Month: May 2022

By Mahlet Mesganaw, Partner at Dagnachew & Mahlet Law Firm Limited Liability Partnership(LLP)

The House of Federation (HoF) of the FDRE is one of the legislative organs of the government of Ethiopia. One of the major powers of the HoF is to decide on constitutional interpretation and constitutional disputes. New developments and gaps in the power to interpret the constitution by the HoF shall be the focus of this article.

General

The HoF is composed of representatives of Nations, Nationalities and Peoples. Each Nation, Nationality and People shall be represented in the HoF by at least one member. For each additional one million of its population, one additional representative shall be selected for each Nation and Nationality. Members of the HoF will be elected by State Councils. Article 62(1) of the FDRE Constitution provides the powers and functions of the HoF. One of the powers and functions of HoF is the power to interpret the constitution. Proclamation No 251/2001 was the governing law detailing the powers and functions of the HoF for the past 20 years till this Proclamation was repealed and replaced by  a Proclamation to Define the Powers and Functions of the House of Federation Proclamation No 1261/2021.

Interpret the Constitution

The HoF has the constitutional power to interpret the constitution. All constitutional disputes shall be decided by the HoF and not courts. To help in the interpretation of the constitution, the HoF is constitutionally granted power to organize the Council of Constitutional Inquiry(CCI). Hence CCI is established as a constitutional organ under Article 82(1) of the FDRE Constitution. The CCI has 11 members. The President and Vice President of the Federal Supreme Court serve as President and Vice-President to the CCI. CCI shall carry on the investigation of constitutional disputes and submit its recommendation to the HoF.

Recommendation and Appeal 

Article 7 of Proclamation No 1261/2021 states that the HoF shall render a final decision on recommendations by CCI that a certain matter requires constitutional interpretation. The HoF may establish a committee drawn from its members to investigate the draft proposal of the CCI. In the case where the CCI rejects a particular matter saying the matter does not deserve constitutional interpretation, such a decision is appealable to the HoF. The HoF committee may be mandated to decide whether an appeal made against a decision of the CCI should be presented to the general meeting of the HoF or not. The HoF by itself or using a committee will render a final decision on the appeal. Such an appeal has to be brought to the HoF within 180 working days. Cases concerning crimes against humanity, cases concerning rights of Nations, Nationalities and Peoples or issues relating to division of power cannot be barred by period of limitation.

Decision Making Time Limit

The FDRE Constitution on Article 83(2) provides the time limit the HoF has to decide on constitutional disputes presented to it. The HoF is required to decide on constitutional dispute cases within 30(thirty) days from the date of receipt of recommendation by the CCI. Similar time limit has been incorporated in the repealed Proclamation No 25/2001. However, the latest Proclamation No 1261/2021 is silent. The latest proclamation indicates the fact that the HoF shall decide constitutional disputes in a short time without mentioning the 30 day time limit.

Stay of Execution

Stay of execution order is included in the latest proclamation. Stay of execution order was not incorporated in the repealed proclamation. When the HoF believes that there will be irreparable damage to an applicant requesting constitutional interpretation, a stay of execution could be ordered. The authority to order a stay of execution is the Speaker of the HoF and not the President of the CCI as it customarily requested.

Rules on Decision Making

The repealed proclamation requires unanimous vote for passing a decision on constitutional interpretation cases. The latest proclamation however is silent on the subject. The FDRE Constitution on Article 64(1) states the fact that all decisions of the HoF require the approval of a majority of members present and voting. Thus it is fair to assume that constitutional interpretation cases will be decided not by unanimous decision but by majority vote of members present and voting.

Execution of Decision

The decision of the HoF on constitutional interpretation comes into effect as of the date of passing of the decision except when the decision itself states otherwise. However, when a given law is termed unconstitutional, the party that issues the law is given three month to amend, change or repeal the law in question. The time period used to be six month in Proclamation No 251/2001, which now is reduced to 3 months. The latest proclamation included a follow up procedure in that the concerned government body to amend, change or repeal the law has a duty to communicate the HoF in writing that it amends, changes or repeals the law in question. The House shall follow up the execution of its decision. For that matter Article 22(1) of Proclamation 1261/2021 states that the final decision of the HoF on constitutional interpretation shall be obligatory.

Binding Effect

The repealed Proclamation No 251/2001 on Article 11 provides that the House’s constitutional interpretation shall have the general effect which therefore shall have applicability on similar constitutional matters that may arise in the future. Such a binding nature of the interpretation is broad enough to oblige not only courts but also the House itself. Nonetheless, the latest proclamation that repealed Proclamation 251/2001 is silent on the subject matter. There is no clear mention that an interpretation on a constitutional matter will have applicability to similar constitutional matters that may arise in the future.

Publication

Pending cases before the HoF are required not to be publicized. Press release or publication of such pending cases by any media including social media is prohibited unless it is for research or study purposes. However when it comes to final decision, Proclamation No 1261/2021 includes the need for publication in a journal and release in media outlets of the decision of the HoF on constitutional interpretation. The publication shall be done in languages of the Federal government, Regional states and English.

Conclusion

The enactment of Proclamation No 1261/2021 is to fill implementation gaps and incorporate new developments. The HoF experience in tackling constitutional interpretation issues has brought to its attention the need to include additional procedures like stay of execution and follow up of its decisions in amending, changing or repealing laws in different government organs. Interpretation of constitutional matters affecting the supreme law of the land has to be given weight and dissemination of information on changes made necessary to reach all Nations, Nationalities and Peoples of Ethiopia.

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By Dagnachew Tesfaye, Partner at Dagnachew & Mahlet Law Firm Limited Liability Partnership(LLP)

The Ethiopian Labour Proclamation No 115/2019 incorporates general working conditions of young workers from Article 89-91. Young workers are those natural persons between the age of 15-18 years. It is prohibited to hire persons below the age of 15 years. In line with Article 89 Sub Article 4 of the Labour Proclamation, the Ministry of Labour and Social Affairs (now the Ministry of Labour) has issued as of August 24,2021 a registered Directive No 813/2021 (the Directive)  that lists activities that are prohibited for young workers. A previous directive  issued in April 2013 on the Lists of activities prohibited for young workers is repealed by this Directive. A look at those prohibited activities for young workers shall be the focus of this article.

Prohibited Activities

Around fourteen activities are listed as prohibited jobs for young workers. These include:transporting persons and goods by land, air, and water and fishing; lifting, pulling heavy goods or works related to these in ports and warehouses; works directly related to electric power generating stations, transmission lines, and power distribution centers;  subterranean works like deep mineral extraction, stone quarries, or related works; work on high places on scaffolding, moving materials up or down using machines, or moving materials from one place to another on cranes and lifts using electric or motorized energy.

The list goes on to include work in undertakings that produce alcohol, tobacco or other substances that induce addiction or are poisonous; work in extremely cold places, warehouses, freezers; work in extremely hot places; jobs that expose young workers to harmful ionizing and non-ionizing radiations like x-rays, ultra-violet rays, gamma rays etc; work in production areas that use dangerous and poisonous chemicals like arsenic, lead, cadmium, manganese, cyanide and other such metallic substances and solvents; works which produce or utilize explosive and incendiary substances and elements; jobs which involve preparation, mixing, or spraying of various pesticide and herbicide chemicals; jobs which bring the worker into direct contact with biological hazards like fungi, bacteria, and viruses that cause contagious diseases and jobs that can harm the physical, mental, and psychological well-being of young workers. 

Weight Limits

Weight limits are categorized under continuous work and non-continuous work. Continuous work has been defined as  uninterrupted and repetitive work that causes physical stress. Consequently, for activities that are fully manual: for continuous work: 7 kgs and for non – continuous work: 11 kgs. Where the activity is wholly manual, but involves climbing up and down a slope: for continuous work: 5 kgs,  for non – continuous work: 9 kgs. Where the movement is on a onewheel barrow: where the floor is bumpy and not smooth: 16 kgs and where the floor is smooth: 20 kgs.

Exception

The prohibited activities shall not be applicable to Youth who are engaged in training and practice under educational and vocational institutions authorized and supervised by the given authority which have responsibility. 

Limits of Hours of Work

Normal hours of work for young workers shall not exceed seven hours a day. It is prohibited to assign young workers on night work between 10 p.m. and 6 a.m,  overtime work and work done on weekly rest days or work done on Public Holidays.

Conclusion

The Labour Proclamation and  the Directive has been issued in order to protect young workers from serious occupational injuries or damages to their health in the course of their work. It is prohibited to assign young workers on work, which on account of its nature or due to the condition in which it is carried out endangers their lives or health. The responsibility is laid upon  the employer to implement the Directive.

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By Mahlet Mesganaw, Partner at Dagnachew & Mahlet Law Firm Limited Liability Partnership(LLP)

Ethiopia has enacted as of March 18,2022 new Private Organization Employees’ Pension Proclamation No 1268/2022(the current Proclamation). This new proclamation has repealed the Private Organization Employees’ Pension Proclamation No 715/2011 and its amendment Proclamation No 908/2015(together referred to as previous proclamations). The major additions to the new proclamation shall be the focus of this article.

Private organization Employee

In the previous proclamations, employees engaged in cotton collection,sugar cane cutting and such other similar works were explicitly excluded from being covered by the proclamation. Now in the current pension proclamation, the exclusion of these types of employees has not been indicated. Thus the definition on who is a private organization employee shall make the distinction as to who is covered and who is not. Private organization employee is defined as ‘any private organization employee who has been a salaried person employed in a private organization for less than 45 days for definite or indefinite period of time or piece of work including managerial employees’.

From Agency to Administration

The authority that administers the private organizations employees pension and social security was organized under an Agency. Now in the current proclamation the authority is changed from Agency to Administration. This is in line with Article 12 of the Proclamation 1263/2021 that deals with the Definition of Powers and Duties of the Executive Organs. Hence the government administrative body that is entrusted to administer the private organization employees pension and social security is the Private Organization Employees Social Security Fund Administration. 

No Option for Provident Fund

The previous proclamation allows employees to choose from pension schemes or the provident fund or agree to be covered by the pension proclamation. Now the new and current proclamation states that ‘all employees who have provident fund or any other scheme called by any other name before the coming into force of this proclamation shall be covered by this proclamation’. As a result the only scheme for private organization employees is the pension scheme provided in the new proclamation and no other. The Administration may issue details by a directive.

Non-applicability to Sole Owners

The current and previous proclamations are applicable to employees of private organizations who are Ethiopian nationals. Nonetheless, domestic workers and employees of governmental international organizations and foreign diplomatic missions were excluded from the current and the previous pension proclamations. However the current proclamation added one more exclusion i.e. sole owner’s managers or employees or sole owner’s. Thus the private organization employees pension proclamation is not applicable to sole owners’ managers or employees or sole owners.

Pension Contribution Collection

The previous proclamation indicates the collection of the pension to be done by bodies to be delegated by the Agency on Article 11(4) of the proclamation. However the current proclamation specified the delegated body. The government body to collect pension contributions is the for the federal government the Federal Ministry of Revenue and for regions the Regions Revenue Authority or any authority legally established for the collection of revenue and tax.

Collection of Pension Contribution

Specific power to sell through tender the property of the private organization who failed to pay the pension contribution has been modified to be handled by a directive to be issued by the Administration in the current proclamation.

Priority

Priority over any debt of pension contribution payment is elaborated by the current proclamation as having priority because it emanates from law, agreement or court decision or over any payment of debt.

Liability of General Manager

The new pension proclamation added the liability of the General Manager of a private organization which has been dissolved, divided or amalgamated for unpaid arrears pension contribution.

Investment of Pension Fund

Specific mentioning of investment of pension funds in treasury bonds and other profitable and reliable investments was indicated in the previous proclamation. Now the current proclamation indicates investments as  ‘profitable and reliable areas’ only. The new proclamation leaves the specific wording of treasury bonds. Who decides on the investment has been previously left to be determined by the directive to be issued by the Ministry of Finance and Economic Development. However, now the current proclamation assigned the task  to the Administration Management Board.

Retirement Age

The retirement age of an employee of a private organization shall be 60 years based on the date of birth registered when he was employed for the first time. The retirement age of 60 has been there in Proclamation No 715/2011 and it is copied in the new proclamation as well.

Service beyond Retirement Age

In calculating the period of service, the period of service beyond retirement age lawfully retained in service would have been considered in the previous proclamation. Now in the current proclamation, lawfully being retained in service beyond retirement age is left out. In other words service beyond retirement age would not be considered as a period of service.

Assessment of Employment Injury by Medical Board

Assessment of employment injury by one medical board could be sent to be evaluated by another medical board. The previous proclamation was silent on  what to do if there exists  conflicting assessment results. The current proclamation gave an indication of a solution to the gap. The Administration is given the task of determining the acceptance of the medical board assessment.

Pension Adjustment

Pension adjustment has been reduced to 3(three) years by the current proclamation from every 5(five) years by the previous proclamation.

Period of Limitation

In the current proclamation, any claim for payment of arrears of pension benefit or payment of gratuity is barred by a 5(five) year period of limitation. The period of limitation used to be 3(three) years in the repealed proclamation.

Responsibility to Digitalize

The Administration is tasked with a new responsibility to collect and digitalize data.

Criminal Liability

The Previous proclamation contains a penalty for unwillingness to submit evidentiary documents and obstruction to result in punishment with rigorous imprisonment not exceeding 5 years and a fine not exceeding Birr 10,000. Now the current proclamation deleted the 5 years imprisonment and Birr 10,000 penalty and  left the penalty to be determined by the relevant provisions of the criminal law of Ethiopia.

To sum up, the new and current private organization pension proclamation has incorporated few additions  with the aim of strengthening and improving the pension scheme and pension fund to the benefit of citizens.

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By Dagnachew Tesfaye, Partner at DMLO

Post-Covid ease of travel restriction will attract tourists to enjoy the amazing landscape, diverse culture and natural beauty of Ethiopia. Additional mesmerizing parks are on the way. The more internal conflict and instability subside, the more the increase in tourism investment. The laws regarding establishment of tourism investment in Ethiopia will be the focus of the article.

Investment in Tour Operations

According to the Investment Regulation No 474/2020, Article 4(12) tour operations are reserved for domestic investors. However the previous investment regulation i.e. Investment Incentives and Investment Areas Reserved for Domestic Investors Council of Ministers Regulation No 270/2012 divided tour operations into two. These were grade 1 tour operations and tour operations below grade 1. Consequently, the previous investment regulation allowed foreign investors to invest in grade 1 tour operations. Whereas tour operations below grade 1 were reserved for domestic investors. The previous regulation  is repealed by the current Investment Regulation on reserved investment areas. Therefore, tour operation has been limited to investment by domestic investors only. New entrants of foreign investors cannot engage in tour operations.

Tourism as a Priority Sector 

The Ethiopian Government has given tourism a priority. The Government invested a lot of capital in developing new tourist destinations and restructured the regulator to focus on tourism. The Ministry of Tourism(MoT) has been restructured from the Ministry of Culture and Tourism to the Ministry of Tourism under Definition of Powers and Duties of the Executive Organ Proclamation No 1263/2021. According to this Proclamation, the Ministry has been given several powers and duties. Among the powers one can mention the power to issue licenses, unless such power is clearly given to other organs, to investors who provide services in tourism to more than one region or where the law provides, to tourism service providers conducted by forign investors. 

In conclusion, the Ethiopian Government is eyeing tourism as a sector that is going to positively impact the economy. The Government is hugely invested  in developing new tourist destinations and their infrastructures. Whereas, the investment in tour operation is reserved to domestic investors under the current Investment Regulation. The previous Investment Regulation allowed foreign investors to invest at least in grade 1 tour operations. Flow in foreign currency and foreign tourists from around the world would have been increased if new foreign investment entrants to tour operations are allowed to invest in tour operations. The intention of the Government on the one hand and the law on tourism investment seems to contradict. This should call for amendment of the law on investment areas allowed for foreign investors in tourism investment.

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