By DMLF Team

The Ethiopian Labour Proclmation No 1156/2019 incorporates sexual harrasment and sexual violence as conditions to terminate employment contracts without notice for both the employer and the worker. This is a new addition to the Ethiopian labour law. We shall briefly look into what sexual harrasment and sexual violence are and the consequesnces in terms of termination of employment contract, serverance pay and compensation.

Sexual harassment has been defined  in the Proclamation as ‘pursuing or convincing another through utterances, signs or any other manner, to submit for sexual favor without his/her consent’’. On the other hand, sexual harassment accompanied by force or an attempt thereof is defined as sexual violence.(Art.2(11)&(12)).

Commiting sexual harrasment or sexual assualt at workplace is termed a prohibited act for employer and managerial employee.(Art.14(1)(h)). Similarly commiting sexual harrasment or sexual assult at work plae is a prhobited act for the worker.( Art.14(2)(h)).

Sexual harrasment or sexual violence at workplace is therefore a sufficent ground for termination of employment without prior notice by the employer. (Art.27(1)(i)). The right of the employer to terminate the contract of employment shall lapse after thirty working days from the date the employer knew the existence of a ground for termination.(Art.27(3)).

Where a worker has been a victim of sexual harassment or sexual violence by the employer or managerial employee, the worker can terminate his contract of employment without notice.(Art.32(1)(b)). In this regard, the worker has to inform the employer in writing the reasons for termination. An action should be taken within 15 working days from the date at which the act occurred or ceased to exist. Otherwise it will be barred by period of limitation.( Art.32(2)&(33)).

Severance pay is available for a worker who resigned due to sexual harrasment or sexual violence by the employer or managerial employee. Where such an act is committed by a colleague  and the incident was reported to the employer but the latter failed to take appropriate action in due time, the worker is entitled to severance pay. (Art.39(1)(d)). 

The amount of severance pay shall be thirty times the average daily wage of the last week of service for the first year of service. Where the service of the worker is less than one year, the severance pay shall be calculated in proportion to the period of service.(Art.40(2)). Where a worker who has served for more than one year, severance pay shall be increased by one-third of the monthly wage(i.e thirty times the average daily wage of the last week of service) for every additional year of service. Nevertheless, the total amount shall not exceed twelve months’ wage of the worker.(Art.40(3)).

Where the termination of employment is made by a worker due to sexual harrasment or sexual violence, the worker is entitled to compensation of his daily wage multiplied by 90. This is in addition to the severance pay.(Art.41(2)).

To sum up, the introduction of sexual harrasment or sexual violence as a serious ground for termination of employment without notice shows the level of importance such an act is given by the legislator. The employer is required by law to take action when such a sexual harrasment or sexual violence in a work place is reported. A victim of sexual harrasment or sexual violence is therefore entitled to severance pay and compensation.

For employment matters and questions you may contact us at info@dmethiolawyers.com

Investment Areas Open for Foreign Investors to Engage with Full Ownership in Ethiopia

By Mahlet Mesganaw, Partner at DMLF


Questions are asked as to which business areas are open for foreign investors in Ethiopia. To answer the question it is important to state what business areas are reserved for domestic investors and the government. 32 business areas are exclusively reserved for domestic investors, 7 business areas are reserved for joint investment by foreign investors and domestic investors and 5 business areas are assigned for joint investment between the government and any investors. Aside from the business areas reserved above, the remaining business areas are open for foreign  investors to engage. Lets see now in detail those reserved business areas for domestic investors and the government.

32 Business Areas  Exclusively Reserved for Domestic Investors

Business areas reserved exclusively for domestic investors are as follows: 1/ Subject to applicable law, banking(policy change is occurring here), insurance and microfinance businesses, excluding capital goods finance business; 2/ Transmission and distribution of electrical energy through integrated national grid system 3/ Primary and middle level health services; 4/ Wholesale trade, petroleum products, wholesale of own products produced in Ethiopia; excluding wholesale of electronic commerce; 5/ Retail trade excluding retail of electronic commerce as provided under appropriate law, of own products produced in Ethiopia; 6/ Import trade, excluding liquefied petroleum gas and bitumen;7/ Export trade of raw coffee, khat, oil seeds, pulses, minerals, hides and skins, products of natural forest, chicken, and livestock including pack animals bought on the market; 8/ Construction and drilling services below Grade I; 9/ Hotel, lodge, resort, motel, guesthouse, and pension services, excluding those that are star-designated; 10/ Restaurant, tearoom, coffee shops, bars, nightclubs, and catering services, excluding star-designated national cuisine restaurant service;11/ Travel agency, travel ticket sales and trade auxiliary services 12/ Tour operation; 13/ Operating lease of equipment, machineries and vehicles, excluding industry-specific heavy equipment, machineries and specialized vehicles;14/ Transport services, excluding the following areas: a) Railway transport; b) Cable-car transport; c) Cold-chain transport; d) Freight transport having a capacity of more than 25 tones; and e) Transport services reserved for joint investment with the Government or domestic investors; 15/ Making indigenous traditional medicines; 16/ Producing bakery products and pastries for domestic market; 17/ Grinding mills; 18/ Barbershop and beauty salon services, smithery, and tailoring except by garment factories; 19/ Maintenance and repair services, including aircraft maintenance repair and overhaul (MRO), but excluding repair and maintenance of heavy industry machineries and medical equipment; 20/ Aircraft ground handling and other related services21/ Saw milling, timber manufacturing, and assembling of semi-finished wood products; 22/ Media services; 23/Customs clearance service; 24/ Brick and block manufacturing;25/ Quarrying; 26/ Lottery and sports betting; 27/ Laundry services, excluding those provided on industrial scale;28/ Translation and secretarial services;29/ Security services; 30/ Brokerage services; 31/ Attorney and legal consultancy services; and32/ Private employment agency services, excluding such services for the employment of seafarers and other similar professionals that require high expertise and international experience and network.

7 Business Areas  Reserved for Joint Investment by Foreign Investors and Domestic Investors

The following business areas are reserved for joint investment by foreign investors and domestic investors. However the foreign investor jointly investing with a domestic investor in these investment areas cannot hold more than 49% of the share capital of the enterprise. The joint investment businesses are: 1) Freight forwarding and shipping agency services; 2) Domestic air transport service; 3) Cross-country public transport service using buses with a seating capacity of more than 45 passengers; 4) Urban mass transport service with large carrying capacity; 5) Advertisement and promotion services; 6) Audiovisual services; motion picture and video recording, production and distribution; and 7) Accounting and Auditing services.

5 Business Areas are Assigned for Joint Investment Between the Government and any Investor

Any investor together with the government can invest in the following areas. These are: 1/ Manufacturing of weapons, ammunition and explosives used as weapons or to make weapons; 2/ Import and export of electrical energy; 3/ International air transport services; 4/ Bus rapid transit; and 5/ Postal services excluding courier services.


We have seen in detail the list of businesses reserved exclusively for domestic investors. We have also seen those business areas that are  jointly developed with a domestic investor and the government. Therefore all the rest of the business areas are open for foreign investors to invest with 100% ownership of the enterprise.

Contact us for your investment questions at info@dmethiolawyers.com