individual sponsors shall be sought.

When an Ethiopian national residing abroad is going to be buried at the place of death, in addition to the above requirements the applicant has to produce succession court papers from the First Instance Courts attested by Supreme Court, authenticated by MoFA and a video or photograph that shows the burial or funeral.

The Directive also gives directions as to what happens when there is no relative coming forward for a deceased Ethiopian National abroad. The Directive also forwards to the law to mediate the dispute among relatives as to sending the deceased body to Ethiopia for burial or not.

Concerning inheritance of the deceased’s property, salary, insurance or money in the country where he/she dies, those who claim as successors should produce court declaration of succession, translated into the working language of the country where he died, authenticated by MoFA in two copies. A power of attorney to the consulate or third party translated in the working language of the country where he/she died, authenticated by MoFA in two copies should be presented. Details about the deceased and the applicant need to be indicated. The deceased’s property lists, where it is found and name of the authority to be requested should be included. And the deceased’s passport copies of the first three pages in two copies and the applicant’s ID or passport copy of the first three pages need to be attached.

The property, salary or insurance money shall be sent to the successors once the successors produce court papers on the liquidation of the deceased’s property.

The Directive has been registered by the Federal Attorney General as per Federal Administrative Procedure Proclamation No 1183/2020 which makes it valid and effective.