Termination of Employment Relationship

By Mahlet Mesganaw, Partner at DMLF

The Ethiopian Labour Proclamation No 1156/2019(hereafter the Proclamation)  governs the private sector employer-employee relationship. According to this labor Proclamation, employment relationships might be terminated in three ways namely  by operation of the law, by agreement of the employee and employer and by the initiation of either the employer or the employee. A brief look on each of these employment termination conditions shall be the focus of this article.

Termination of contract of Employment by the Operations of the Law 

The conditions under which a contract of employment is terminated by operation of the law are provided under Article 24 of the Proclamation. The grounds for termination by the law include a) on the completion of the work where the contract of employment is for a specified work; b) up on the death of the worker; c) up on the retirement of the worker in accordance with the relevant law; d)when the undertaking ceases operation permanently due to bankruptcy or for any other cause; and e) when the worker is unable to work due to partial or total permanent incapacity. Hence the existence of these five conditions guarantee the termination of the employment by operation of the law.

Termination of Contract of Employment by Agreement

The second way to terminate a contract of employment is by agreement of the employee and employer.  The employee and employer may terminate their contract of employment by agreement.  However, such an agreement cannot override the right  an employee has under the labour law. Thus any agreement by the employee to  waive any of his rights under the law shall have no legal effect. The legal format requirement for termination of employment by agreement is to make the agreement to terminate the employment relationship  in writing. Otherwise oral agreement shall not be effective and binding on the employee.

Termination of Contract of Employment by the Initiation of the Parties

The third way of termination of an employment contract is by the initiation of the employer or the employee. The major parties to an employment agreement are the employer and employee. Either the employer or the employee may seek the termination of the employment contract. Thus we shall see the legal requirements and conditions under which the employer or employee initiates the termination of their contract of employment here below.

A)Termination of Contract of Employment by the Employer:  An employer is entitled to terminate a contract of employment either without prior notice or with prior notice. Article 26 of the Labour Proclamation provides the principle under which a contract of employment is terminated by the employer. The article states ‘’a contract of employment may only be terminated where there are grounds attributed to the worker’s conduct or with objective circumstances arising from his ability to do his work or the organizational or operational requirements of the undertaking’’ . Thus termination of contract of employment by the employer can be executed either without prior notice or with prior notice. 

i)Termination of Contract of Employment by the Employer without Prior Notice: The conditions under which an employer can terminate a contract of employment without prior notice i.e automatically when these conditions happen include the following a) unless the reason for being late is justified by the collective agreement, work rule or contract of employment, being late for duty eight times in six months period while being warned in writing of such a problem; b) absence from duty for a total five days in six months period while being warned in writing of such a problem; and where the absence cannot be classified in any of the leaves provided under the Proclamation; c) deceitful or fraudulent conduct in carrying out his duties; d) Misappropriation of the property or fund of the employer with intent to procure for himself or to a third person unlawful enrichment; e) performance result of a worker, despite his potential, is persistently below the qualities and quantities stipulated in the collective agreement or determined by the agreement of the parties; f) being responsible for brawls or quarrels at work, having regard to the gravity of the case; g) conviction for an offence where such conviction renders him incompatible for the post which he holds; h) being responsible for causing damage intentionally or through gross negligence to any property of the employer or to another property which is directly connected with the work of the Undertaking; i) commission of any of the prohibited acts under Article 14 (2) of this Proclamation namely Intentionally commit in the workplace any act which endangers life or property;  take away property from the work place without the express authorization of the employer; making use of falsified document or an attempt thereof; to use drugs prohibited by law or use alcoholic beverges and have impared physical and mental status at the work place; except for HIV/AIDS test, refuse to submit himself for medical examination when required by law or by the employer for good cause; refuse to observe safety and accident prevention rules and to take the necessary safety precautions;  conduct meeting during working hours in disregard to the time assigned by the collective agreement or without obtaining the permission of the employer; commit sexual harassment or sexual violence at workplace; and physically abuse anyone in a work place; j) absence from work due to a court sentence passed against the worker for more than Thirty days; k) commission of other violations stipulated in a collective agreement as grounds for terminating contract of employment without notice. These detailed conditions to terminate an employment contract by employer without prior notice are exhaustive. However, a collective agreement may include or exclude these conditions and the law gives priority to the conditions mentioned in the collective agreement.

 Where an employer terminates a contract of employment without prior notice as per the conditions laid down above, the employer is required to render to the employee a written statement specifying the reasons for and the date of termination. The right of an employer to terminate a contract of employment without prior written notice has a period of limitation. The employer should take the decision to terminate within thirty working days from the date the employer knew the existence of a ground for the termination. Otherwise, the ground for termination without prior notice shall lapse after thirty working days.

ii)Termination of contract of Employment by Employer with Prior Notice: The following two grounds guarantee good cause to  termination of employment of contract by employer with prior notice. The first ground as stated in Article 28(1) is ‘’.. the loss of capacity of, and situations affecting, the worker.’’ The second ground that constitutes good cause is attributable to the organizational or operational requirements of an undertaking. 

With regard to the first ground, i.e. loss of capacity of the employee or the situation affecting the employee that substantiate as a good cause for termination with notice include: a) The worker’s manifest loss of capacity to perform the work to which he has been assigned; and his lack of skill to continue his work as a result of his refusal or inability to make use of an opportunity of training arranged by the employer to upgrade his skill or after having been trained, his inability to acquire the necessary skill; b) The worker is, for reasons of health or disability, permanently unable to carry out his obligation under the contract of employment; c) The worker’s unwillingness to move to a locality where the undertaking relocates; d) The post of the worker is canceled for good cause and the worker cannot be transferred to another job position.(Article 28(1)). However, to protect the employee and to impose a duty of proof on the employer, the condition under which the employee manifests loss of capacity to perform work referred as (a) above needs to be verified by a periodical job performance evaluation. 

The second ground relates  to the organizational or operational requirements of an undertaking. As per Article 28(3) such an organizational or operational requirement constitute good causes for the termination of a contract of employment with prior notice when  a) 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; b) ‘….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; c) a decision to alter work methods or introduce new technology with a view to raise productivity resulting in termination of a contract of employment.  

B) Termination of Contract of Employment by the Employee: Similar to an employer, an employee is entitled to terminate his/her employment contract either with prior notice or without prior notice. We shall look at each of them briefly. 

i)Termination of Contract of Employment without prior notice: The employee can terminate his employment of contract without prior notice and such termination is considered as justified  where a) the employer has committed any act contrary to human dignity and morals or other acts punishable under the Criminal Law against the worker; b)  the workers has been a victim of sexual harassment or sexual violence by the employer or a managerial employee; c) In the case of imminent danger threatening the worker’s safety or health, where the employer, having been made aware of such danger, failed to act within the time limit in accordance with the early warning given by the competent authority or appropriatetrade union or the worker himself to avert the danger; d) the employer has repeatedly failed to fulfill his basic obligations towards the worker as prescribed under this Proclamation, collective agreement, work rules or other relevant laws. However, the employee cannot orally quit his work. The employee has to inform the employer in writing the reasons for termination and the date on which the termination is to take effect. In addition to the above, the employee’s right to terminate his contract of employment in accordance without prior notice shall lapse after fifteen working days from the date on which the act occurred or ceased to exist. 

ii)Termination of Contract of Employment by Employee with Prior Notice: without prejudice to  conditions mentioned as good cause for termination without notice, any employee who has completed his/her probation period may, by giving thirty days prior notice to the employer, terminate his/her contract of employment. 

To sum up, the Ethiopian Labour Proclamation 1156/2019 incorporates termination of employment conditions either by operation of the law, by the agreement of the parties  or by the initiation of the employer and employee. Where the majority of termination of employment occurs as a result of initiation by employer or employee, the law has put rules of conditions of termination with prior notice or without prior notice. What the law considers justified causes of termination of employment has also been exhaustively included in the labour law for both the employer and employee to take action accordingly. 

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Adoption by Foreigners of Ethiopian Origin

By Dagnachew Tesfaye, Managing Partner at DMLF

The Ethiopian Constitution Proclamation No 1/1995 under Article 36 Sub-Article 5 provides the obligation of the state as follows: ‘’the state shall accord special protection to orphans and encourage the establishment of institutions which ensure and promote their adoption.’’ The Ethiopian government assumed a duty to support organizations that care for orphans. Such orphans need to be supported to the extent of adoption. The constitutionally recommended solution is not foster care or institutional care but adoption. This is because adoption, unlike foster care or institutional care, is a permanent solution. The Constitution chose adoption for purposes of guaranteeing permanent solutions to problems of orphans. Adoption is a legally framed family creation mechanism next to blood relationship and marriage. Thus the Ethiopian Constitution is propagating that orphan children should be placed back into the family unit through adoption.

Following the Constitution, the House of Peoples’ Representative enacted the Revised Family Code Proclamation No 213/2000. The Revised Family Law from Articles 180-196 incorporates detailed rules on who can be adopted and who can adopt, the rights of family of origin and orphanages, what procedure to follow when the adopter is a foreigner and finally the principle of non-revocability of approved adoption.

The implementation of the law led to the establishment of several public and private orphanages and adoption agencies. Many vulnerable children including orphans and abandoned children have benefited through adoption by Ethiopians, foreign nationals of Ethiopian origins and foreigners.

The Ethiopian government claimed that foreigners adopting Ethiopian children has resulted in an identity crisis that affects the adopted children psychologically and socially.  As a result, the government coined a policy namely  FDRE National Children’s Policy. The National Children’s Policy envisages the shift from inter-country adoption to a focus on domestic alternative care options. To fulfill the policy goal, the Ethiopian government promulgated the Revised Family Code Amendment Proclamation No 1070/2018. The preamble of this Proclamation states the fact that the Proclamation is needed to harmonize the Revised Family Code with the National Children’s Policy. This is the sole preamble in the Proclamation. The content of Proclamation is short. It simply deletes the articles that incorporate ‘foreigner’ from the Revised Family Code. Consequently,  Article 193 and 194(3)(d) of the Revised Family Code are declared deleted. With this, foreigners adopting Ethiopian children were reported to have been banned, though there is no clear indication in the Proclamation that the intention is to ban inter-country adoption.

Following the reported ban on inter-country adoption, the Ministry of Women, Children and Youth Affairs came up with a directive namely Directive on Foster Family and Domestic Adoption Services No 48/2020. The directive provides detailed rules and procedures on foster care and domestic adoption.

Foreigners of Ethiopian origin kept fighting the prohibition on them from adopting Ethiopian children. Their legal fight bears fruit. The reported ban on all ‘foreigners’  from adopting Ethiopian children has been found to have basic errors of law. The Amendment Proclamation No 1070/2018 to the Revised Family Code was subjected to interpretation by the Federal Supreme Court and found out to incorporate fundamental error of law. The Federal Supreme Court on Cassation File No 189201 Volume 24 on March 11,2020, gave a binding legal decision about the ban and said that the ban on foreigners adopting Ethiopian children is not applicable to foreigners of Ethiopian origin. Such a decision by the Federal Supreme Court is a binding precedent to all levels of the federal and regional courts.

Hence such a binding decision by the highest court of the land made inter-country adoption by foreigners of Ethiopian origin possible in the courtroom. However, inter-country adoption by foreigners of Ethiopian origin requires the administrative and executive organ of the Federal Government and the concerned organ of the foreign country to work in consortium. 

The FDRE Ministry of Foreign Affairs together with its embassies and consular offices is required to handle issues of foreigners of Ethiopian origin in the adoption process. The Ministry should elaborate the possibility and permissiveness of inter-country adoption by foreigners of Ethiopian origin to the foreign government concerned organs or their embassies located in Addis Ababa. Some of  these foreign countries  require prior approval for foreigners of Ethiopian origin before they commit to adopt an Ethiopian child. To get this prior approval, these foreign countries need to be notified of the option for adoption being opened up for foreigners of Ethiopian origin. The ambiguous news that Ethiopia has banned foreigners from adopting Ethiopian children is later clarified by rule of law that the ban is non-applicable to foreigners of Ethiopian origin. This information should be clearly amplified by the Ministry of Foreign Affairs and our embassies. Moreover the Ministry should  give support in authentication of documentations of foreigners of Ethiopian origin in their adoption process. On the other hand, the FDRE Ministry of Women and Social Affairs is the organ of the government concerned about Ethiopian children care and adoption. The Ministry should render support to court approved adoption decisions in getting the necessary vital records such as birth certificates and passports.

Foreigners of Ethiopian origin could be single parent or married couples. When they are married couples, one of them could be foreigners of Ethiopian origin or both of them could be foreigners of Ethiopian origin. The place where foreigners of Ethiopian origin live could be in Ethiopia or elsewhere. The adoption requested could be relative or kinship adoption or adoption from orphanages or adoption by step dad or step mom. The adopted child could be an orphan or an abandoned child or vulnerable child or the child of the other spouse. The fear of identity crisis, which has been the core source for banning inter-country adoption will be non-existent when the adoptive parents or at least one of them is a foreigner of Ethiopian origin.

Therefore, the Ethiopian Constitution encourages adoption. The Federal Supreme Court of Ethiopia, as the highest court of the land, by interpretation allowed foreigners of Ethiopian origin to adopt Ethiopian children. Proclamation No 1070/2018 doesn’t ban foreigners of Ethiopian origin from adopting Ethiopian children. So long as the adoption serves the best interest of the child, the executive organs of the government of Ethiopia should pave the way to realizing that goal. It is their constitutional duty.  The FDRE Constitution on Article 36 sub-article 2 provide as follows: ‘’In all actions concerning children undertaken by public and private welfare institutions, courts of law, administrative authorities or legislative bodies, the primary consideration shall be the best interests of the child.’’

For any adoption related inquiries you may contact us at info@dmethiolawyers.com

Overseas Employment for Ethiopians

By Dagnachew Tesfaye, Managing Partner at DMLF

Overseas Employment is governed by Ethiopia’s Overseas Employment Proclamation No 923/2016 and it’s amendment Proclamation No 1246/2021. This Proclamation No 923/2016 came into force repealing the Employment Exchange Service Proclamation No 632/2009. Nowadays many countries in the world are looking for skilled and non-skilled immigrant workers for job openings in many different sectors. This brief article will look into the major contents of the Proclamation and it’s amendment and a brief conclusion shall follow.

The aim of the Proclamation as is seen from its preamble is to ensure the rights, dignity and safety of Ethiopian workers overseas. Accordingly, the Proclamation mentions three (3) ways in which employment overseas could be conducted. These are first through public employment exchanges, second is through private agencies and third is through direct employment. 

Public employment exchange service is an overseas employment service conducted through government to government. The Ethiopian government organ responsible for public employment exchange is the Ministry of Labour and Skills (formerly Ministry of Labour and Social Affairs). The Ministry of Labour and Skills (the Ministry) will provide recruitment  and placement services to government organizations in recipient countries based on government to government agreement. The tasks the Ministry undergo include interviewing and selection; causing medical examinations; approval of employment contracts, provision of pre-employment and pre-departure orientations, facilitation of departure of employed workers and other similar services. The Ministry is required by the Proclamation to undertake a deposit into the Foreigner Employers’ Guarantee Fund of USD$ 100 per worker from the foreign employer. The aim is for covering claims of workers that may arise from breach of contract of employment.

The second form of overseas employment exchange service is through a private employment agency. Private Employment Agency or Agency is defined in the Proclamation as ‘’any person other than a Government body, which makes a worker available to an overseas employer by concluding a contract of employment with such a worker.’’ Thus a Private Employment Agency can be a sole proprietor or a business organization.  Engagement in the  business of private employment agencies is permitted for Ethiopian nationals, foreign nationals of Ethiopian origin or foreigners. However the later two I.e. Foriegn nationals of Ethiopian origin and foreigners can engage in overseas employment together with Ethiopian nationals for skilled manpower. The minimum paid up capital should be not less than ETB 1,000,000 (One Million Birr) for fully Ethiopian owned agency. Foreign nationals of Ethiopian origin can own up to 25% of the shares. These 25%shares shall not be less than 2,000,000(Two Million Birr). Whereas when the member of the company is a foreigner, he can own only up to 20 % whereby the value in Birr shall not be less than 2 million Birr. In addition to this, one of the eligibility requirements for a private employment agency is to deposit a financial guarantee of USD$100,000 (mandatory in USD for foreigners and foreign nationals of Ethiopian origin) or its equivalent in Ethiopian Birr (for Ethiopias) in a blocked account. The purpose of such a guarantee is to ensure the protection of the rights and safety of deployed workers.

The last form of overseas employment exchange is through direct employment. Direct employment is defined in the Proclamation as an ‘’employment relationship between an employer and a worker without the involvement of a Government organ or an Agency’’. However, contrary to the definition, the Proclamation indicates the involvement of the Ministry for approval of direct employment. Article 6 states the fact that the Ministry may permit direct employment on grounds of ”…a) where the employer is a staff of an Ethiopian Mission; b) where the employer is an International organization; and c) where the job seeker acquires a job opportunity by his own accord in job positions other than house maid services.” Those employers who are entitled to undertake direct employment are required to deposit a foreign employer’s guarantee of USD$100 per worker into the Foreigner Employers’ Guarantee Fund administered by the Ministry.

In general the Proclamation prohibits no overseas deployment of workers without a certificate of occupational competence. The educational requirement of completion of 8th grade has been left out in the amendment Proclamation. Similarly the amendment Proclamation changed the requirement of mandatory existence of bilateral agreement with receiving state for deployment of overseas workers. Deployment of overseas workers is allowed to countries where there is bilateral agreement or as the case may be a Memorandum of Understanding with the receiving country. However, where there is no bilateral agreement or MoU, if the employment agency managed to acquire job opportunities for skilled workers, the government may render green light to proceed by signing an agreement with the receiving country’s company.

Moreover, the employer is obliged by law to buy from the domestic market insurance for life and disability for the benefit of the worker deployed overseas. Other than domestic workers, skilled workers who are employed overseas through an agency shall pay the agency an amount of one month salary over four payment periods.

In conclusion, Ethiopia’s Overseas Employment Proclamation and amendment are enacted with the purpose of protecting the rights, dignity and safety of Ethiopian workers abroad. The vehicles through which employment overseas were conducted include public employment exchange, private agencies and direct employment. The Proclamation was amended in its several parts which begs the question that rather than amendment, a new Proclamation could have been valid. Nowadays, the need to migrate and work overseas has expanded in terms of skills and recipient countries. The government needs to take proactive measures and sign and execute as many bilateral agreements as possible. There is a need to devise a way to work through the Proclamation to meet the timely needs of millions of Ethiopians who wish to migrate overseas and work.

You may contact us for employment related inquiries at info@dmethiolawyers.com

Social Dialogue: Alternative Dispute Settlement Mechanism for Labour Issues

By Dagnachew Tesfaye, Partner at DMLF

The Labour Proclamation No 1156/2019 (the Proclamation hereafter) has introduced a new dispute resolution mechanism namely ‘Social Dialogue’. This concept of Social Dialogue was not known and was non-existent in the previously repealed Labour Proclamation No 377/2003. Only conciliation and arbitration were the two known  alternative dispute settlement mechanisms. Now in addition to conciliation and arbitration, social dialogue is included as one form of alternative dispute settlement mechanism pertaining to labour issues.

Social Dialogue is defined in the Proclamation as a process of information exchange, dialogue or negotiation of bilateral or tripartite nature between employer and employee or involving the government on economic and social issues of mutual interest towards arriving at common understanding.

The Ethiopian Government has given due attention to the concept of social dialogue by incorporating social dialogue in the preamble of the Proclamation. The second paragraph of the Preamble of the Proclamation provides ‘it has been found necessary to lay down a working system that guarantees the rights of workers and employers to freely establish their respective associations and to engage, through their duly authorized representatives, in social dialogue and collective bargaining, as well as to draw up procedures for the expeditious settlement of labour disputes, which arise between them.(underline included for emphasis).

Employers and employees or their respective associations namely trade unions or employers associations, federation or confederations may introduce social dialogue into their employment agreements, work rules, collective agreements in order to legally prevent and resolve labour disputes amicably.

Therefore the introduction of social dialogue as one form of ADR for labour issues is a significant endeavor for the Ethiopian legal regime.  This new concept of social dialogue needs action for its implementation and realization of the benefits that come with it.

For any labour related questions you may contact us at info@dmethiolawyers.com