Foreign National Ethiopian Origin Identification Card

By Mahlet Mesganaw, Partner at DMLO

Foreign nationals of Ethiopian origin shall be granted a special identification card. The procedure and eligibility requirements for the special identification card are specified under Proclamation No. 270/2002 and Regulation No. 101/2004. The identification card is issued with the aim of executing the rights, privileges and responsibilities of those foreign nationals of Ethiopian origin.

Who Issues the Identification Cards

The Ministry of Foreign Affairs and the Immigration, Nationality and Vital Events Agency are tasked with the authority to issue the identification cards. MoFA will issue the identification cards through its embassies all over the world when the request comes outside of Ethiopia. When the request for the identification card is made in Ethiopia, the Agency shall be the authority to issue the identification cards.

Who is Eligible

A person who has been an Ethiopian national before acquiring a foreign nationality is eligible. Moreover, if the foreign national has at least one of his parents or grandparents or great grandparents who were an Ethiopian national, then he is eligible for the identification card. One exception here is that an Eritrean who forfeited Ethiopian nationality for Eritrean nationality is not eligible.

The spouse, who holds a foreign nationality but is married with a foreign national of Ethiopian origin is also eligible to apply for the identification card. Here spouses who are Eritrean nationals are accommodated.

Minors, who are children of holders of the foreign national Ethiopian origin identification card, are eligible to enjoy the rights and privileges granted to  the foreign national of Ethiopian origin. The names of the minors shall be mentioned in their parent(s) identification card. This will enable the minors to enjoy the corresponding rights and privileges without a separate identification card. Nevertheless, the minor can request for a separate identification card from his parent(s). Considering the law on minors and the circumstances for the request, a separate identification card may be issued to the minor.

Some foreign nationals who reside in Ethiopia but who are not Ethiopians by origin may be eligible for the identification card. When the MoFA and the Agency jointly find it appropriate, a foreign national residing in Ethiopia may be eligible to acquire foreign national of Ethiopian origin identification card.

Document Requirements

The application shall be in a prescribed form. The form shall be accompanied by four recent passport size photographs. In addition to that there will be documentary evidence showing the applicant is a foreign national of Ethiopian origin. Valid passport or travel document and marriage certificate and birth certificates of his children under the age of 18, if applicable, shall also be produced.

Rights and Privileges of Having the Identification Card

The foreign nationals of Ethiopian origin are not required to have an entry visa or residence permit to live in Ethiopia. They can be employed in Ethiopia without a work permit requirement. Enjoy pension schemes under the relevant pension law. Own immovable property. They will be considered as domestic investors to invest in Ethiopia under the investment law. In general, enjoy the economic, social and administrative services without any restrictions as imposed on foreign nationals.

Validity Period and Renewals

The validity period of the identification card shall be five years since the date of issuance. Renewal shall be conducted after ascertaining the fact that grounds for cancellation are non-existence. The Ethiopian mission shall conduct the renewal when the request is abroad and the Agency when the request is in-country.

Service Fee

The amount of fee payable to obtain the identification card is US$ 500(Five Hundred Dollars) or for renewal USD$ 200(Two Hundred Dollars) or for lost identification USD$ 300(Three Hundred Dollars) or their equivalent in local currency where it is requested or in ETB if the applicant is residing in Ethiopia.

Return of the Identification Card

Without any reason whatsoever and at any time, a holder of the identification card may return the identification card to the issuing authority. However, if there are obligations the identification card holder entered during the validity period of his identification card, he shall be obliged to discharge his obligations.

Cancellation of the Identification Card

If the identification is obtained by means of fraud, false representation or concealment of any material fact, the identification card may be canceled. If the holder of the identification card is convicted for crimes of terrorism or smuggling of narcotics or armament, the identification card will be cancelled. The identification card will be canceled, if the holder is a citizen of a country at war with Ethiopia or is willingly helping such country. If the holder of the identification card proved to have served in the regular army or intelligence of another country, the identification card will be canceled. Finally the identification card will be canceled if holding the identification card is contrary to public and national interest. The cancellation decision shall be passed by a joint session of the MoFA and the Agency.

Therefore, the procedure for issuance of the identification card till the return or cancellation of the identification card are listed by law. Enjoyment of the rights and privileges are believed to strengthen the ties of foreign nationals of Ethiopian origin to their country of origin and contribute to the development and prosperity of Ethiopia.

Ethiopian National Dialogue Commission

By Dagnachew Tesfaye, Partner DMLO
On December 29,2021, the FDRE House of People’s Representative has approved into legislation by a majority vote the establishment of National Dialogue Commission by Proclamation No.1265/2021. The Commission is tasked with implementing inclusive dialogue on national issues for the creation of national consensus and establishment of common grounds.

Major Diaspora Favorable Ethiopian Laws

By Mahlet Mesganaw, Partner at DMLO

Foreign Nationals of Ethiopian Origin(Diasporas) are believed to contribute to the development and prosperity of Ethiopia. Lifting legal restrictions were done starting from 2002. Some of the laws lifting restrictions on the diaspora will be discussed briefly here below.

Foreign Nationals of Ethiopian Origin are defined to include those foreign nationals who had at least one  parent or grandparent or great grandparent being an Ethiopian national. In addition to that, those who had been Ethiopian nationals before  acquiring a foreign national fall under foreign nationals of Ethiopian origin definition. One exception here is that an Eritrean who forfeited Ethiopian nationality for Eritrean nationality cannot be considered foreign national of Ethiopian origin. Spouses and minor of the person who holds a foreign national of Ethiopian origin identification card are also eligible to apply for the identification card. Some foreign nationals who reside in Ethiopia but who are not Ethiopians by origin may be eligible for the identification card.

To enjoy the rights and privileges, the diaspora has to apply and acquire foreign national of Ethiopian origin identification card. However, a holder of such an identification card still cannot be employed on a regular basis in the national defense force, security apparatus, foreign affairs and other political establishments. More so, the holder of the identification card shall have no right to vote or be elected to any office of any level of government. 

Some of the privileges are mentioned under the proclamation namely Providing Foreign Nationals of Ethiopian Origin with Certain Rights to be Exercised in their Country of Origin Proclamation No. 270/2002. The foreign nationals of Ethiopian origin are not required to have an entry visa or residence permit to live in Ethiopia. They can be employed in Ethiopia without a work permit requirement. Enjoy pension schemes under the relevant pension law. Own immovable property. They will be considered as domestic investors to invest in Ethiopia under the investment law. In general, enjoy the economic, social and administrative services without any restrictions as imposed on foreign nationals.

Under Banking (Amendment) Proclamation No 1159/2019 and Insurance Business(Amendment) Proclamation No.1163/2019, a foreign national of Ethiopian origin is allowed to form and operate a bank or an insurance company or buy shares in a bank or insurance company. He can do so individually or through a company fully owned by foreign nationals of Ethiopian origin or jointly by foreign nationals of Ethiopian origin and Ethiopian nationals. His share purchase shall be in acceptable foreign currency. However when earning a dividend or transfer of those shares in any form, the payments shall be in local currency.

Investment Proclamation No.1180/2020 defines domestic investors to include those foreign nationals considered by relevant law of Ethiopia as domestic investors. As seen above under Proclamation No 270/2002, foreign nationals of Ethiopian origin are treated as domestic investors. Minimum capital requirement for investment will not apply to foreign nationals of Ethiopian origin. Foreign nationals of Ethiopian origin can engage in any businesses including those that are reserved for domestic investors. To see the list of businesses, you may click the following link:

Family law wise, adoption of Ethiopian children is still made available. The Federal Supreme Court Cassation Bench on File No 189201 on March 11,2020 on Volume 24, allowed by interpretation foreign nationals of Ethiopian origins to adopt Ethiopian children. Adoption can be relative adoption or adoption from orphanages.

Advocacy  license permits for only Ethiopian nationals were lifted. Under Federal Advocacy Service Licencing and Administration Proclamation No. 1249/2021, not only Ethiopians but also foreign nationals of Ethiopian origin are allowed to request and acquire the federal advocacy license.

To sum up, lifting legal restrictions on foreign nationals of Ethiopian origin will enable their engagement in the economic and social development of their country of origin. Lifting legal restrictions will pave the way for a significant number of foreign nationals of Ethiopian origin to pour their finance, know-how and technology to the development and prosperity of Ethiopia.

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Investment Businesses Open for Foreign Investors in Ethiopia


By Luwam Chalachew,, Legal Assistant at DMLO


Foreign national or an enterprise irrespective of where it is incorporated in which a foreign national has an ownership stake is considered a foreign investor. An enterprise incorporated outside of Ethiopia by any investor is also considered a foreign investor. An Ethiopian permanently residing abroad who opts for a foreign investor treatment under the law is also considered a foreign investor. The above list constitute foreign investor under the Investment Proclamation No 1180/2020..

Any foreign investor who can allocate a minimum capital of USD $200,000 can engage in investment in Ethiopia. A foreigner investing together with a domestic investor is required to come up with a minimum capital of USD $150,000. Fulfilling the minimum capital requirement, a foreign investor can invest in all businesses of investment except those reserved exclusively for domestic investors. 

Businesses of Investment Open for Foreign Investment 

According to Article 6(3) of the Proclamation, one investment sector open to foreign investors is joint investment with the government of Ethiopia. Another businesses sector that is open for foreign investor is joint investment with domestic investors. All businesses outside the reserved businesses for domestic investors are also open for foreign businesses to engage in. In other words, foreign investors are not allowed to engage in the areas of investment which are exclusively reserved for domestic investors. Outside of the later, foreign investors are allowed either to invest alone or jointly on selected sectors with government and domestic investors.

Business Types Reserved for Join Investment with Government 

  • Manufacturing of weapons, ammunition and explosives used as weapons or make weapons,
  • Import and export of electronical  energy,
  • International air transport services,
  • Bus rapid transit and
  • Postal service excluding courier service

Businesses Exclusively Reserved for Domestic Investors 

  • Subject to applicable laws, banking, insurance, and microfinance business excluding capital goods finance business,
  • Transmission and distribution of electrical energy through an integrated national grid system.
  • Primary and middle level health service,
  • Wholesale trade, petroleum, petroleum products, wholesale of own products produced in Ethiopia, excluding wholesalers of electronic commerce,
  • Retail trade, excluding retail of electronic commerce as provided under appropriate  law of own products produced in Ethiopia,
  • Import trade excluding liquefied petroleum gas and bitumen,
  • Export trade of raw coffee, chat, oil seeds, pulses, minerals, hides and skins, products of natural forest, chicken, and livestock including pack animals brought on the market,
  • Construction and  drilling services below grade 1,
  • Hotel, lodge, resort, motel, guesthouse, and pension services excluding those that are star designated,
  • Restaurant, tearoom, coffee shops, bars, nightclubs, and catering services excluding star designated national cuisine restaurant service,
  • Travel agency, travel ticket sales and trade auxiliary service,
  • Tour operation, 
  • Operating lease of equipment, machineries and vehicles excluding industry specific heavy equipment, machineries, and specialized vehicles,
  • Transport services, excluding the following areas,
  1. Railway transport,
  2. Cable-car transport,
  3. Cold-chain transport,
  4. Freight transport having a capacity of more than 25 tones, and
  5. Transport services reserved for join investment with government or domestic investors,
  • Making indigenous traditional medicines,
  • Producing bakery products and pastries for domestic market,
  • Grinding mils,
  • Barbershop and beauty salon services, smothery. And tailoring except by garment factories,
  • Maintenance and repair services including aircraft maintenance repair and overhaul (MRO), but excluding repair and maintenance of heavy industry machineries and medical equipment,
  • Aircraft ground handling and other related services,
  • Saw milling, timber manufacturing, and assembling of semi-finished wood products,
  • Media service,
  • Customs clearance service,
  • Brick and block manufacturing,
  • Quarrying,
  • Lottery and sports betting,
  • Laundry service excluding those provided on industrial scale,
  • Translation secretarial services,
  • Security services
  • Brokerage services,
  • Attorney and legal consultancy services and
  • Private employment agency service, excluding such services for the employment of seafarers and other similar professionals that require high expertise and international experience and network.

Businesses Exclusively Reserved for Join Investment with Domestic and Foreign Investors 

  • Freight forwarding and shipping agency services,
  • Domestic air transport service,
  • Cross- country public transportation service using buses with a seating capacity of more than 45 passengers,
  • Urban mass transport service with large carrying capacity,
  • Advertisement and promotion services,
  • Audiovisual services, motion picture and video recording production and distribution and
  • Accounting and auditing service. 

A foreign investors investing jointly with domestic investors in the businesses specified above are not allowed to hold more than 49% of the share capital of the investment enterprise.  


Generally all business sectors are open for foreign investors except those reserved for domestic investors exclusively. For that matter, joint investment on selected businesses with the government or with a domestic investor, are indirectly businesses open  for foreign investors to engage in Ethiopia. Jointly or alone, a foreign investor can do investment business in Ethiopia in multitude of business sectors.

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Major Points on Federal Courts Court-led Mediation Directive

By Dagnachew Tesfaye, Attorney-at-law at DMLO


The Federal Supreme Court(FSC) has issued Federal Cours Court-led Mediation Directive No 12/2021 effective as of December 27/2021. The Directive provides procedure of court-led mediation, structural organization of court-led mediation, principles of mediation, and about mediators and their fees. Few core contents of the court-led mediation will be dealt here below.

Structural  Organization of Court-led Mediation

There shall be a Court-led Mediation Committee organized under the FSC with 9(nine) members with mandates to oversee the whole court-led mediation process and particularly duties and responsibilities and disciplinary matters. The Committee shall engage in presenting recommendations for improvement of the court-led mediation.

Court-led Mediation Coordination Office shall be established in the FSC, FHC and FFIC. The Coordination Office in the FFIC and FHC shall be accountable to their respective presidents and are subordinate to the one in the FSC. Each coordination office shall have coordinators and relevant employees. 

There will also be Court-led Mediation Centers at FHC and FFIC branches. These centers shall have mediation officers and mediation secretaries. 

Finally, the FSC shall organize a Court-led Mediation Roster that registers interested and qualified mediators. The registered mediators shall pay an annual fee of ETB 750 as a membership fee and for initial registration ETB 300.

Court-led Mediators

Court-led mediators could be employees of the court who have taken mediation training. Any other person whose name is entered in the FSC Roster as a mediator can also be a mediator. Not only lawyers but also engineers, psychologists, agricultural professionals, medical professionals can be included in the FSC Roster. For lawyers, a first degree in law and 5(five) years relevant experience and for non-lawyers 10(Ten) years relevant experience is required. Both lawyers and non-lawyers should take a training of 80 hours in mediation and obtain certification. The idea of certification entails the establishment of not only mediation training centers but also ADR training centers. These centers can be private or governmental. It is part of making Addis Ababa as the hub for arbitration and mediation centers in Africa.

The fee for the mediator in principle is the agreed amount by the parties to the case. However, when the mediator is the employee of the court, the mediator shall not be paid mediation fee. Whenever there is no agreement on the fee by the mediator and the parties, the standard mediation fee arrangement as attached to this Directive shall apply. The manner of payment of the fee by the parties is that each party shall divide equally the fee and pay. To whom the parties pay the fee is not clear. Since it is court-led mediation, probably the parties pay directly to court and not personally to the mediator. The mediator who is registered in the roster of the FSC has the obligation to do at least two pro bono court-led mediation cases in a year.

Procedure of Court-led Mediation

New cases that are subject for mediation shall be referred to mediation before oral hearing is conducted on the cases. Civil cases that are subject to automatic court-led mediation are labour cases, commercial cases, construction cases, family cases, succession cases, contract cases and extra-contractual cases. Nevertheless, bankruptcy cases, cases in which the government or public enterprise are parties to the case as a plaintiff, defendant or intervening party, cases that have public interest in them, cases in which the judge thinks court judgment should be passed on the cases, consensual divorce and consensual division of property after divorce shall not be referred to court-led mediation.

Not only new cases, but cases that are pending with a judge can also be referred to court-led mediation if the judge thinks there is a possibility of resolving the case through court-led mediation.

The parties to the case are at liberty to choose a mediator from the Mediation Center before the date assigned for mediation. If there is no agreement, the Coordinator shall assign one mediator from the roster or assign a mediator from those employees of the court that are hired for mediation purposes.

On the date of appointment of mediation and afterwards, the mediator is obliged to conduct the mediation following mediation principles and mediation procedures. Non appearance of both parties or one of the parties at the time of assignment for agreement has the consequences of payment of ETB 1000 cost. To whom this cost is paid is not specified. The cost is paid to the court or to the appearing party if any or that of the mediator has to be cleared out.  

The mediation has to be completed within 30 days of the commencement of the court-led mediation. Prolongation for an additional 20 days is possible if there are sufficient reasons to do so.

The participating parties to the court-led mediation are the parties themselves or their duly assigned proxies with special power of attorney to mediate. The Attorney’s role is limited. The attorney can participate in the proceeding and only speak at the end of the mediation upon the permission of the mediator. Whether the Attorney can advise his client on legal matters to enable his client to reach agreement is left silent here as the focus is on the mediator and the mediation process. The possibility of an attorney of the client receiving a special power of attorney to mediate is not a closed option. Since a special proxy to mediate is a possibility, attorneys may take up the mediation on behalf of their clients.

If the parties reach an agreement, the mediator  shall prepare the agreement. The mediator shall make sure the agreement is read for the parties and both parties sign them. The Coordinator shall prepare a cover letter and send the agreement for the approval of the court. Whether the judge has the discretion to reject the agreement is not clearly mentioned, but since agreements are approved as per the Civil Procedure Code, the judge shall make sure the agreement is not contrary to law and morals. In those cases that agreement is not reached, the mediator shall return the file back to the court through the Coordinator.

Place of Mediation

The court-led mediation can be conducted in a designated place chosen by the Court-led Mediation Committee that is outside of the court. However, in all other circumstances, the place of court-led mediation shall be inside the offices of the different branches of the FFIC and FHC mediation centers. Here the question raised will be the unavailability of space suitable for mediation, how to conduct the mediation of multiple cases assigned by different judges at the same time and how to manage individual mediator’s case loads.

Principles of Mediation

The mediator should show professional competence, due diligence and secure quality of the mediation process. In doing so the mediator has to assure confidentiality, equality between the parties, neutrality and assist the parties reach an agreement by themselves.


The court-led mediation Directive is issued following the Federal Court Proclamation No 1234/2021 Article 55(2) whereby the FSC is assigned the task to issue a directive to implement the Proclamation. The rules indicated in Article 45-48 of the Proclamation on court-led mediation are now elaborately detailed for easier execution by this Directive. The Directive has established organs to implement the tasks of court-led mediation. Mediators are required to undergo training and strictly follow basic mediation principles. Court-led mediation shall benefit in resolving issues between parties in a short amount of time and as a result reduce the courts’ caseloads.

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Highlights of Foreign Currency Allocation: NBE Directive


By Luwam Chalachew, Legal Assistant at DMLO


The National Bank of Ethiopia pursuant to the authority vested to it by Article 20(3) &27(2) of the National Bank of Ethiopia Establishment Proclamation no.591/2008, has issued a new directive concerning transparency in foreign currency allocation and foreign exchange management. The Foreign Currency Allocation and Foreign Exchange Management Directive No FXD/77/2021 has entered into force on December 1/2021. The main objectives of this Directive is in order ensure efficient and proper allocation of foreign exchange. And in order to ensure that foreign exchange is allocated in a transparent and sound manner to priority and other economic sectors without opening a room for rent seeking behavior and malpractice. The Directive requires each bank to have transparent and sound foreign currency allocation and foreign exchange management guidelines or procedure manual which shows the accountability of each employee of a bank involved in the foreign exchange transaction. For effective implementation, the Directive stipulated  powers and functions of different organs. A brief look into responsibilities of different organs of a bank and foreign currency allocation priority areas shall be made here below.

Responsibility of Board of Directors of a Bank

Responsibilities of the board of directors of a bank are stipulated under Article.3 of the Directive. Among these responsibilities, the board is responsible to develop a foreign exchange operation management guideline in line with the NBEs directives. The board is also responsible to review the bank’s overall foreign exchange exposure at least once a month in order to ensure that it is maintained at prudent levels and is consistent with available resources. In evaluating and controlling these operations the board has the responsibility to ensure that adequate resources, both technical and human are available. The board also has the responsibility to create reporting and compliance mechanisms to establish rules.

Responsibility of Executive Management of a Bank  

The executive management of a bank is responsible to maintain records which are sufficient to determine at all times the bank’s compliance with its own internal foreign exchange transaction policies and procedures. The management should avail any information and documentation when requested by National Bank. The executive management should also maintain a daily record showing close of business in foreign exchange. It should also ensure that proper reporting procedures are put in place between the head office and its branches on daily foreign exchange operations. Regarding the bank’s foreign currency open position and outstanding balances, the executive management should reconcile foreign exchange transaction accounts at least every month diligently and with due consideration to the need to provide timely information to the National Bank. Generally the executive management should establish effective internal controls to monitor and control the overall foreign exchange operation.

Responsibility of Internal Audit   

The internal audit in each bank shall conduct at least one audit semi-annually and make surprise checks when necessary to test compliance with the foreign exchange operations guidelines. The auditor shall report the findings to the respective bank’s board as well as senior management of the bank and a copy of the internal report shall be submitted to the Foreign Exchange Monitoring and Reserve Management Directorate of the National Bank at the same time of the submission of the report to the board of management. 

Foreign Exchange Allocation and Priorities 

The Directive laid out foreign exchange allocations and priorities in three categories. The Directive also stipulated import items and payments are to be served on a first come first served basis.

The directive put a first priority to pharmaceutical items, medicine, input for manufacturing of pharmaceuticals and laboratory reagents. It also adds input for manufacturing of edible oil and liquefied petroleum gas that has not been listed in the previous directive. The reason for listing pharmaceutical inputs, edible oil inputs and fuels in the first priority is in order to mitigate shortage of foreign currency in those sectors.

As second priority, inputs for agriculture and inputs for manufacturing including fertilizer, seed, pesticide and chemicals shall follow. 

Third priority includes motor oil and lubricants, agricultural inputs and machineries, pharmaceutical products, manufacturing industries request for procurement of machineries, equipment, spare parts, and accessories, import of nutritious food for babies, spare part for construction machineries for own use by construction companies whose total values not exceeding  USD 50,000 and educational materials. Profit or dividend transfer, transfer of excess sales of foreign airlines and sales from share and liquidation of companies by FDI are also categorized under the third priorities. 

The Directive also stipulated that the total foreign currency allocated for imports listed in the three categories shall not be less than 50 percent of the total foreign currency allocated for all imports of goods and services at any time. In this case the bank is obliged to surrender the difference to the National Bank every month within the first working days of the next month. 


The NBE Directive No FXD/77/2021 has been anticipated to enable the NBE to carefully manage its scarce reserve in foreign exchange and ensure its efficient and proper allocation. To do that the Directive laid core responsibilities to management of each bank. For easier implementation and management, priority sectors have been identified in line with the economic wheel of the country.

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One Key Aspect of Employment Law: Probation Period

By Luwam Chalachew, Legal Assistant at DMLO


Probation period is a fixed period of time that employees are exempt from certain rights. Most importantly, the absence of notice period required for termination of contract and payment of compensation as well as severance payment after termination. From the employer point of view, probationary period is used to evaluate the workers performance, skill, abilities, and personality. Also whether the employee can engage with the existing organizational culture. And from an employee’s point of view, probationary periods are there to see if the employee enjoys working for the employer and whether the employee is a suitable match for their skills and abilities required for the job. Generally the probationary period allows both employee and employer to see if they are a good fit and to make things easier if they need to terminate the contract. We will see in this article the probation period from the employer as well as employee point of view as envisaged under the Labour Proclamation of Ethiopia Proclamation No 1156/2019.

Importance of Probationary Period  

From the employers perspective, probation periods are important as they help employers to be sure they have made the right recruiting decision and to take action more quickly if they feel the new employee is not suitable for the role. These reduce the expenses of keeping employing someone who is unsuitable for the job. Probation enables the employer to replace the unsuitable employee more swiftly.

Probation Period under the Ethiopian Labor Proclamation

The previous Labor Proclamation no.377/96 was replaced in 2019 by the new Labor Proclamation No.1156/2019 (hereinafter the Labor Proclamation).

Few changes are introduced regarding the probation period under the new proclamation. These include one the length of probation period was extended from 45 consecutive days to 60 working days and two the new Labour Proclamation specifies the beginning date of probation period under Article 11(3) which is the first date of employment while the previous proclamation was silent about this. 

Agreement of Probation Period

Probation period is not a mandatory procedure. It is made when the parties agree to have a probation period. Silence about it doesn’t amount to presumption of probation period.  According to Article 11(3) of the Labor Proclamation, if the parties agree to have a probation period, the agreement shall be made in writing. And the length of the probationary period shall not exceed 60 working days starting from the first date of employment. The length of the probationary period is limited in that the probation period cannot be extended by agreement beyond 60 days.

Reemployment by the Same Employer

According to Article 11(2) of the Labour Proclamation, a worker re-employed by the same employer for the same job shall not be subjected to probation. In this case a worker who is reinstated to a position in the same organization in the same area doesn’t have to serve a probationary period.

 Rights and Obligations of Probationary Workers

During probation period, probationary workers shall have the same rights and obligations that a worker who has completed his probation period possesses unless the law or work rules or collective agreement provides otherwise.

Termination of Probation Period 

According to Article 11(5) of the Labour Proclamation, if the worker during his probation period proves to be unfit for the post, the employer can terminate the contract of employment without notice.  In this case the law is silent on the grounds to evaluate the fitness of the worker to the post. So it seems it is left for the employer to decide.  Evaluation of fitness goes beyond competence and may include personal characteristics of the employee. In making the evaluation, the employer may use subjective as well as objective criteria to determine the workers fitness to the post.  If the worker proves to be unfit for the post, the employer may terminate the contract of employment without notice. Unlike termination of a normal contract of employment, the employer is not obliged to pay severance payment or compensation while terminating the contract of employment during the probation period.

The worker may also terminate the contract of employment without notice during his probation period.

Unlawful termination  

One case in which termination of contract of employment during probation period may be unlawful is termination based on the grounds listed under Article 26(2) (d) of the Labour Proclamation. This includes termination of contract of employment based on the workers nation, sex, religion, political outlook, marital status, race, color, family responsibility, pregnancy, disablement or social status. If termination is made based on these grounds, the termination will be unlawful.  

End of Probation Period 

Length of probation is fixed as it is stipulated under Article 11(3) of the Labour Proclamation. So according to Article 11(7) of the Labour Proclamation,  if a worker continues to work after the expiry of the fixed period, a contract of employment for the intended period or type of work shall be deemed to have been concluded from the beginning of the probation period. 


Generally the probation period is a fixed period which allows both employee and employer to see if they are a good fit for the job. During the probation period, both employee and employer can terminate their contract of employment without giving notice. And the employer is not expected to pay severance payment or compensation.

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Conditional Dissolution of Marriage and Period of Limitation for Partition of Common Property: Cassation Decision

By Luwam Chalachew, Legal Assistant at DMLO
This article summarizes the decision of the Federal Supreme Court Cassation Division decision regarding conditional dissolution of marriage and period of limitation for demanding partition of common property of spouses after divorce. The case has been between applicant Mrs. Almaz Leshe VS respondent Mr. Bekele Belachew on Vol.19 File No. 102662 on April 15/2008.
Regional First instance court
The case was first brought to Amhara Region Debre Berhan First Instance Court by the applicant. The issue first provided under the statement of claim of the applicant was that the applicant and respondent were married and lived together for 40 years but due to disagreements between them since 2006 E.C the applicant petitioned for a divorce and partition of common property.
The respondent on his statement of defense accepted the fact that they were married but he states that the applicant left the house and they were living separately since she left him 19 years ago and he objected by raising the period of limitation as preliminary objection and for the defence the respondent argued there are no common properties to be shared among them. Finally the regional First Instance Court after hearing both parties decided that the marriage was dissolved 10 years ago and closed the case citing period of limitation.
Appeal to the High Court and Application to Regional Cassation
The applicant appealed to the Semen Shewa Zone High Court opposing the decision of the First Instance Court. But the court did not accept the application. The case was also brought to the Regional Supreme Court Cassation Division. The Cassation bench also dismissed the case stating that there is no basic error of law.
Review by the Federal Supreme Court Cassation Bench
On application the Cassation framed an issue on the appropriateness of decision of lower courts that ordered marriage of applicant and respondent is dissolved conditionally. The Cassation first examines the lower court’s decision. And the reasons of the lower court to conclude that the marriage of applicant and respondent dissolve conditionally were due to the fact that they were living separately since 1987E.C. The high court also accepted this fact.
The Federal Cassation bench states that the First Instance Court bases its decision on Federal Supreme Court Cassation decision file no.31891 i.e. living separately for a long period of time will result on the dissolution of the marriage between spouses conditionally even though court didn’t approve on this matter as it is also stipulated under Article 2(1) of Proclamation no.454/1997. There is also a binding decision of the Federal Supreme Court Cassation decision on file no. 679224 which states the fact that if obligations of cohabitation, support and assist each other are in place, merely physical separation of spouses does not dissolve the marriage.
The Cassation also examined the case in line with its former decisions on file no. 14290, 20983, 31891 and 67924. Applicant and respondent got married and have children but it is witnessed that they were living separately since 1987. Accordingly, the Cassation reasoned that according to Amhara Regional Family Code Article 61 spouses owe each other respect, support and assistance during their marriage time. So this thing was not in place between the parties due to the space between them for a long period of time. So the Cassation concluded that marriage of applicant and respondent was dissolved conditionally since 1987. Regarding partition of common property, the Cassation stated that application for partition of common property should be closed by period of limitation as long as it is not brought within 10 years according to the relevant Cassation decisions mentioned above. Generally the Cassation concluded that there is no basic error of law.
The main idea of marriage is about cohabitation, respect, assisting and supporting each other. So spouses who live separately for a long time without the intention of getting back together and in the absence of the obligation to respect, support and assist each other the marriage is presumed to be dissolved conditionally. Regarding application for partition of common property it will be barred by a 10 years period of limitation.
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Departure of New Commercial Code of Ethiopia on Formation of Share Companies

Lydia Kedir and Dagnachew Tesfaye
The new Commercial Code Proclamation 1243/2021 comes with some changes in the formation area of share companies. The new Commercial Code uses the same definition of the old Commercial Code(1960) on share companies: ‘A share company is a company whose capital is fixed in advance and divided into shares and whose liabilities are met only by the assets of the company.’ Hence we discuss here some of the departures of the new Commercial Code from its predecessor only in the formation stage of a share company.
Nominal value of Shares
The minimum capital of ETB 50,000(Fifty Thousand) for formation of a share company remains the same between the old and new Commercial Code. However the par value of each share, says the new Commercial Code, should not be less than ETB 100(hundred). In the old Commercial Code, the par value of shares used to be not less than 10(ten) Ethiopian dollars.
Distinction between Founders and Promoters
The old Commercial Code gives the name and status of a founder to any person, even though outside the company, who has initiated plans or facilitated the formation of the company. Now in the new Commercial Code a person( both artificial or natural) who initiates the formation of a company by public subscription, invites persons to join the company by preparing prospectus or in general acts with the view to realizing the formation of the company is called promoter. The new Commercial Code provides in detail what the liability of promoters are and special benefits allocated to promoters. Under the new Commercial Code, the name ‘founder’ is narrowed down to those individuals who establish a share company as between themselves without offering shares for public subscription. Article 252(2) of the new Commercial Code obliges the number of founders of a share company not to be less than five.
Redacting Article of Association
The old Commercial Code provides both memorandum of association and articles of association as formation documents of a share company. Whereas in the new Commercial Code, only memorandum of association is accepted as the formation document of the share company. Article of association is left out.
Valuation and Verification of Contribution in Kind
The old Commercial Code used to put a report of valuation of the in-kind contribution by a subscriber to be made by experts appointed by the Ministry of Commerce and Industry. Such valuation shall be verified within six month from the date of the formation of the company by directors and auditors. Now in the new Commercial Code, it is stated that the person who made the contribution in kind will provide an expert valuation report. The requirement of an appointed expert from the Ministry is left out. The verification process became a two step process. The promoters and formation auditor shall verify the valuation of contribution in kind first. This happens before the meeting of subscribers takes place. And then the board of directors and auditors shall verify the valuation in kind within six months from the date of registration of the company. Where the company under formation is not established by public subscription, the founders of the company shall verify the report of the expert. Similarly the second step of verification happens within six month from the date of registration of the company by the board of directors and auditors.
Signatories and Contents of Prospectus
Prospectus is a document prepared for serving the purpose of an offer for subscribers. The prospectus used to be signed by founders in the old Commercial Code. In the new Commercial Code, the prospectus is signed by all the promoters. The prospectus added few contents to the previous code. The prospectus will contain the anticipated time within which the formation of the company is to be completed and the company acquires legal personality. The law on Article 259(1)(g) second sentence of the new Commercial Code stipulates that under any circumstance, the time set for the compilation of the formation of the company shall not exceed five years. The prospectus should include bank details opened in the name of the company under formation in which payments are required to be deposited.
Auditing Requirement before Calling of Meeting of Subscribers
The old Commercial Code did not have the requirement of auditing before the meeting of subscribers. The meeting of subscribers will be called when the time for making an application for shares has expired. Now in the new Commercial Code, before the meeting of subscribers is called, the promoters are obliged to verify by an external auditor as to the fulfillment of the requirements of the formation of the company. The audit shall look into the fact that the promoters meet the requirement set by the law, full subscription of the capital of the company is made, contribution in kind is valued by experts and it is correct, deposit of cash collected from subscribers in the bank account opened in the name of the company is made and any other requirement set out by law or the memorandum of association of the company. Such an audit report shall be presented by the auditor to the meeting of subscribers for their approval.
Powers and Duties of Meeting of Subscribers
The new Commercial Code included as powers and duties of the meeting of subscribers the right to approve the reports of the promoters and formation auditors. The meeting will also determine the shares in the profits allocated to the promoters. In the old Commercial Code, the resolution of subscribers’ meetings was required to be signed by the founders. Now in the new Commercial Code, resolutions of subscribers’ meetings shall be drawn up and signed by all the promoters or founders and members of the board of directors that were elected at the meeting.
Who Registers the Company in the Commercial Register?
The old Commercial code was silent as to who goes to register the company at the commercial register. Now under Article 265(2) of the new Commercial Code, the registration of the company shall be effected by the promoters or as appropriate, the founders or any other person having a power of attorney form the promoters or founders.
Accompanying Documents for Registration in the Commercial Register
The new Commercial Code avoided the articles of association as an accompanying document for registration and included an audit report regarding valuation of contribution in kind and company formation. The rest of accompanying documents namely authenticated memorandum of association, prospectus where the company is formed by public subscription and resolution of meeting of subscribers will be submitted.
Action Period for Non-Compliance
The entry into the commercial register without complying fully, results in the endangerment of the interests of creditors or shareholders, the latter may request for dissolution of the company or any other appropriate measure from the court. Such a request has to be taken within three months from the date of registration in the commercial register, as per the old Commercial Code. Such a period of action for non-compliance is extended to one year by the new Commercial Code.
The departures in tasks and responsibilities, documents requirements and period of actions of the new Commercial Code from the old Commercial Code in the formation process of a share company contribute to clarity and easier implementation procedure. Many of the old Commercial Code concepts and ideas are still maintained, which shows that the old Commercial Code has proven effective in the formation stage of share companies throughout the test of time.

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Core Points on the State of Emergency

By Mahlet Mesganaw, lawyer and founder, DMLO

The government of Ethiopia has issued a State of Emergency Proclamation no 5/2021, effective as of November 2nd 2021 to last for six month. The scope of application is the whole country. The main purpose of the State of Emergency(SoE) is to avert the imminent threats against the existence of the nation which cannot be averted by regular law enforcement mechanisms posed by TPLF and its affiliates and outside forces. The HoPR on May 6,2021 has categorized TPLF and Oromo Liberation Army(OLA)-Shene as terrorist organizations. This brief article will cover core contents of the SoE Proclamation.

The Establishment of Command Post
The SoE has established a command post with a duty to execute the SoE Proclamation. The Command Post shall be spearheaded by the FDRE Head of the Defence Force and report to the Prime Minister. The Command Post shall have the power to issue directives to implement the SoE. Accordingly, till this date two directives were issued. The first directive Directive No 1/2021 is on the organizational structure of the Command Post. The second directive is Directive No 2/2021 is on the procedure of issuance and acquisition of temporary id cards.

Prohibited Acts
It is prohibited to disseminate information that empowers the terrorist groups, encourages the activities of the terrorist group or terrorizes civilian population. It is prohibited to render monetary, information, material or moral support, directly or indirectly to terrorist groups. Public gathering and demonstration without the permission of the Command Post or any other delegated authority is prohibited. It is prohibited to carry and move around firearms without permission. Residents are prohibited from moving around without carrying identity cards, passports or any other similar identity card. It is prohibited to disrupt the activities of any essential service or production sector or carry out acts of economic sabotage. Finally one of the prohibitions is against abuse of power. It is prohibited to engage in abuse of power with the intent to gain an illicit benefit under the pretext of enforcing the SoE Proclamation or detaining deliberately without reasonable suspension.

Non Derogable Rights and Use of Proportional Force
The Command post shall respect non-derogable rights listed under Article 93(4) of the FDRE Constitution during the enforcement of the SoE. Among the non-derogable rights the first one is Article 1 of the Constitution which embodies the nomenclature of the state i.e. The Federal Democratic Republic of Ethiopia. The second human right provision that is non-derogable right is prohibition against Inhuman Treatment indicated under Article 18 of the Constitution. Accordingly, everyone has the right to protection against cruel, inhuman or degrading treatment or punishment. No one shall be held in slavery or servitude. Trafficking in human beings for whatever purpose is prohibited. No one shall be required to perform forced or compulsory labour. The right to equality is the other non-derogable right. Article 25 of the Constitution declares that all persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall guarantee to all persons equal and effective protection without discrimination on grounds of race, nation, nationality, or other social origin, colour, sex, language, religion, political or other opinion, property, birth or other status. Finally Article 39 of the Constitution i.e the Rights of Nations, Nationalities, and Peoples unconditional right to self determination, including the right to secession and the right to speak, to write and to develop its own language; to express, to develop and to promote its culture; and to preserve its history are non-derogable rights during the enforcement of the SoE.

The security forces can be ordered by the Command Post to use proportional force for the execution of the SoE measures provided in the Proclamation.

State of Emergency Measures
The State of Emergency measures include ordering the deployment of armed forces in any part of the country to maintain peace and security. The Command Post can order citizens whose age are fit for military service and who are in possession of firearms to take military training and take orders for military missions. In case those with firearms are unable to be deployed, they will be required to hand over their firearms. It can order curfew, closure of public transportation or any means of transportation. It can arrest without a court warrant upon reasonable suspicion and also search any person’s house, premise and vehicle upon reasonable suspicion that he/she cooperates with terrorist groups. It can order the closure of a given street or service giving institution for a certain period of time. It can give an order for persons to remain in a certain place or prohibit them from entering or evacuating from a given place for a certain period of time. It can partially or fully suspend local administrative structure and replace administrations with civilian or military administrations in parts of the country where there are serious security threats. The Command Post can order the regulatory authority to suspend or permanently cancel licences of civil society organizations, mass media or journalists which have been suspected of providing direct or indirect, moral or material support to terrorist organizations.

Suspended Laws
Without prejudice to diplomatic immunities enshrined under the Vienna Convention on Diplomatic Relations, substantive and procedural laws inconsistent with the SoE Proclamation remain suspended during the implementation of the Proclamation. In addition to that any judicial organ shall have no authority till the expiry of the enforcement of the SoE Proclamation.

Criminal Liability
Whoever violates the provisions of the SoE Proclamation or directives issued in accordance with the Proclamation shall be punished with simple imprisonment of upto 3 years or depending on the gravity of the offence rigorous imprisonment of up to ten years or if the violations entails grave punishment in other laws, such punishment shall apply. Even after the expiry of the SoE, violations of the SoE Proclamation and directives committed during the course of the SoE will cause criminal liability in accordance with ordinary criminal procedure rules.

The State of Emergency Proclamation has been issued to protect the sovereignty and territorial integrity of the country and its people. The severity of the threat is imminent and the government has to protect the well being of its people. Using the regular law enforcement mechanism will not avert the imminent threat posed against the existence of the nation. Given the gravity of the situation, every person needs to know and abide by each and every provision of the State of Emergency Proclamation and directives issued in accordance with the SoE Proclamation.

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