aEmployment relationship is a contractual relationship to render service in an anticipation

of wage. As a result, the general principles of law of contract (capacity, consent, legality,
some times morality, formality) shall apply unless, of course, the special part has its own
special principles. In the case of the issue of capacity, the parties should be capable of
contracting in the sense that they should be people who can express their consent
sustainable at law. Sustainable consent may emanate either from mental condition or age.
Because, some times, not only minors but also people with mental deficiency may not be
considered to be capable of contracting by law. They may not also be in a position to give
consent sustainable at law. In the majority of cases, the minimum age enabling a person
to enter into a contract is the age of majority (18). But, in the case of labor or
employment relation of labor law, the minimum age enabling a person to enter into a
contract of employment is the age of 14 which seems to be much earlier than the one
required under general law of contract (art 89). 89 General 1/ For the purpose of
this Proclamation, “Young worker” means a person who has attained the age of fourteen
but is not over the age of 18 years. 2/ It is prohibited to employ persons under fourteen
years of age. 3/ It is prohibited to employ young workers which, on account of its
nature or due to the condition in which it is carried out, endangers the life or health of the
young workers performing it. 4/ The Minister may prescribe the list of activities
prohibited to young worker which shall include in particular:
a) work in the transport of passengers and goods by road, railway, air and internal
waterway, docksides and warehouses involving heavy weight lifting, pulling or pushing
or any other related type of labor; b) work connected with electric power generation
plants transformers or transmission, lines;
c) Underground work, such as mines, quarries and similar works; d) work in
sewers and digging tunnels. 5/ the provisions of sub-article (4) of this Article shall not
apply to work performed by young workers following courses in vocational schools that
are approved and inspected by the competent authority. The acontrario reading of sub-
article 2 of this article shows that it is possible to enter into a contract with people above
14 years of age. People between 14 and 18 years of age are young employees having
special category of employees. There are protections that the law gives to these
categories of employees. But now, we will try only to establish the general framework.
For the time being, the point to note is that entering into a contract as far as employment
relation is concerned, there is a deviation from the general principle of contract. Because,
as we have already noted, in the case of the general principle of contract, capacity begins
at the age of 18. But, in the case of contract of employment, capacity begins 4 years
earlier than the above limit. As reguards to legality, the general principle of contract
(article 1678/B and 1716) shall apply to contract of employment as well. A contract is a
juridical act. At the end of the day, if and when a dispute arises, the contract is going to
be brought and enforced before a court of law. On the other hand, the court of law is a
legal institution. And it is impossible to take illegal transaction to such institution for
enforcement. This principle of legality is designed under article 4/4 of the labor proc.
According to this sub-article, a contract of employment shall not be concluded for the
performance of unlawful or immoral activities. This sub-article seems to be the direct
reproduction of the general principle of contract (article 1716/1 of the Civil Code. As
regards form, the general principle of contract states that unless otherwise provided by
law, no special form shall be required and a contract shall be valid where the parties

1
agree (article 1719). According to this general principle, there may be cases where the
law prescribes a contract to be in written form and get observance and obedience by the
parties. But, in all other cases, it is a consentual relationship of the parties that determines
the form of the contract. Article 5 of the labor proclamation, hereto, seems to be the
direct reproduction of this general principle of contract. This article provides that unless
otherwise provided by law, a contract of employment shall not be subject to any special
form. So long as the law doesn’t require any special form, the parties may not need the
written instrument to assert the existence of their contract. Parties can prove its existence
by any other means. For example, despite the fact that the contract is unwritten, if an
employee is able to show that he is rendering service and the employer is providing him
with the required wage every month, or if he shows that he has continued with that
transaction for a certain period of time such as a month or a year, there is a contract of
employment fully acceptable by law. But, here again, there may be areas where the law
may require the parties to have special form. one of those areas by which parties are
required to have a special form is period of probation (article 11/3). This sub-article
provides that where the parties agree to have a probation period, the agreement shall be
made in writing. This period of probation is one of the areas where the law provides
otherwise (article 5). The other area whereby the parties are required to have a special
form for their contract of employment is contract of Apprenticeship (article 48/3). This
sub-article provides that the contract of apprenticeship and its modifications shall be valid
only where it is made in writing and attested to by the Ministry. As we are able to
observe here, the contract of apprenticeship is not only required to be in writing but also
attested by the ministry. I.e. it requires more than special form. But, where the law is
silent whether a contract of employment should be in written form or not, the parties are
at liberty to proceed with their interaction with no formal requirement for their contract.
Of course, the parties themselves are at liberty to provide a special form. Some times,
there exists a confusion between form required by law and form agreed by the parties.
When a form is required by law, in addition to reducing the agreement of the parties into
writing, there are some more requirements to be fulfilled. For instance, it should be
signed by the parties; it should be attested by two witnesses. Unless these requirements
are met, the law considers the contract to be a mere draft of a contract (article 1720/1).
But, when the form is agreed by the parties, it is not a must to have signature of the
parties and attestation by two witnesses for their contract to be valid. Ada agreed to sell
his car to Bada. Then, the two parties decided to prepare a written instrument as to their
transaction. They put their signature on their written instrument but no attestation of the
two witnesses therein. At a later stage, one of the parties wanted the contract to be
enforced while the other did not. He argued that there is no valid contract with out the
attestation of two witnesses. Is his argument valid under law of contract? People tend to
evade reading of article 1726 versus 27 of the Civil Code. Article 1727 talks about when
a form is required by law. But, article 1726 tries to give effect when a form is stipulated
or agreed by the parties. If the parties have agreed to make their contract in writing and,
at the same time, are silent as to signature and attestation of two witnesses, then it is the
agreed term. If they are in need of turning their contract into writing thereby inserting
their signature and attesting by two witnesses, then it is still the agreed term. So, when a
contract is made in writing, to believe that it should not only be signed by the parties but
also attested by two witnesses, is a misconception. As regards the content, the general

2
principle of a contract states that as long as the content of a contract or the obligation of
the parties is clearly defined, possible, lawful and moral, then the contract is valid. When
we come to contract of employment, even if the content is clearly defined, lawful,
possible, there is a restriction. For example, the content of the contract should not bring
about less favourable conditions for the employee than what has been prescribed by law,
work rules, collective agreements and etc (article 4/5 of the LP. Article 4/5 of the same
proc provides that 5/ the contract of employment shall not lay down less favorable
conditions for the employee than those provided for by law, collective agreement or work
rules. It is remembered that there are minimum conditions stipulated as to annual leave,
maternity leave, sick leave, maximum working hour and etc designed in the form of
provisions provided by law. Any contract of employment cannot deviate from these
minimum labor conditions. On the other hand, the content of the contract should be
checked against these minimum labor conditions provided by law or collective
agreement, if any, to which the enterprise is a party. The principle is meet or exceed rule.
This means that the contract should either meet the minimum standards required by law
or go above it. If the contract is found to have gone below one of the minimum standards
required by law, not the whole contract but only that part of the contract which has been
found to have gone below the minimum labor condition shall be called off and replaced
by the prescription of the law. We have already indicated that the employee is the weaker
party at the time of bargaining. If we allow the content of the contract to be determined
by the parties, it will be detrimental to the welfare and wellbeing of the employee. So,
any contract of employment, no matter how clearly defined or possible it may be, is
deemed to be invalid if it does not meet one of the minimum labor conditions provided by
law. For example, it is possible for a worker to render service with out annual leave. But,
annual leave has been enshrined to be one of the minimum labor conditions under Article
76 and 77 of the LP. Article 76/1 provides that an agreement by a worker to waive in any
manner his right to annual leave shall be null and void. Article 77/1 also provides that a
worker shall be entitled to uninterrupted annual leave with pay which shall in no case be
less than: a) fourteen (14) working days for the first one year of service;b)
fourteen (14) working days plus one working day for every additional year of service.
This is again a deviation from the general principle of a contract as to consent. Because,
the consent of the parties is not respected due to the fact that the law has stepped in the
transaction of the unequal parties for the market to work well. The arrangement for a
contract of employment under the federal civil servant proc is a little bit different from
that of the labor proc because of the fact that one of the parties to the transaction is a
public power or state. When a certain state institution as a public power decided to
employ a civil servant specially for permanent position, the procedure is a little bit strict
and laborious. The first procedure to be made is vacancy announcement (article 16 of
FCSP. Article 16 provides that 1) Government institutions shall advertise
every vacant position to be filled by a new civil servant. 2)
Notwithstanding Sub-Article /1/ of this Article, whenever there is shortage of
professionals in the labour market, a government institution may solicit
graduates of higher educational institutions for recruitment in
cooperation with the institutions. 3) The Agency shall issue directives
with regard to advertising vacant positions, and the preparation and
conducting of examinations and disclosing the results thereof. According to

3
sub-article 2, in case where the required field is not available or available in a
scares quantity in the market, the government institutions may directly deal
with the producer of the labor. So, this sub-article seems to be an
exceptional arrangement. Technically, vacancy should be announced to the whole
world in a news paper of wider circulation, electronic media, in a notice board of the
concerned government institution or in any other means. Vacancy announcement
primarily serves transparency despite the fact that it may have additional objectives.
Vacancy usually comes up with some requirements to be met in terms of qualification,
year of service, some times salary, place of work and etc. in short, vacancy
announcement is, more than anything elce, an expression of transparent working system.
Of course, it emanates from the prescription of the constitution. It is beneficial not only
for job seekers or applicants but also for government institutions due to the fact that it
widens choice opportunity for the latter. When ever vacancy is made transparent and
open, the institutions will obtain candidates of various quality from a wider pool. Once
applicants expressed their interest, the next step shall be recruitment stage (article 13 of
the FCSP). This article provides that 1) There shall be no discrimination
among job seekers or civil servants in filling vacancies because of their ethnic
origin, sex, religion, political outlook, disability, HIV/AIDS or any other
ground. 2) A vacant position shall be filled only by a person who meets
the qualification required for the position and scores higher than other
candidates. 3) Notwithstanding the provisions of Sub-Articles (1) and
(2) of this Article, in recruitment promotion and deployment preference
shall be given to: a) female candidates; b) candidates with
disabilities; and c) members of nationalities comparatively less
represented in the government office, having equal or close scores to that
other candidates. 4) The definition of disability applicable in the
appropriate law relating to disability shall also apply for the purposes of this
Article. Recruitment shall be undertaken among the applicants on the basis of non-
discrimination (13/1 and on the basis of merits (13/2). 13/3 has apparently deviated from
13/1 and 2. There should be no discrimination among the applicants with any ground.
Because, the employer is a public institution being financed by the revenue generated
from all tax payers. So, it should be available even handedly and horizontally to all who
meet the qualifications irrespective of their ethnic origin, religion, political outlook and or
any other means. Needless to say, the principle of nondiscrimination is also available in
the private sector or labor law employment regime. Because, it is a principle emanated
from the constitution (article 25) and that should be observed not only by public actors or
employers but also private actors. The labor proclamation has also its own provision as to
non-discrimination. The other principle of filling vacancy is that vacant position shall
be filled only by a person who meets the qualification required for the
position and scores higher than other candidates. Discrimination should be
avoided and the recruitment must merit based. When the recruitment is merit
based, it will be beneficial to the government institution because it gives the
position to qualified candidate capable of rendering qualitative service for the
employer. The other advantage of the fact that employment is merit based is
that people who are aware of such fact will invest on themselves to be
meritorious. So, in one way of another, if an employment is merit based, hard

4
working people shall be rewarded. It is eimportant to stick to merits to be
determined some times by performance. Written or oral examination may also
be taken. Previous card of a transcript may be taken into account. Recruiting
candidates based on their card of transcript is, however, misleading and
difficult due to the fact that some institutions are generous while others are
not in their grading system. As a government office, the institution must
provide with a sort of affirmative action. So, 13/3 provides that Preference
shall be given not only at the time of pre-employment but also at the time of
promotion to female candidates, persons with disability and members of
nationalities comparatively less represented in government office having equal
of close scores to that of the candidates. Under 13/3, the principle of equity
seems to have come into picture. For example, there may be so many
candidates equally meritorious while there is only one vacant job. In this case,
even if one of them is going to be assigned, we don’t draw lotes. Rather, we will
make the assignment be enforced in another mode or fashion. As a
government, the most equitable way is to reward the historically marginalized
members of the society. In this case, females, persons with disability and
persons who are not well represented in the civil service for what ever
historical reason shall be made to take priority. Through this arrangement, in
addition to non-discrimination and merit based recruitment, the law is trying
to achieve other equally important goll, the gall of equity. I.e it tries to narrow
the gap in employment as far as sex, disabilities and historically
disadvantaged group are concerned. Even if we have already said that there
should be the principle of non-discrimination on the basis of variables, it
doesn’t mean that everybody will be eligible. There are some elements to be
taken into account as to eligibility in public service as well. In the labor law
regime, we have said that a person with 18 years of age is able to enter into a
contract of employment with out limitation as young employees are. The
minimum age for civil service regime is the age of 18 years (14). It could
somehow be a reason for discrimination. Article 14 provides that 1) the
following shall not be eligible to be civil servants: a) a person under the
age of 18 years;
b) Any person who has been convicted by a court of competent jurisdiction
of breach of trust, theft, or fraud;
c) Any person who is unwilling to take oath fidelity according to Article 18
of this Proclamation
d) Without prejudice to Sub-Article (1) (b) of this Article a civil servant
who has been dismissed on grounds of disciplinary offence, before
the lapse of five years from the date of his dismissal. The eligibility of
attaining 18years of age has an exception under sub-article 2 of the same
article. Because, the same sub-article provides that the Agency may issue
directives on circumstances in which young persons above the age of 14
under 18 may be appointed as civil servants and on the conditions of service
applicable to them. Unlike the labor proclamation, previous character of the
applicant is another important element of eligibility under the civil service proc. In the
civil service case, since the employer is a public office, the employee is expected to be a
5
person of integrity and good character. As to good character, breach of trust, theft and
fraud are the most important crimes that have been given serious attention. If an applicant
is found to have convicted of a breach of trust, the law presumes that the applicant’s
integrity is in question. Here, it must be noted that for a person’s denial of eligibility, not
accusation and investigation but conviction is taken to be a precondition. Note must also
be taken that a person is denied of his right to be a civil servant not for all types of crimes
but only for those crimes that are very much associated with entergrity or faithfulness.
But, it is too much confrontational whether these are the only crimes that must be taken
into account or not while assessing the previous character of an applicant. The other
mode of assessing eligibility is loyalty to the constitution. People who do not accept the
constitution usually refuse to take oath as to loyality to the constitution and enter into
conflict with their employer. Hence, they may lose the opportunity to win the candidacy.
But, what they have been asked is not the matter of accepting but respecting the
constitution. Even if we do not accept laws personally, we should be bound by them. This
is the main nature of not only the constitution but also other ordinary laws. As to fidelity,
not only loyality to the constitution, but also office secret, truthfulness, faithful service
and loyality to other laws are also included(18/2). Article 18/2 reads as The appointed
civil servant shall, before commencement of his work, take the following
oath of fidelity: “I being a civil servant solemnly and sincerely swear to
faithfully serve the people and execute government policy, and to respect at all
times the Constitution and the laws of the Country and not to
disclose to any party information that is revealed to me by reason of my
duties and is classified as secret or confidential by law or standard
transparent procedure. In short, people are misunderstanding the
concept of non-acceptance and compliance with laws. The condition of
taking oath is not available under the labor proclamation. Because, it is
business oriented employment relation. Rather, it is deemed to be an
implicit term of the contract. And because, if the employee failed to be
faithful, he may be dismissed of disceplinery ground. Other associated
conditions for eligibility are submission of medical certificate and written
testimony of police record as to theft, breach of trust and fraud (17). The
candidate who has scored the highest mark from among the competitors
and passed the examination, shall submit medical certificate except
HIV/AIDS test to prove his fitness for service and written testimony to prove
that he has no police record with regard to crimes referred to in sub-
Article/1/ /b/ of Article 14 of this proclamation. These are not also
expressly found under the labor law regime. The civil service would like
to make sure that the job seeker is medically fit for the civil service under
consideration. Such medical fitness is verified in terms of medical
certificate. Some times, these requirements are found to be missing their
targate. Because, people with disability may be victims of medical
certificate since medical doctors may say that he is not medically fit by
looking at their external and physical conditions. So, this must be wisely
handled. There is also confusion as regards the police record. Because,
there is a variance between what we find in a police record and what the
law requires. The police give to the candidate a certificate that proves his

6
innocence of any crimes or that he has previously a record of crime. On
the other hand, the law does not require a police record as to all types of
crimes but theft, breach of trust and fraud only. Once a candidate has
satisfied all these procedures or steps, they shall be employed as public
servant of probational employment. Consequently, letter of probational
and not permanent appointment shall be issued(18/1). Article 18/1
reads as a newly appointed civil servant shall be served with a letter of
probational appointment, signed by the Head or any other authorized official
of the government institution, stating the title and grade of his position,
his salary and date of
commencement of his appointment, together with job descriptions of his
position. But, it must be noted that unlike the labor law regime where we can
negotiate as to what service we are going to render and what not, any job in
the civil service is non-negotiable. Rather, it is already determined by the
government office together with the position and the salary since they have, in
advance, a cheque list of the job. To begin with, it is not a contract of
employment that can be negotiated by the parties but a letter of appointment
which is a unilateral instrument issued by the employer alone. The employee
is not expected to sign on the letter; rather, he will have to receive the letter
after signing in advance. But, as far as the contents are concerned, it is a
contract of employment because of the fact that the employee shall render
service under the control and authority of the employer in return for
remuneration and so on. The fact that the employee can resign at any time
makes the letter a voluntary arrangement. As to how long a probational
arrangement lasts, there is the so-called probational period(article 20/2).
According to the same sub-article, the period of probation of a civil servant on
the position of his appointment shall be for six months; provided however,
if the performance result is below satisfactory, it may be extended for an
additional period of three months. As a principle, a probational period lasts for
6 months but extends itself to the period of 9 months under exceptional
situations. So, the letter of probational appointment will enable the
government office to assess whether the candidate is suitable for the post he is
assigned or not(20/1). Because, the purpose of probation is to prove the
competence of a newly appointed civil servant through follow-up of his
performance. This seems to be the main purpose of the letter of probation for
the fact that academic credentials are usually misleading. These credentials do
not show character and integrity even if they may show skill and qualification.
On the other hand, skills and qualification, though necessary, are not
sufficient. After such probational period, performance evaluation will be filled.
If the performance evaluation shows that the performance of the employee
during the lasts 6 months is below satisfactory, he will be given an additional
grace period of three months mainly for the benefit of the civil servant. But, if
she/he passed the test of probation, letter of permanent appointment will be
issued(21). In other words, where the civil servant on probation has recorded
satisfactory or above satisfactory performance result, a letter of permanent
appointment shall be issued to him. So long as the civil servant resumes on the
7
same position, there will be no change in job description. The nature of the
letter, how ever, shall be changed from a letter of probational appointment to a
letter of permanent appointment which describes his being permanent civil
servant of that specific government institution. These are generally the
procedures of forming employment relation be it under the civil service or labor
law employment regime. Note must be taken that we have a probation period
under the labor law regime as well(11). Article 11 provides that 1/ a person
may be employed for a probation period for the purpose of testing his suitability to a post
in which he is expected to be assigned on the basis of a contract of employment. 2/ a
worker re-employed by the same employer for the same job shall not subject to
probation. 3/ Where the parties agree to have a probation period, the agreement shall
be made in writing. In such a case, the probation period shall not exceed forty-five
consecutive days. 4/ unless this Proclamation or work rules or collective agreement
provides otherwise, the worker shall have during the probation period, the same rights
and obligations that a worker who has completed his probation period has. 5/ If the
worker proves to be unfit for the job during his probation, the employer can terminate the
contract of employment without notice and being obliged to pay severance pay or
compensation;
6/ a worker on probation may terminate his contract of employment without notice.
7/ If the worker continues to work after the expiry of the probation 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. The clause “may be employed”
under 11/1 of the labor proc indicates that enforcing the probational period is, however,
optional. An employee under the labor law regime may be employed as a permanent
employee beginning from the first day of his involvement in the employment relation. If
the parties have agreed as to the existence of a probation period, such probation period
should be in writing and expressly stated. As far as the duration is concerned, the
probational period under the labor proc is much shorter than that of the probational period
under the civil service proc. i.e. the probation period under the labor proc shall, in no
way, exceed forty-five consecutive days. It is not even for forty five working days but
consecutive days. If the probation is going to be made on working days, Assessment in
such days is much longer than assessment in consecutive days as the working days
exclude holidays. Of course, the parties may agree to the extent of no probation or with in
that latitude. Probation is very important because it has a certain impact on job security.
The longer the period of probation, the less secured the job will be. Because, at the time
of probation, the employer can easily terminate the contract of employment with out
being required to show inefficiency of the employee. Under the civil code, probation is
left to the parties. For example, for a contract of three years employment, the employer
may determine that the first year would be period of probation. Because, when it is left to
the parties, the employer usually detects its terms. The employer shall be beneficiary
when the period of probation is much longer. Because, he can dismiss the employee at
any time with in the range of the period of probation simply by stating that the employee
is unfit to the position. The alleged inefficiency of the employee may not also be checked
by an outside organ. At the time of probation, only the appreciation of the employer is
taken to be sufficient. The employer is not required to give notice of termination as well.
Under the civil code, the fact that probation is left to the parties is disadvantageous to the

8
employee due to the weakness of the latter in bargaining power. Under the military
regime, the prevailing legal actors would consider undefined or undetermined probation
period to be unfair to the employee. So, they came up with a labor proclamation No 64 of
1975 with a probation period of, at most, 90 days. But, the law was not of any problem if
the parties had agreed to have a probation period less than 90 days. Then came labor
proclamation No 42 of 1993. This proclamation was the labor proclamation of the
transitional period following the downfall of the military regime. Under such
proclamation, the probation period was determined to be, as a ceiling, forty five days.
The shorter the probation period, relatively, the better secured the job will be for the
employee. Even if the employers get despondent at this arrangement, the labor
proclamation No 377 of 203 has maintained the maximum ceiling of forty five days as a
probation period. But, at the time of enacting this new proclamation, the employers’
association was very much objecting to this arrangement. Because, they believe that the
probation period of forty five days is too short to determine suitability. They would also
take comparison from the civil servants proclamation. The government has set aside the
whole 6 months to determine suitability. But, when we come to the private sector, the law
limits the probation period to a maximum ceiling of forty five days. In connection with
probation period, there are at least theoretical arguments. Let’s assume that there is a
contract of employment concluded by a certain employee and an employer. One of the
terms of the contract states that the first three months of employment shall be period of
probation. Two months later, the employer terminated the contract of employment by
invoking the employee’s unfitness to the position. Then, the employee took the case to
court of law and argued that there is unlawful termination. The employer responded that
the first three months were ment for probation period. On the other hand, in a probation
period, the employer argued that he, on the basis of article 11/5 of the LP, has made a
valid termination of contract of employment. Whom do you think the winner? Even if the
parties have agreed that the first three months be period of probation, the maximum limit
for probation period provided under the LP is only forty five consecutive days. So, we
could not give effect to such probation period agreed by the parties. As soon as the first
consecutive forty five days has lapsed devoid of objection from the employer, the law
assumes that the employee has been employed for indefinite period. On the other hand, if
the status of the employee has been changed from probational employee to permanent
employee, the employer can no longer terminate the contract of employment by invoking
the provisions of probation period. This does not mean, however, he cannot terminate the
contract at all. Rather, the termination should go into another territory. Meaning, he must
show that the employee was incompetent, ill-disciplined and other related causes. So, any
contract of the parties that goes beyond the maximum ceiling of the law is not simply
given effect as a probational period. As far as the parties have agreed that the first three
months be probational period, there are three options as to the decision of the court. One
option is to consider as if there were zero probation. The second option is that there is
probation; but, the probational period is only forty five days. The third option is to
maintain the agreement of the parties. When we talk of the right of the employee, we
should not neglect the right of the employer. Because, in the absence of the employer,
there is no employee. If we ignore the employer, we may have an excessive pro-labor
position. There are conflicting interests as to this position. One of them is labor
investment and the other is capital. Excessive pro-labor position which is of socialist

9
nature is an extremist position. This position may have a negative impact on investment.
Specially, when the investment is a sort of foreign investment, and the investors come to
know of the fact that Ethiopian law is excessively pro-labor, they will be forced to look
for another country to invest their capital. Consequently, capitals would fly away and
unemployment will prevail. Strategically, it is not beneficial to the whole employees. On
the other hand, if we have become an excessive pro-investment, it will again have a
negative impact on labor. Because, we are going to negatively affect the fundamental
rights and well being of the labor force. Hence, it will be a crude exploitation and the
laborers shall revolt thereby becoming a source of social and political unrest. From such
an angle, everybody will be the loser. So, it needs to strike a balance. But, striking the
balance doesn’t mean that we should presume the employee and the employer to be on
equal footing. While striking the balance, the weakness of the labor must be taken into
account. When we come to the point of choosing one of the options we mentioned above,
we can solve such a dilemma in terms of interpretation by analogy. Under the general law
of contract, if two parties concluded a contract of loan with interest and the rate of
interest is not specified in the contract or if the mentioned interest is found to be above 12
%, the rate of the interest shall be reduced to the legal interest rate(9)(article 1751). So, if
the parties have agreed that the probational period be more than forty five days, it seems
to be possible to bring down to the legal maximum by analogy. We have tried to see the
scope of labor proclamation by comparing with agent-principal relationship and client-
contract relationship on the one hand employee-employer relationship on the other. In the
case of agent-principal and client-contract relationship, command and control is loose or
non-existent as compared to the command and control the employer exercises over the
employee. Because, the employee is to render service under the authority or the direction
of the employer. For such reason, these two relationships are excluded from the ambit of
labor proclamation or employment relation. Of course, they are similar to employee-
employer relationship as they are sourced predominantly of contract and they are to
render service. So, what must be noted here is that, in the client-contract and agent-
principal relationship, the command and control one party has against the other is loose
or non-existent. Therefore, we excluded such relationships from the ambit of employment
law. Some times, even if there is a command-control relationship, there could still be
other relationships that could be excluded. We have already said that for employment
relationship to exist, we need a physical person rendering service under the direction and
control of the employer for the benefit of the employer in consideration for wage in terms
of definite or indefinite period or piece work. So, even if these definitions may be
satisfied under employment relationship, we again said that religious service is outside of
the ambit of employment law. On the basis of the decision of the Supreme Court, when
the service that is rendered by the person is a religious one, we cannot regulate such
religious service or employment relationship by a secular law (the labor proclamation).
Because, it has something associated with religion and state cannot interfere with the
religious affairs. In short, in face of the absence of command and control from the
employer, we excluded client-contractor and agent-principal relationship. We also
excluded some services due to the religious nature they have from the ambit of the labor
proclamation. But, we have still further exclusions that have been spelt out under article
3/2 of the labor proclamation itself. The mentioned sub-article reads, this Proclamation
shall not be applicable to the following employment relations arising out of a contract of

10
employment. a) Contracts for the purpose of upbringing, treatment, care or
rehabilitation. b) Contracts for the purpose of educating or training other than as
apprentice. c) managerial employee who is vested with powers or prerogatives to lay
down and execute management policies by law or delegation of the employer depending
on the type of activities of the undertaking with or without the aforementioned powers is
vested with the power to hire transfer suspend layoff, recall, discharge, assign or
discipline employees and include professionals who recommend measures to be taken by
the employer regarding managerial issues by using his independent judgment in the
interest of the employer. d) Contracts of personal service for non-profit making
purposes. e) contracts relating to persons such as members of the Armed Force
members of the Police Force, employees of state administration, judges of courts of law,
prosecutors and others whose employment relationship is governed by special laws. f)
Contracts relating to a person who performs an act, on consideration of payments, at his
won business or trade risk or professional responsibility under a contract of service.
Article 3/1 states that this Proclamation is applicable to employment relations based on a
contract of employment that exist between a worker and an employer except the
exclusion under sub-article two. Among the exclusions of sub-article 2, the most
controversial ones before Ethiopian courts are management employees, domestic
employees and employees of state administration. Even if command and control exists or
the service is of no religious nature, all these employees are excluded from the ambit of
the labor proclamation. But, why is it controversial? Who are these? Management
employees are employees exercising or holding managerial function or position in an
enterprise. Decision makers on various things of the company such as recruitment,
promotion, demotion, transfer, termination, operational plan, the size and the nature of
the product and so on are within the prerogative of the management. Some times, owners
may be share holders of a company. They are through out the year out of picture. They
appear there once a year in the form of general assembly to determine the profit and loss
of the company for that specific year. Needless to say, a person may be both an owner
and a manager especially when we are speaking of very smaller enterprises such as a
garage, bar and etc. But, when we speak of a full-fledged company the owners are usually
far from the day to day activities of the company run by a manager. Strategically
decisions of the company are given by the board. So, unlike the owners who are usually
passive, the board and the manager are people who would be always in the picture.
Because, the latter are people having multiple says on the fate and destiny of the
enterprise. Since these are very much associated with the interest of the company in one
way or another, they have power of determining the fate of the employees and they are
there on behalf and for the benefit of the owner. Therefore, they have a conflicting
interest with the labor force. Because of this nature, the law tries to exclude these people
from the ambit of the labor proclamation. Of course, the general manager could be an
employee for the fact that the board can appoint and dismiss him. He is rendering service
having no religious nature under the command and control of the board in an anticipation
of wage. As a result, the definitional elements of employment relationship are somehow
satisfied. But, the nature of the service he is rendering is more of representing the
enterprise. In short, he is more allied to the enterprise than to the labor force thereby
being excluded. Excluding the managerial employees from the ambit of the labor
proclamation is not new. At the time of the military regime, the managerial employees

11
were not beneficiaries of the labor proclamation as well. How do we determine whether
some one is a managerial or ordinary employee? At least, Ethiopian labor history has
witnessed two mechanisms as to determining whether an employee is a managerial or
ordinary. These approaches are structural and functional approaches. Structural and
functional approaches are used to determine managerial and ordinary employees. Labor
proclamation 64 of 75 was mainly making use of structural approach. By structural
approach, we mean that any official in an enterprise or company who is accountable to
the general manager or to his deputy(s) shall be a member of the management team. So,
in order to determine whether some one is a member of the management or not, we shall
see the structure of the company. In general, in a management team of a company, we
include board of directors, general manager, organs accountable to the general manager
such as legal service and communication or public relation directors, then, two deputy
general managers, 1 for operation and another for administration and finance, and under
the deputy general manager for operation, sales manager and production manager, under
deputy general manager for administration and finance, administration head and finance
head. Actually, this list is not exhaustive. These officials could not benefit from the
minimum labor conditions of the proclamation and they cannot be members of trade
unions or beneficiary of unionization. If a contract of employment for a manager is
terminated, he cannot claim reinstatement by invoking the provisions of the labor
proclamation. These are of course implications of exclusion. Persons such as the sales
officer, the production section, casher, the personel and etc may seem to be members of
the management team. But, these officials are not included under the management team
for the fact that none of them are accountable to the general manager or to his deputy
manager(s). Rather, they are governed under the ambit of the labor proclamation. In
general, in structural approach, we are not interested in what activity or function a
particular employee is undertaking. Note must be taken that this approach is somehow
problematic. Case.
In 1983, there was a hotel which had about 20 employees beneath it. The owner was, at
the same time, manager of the hotel. Below him, there were three managers 1) manager
of beverage affairs, 2 manager of bedding affairs, 3) manager of meal affairs. Then, the
employees of the hotel were in need of forming association which was a fashion brought
by the prevailing ideology. The employees were allowed to have a meeting hall and the
general manager was admitting the legally recognized employees by standing at the gate
of the hall. The beverage, meal and sleeping managers were to join the meeting by
regarding themselves as an employee of the hotel. Then, the general manager forbid the
other managers from taking part in the meeting by alleging that they are managers not
employees and they are accountable to him as per the proclamation. On the other hand,
the forbidden managers were eager to be members of the association for the fact that they
were gaining no benefit from their managerial position. Then, they took the case to the
competent labor court under the ministry of labor and social affairs. The general manager
responded that the plaintiffs were accountable to general manager and hence they are side
of the management team. The confused court ordered the owner of the hotel to bring their
job description before the court. The job description stated that the manager of the
beverage affairs unlocked and scanned over the refrijetor whether a verity of drinks had
been inserted therein and prepared to be consumed. The manager of the sleeping affairs
checked whether the sheet and pillow on which a guest spent the night had been changed

12
and bed rooms had kept clean or not. The manager of the meal affairs was doing the same
activities in connection with meal. The court asked the defendant whether they were
taking measures such as cutting of salary, dismissing employees if found undisciplined
against the employees beneath them. The general manager responded that they would
bring the employee which was at fault to him to take measures upon the employee found
to have been at fault. The court explained that the law made officials below the general
manager to be included under the management team because of the fact that they were
involved in passing crucial management decisions. So, even if they seem to be
managerial staff in form, in terms of content, they had no managerial functions. They
could not be considered to be included under the management team. Finally the court
decided that they could form workers’ association together with the other employees.
From then on wards, structural approach was found to be misleading. If we are going to
focus solely on the structure, there could be a danger that people who should not have
been member of the management staff will be categorized under the management team
and denied of the protection of the law. After the repeal of the labor proclamation 64 of
1975, the labor proclamation 42 of 1993 of the transitional period substituted the
structural approach for the functional approach. The functional approach was again taken
over by the current proclamation. So, under the current proclamation, it is not the
structure that matters but the actual function a particular employee undertakes to
determine whether someone is a management staff or not. Article 3/2/c tries to let’s know
what managerial functions are as follows. managerial employee is he who is vested with
powers or prerogatives to lay down and execute management policies by law or
delegation of the employer depending on the type of activities of the undertaking with or
without the aforementioned powers is vested with the power to hire transfer suspend
layoff, recall, discharge, assign or discipline employees and include professionals who
recommend measures to be taken by the employer regarding managerial issues by using
his independent judgment in the interest of the employer. From this provision, we can
understand that laying down and executing management policies, hiring, transferring,
suspending, laying off, assigning and taking disciplinary measures against employees are
assumed to be managerial functions. Generally speaking, if an employee is found to be
involved in any of these functions, the law presumes him to be member of the
management staff. The law considers that the managerial positions are positions of trust.
The employer or the owner of the enterprise assigns people to these positions if he has
sufficient trust on them. On the other hand, if these people have obtained the confidence
of the employer, the law assumes that they will be better protected by the employer as far
as they are assigned there to protect the interest of the employer. So, there may not be a
need to give further protection. That is why the law decides to exclude them from the
umbrella of the labor law. The other reason by which the law wants to exclude members
of the management team here is that if the law treats them to be employees, they will
have the opportunity to join the labor or trade union. On the other hand, if they joined the
labor union, the union will suffer from heterogeneous interest. If so, there will be
members who are more associated with the employer in one hand and ordinary
employees on the other. In such a case, divergence in interest could be created in it and
unlike homogeneous interest, this will make the union yellow, teletafi. Because,
apparently, as a yellow union, even if they are deemed to be unions of the labor force, but
actually, they stand for the interest of the employer. Finally, if these people are allowed

13
to be members of such unions, the unions shall be directly or indirectly under the control
of the employer. The third reason is that if the law allows members of the management
team to join trade unions, there could be a danger that company secret would go to the
trade unions. Because, due to their positions, they have the opportunity to know of certain
secrets of the company be it business secret or whatever that should not be divulged to
outsiders. Such company secrets will again be passed to other outsiders through the trade
unions. So, the exclusion is important not only to protect the interest of the union but also
to protect the interest of the company. The other justification for exclusion is that people
who are assigned to those posts are more of technocrats or white-collar employees. When
someone is assigned to these positions, the assumption is that he is skillful. If he is a
skilled employee, because of his skill, his marketability is higher. If his marketability is
higher, he can negotiate better benefit by himself even without protection of the law. So,
even if the law does not provide any protection to them and they are not found to have
equal bargaining power with the employer, they can stand by themselves backed by their
skill and knowledge as compared with the ordinary employees that are unskilled or
semiskilled and abundant in the market. Even, in some points, they can hire the advice of
a lawyer to protect their interest since they are better relatively paid. They may be able to
understand the provisions of the law and try to customize their contractual relation in line
with the law. In the majority of the cases, they are literate and understand the
implications of their acts while signing the contract or bargaining. For all these reasons,
members of the management team are outside of the ambit of the labor proclamation.
Rather, they will be protected by the employer if they have obtained the confidence and
trust of the employer. Secondly, if they have a problem, they need to exhaustively put
their terms of protections in their contract of employment. We have already said that the
civil code serves as gap filling instrument. On the other hand, unlike the labor
proclamation, the civil code does not exclude them. So, their contract of employment will
govern their employment relation. In case their contract employment does not cover
subject-matters for their protections, the civil code may be of some help. At the time of
the derg regime, since managerial positions were excluded from the ambit of the labor
law proclamation, there was a directive issued by the ministry of industry as to how
management staff should be hired, promoted, transferred, dismissed. This directive was
also concerned with what annual leave they are entitled, what procedures to be followed
in order to dismiss them, what benefits they are going to get in the form of bonus and
salary increment. However, this directive was applicable to only state enterprises and not
private sectors. At this time, the government is moving away from state enterprises
through privatization. And the application of this proclamation is becoming very limited
as it has no effect to apply in private sector. Of course, still, it may apply in some state
enterprises that are not yet privatized. The other employment relationship that has not
been covered by the labor proclamation is employees of household. Article 3/2/d
provides that contracts of personal service for non-profit making purposes are excluded
from contract of employment under the labor proclamation. Who are these people? Why
are they excluded under the umbrella of the labor proclamation? The people referred
under article 3/2/d are domestic workers. some people may say that domestic workers are
even more oppressed than any other labor force. However, domestic workers are outside
of the ambit of the labor proclamation. If we consider that these people be covered by the
labor proclamation and if the purchaser of their service has to dismiss a domestic worker,

14
he will not only have to inform her fault but also be expected to prove her fault before a
court. Secondly, if the employer has ordered her to work in the evening or on night such
as cooking meal and serving dinner, she will claim overtime fee. Unfortunately, if she
came having conceived somewhere outside, the employer will have to give maternity
leave as per the proclamation. So, all the entitlements that are available in the labor
proclamation shall be extended to her as well. If so, the employers would prefer to
perform the work by themselves and it will back fire. The employers are marginal
consumers. They will consume or purchase the service to the extent that it is within their
economic power. When it becomes expensive, they shall leave it and develop copying
mechanism or survival strategy. Survival strategy refers to the work done by the
employers by cutting time of their leisure. So, the fear of the law seems to be that
excessive protection to domestic workers may back fire. Because, they may lose the job
altogether. The other thing is that in industrial relation, almost all working systems are
more or less similar. In this case, labor standardization is possible as to the minimum
labor conditions. But, when we come to the domestic service, every household is unique
by its very nature due to factors such as economic consideration and the likes. So,
domestic service will be too domestic to be regulated by the law. Of course, the law does
not exclude them altogether. Because, there is a promise that the council of ministers will
come up with a certain regulations to regulate their employment relation under article
3/3/c of the labor proclamation. Such promise reads, the Council of Ministers shall issue
regulations governing conditions of work applicable to personal services. Akin to the
current proclamation, Even if this promise was also included under the labor
proclamation 42 of 1993, the council of ministers did not yet come up with the promised
regulation governing such personal service to this effect. In the absence of such
regulation, they are going to be protected by their individual contract of employment
which is less likely to be observed. Otherwise, they shall be protected by the Civil
Code(article 2601, 02, 04). Because, the labor proclamation has excluded them from the
umbrella of the labor proc not from the protection of the civil code. It must be noted that
it is not the nature of the service that has been excluded. It is rather the nature and
identity of the employer. If the service is rendered to the profit making enterprise, even if
the service is assimilated to a household service, it would be within the coverage of the
labor proclamation. To illustrate this case, we can compare and contrast two janitors 1
employed to keep a hotel clean, and the other employed to keep a residence clean. In this
case, the work is more or less the same. But, the employee of the hotel is with in ambit of
the labor proclamation since a hotel is a profit making enterprise. Her employer can pass
of the cost to the consumers. But, when it is a personal service at a household level, the
purchaser of the service cannot claim that his employer could increase his salary by
invoking that he has made wage increment to his domestic worker. A guard at a hotel and
a guard at a household can also be taken as additional examples. The guard at the hotel is
under the ambit of the labor proclamation while the guard at the household is not. So, it is
not the nature of the service that has been excluded but the identity of the employer. In
such a case, we should ask whether the employer is a profit making or not. This does not
mean that the labor proclamation is limited to profit making enterprises only. It is only in
this particular case that it seems to be limited to prophet-making enterprises only. There
are some articles which are relevant whether the owner is a profit making or not. In other
cases, there are situations where employment relation in non-profit making enterprises

15
will be governed by the labor proclamation. For the purpose of sub-article under
consideration, whether the employer is a profit making or not is important rather than the
nature of the service. We have said that if there is an employment relationship, the labor
proclamation shall apply. Because of such fact, we excluded agency-principal
relationship and client-contractor relationship from the sphere of the labor proclamation.
On the other hand, even if an employment contract exists, there are situations where the
labor law will not apply. If the nature of service tends to be a religious type, we will
exclude it from the umbrella of the labor proclamation. Even from the aspect of the
material service, we have tried to exclude managerial employees and domestic servants.
When we talk of domestic service, we should remember that there exists the so-called
mixed service. Mixed service is a situation where the employee is required to render both
domestic and business service at the same time. Let’s assume that a certain person is a
household employee who serves as a driver to take the kids from home to school. He will
also transport the wife when ever she wants to go shopping and so on. This is purely
domestic service since it is for the purpose of non-profit making. Let’s also assume that
this household has a garage and the driver, at time the kids are at school, may be required
to work in the garage as a driver working in the garage or as rendering labor to the
garage. In this case, we can say that the driver is rendering mixed service to his employer.
Where is he categorized? Is he a domestic servant or not? There was also another
practical case. A householder began carrying out weaving business in the household’
residence. Then, a 20 years girl who was employed by the household to cook meal and
keep the house clean also started keeping the business center clean as well. She also helps
in taking part in weaving with the other workers after she kept everywhere clean. Then,
as a result of disagreement between the wife and the servant, the former told the latter
that she has dismissed her from then on wards. On the other hand, the domestic servant
brought the case before a court of law and pleaded that she was an employee governed by
the labor proclamation and should be back to her position as far as the employer became
unable to establish the fact that I was at fault. Even, she argued that, if she has to be
dismissed, she should be paid compensation. She also pleaded that the annual leave that
she did not take be paid her in terms of money and be given a certificate. On the other
side, the employer responded that she was a domestic servant and they were at liberty to
dismiss her at their pleasure. In this case, in order to decide whether she was a domestic
servant or not, we may take into account what the original contract of employment was
about irrespective of the function or outcome. However, this method may sometimes be
of unfair outcome. Secondly, we should take into account as to which part of the job
consumes substantial part of her time. Then, even if the contract states that she is a
domestic servant, if we find that the domestic service consumes more substantial part of
her time than the service she renders to the business, we can consider her as a domestic
servant and vice versa. Because, we should not be interested in the form but in the
content. But, if the time that has been spent to both services is more or less comparable
and doubtful to determine as to which part of the job consumes substantial part of her
time, then the benefit of doubt makes the employee to be a business servant. The benefit
of doubt is to benefit the employee. Because, the employee, from the very beginning, is a
weaker party and she needs protection whenever doubt arises. The other thing that
exclusion is exception. As a principle, we have said that whenever there is an
employment contract, the labor law will apply. On the other hand, one of the principles of

16
interpretation is that exception should be interpreted very narrowly. By interpreting
exceptions very narrowly, we mean that in case of doubt, we are going to resort to the
general principle. So, if we are not sure that she is a domestic servant from the facts
before us, we should categorize her as an employee to be governed under the labor
proclamation. There is another modality of exclusion technically called conditional
exclusion. What we have discussed so far is termed as express or outright exclusion in the
sense that the labor proclamation has excluded them expressly. Among the express
exclusion the excluded employees are employees of state administration. Article 3/2/e
states that contracts relating to persons such as members of the Armed Force members of
the Police Force, employees of state administration, judges of courts of law, prosecutors
and others whose employment relationship is governed by special laws are also excluded
from the ambit of the labor proclamation. It is remembered that we have the three
traditional functions of a state. They are legislative, executive and judiciary. There are
many experts who work there and on whom the labor law does not apply even if there is
an employer-employee relationship. They may have their own especial laws regulating
their type of employment relationship. For example, we have special laws for the armed
force, the police force, the judges, public prosecutors, the parliamentarians and etc. so
long as they have their special law; we don’t need to resort to the general law. Because,
for special circumstances, the special privileges over the general. On the other hand, state
service requires uninterrupted service. For example, if we take the police force, they are
almost 24 hours in duty. The same is true for the armed force. Even if the employees of
the state administration are to render service with in the 8 hours maximum limit, the
service should be obtained every day without interruption. So, if we bring these members
of the society into the labor proclamation, they will be tempted to form an association;
they will also bargain with the employer; if the employer fails to accept their terms, they
will call upon a strike. On the one hand, we need uninterrupted service for the interest of
peace and order and on the other we are going to allow them to call upon a strike. As to
the employees of state administration, they are not entitled to bargain; but, they are
entitled to resign. Because, the nature of the service is not amenable to bargain. The wage
and other benefit, since they are allocated in the form of budget, are not flexible. But, in
any relation that is covered by the employment law or labor law, we can bargain and we
can flexibly arrange the benefits. Because, unlike the public service, after all it is a profit
making enterprise, an increase in wage and any benefit in the form of bonus will be
distributed to the consumers. On the other hand, the government is trying to make its
service available to all at the minimal cost. So, there is no room for bargain under the
government service; there is no room for strike because of the very nature of the service
that it needs to be given uninterruptedly. But, because of these and other considerations,
employees of the state administration are outside of the coverage of the labor
proclamation. There may be confusion when employees of state administration become
employees of state enterprise. As indicated earlier, there are the traditional functions of a
state, legislation, execution and interpretation of law. But, at a latter time in history,
though the degree varies depending on the type of government, state is also involved in
economic function. For example, under the military regime due to the ideology it was
following, the visibility of the state in economic activities was very much high in the
sense that it nationalized the means of production that were to be privately owned. So, the
state was very much visible not only in law making but also in economic activities. As a

17
result of this, there may be employees of state enterprise. These are, broadly speaking,
employees of the state. Because, these state enterprises are owned by the state. The point
to note is that the exclusion applies only to employees of the state administration. The
employees of the state enterprises are covered by the labor proclamation. It must be noted
that the labor proclamation does not say that the employees of the state but the employees
of the state administration are excluded from the ambit thereof. In short, when the state
acts as an administrator, its employees are excluded from the ambit of the labor
proclamation. But, when the state acts as a business man, its employees are covered by
the labor proclamation. How do we determine whether a given employer is a state
administration or a state enterprise? National bank and commercial bank are both banks;
both are owned by the state. But, the national bank is different from the commercial bank
in many respects. The national bank is an agency of state administration while the
commercial bank is a state enterprise. So, employees of the commercial bank which is of
business purpose are with in the ambit of the labor proclamation while employees of the
national bank which is of regulatory, licensing or quasi-judicial or legislative(the power
to issue directives) power are out side of the labor proclamation. Basically, what makes
an entity a state administration is the power in the form of regulatory actings. The other
method which helps us to determine whether a certain entity a state administration or
state enterprise is the issue of budgeting. Government allocates annual budget for state
administration. However, when it is a business entity, not every year but at the time of
formation, allocation of capital in the form of authorized or paid-up capital will be made
by the government. After that, this capital will generate profit and the enterprise will
justify its existence through that arrangement. The Ethiopian civil aviation is a state
administration while the Ethiopian air line is a state enterprise. The telecommunication
agency is a state administration while the telecommunication corporation is a state
enterprise. The same is true for the Ethiopian electric power authority and electric power
corporation. When we come to the point, conditional exclusion refers to the situation
where certain conditions are satisfied, the employees will be excluded from the ambit of
the labor proclamation (article 3/3 of the LP). This sub-article reads, notwithstanding the
provisions of sub-article (1) of this Article. a) Employment relation between Ethiopian
citizens and foreign diplomatic missions or international organizations operating within
the territory of Ethiopia is a signatory provides, otherwise; unless the council of Ministers
by regulations decides, or an international agreement to which Ethiopia is a signatory
provides, otherwise. b) The Council of Ministers may, by regulations, determine the
inapplicable provisions of this Proclamation on employment relations established by
religious or charitable organizations: c) The Council of Ministers shall issue
regulations governing conditions of work applicable to personal services. Employees of
foreign diplomatic mission, international organization, employees of religious institutions
employees of non-governmental organization and employees of charitable organization
are some of the categories of employees that may be excluded on condition. But, if those
conditions are not satisfied, those employees remain to be the subject-matter of the labor
proclamation. International organization or embassies have a lot of local employees. In
the case of embassies, the most sensitive aspect of the job is rendered by their own
nationals. But, for those non-sensitive activities, they employ local staff. These local
employees are basically to render service under the direction of the embassies in return
for wage for definite or indefinite period. So long as the definitional elements are

18
satisfied, there is employer-employee relationship; therefore, the labor proclamation shall
apply. But, the employer is a special entity in Ethiopia. He is a diplomatic mission or a
representative of foreign government. Ethiopia also opens embassies over other countries.
So, the principle of reciprocity is to be applicable. If we treat the embassies here in a very
acceptable way, the other countries will also treat Ethiopian embassies there in a similar
way. And if we do the opposite, retaliation shall follow. This is what the principle of
reciprocity means under diplomatic parlance. When a foreign government opens an
embassy in Ethiopia, they will make an agreement with the ministry of foreign affairs.
One of the items that will be included in the agreement is that they don’t want to submit
to Ethiopian courts as a defendant. In the case of employment, they may respect the
provisions of the labor proclamation. But, if and when a dispute arises with one of the
local employees, they don’t want to submit to Ethiopian courts. If the Ethiopian
government does not accept their demand, Ethiopian embassies will also submit to
foreign courts. When we come to the practice, there is a certain unit under the ministry of
foreign affairs that tries to handle disputes between local employees and the embassies in
the form of amicable settlement. By amicable settlement, we mean that the Ethiopian
government does want to accord a minimal protection to its nationals. On the other hand,
it doesn’t obligate embassies to submit to Ethiopian courts. This is recognized on the
basis of article 3/3/a. in principle; their relationship is governed by this proclamation due
to the satisfaction of the definitional elements of employer-employee relationship. But,
either the council of ministers will issue regulation excluding this type of employment
from the ambit of the labor proclamation. Or Ethiopia may sign an international
agreement with these diplomatic missions or international organizations to this effect.
But, the council of ministers did nothing as to coming up with a regulation excluding the
employment relationship between embassies and their local staff from the ambit of the
labor proclamation. Instead, there is an international agreement that has been handled by
the ministry of foreign affairs with the embassies or international organizations. This
agreement is called headquarter agreement. So long as there is this type of agreement
either in the form of headquarter agreement or an agreement with a diplomatic mission or
an embassy, the applicability of the labor proclamation, as far as its aspect of judicial
settlement, will be excluded. Of course, it depends on the nature of the agreement.
Practically, they don’t exclude the applicability of the labor proclamation; rather, they
only exclude the dispute settlement forum. I.e. they don’t to go to court; simply, they
would like to appear before the unit under the ministry of foreign affairs. But, actually
even if our labor proclamation does not apply on them, since most of the embassies and
international organizations apply the ILO standard, it is deemed to be favorable to our
nationals. The other conditional exclusion is the exclusion given under article 3/3/b.
employees of religious organizations rendering a religious service have been already
excluded at a higher level. Because, their service is not what has been envisaged as a
service by the labor proclamation. But, employees of religious organizations are not only
those employees rendering a religious service. Some employees of religious
organizations such as the Gardner, guard, seller and receiver of alms materials, and etc
may render material service as well. So, for these types of employees, what the law is
saying is that if the council of ministers comes up with a regulation that will have an
effect of excluding them from the labor proclamation, they will be subject to exclusion.
In default of that regulation, they will continue being subject-matter of the labor

19
proclamation. This dependence on the determination of the council of ministers is what
makes it conditional. Even if this sub-article is existent since the time when the
proclamation 42 of 1993 was vibrant, there is no regulation issued by the council of
ministers to this effect. As a result of the absence of such regulation, employees of
religious organization with the exception of those rendering religious service are still
under the protection of the labor proclamation. The same is true in respect of the NGOs
or charitable organization. Practically, these religious employees are disturbing the
religious institutions. They request bonuses from them while there is no profit derived by
them. On the other hand, the labor proclamation is mainly issued for profit making
organizations. So, the religious institutions are requesting the council of ministers to
make them out side of the labor proclamation and issue regulation to this effect. Because,
they found the labor proclamation difficult for execution without profit making purpose
and making profit. The council of ministers, on its part, states that it is ready to approve if
the ministry of labor and social affairs has come up with the draft of the regulation. This
is because the ministry of labor and social affairs is entrusted with managing and
supervising the labor proclamation. However, nothing has been created so far. The same
thing is going on as to the regulation of the NGOs. The parliament has not ever examined
the council of ministers why the latter did not do the assignment (coming up with
regulation) given to it before 20 years. The council of ministers, on the other hand, has
not ever asked the ministry of labor and social affairs why the latter has not come up with
the draft of the regulation yet. Scope of application of the civil servant proclamation.
There are some exclusions under the civil service proclamation as well. We have just
seen that the labor proclamation is basically to regulate profit making organizations. But,
with respect to the currant application, it has also applications in non-profit making
entities such as religious organizations and NGOs. Article three of the FCSP reads,
this proclamation shall be applicable on “government institutions” and
“civil servants” covered by the definition given under article 2 of this
proclamation. As to what government institution and civil servant mean, the
above article has made a cross reference to article two. So, In order to
understand the full meaning of article three, we need to go to the definitional
provision, article 2. According to article two, “Civil Servant” means a person
employed permanently by federal government institution. On the
other hand, the same article provides that “Government Institution”
means any federal government office established as an autonomous
entity by a proclamation or regulations and fully or partially financed by
government budget, included in the list of government institutions to be
drawn up by the Council of Ministers. The word “permanently” implies that
permanent employee is the subject-matter of the civil service proclamation.
It is remembered that under the labor proclamation, we said that a contract
of employment could be for definite, indefinite or peace work. Of course, the
word “indefinite period” has equivalent effect with the word “permanent”
while the word” definite period” has equivalent effect with “temporary
period”. When we come to the civil service, it applies only to permanent
employment. This seems to be one of the major distinctions in between. As
we have tried to briefly notice, once employees are employed as probationer
employee for 6 months and they satisfied the requirements, they will be

20
issued with a letter for permanent employee only in government institution.
The scope of application of this civil servant proclamation is limited to
federal government offices. It authomatically excluded the regional
government offices. The assumption is that they will have their own legal
instrument regulating their respective civil servants. So federal government
office established as an autonomous entity by proclamation (parliament) or
regulation (council of ministers) are the main subject-matter of the civil
service proclamation. Practically, ministerial offices are established by
proclamation or parliament. Offices below ministries such as agencies and
authorities are established by council of ministers through regulation. So,
the nature of the instrument does not matter. Rather, the point is that
there should be an established legal instrument. By legal instrument, we
are referring to federal agency or authority establishing instruments. This
instrument will give the institution a legal personality. This legal
personality, in return, will give it an autonomous position. Another
implication for the federal government office, is that it must fully or partially
financed by government budget. This point is an important point to put
distinction between state agencies and state enterprises. For example, the
Ethiopian telecommunication corporation is a federal entity. So, it satisfies
the first element. Its establishment was also born out of a legal instrument,
regulation since every state enterprises are established by regulation. The
second element to be federal government institution has been satisfied as
well. But, when we come to the requirement of being fully or partially
financed by government budget, even if partial or full financing may come
from a government to a state owned enterprise, it is not in the form of
budget but in the form of working capital. This element makes the entity
under consideration out side of such definition. Because, state enterprises
are not financed by government budget or periodical allocation of
resources. The other element is that the institution must be included in the
least of council of ministers. This definition doesn’t seem to be very much
interested in the function. In our previous section, we have put emphasis
on regulatory power for government offices. But, under this proclamation,
the requirement of regulatory power is very much hidden. Of course, the
establishing instrument provides the agency with certain powers and
responsibilities. Under such list of powers and responsibilities, its
regulatory power will also be spelt out. But, as a definitional element, we
don’t find it expressly being spelt out. Because of this, organs that do not
have regulatory power are included under government office. Typical
examples are the Universities. Strictly speaking, Universities are service
rendering entities. They do not have regulatory power. The power to
regulate Universities lies on the ministry of education. So, since regulatory
power is not taken as a requirement in determining whether a certain entity
is a government office or an enterprise, institutions such as Universities
and hospitals are included within the category of government offices.
Therefore, their employees are to be considered as civil servants. But,
employees of the Unity or the Admas Universities are subject-matters of the
21
labor proclamation whereas employees of the Addis Ababa University are
subject-matter of the civil servant proclamation. The formers can form an
association by the existing law while the latter cannot. The formers can call
on strike; but, even if the job and the working atmosphere is similar, it is
not possible for the latter to call upon a strike on government Universities.
So, in general, permanent employees are employees rendering services in
these institutions. Here too, there are exclusions under article 2/one. The
same sub-article carrying the exclusions reads, 1) “Civil Servant”
means a person employed permanently by federal government
institution; provided, however, that it shall not include the following:
a) Government officials with the rank of state minister, deputy
director general and their equivalent and above;
b) Members of the House of Peoples' Representatives and the House
of the Federation;
c) Federal judges and prosecutors;
d) members of the Armed Forces and the Federal Police including other
employees governed by the regulations of the Armed forces and the Federal
Police;
e) Employees excluded from the coverage of this Proclamation by other
appropriate laws. Government officials with the rank of state minister,
deputy director general and their equivalent and above are excluded from
the ambit of the civil servant proclamation. Actually, even if we do not put
such exclusions, since they are assigned to a specific position not by
employment but by appointment, we can say that there is no employment
relationship. As a result, they are excluded at the definitional level. Our
drafters seem to be confused in that they have included them under these
exclusions. Members of the House of Peoples' Representatives and the
House of the Federation are also excluded since they are people holding
position by nomination or periodical election. By definition, they don’t have
employment relation as well. To begin with, if the civil service is to be
formulated through a contract of employment, they are not employees. The
drafters seem to have included them as a result of lack of clarity of
understanding the concept. Federal judges and prosecutors are excluded
from the ambit of the civil service proclamation in that they are holding
office through appointment. We have already said that there are two
broad employment regimes. All the exclusions, be it on election or
employment, are the third regimes of service rendering arrangement. We
have said that members of the Armed Force are excluded from the ambit of the labor
proclamation. But, there are employees rendering service of a civilian nature with in the
military camp. Though, they are still categorized as members of military. For example,
there are doctors working in tor hailoch hospital. These doctors may have the title of
colonel and other military ranks. Basically, they are not military people. But, they are
assimilated with the military so long as they associate themselves with the title of the
military. So, they are to be governed by the special law. But, other supporting staff will
be subject-matter of the civil servant proclamation. The same is true for parliamentarians,
judges and the police force. I.e. parliamentarians, judges and the police force will be

22
governed by the special law while the supporting staff remains to be subject-matter of the
civil servant proclamation. So far, we have seen the scope of application of both
proclamations. Now we shall move to the opporating part of the proclamation.
Obligations of the parties, in principle, are to be regulated by their respective contract.
Especially in the case of the labor law, the contract will have a lote of details. There are
requirements by law even if the contract is silent about some things. Because, these are
implied terms that will be read into the contract. Article 12 and 13 of the labor
proclamation talks about the obligations of the employer and employee respectively.
article 14/1and 2 talks about obligations of the employer and employees respectively
again. Obligations of the employer article 12 talks about are positive duties (actions).
Obligations of the employees under article 13 are also positive obligations (actions).
Obligations of the employer and the employee under article 14 /1&2 are, however,
negative obligation (inactions). Article 12 reads, 1/ an employer shall in addition to
special stipulations in the contract of employment have the following obligations. a)
To provide work to the worker; in accordance with the contract of employment and b)
unless otherwise stipulated in the contract of employment, to provide him with
implements and materials necessary for the performance of the work. 2/ to pay the
worker wages and other emoluments in accordance with this Proclamation or the
collective agreement. 3/ to respect the worker’s human dignity;. 4/ to take all
the necessary occupational safety and health measures and to abide by the standards and
directives to be given by the appropriate authorities in respect of these measures;. 5/
to defray the cost of medical examination, of the worker whenever such medical
examination is required by law or the appropriate authority. 6/ to keep a register
containing the relevant particulars specified in Article 6, hereof weekly rest days public
holidays and leave utilized by the worker, health conditions and employment injury of the
worker and other particulars required by the Ministry. 7/ upon termination of a
contract of employment or whenever the worker so requests, to provide the worker, free
of charge, with a certificate stating the type of work he performed, the length of service
and the wages he was earning. 8/ to observe the provisions of this Proclamation,
collective agreement, work rules and directives issued in accordance with law. 9/ to
record and keep of information as required by this Proclamation, and any other
information necessary for the Ministry to carryout its powers and duties, and submit same
within a reasonable time when requested by the Ministry. The employer is obligated to
provide work to the employee. Assume that the employee is paid wage for long without
being provided with work by the employer. Is there any irrationality behind this? When
we try to see the labor law development, traditionally, the main and almost the sole
obligation of the employer was to pay wage. The law was not interested in the obligation
of the employer to provide the employee with a job or not. The assumption was that the
employer is an economically rational person and he will not give a free lunch. He will
exploit a certain service for a certain wage. When we come to our point, Except in a
certain arrangement, unlike periodical payment, when the job is associated with or paid
on the basis of peace work or peace rate(yequrt kifiya), not providing an employee with a
job amounts to denying wage. An employee was employed in an organization to make
clothes whenever the latter serves him with a machine and article of closes to be sewed.
The employee was contracted with his employer that he could obtain 8, 12&15 $s per a
browse, a pair of trousers and coat respectively. In this case, if the tailor is successful in

23
making a browse, a pair of trousers and coat per day, he will obtain 35 $s per day. In
short, peace rate is closely associated with output or result-oriented. But, some times, the
employer may indirectly deny the employee of his wage by not serving machine and
article of closes to be made. So, denying a job will occasionally have an impact of
denying wage. Because, when the payment is not periodical or when the payment
arrangement is peace rate, unless and until the employee has been given job, he will not
obtain wages anyways. So, for peace rate arrangement, the obligation to provide wage
from the side of the employer is a valid obligation. Of course, at a latter stage, with the
international human right movement, there appears a concept that job is a source of
pleasure, development and human dignity. Unless a person renders something beneficial
to the society, he will not have dignity before his society. The other one is that job is
beneficial for career development. Unless an employee is given an opportunity to develop
his career within a certain qualification, he will freeze at a certain level. In such a way,
the employer is restricting his development as a human being if he is allowed to deny him
of job despite payment of wage. The other obligation of the employer is the duty to
provide wage as agreed by the parties or not lower than the minimum wage if any. Of
course, in Ethiopia, we do not have a minimum wage for the private sector or labor law
regime. The parties should mention the wage in their agreement. If they fail to do so, the
civil code seems to have its own solution for such a case. According to the Civil Code,
The ordinary wage for that particular job in a similar position shall be taken to fill the
gap. If there is an employee who is working in the same position and rendering the same
service, the wage that is paid to that individual will be paid to the other individual as
well. Because, the principle, “equal pay for job of equivalent value” will be taken into
consideration. On the other hand, the employee is not rendering a probono service but
expecting wage in return. In some enterprises, there may be additional benefits such as
transport allowance, housing allowance and etc other than wage. These benefits may have
emanated from the contract, work rules or collective agreement. If there is such kind of
arrangement, this will also be part of the obligation of the employer that needs to be paid.
Provision of working tools and materials is within the obligation of the employer unless it
is contracted out. Some times, parties (mechanic and the employing car owner, for
example), in their contract, may provide that the employee will come with his own tools.
If they expressly agree in advance that the employee will bring the necessary tools to
render service the provision of working tools by the employer can be contracted out. But,
in the absence of such agreement, the assumption is that working tools and materials shall
be supplied by the employer and the laborer will report for duty having solely his labor.
The employer is also obligated to respect the worker’s human dignity. Some times, in
some corners, employers especially the traditional ones have or want to have a form of
master and servant relationship with their employees. So, they try to treat them as a
servant. Note must be taken that we had a tradition of slavery. Employers of such
mentality do not give the necessary dignity to their employees. The employer has also a
duty to take all the necessary occupational safety and health measures and to abide by the
standards and directives to be given by the appropriate authorities in respect of these
measures. By the word ”safe”, we refer to a working environment free from accident. By
the word “healthy”, we refer to a working environment free from occupational disease.
So, the employer is duty bound to make working environments safe and healthy. The
necessary protective tools depending on what type of activities or services the employee

24
is going to render should be well provided. For example, while rendering services, if the
employee is going to be exposed to ray, he may be in need of being provided with
goggle. In short, the employer is duty bound to prevent preventable risks. One of the
mechanisms to prevent risks is to provide the necessary safety equipments and to instruct
the employee when and how to make use of them. This seems to be an implicit
obligation. Voluntary assumption of risks no longer exists under the current Ethiopian
labor law relation. Traditionally, employees would report for duty to have anointed holly
ashes or holy water to prevent risks. And the employer was not expected to care about the
possibility of the risks that might be caused to the employee. If these obligations are
mentioned in the contract, life will be good. If they are not mentioned in the contract, the
law will step in and make them part of the contract. On the other hand, there are negative
obligations that the employer is not allowed to do (14/1). Article 14/1 provides that
1/ it shall be unlawful for an employer to. a) Impede the worker in any manner
in the exercise of his rights or take any measure against him because he exercises his
right. b) Discriminate against female workers, in matters of remuneration, on the
ground of their sex. c) Terminate a contract of employment contrary to the
provisions of this Proclamation. d) Coerce any worker by force or in any other
manner to join or not to join or to cease to be a member of a trade union or to vote for or
against any given candidate in elections for trade union offices. e) Require any
worker to execute any work which is hazardous to his life. f) Discriminate between
workers on the basis of nationality, sex, religion, political outlook or any other
conditions. According to sub1/a, the employer should not take retaliatory measure against
an employee because the employee exercises his right under the law. An employee who
feels that his right under the law or the contract has been violated may take his case to
court and proceed against his employer. The employer may, on the other hand, take
retaliatory measures by demoting, dismissing him and so on. In another case, a suit may
be instituted against the employer by an employee. The other employee may have an
intention or be forced to appear as a witness against the employer. In this case, he will
take retaliatory measure as well even if he is not allowed to take unilateral action against
the employee because of the fact that the latter exercised his right of taking grievance to
court. Of course, employers with a mentality of master and servant relationship are seen
to take such type of measures. But, as an effect, they will pay the price. The other
prohibited act is discriminatory payment on the basis of sex. Employers should not create
discrimination among employees on the basis of their sex. Historically, even today in
some sectors, employees of a similar job are paid differently on the basis of their sex.
This fact can be observed between two female and male day laborers of construction to
day. This sub-article seems to be talking solely about discrimination at the level of
payment. It does not seem to be concerned with discrimination at the level of
employment. But, this seems because the constitution has already regulated that aspect
(discrimination at the level of employment). Practically, female workers are not
discriminated at the level of payment. Rather, they are discriminated at the level of
recruitment, training opportunities, promotion and etc. but, this part has only limited itself
to discrimination at the level of payment. In fact, there is a convension called equal
remuneration convension no 100 to which Ethiopia became a party in 1999. This
convension states that there should not be discriminatory payment on the basis of sex.
Jobs of equal value irrespective of which sex is rendering them should be paid equally.

25
The employer is also prohibited from interfering with worker’s freedom of association.
Employees have the right to form an association so as to have an organized voice against
the employer so that their bargaining power could be promoted because of the
collectivity. To be member of the trade union or not, to remain as a member of the union
or withdraw from the trade union should lay on the interest of the employee. No one, be it
an employer or a state, shouldn’t interfere with such affair. Traditionally, there was an
agreement called yellow dog contract. Under such contract, when an employee enters into
a contract with an employer, one of the terms of the contract would be that the employee
would commit himself not to join to trade union. Then, if this employee was found to
have joined the trade union, it would be breach of contract. This breach of contract would
also be valid ground for termination of contract. Even, Courts would accept such type of
contract under the principle of freedom of contract. But, after freedom of association was
made one of the fundamental rights, persons come to know of the fact that none of the
fundamental rights cannot be renounced or waved through contract. In the case of yellow
unions (unions influenced by the employers), the pressure of the employer upon the
employee could be to join the union. But, if the union is free from the influence of the
employer, the pressure of the employer upon the employee could be not to join or
withdraw from the union. There is positive freedom of association. Implicitly, there is
also negative freedom of association. Positive freedom of association is to mean the right
to form or join an association. Implicit in it, when we have a freedom of association, we
have the right not to form or join or to withdraw from that an association at any time.
This amount to be negative freedoms. In general, if an employer takes part in such kind
of activities, it is considered to be unfair labor practice. There is also a broader
formulation of non-discrimination among workers on the basis of nationality, sex,
religion, political outlook and any other conditions. It must be noted that the employer is
allowed to make discrimination among workers on the basis of productivity, discipline,
integrity and etc. because; these are very relevant for the production and the interaction in
between. So, an employer may reward the productive employee and demote the lezy one.
However, if the employer tends to discriminate workers on the basis of ethnicity,
religious belief or sex, it would be unfair and unjustified. Because, there is no scientific
relationship between productivity and sex, productivity and ethnicity, productivity and
religion or productivity and political outlook. Productivity, by its very nature, is related to
individuality. In the majority of cases, these variables of social life, sex, ethnicity and
some times religion are unchosen things. No one can choose his ethnic origin, or sex.
Rather, he will find himself belonging to a certain ethnic group or either of the two sexes.
If so, people should not be victims of a factor that they did not choose. These factors are
not only unchosen but also immutable by their very nature. Of course, there may be an
exception to this discrimination. There is what we call inherent job requirement. They are
also called genuine occupational qualifications. Some times, the very nature of the job
may require a particular sex or someone of a particular ethnic origin or a certain religion.
For example, the job of same sex search inherently requires a certain sex. The job of
acting female character in a movie or theatre also requires feminine sex only. In general,
the issue of discrimination should be understood with the foot note of the exception. The
other one is obligation of the employee (13&14/2). Article 13 reads, every worker shall
have the following obligations. 1/ to perform in person the work specified in the
contract of employment. 2/ to follow instructions given by the employer based on

26
the terms of the contract and work rules. 3/ to handle with due care all instruments
and tools entrusted to him for work. 4/ to report for work always in fit mental and
physical conditions. 5/ to give all proper aid when an accident occurs or an
imminent danger threatens life or property in his place of work without, endangering his
safety and health. 6/ to inform immediately the employer any act which endangers
himself or his fellow workers or which prejudice the interests of the employer. 7/ to
observe the provisions of this Proclamation, collective agreement, work rules and
directives issued in accordance with the law. The employee is expected to give personal
service or to perform the work personally. He cannot delegate it as of right. Because, it
was his personal character that was taken into account at the time of employment. Of
course, if he validly delegate because he is ill or faces accidentally the death of his close
relative or anything else, he is considered as if he was rendering service personally.
Factors or variables that were taken into account shall be meaningless. In such a case, the
duty to look for a substitute lies on the employer. In short, personal service is, in one
hand an obligation and a sort of entitlement on the other. The employee has a duty to
obey instructions given by the employer based on the terms of the contract and work
rules. Under the definitional element, we’ve said that the employee agrees directly or
indirectly to perform work for and under the authority of an employer. This is what we
call command and control. So, the employee is duty bound to obey lawful orders of the
employer. The employee is also duty bound to handle with due care all instruments and
tools entrusted to him for work. We’ve said that the employer is duty bound, unless
otherwise stipulated in the contract of employment, to provide him with implements
and materials necessary for the performance of the work. Then, a corsponding obligation
of the employee will be to handle those tools and materials with the at most care and
sense of ownership or responsibility even despite dissatisfaction with his job. The
employee is also duty bound not only to report for work but also always be in fit mental
and physical conditions. For example, the employee is not allowed to report for duty in a
state of intoxication(14/2/c). Article 14/2 provides that 2/ it shall be unlawful for a
worker to. a) Property. b) Take away property from the work place without the
express authorization of the employer. c) Report for work in a state of intoxication.
d) Except for HIV/AIDS test, refuse to submit himself for medical examination when
required by law or by the employer for good cause. e) Refuse to observe safety and
accident prevention rules and to take the necessary safety precautions. Because, it will
have a negative impact on the production process. He may also create a danger to himself
or to others as a result of his unfitness. No employee is allowed to report for duty in a
state of intoxication. It will have a negative impact on his job responcibility. So, it could
be a ground for termination. Secondly, if an employee reports for duty in a state of
intoxication and sustain injury, there will not be compensation for employment injury.
Rather, he will be his own insurer(14/2/c cum 96/2). Article 96/2 reads, 2/ The
employer shall not be liable for any injury intentionally caused by the injured worker
himself; any injury resulting from the following acts in particular shall be deemed to be
intentionally caused by the worker. a) Non-obedience of express safety instructions
or non-observance of the provisions of accident prevention rule specifically issued by the
employer; or. b) Reporting to work in a state of intoxication that prevents him from
properly regulating his conduct or understanding. As far as the employment security
concerned, read 27/1/i. Article 27/1/I reads unless otherwise determined by a collective

27
agreement, a contract of employment shall be terminated without notice if the employee
is found to have been involved in the commission of any of the unlawful activities
referred to in Article 14(2). The employee is duty bound to give all proper aid when an
accident occurs or an imminent danger threatens life or property in his place of work
without, endangering his safety and health. Not giving all proper aid when an accident
occurs or an imminent danger threatens life or property without, endangering his safety
and health is also a crime under the criminal law. Of course, this obligation may not be
mentioned in the contract. The employee is obligated to observe the provisions of the
Proclamation, collective agreement, work rules and directives issued in accordance with
the law. Employers may come up with work rules such as search at the gate, dress code
or uniform, safety clothes and the likes that will have an impact on respective discipline
or work ethics. Employers may prescribe the applicability of some work rules very
strictly. For example, they may oblige male employees to have a suit, white browse, tie
and black pair of shoes while reporting for duty. At the same time, they may be obliged
to shave their beards, get their hairs cut and so on. Female employees, on their part, may
be obliged to have dress, keep their hair clean and so on. Both sexes may object to such
work rules in light of privacy. For example, employees may refuse to be searched without
warrant from court of law. But, search by checking in and out may envisage property
right of the employer. Some times, the opposition may come in connection with religion.
Employees may object to the work rule by invoking that their religion never allows them
to shave their beard. Is there any legitimate purpose to be served that determines whether
it is necessary or not? Is it being undertaken in a rational way? In the case of rational
taste, it should not be discriminatory. If employees are searched in a discriminatory way,
the rationality of such measure will be at issue. In some offices, the searcher is, at the
same time, a Gardner. Then, when a person is to come in, the Gardner may come and
search with muddy palms of hand. This may also challenge rationality of the measure. In
general, for such measure to be rational, they should arrange same sex search. The
expectation of our privacy is usually relative. When we are at home, we may have
maximum privacy. But, when we step in to a public place, there will be a counterbearing
interest from that side. This purpose of making peace security prevalent may have an
impact of limiting one’s privacy. So, in the majority of cases, searching at the gate while
coming in is usually associated with safety. Searching at the gate while coming out is also
a legitimate business purpose in the sense that it is the manner of protecting the right of
ownership. We’ve said that legal obligations, even if they are not spelt out in their
contract, should be read into it. The employer is entitled to draw up work rules in order to
take strict decisions at work places. Some times, these work rules may seem to affect
privacy. They may also seem to contradict to the right of the religious belief. Companies
may require their employees to dress a certain type of clothes as a uniform. The uniforms
that are required to dress may be found to be contradictory to the religious code of
dressing. Can an employer prescribe dress code that may have a certain contradiction to
the religious code of dressing? In our previous discussion, we had some parameters of
evaluating whether a search is at conflict or not. Is there any legitimate and necessary
business purpose to be attained by prescribing uniform at work place? The existence of
uniform seems to pass the necessary taste. If there is any uniform, we can easily identify
an employee so that customers may not have a problem to address their issues To Whom
It May Concern. In this case, companies can achieve customers’ satisfaction. Secondly, if

28
dressing uniform presumes for long, it will be associated with a certain business brand.
So, if we consider that there is a certain business purpose to be achieved, then it can be
said that it has passed the first taste. The second one is rational taste. In the case of
rational taste, neutrality is the first requirement to be taken into account. If the uniform
tends to favor a certain religion to the exclusion of the other, it will not be rational. At
least, it should apparently be neutral of religion. For example, a uniform do not have to
bear an image of cross lest it should be suspicious of favoring religion. This is the way
how we reconcile legitimate business purpose on the one hand and personal individual
preferences on the other hand. For a search to violate constitutional right of privacy, the
employee who has been searched must have subjective expectation of privacy which
would be considered reasonable by society. An employee may have subjective
expectation of privacy. But, that is not sufficient. So long as he is living in society, his
subjective expectation of privacy must be considered reasonable by society. If so, at the
end of the day, it will not be a subjective but an objective standard. People may have
maximum privacy if they are living far from society. People may have maximum privacy
at home. But, when we come to public places such as work place or offices, a person’s
subjective expectation of privacy is not sufficient. I.e. it should be regarded reasonable by
society. It should go to the extent of the society’s objective expectation of privacy so that
one’s subjective expectation of privacy is to be respected. So far, we have put obligations
of the employer in both directive and prohibitive form. We have also put obligations of
the employee in the form of instruction and prohibitions. The attribute of the law is that it
puts directive or prohibitive norm and what happens when these norms are not observed.
Sanction for non-compliance is an attribute of law. Because, law, by its very nature, is
not a mere recommendation; it is attached to a certain sanction for the failure to observe
it. In this case also, for failure to fulfill some of the obligation, the law has its own
remedy. For example, under article 12/4, the employer has the obligation to take all the
necessary occupational safety and health measures and to abide by the standards and
directives to be given by the appropriate authorities in respect of these measures. If the
employer fails to discharge such obligation, the law under article 184/2/a of the LP
provides the remedy. According to this article, an employer who fails to fulfill the
obligations laid down in Article 12(4) of this Proclamation shall be liable to a fine not
exceeding Birr one thousand (Birr 1200). Under article 12/6 of the LP, The employer has
the obligation to keep a register containing the relevant particulars specified in Article 6
of the LP weekly rest days public holidays and leave utilized by the worker, health
conditions and employment injury of the worker and other particulars required by the
Ministry. If he fails to discharge such obligation, the law under article 184/2(b) of the LP
has put the remedy. So, according to this article, an employer who fails to keep records
required by this Proclamation, and provide type of information at a reasonable time to the
Ministry in accordance with this Proclamation shall be liable to a fine not exceeding Birr
one thousand (Birr 1200). We’ve seen that the employer is also required to discharge the
prohibitive obligation enshrined under article 14 /1of the LP. If he fails to do so, the law
under article 184/2(c) of the LP provides the remedy. On the basis of this sub-article, an
employer who violates the provisions of Article 14(1) of this Proclamation shall be liable
to a fine not exceeding Birr one thousand (Birr 1200). There are pressures that this
punishment should be raised to a certain level so that it should be deterrent enough. We
remember that article two of the LP defines employer as “employer” means a person or

29
an undertaking who employs one or more persons in accordance with Article 4 of this
Proclamation. So, on the basis of this definition, an employer who has employed only one
employee and an employer who has employed 3000 employees would be subject to the
same fine. At a certain level, in small enterprises, the punishment may have a certain
deterrence effect. But, in bigger companies, this amount of punishment seems to be a
toothless and irrelevant. Companies, no matter how big they are, are not sanctioned to
pay a fine of more than 1200 ETB. Because, it is the maximum amount to be imposed
upon an employer who failed to fulfill his obligation. So, for enterprises that may employ
to the extent of 50 employees, it may have a deterrence effect. But, for bigger ones, it
seems to be a joke. Because, they will not have an incentive to comply the law as they
will be subject to a very small amount of fine. The punishment doesn’t also take into
account the persistence of violence. Even if an employer commits a repeated violation of
the law, he is subject to the same fine for every violation of the law he commits. With
these limitations, the point to know is that there is a sanction attached with each of the
directive or prohibitive norms. There are also sanctions attached to the obligations of the
employees. If an employee fails to discharge the obligation under article 14/2, the law
under article 27/1(I) provides the solution. Article 27/1(I) provides that unless otherwise
determined by a collective agreement a contract of employment shall be terminated
without notice if the employee is involved in the commission of any of the unlawful
activities referred to in Article 14(2). So, non-observance of the prohibitive norms may
subject an employee to losing his job. Article 14/2C) must be read with article 96/2(B). If
someone reports for work in a state of intoxication and sustains employment injury at a
time, he will be subject to the risk of not being compensated by the employer. In short, if
the employee is found in the above situation, (1) he will lose his job or (2) he will be his
own insurer at the time of accident. If the employee doesn’t obey express safety
instructions or doesn’t observe the provisions of accident prevention rule specifically
issued by the employer (96/2(a)), he will be considered as if he intentionally inflicted an
injury upon himself. As a result, the employer is not required to compensate him in the
event of an accident. in general, In the case of non-observance, either termination or non-
compensation or both may follow. When we go to the civil service proclamation, we have
more or less the same obligations on the employer and the employee even if they are not
clearly drafted like those of the labor law regime. Applying the principle of non-
discrimination between workers on the basis of nationality, sex, religion, political outlook
or any other conditions is one of the duties of the employer. We’ve seen this obligation
under article 14/1(F) of the LP. We’ve tried to explain the rationales for condemning
discrimination. Of course, the civil service proclamation has moved forward one step.
Other than non-discrimination under article 13/1, the civil service proclamation obligates
the employer to undertake a sort of affirmative action for certain members of the society
(13 /3) when he has a civil post and the candidates are more than one. I.e. there are
other policy considerations that must be taken into account. This is non-discrimination at
the level of employment. But, there is also another obligation of non-discrimination at the
level of payment (7). Article 7 of the FCSP pertaining to equall Pay for Equal
Work provides that all positions of equal value shall have equal base
salary. Irrespective of who performed the job, employees should be
equally remunerated. Of course, this is also constitutionally recognized.
Historically, females were not equally paid even if they rendered service

30
of a comparable value. In short, there are so many implicit obligations of
the employer here and there under the civil service proclamation.
Obligations of the employees under the civil service proclamation are also
listed from article 61-64 of the FCSP. Article 61 provides that any civil
servant shall. 1) Be loyal to the public and the Constitution. 2)
Devote his whole energy and ability to the service of the public. 3)
Discharge the functions specified in his job description and accomplish
other tasks ordered legally. 4) Observe laws, regulations and directives
related to the civil service. 5) Have a duty to perform government policy
efficiently. So long as employees are working for public interest, they should be
loyal to the public. They should also be loyal to the constitution. But, their
loyality to the constitution does not imply their acceptance but respect thereof.
The employees are required to give faithful service and obey laws, regulations
and directives. Every time, there will be subsidiary instruments that will be
issued by the Competent authority. These instruments have an impact on the
working system of the civil servants. The duty to obey these instruments is left
for the civil servants not for others. Policies are the bases for the legal
instruments. Strictly speaking, policies are political documents. So, even if an
employee has a stand against those policies, he is required to implement them
as a civil servant. If an employee’s objection to the policies outweighs his
implementation, the option that the employee may have is to resign the post.
There is also an ethical requirement under article 62 of the FCSP. Because,
civil service is the area where maximum integrity of the civil servant is
required. Article 62 reads, without prejudice to the provisions of Article 61 of
this proclamation, the Council of Ministers shall issue detailed code of
conduct Regulations of the Civil Servannt. Employees in their vertical and
horizontal relation with their customers and boss in one hand fellow civil servants on the
other respectively are required to comply with the rules of code of conduct to be issued
by the council of ministers. Article 62 provides that 1) any civil servant shall
have the obligation to take medical examination, with the exception for
HIV/AIDS, when required by the government institution on sufficient
grounds related to the service. 2) Expenses incurred pursuant to Sub-
Article (1) of this Article shall be covered by the government institution.
Employees may be required to undertake periodical or random medical
examination of different type except for that of HIV AIDS. It is remembered
that the employer is obligated to create a healthy working condition. On the
other hand, employees, be it in a company or public service, are working in
groups. In such a time, if there is a certain contagious disease at a certain
corner, unless it is medically verified and the necessary protection is to be
undertaken, the existence of healthy working condition will be very unlikely.
but, note must be taken that the coast is to be covered by the employer. Not
only the employer under the civil service, but also the employer under the
labor law regime has the obligation to defray the cost of medical examination, of the
worker whenever such medical examination is required by law or the appropriate
authority (12/5). Under the labor law regime, we’ve said that the employer is duty bound
to supply tools and materials for rendering service. Correspondingly, the employee is
31
required to handle the tools and materials with due care. The same thing is enshrined
under article 64 of the FCSP. Article 64 of the FCSP reads, any civil servant shall
have the responsibility to properly handle and use the equipment and
materials provided to him for the carrying out of his duties. In case the tools
and materials are consumable, the employee is required to consume them
very efficiently. If the tools and materials are non-consumable, they are also
required to handle them as if the materials were their own properties.
Suspension. Technically, suspension is a temporary measure. Suspension is
a gray area in the sense that the employee has bare employment with rights
and obligations of the parties suspended. At the time of suspension, rights
and obligations of the parties will be withheld for some time. But, still, the
contract exists. Suspension has an attribute of termination. Because, the
obligation of the parties are being withheld. But, the parties will be reinstated
to their former position at the end of the suspension due to the fact that the
contract is still alive. So, suspention consists of such an attribute of contract
of employment and termination that it is said to be a grey area. Article 17
reads, 1/ Rights and obligations arising out of a contract of employment may be
temporarily suspended in the manner provided for in this section. 2/ Temporary
suspension of rights and obligations arising out of a contract of employment shall not
imply termination or interruption of the contract provided, however, a contract of
employment shall interrupt the obligation of. a) the worker to perform the work.
b) the employer to pay wages, other benefits and allowances unless otherwise
provided for in this Proclamation or in the collective agreement. Suspension is a situation
where the employee will not be required to provide service to the employer and the
employer will not be obligated to pay wages and other benefits to the employee.
Nonetheless, their contractual engagement remains intact. Therefore, suspension is a grey
area in the sense that it has attributes of termination on the one hand and of employment
relation on the other hand.
Article 18 provides that The following shall be valid grounds for the suspension, in
accordance with Article 17, of rights and obligations arising out of a contract of
employment:
1/ leave without pay granted by the employer upon request by the worker;
2/ leave of absence for the purpose of holding office in trade unions or other social
services;
3/ detention for a period not exceeding thirty days, provided that the employer is
notified within ten days or is supposed to know of the detention;
4/ national call;
5/ full or partially suspension due to force majeure of the activities of the employer
for a period of not less than 10 consecutive days;
6/ financial problems, not attributable to the fault of the employer, that requires the
suspension of the activities of the employer for not less than ten consecutive days.
A contract of employment may be suspended for a variety of reasons. Some of the
grounds are:
-Voluntary arrangement of the parties;
-Societal interest;
-Due to reasons beyond the control of the employer;

32
 -Due to disciplinary reasons.

2.2.1. Voluntary arrangement

The employer and the employee may agree to suspend their contractual relation for
sometime. For example, the employee may get an offer for a better pay for six months of
employment. In such case she may request her employer to grant her leave without pay
for six months. If the employer accepted the request, this is a typical case of suspension.
Within the agreed six months, the employer will not pay the wages and other benefits to
the employee and the employee will not be required to render service for her employer.
At the expiry of the six months period, however, the parties will be reinstated to their
previous employment relation.1 2.2. 2 Suspension for the benefit of society. An
employee may be elected to hold office at higher level trade union structure which may
demand full time engagement. The other possibility is he may hold office at kebele or
woreda level or he may be elected as parliamentarian. It is also possible that the
employee may be required to discharge national service (be it military service or
otherwise)

In such cases what will be the fate of his contract of employment? Should it be
terminated? Should he be still considered as an employee and collect wage from the
employer even if he is not rendering service to him? It seems unfair to terminate the
contract of employment of this individual because he is rendering service which is
important to society at large and should not be sanctioned for that. Individuals should be
encouraged to serve society. This can be achieved by ensuring employment security to
such individuals.

Should the employer then be required to pay him wages while the employee is not
rendering service to him? This is again unfair to the employer because as the service is
being rendered to society at large it should be society which should incur such costs and
not the employer individually.

To strike the balance between these two concerns, the Labour Proclamation has come
up with this solution. This solution is suspending the contract of employment until such
time the employee accomplishes his societal service after which he will regain his
employment.2 2.2.3 Suspension due to reasons beyond the control of the employer. At
times situations which will have an impact of temporary cassation of activities of the
undertaking may occur. Most of these situations are economic reasons though there may
also other reasons. For example, the Wonji sugar factory may be compelled to temporary
suspend its operations fully or partially due to the over flow of the Awash River. This
may be one incident where suspension may result from non-economic reasons. Financial
problem may also be a ground for temporary cassation of operations.

Suspension under these grounds is not within the sole discretion of the employer. Article
19 pertaining to Duty to inform reads, when rights and obligations arising out of a
contract of employment are suspended in accordance with sub article 5 or 6 of Article 18,

1
Art. 18(1) LP & Art.45 (1) FCSP.
2
Art.18(2) LP & Art.45(2) FCSP.

33
the employer shall inform the Ministry in writing within three days of the occurrence of
the ground for suspension. It is subject to revision by the Ministry of Labour and Social
Affairs or Regional Labour and Social Bureaus. In order for the Ministry to determine
whether the stated reason is adequate to suspend operation or not, the employer should
notify the Ministry within three days of the occurrence of the alleged ground of
suspension.

Article 20 with regard to Determination by the Ministry also provides that 1/ The
Ministry shall determine the existence of a good cause for suspension within three days
after receipt of the written information pursuant to Article 19. 2/ Where the Ministry
finds that there is no good cause for suspension it shall order the resumption of the work
and payment for the days on which the work was suspended. 3/ The party who is
aggrieved by the decision of the Minister in accordance with sub-articles (1) and (2) of
this Article may, with in five (5) working days, appeal to the competent labour court. The
Ministry is expected to determine whether or not there is sufficient ground for suspension
or not within three working days after the receipt of the report. Article 21 dealing with
Effect of Confirmation or Authorization of Suspension reads, 1/ Where the Ministry
confirms or proves the existence of good causes for suspension, it shall fix the duration of
the suspension, provided, however, that the duration shall not exceed a maximum of
ninety days. 2/ Where the Ministry is convinced that the employer cannot resume its
activities with the maximum period set under sub-article (1) of this Article, the worker
shall be entitled to the benefits specified under Articles 39 and 44. If the Ministry
determines there is sufficient ground for suspension, it will approve it and fix the duration
for it. But the duration shall not exceed ninety days.

If the Ministry determines that there is no adequate reason to withhold operation, it will
order the resumption of the activities and payment of wage for the days on which the
employees were suspended. The employer may appeal within five working days against
this decision to the appellate court of the Region where it runs its business.

If the employer fails to inform the Ministry of the occurrence of a ground for suspension,
it will not have valid ground to suspend its operation. Furthermore it may be liable to fine
for failure to notify.3 2.2.4. Disciplinary Suspension. One of the prerogatives of an
employer is to take disciplinary action against an employee. The employee on its part is
required to render faithful service to the employer. Failure to observe such faithfulness
may subject the employee to disciplinary action. But prior to taking action, the employer
is expected to undertake the necessary investigation into alleged misconduct of the
employee. Until such time the investigation is completed, it may be appropriate to
suspend the employee so that investigation could go smoothly.

With this purpose in view, the Labour Proclamation delegated collective agreements to
deal with the matter. Nevertheless, disciplinary suspension is not to exceed one month in
duration within which time the employer should complete its investigation and arrive at a
decision(27/4). Thus, as the Labour Proclamation now stands, disciplinary suspension is
not within the unilateral power of the employer, it is rather to be determined by the
3
Ibid, Art.184(1)(c)

34
employer and the trade union (i.e. collective agreement). Besides, its length is not even
left to collective agreement; it is rather fixed by law and cannot exceed one month.4

Note & Exercises.

* Under the Civil Service law, disciplinary suspension is within the sole prerogative of
the employer. Its length could also be as long as two months.(compare Art.27(4)
Labour Proclamation and Art.70 of Civil Service Proclamation) Why do you think the
legislature decided to adopt double standard in this regard? Is it justified? Why? Why
not?

* More often than not, misbehaviors which may subject an employee to disciplinary
investigation could at the same time be reasons for filing a criminal charge against the
same. Let us assume that parallel actions (i.e disciplinary & criminal proceedings)
were being commenced against the employee. Let us further assume that the
disciplinary proceedings resulted in positive determination that the employee indeed
committed that alleged misconduct and summarily dismissed due to it. Let us also
assume that the criminal proceedings failed to convict the accused for lack of adequate
evidence and hence the accused has been acquitted. What effect will the acquittal have,
if any, on the disciplinary action? I mean, should the employee be reinstated now that
his/her innocence has been judicially determined? Why/ why not? 2.2.5. Consequences
of expiry of period of suspension. Normally as soon as the duration for suspension
expires, the employee will be reinstated to his/her previous employment. But there may
also be circumstances where suspension may be transformed into termination. For
instance, in case of disciplinary suspension (e.g. if the outcome of the investigation shows
a serious misconduct attributed to the employee), the contract of the suspended employee
may be terminated. In case of suspension for reasons beyond the control of the employer,
particularly suspension due to economic reasons,(e.g. if the undertaking cannot resume
operation within ninety days) suspension will be transformed into termination.

Termination of contract of employment under the labor proclamation (23-29 and

31-32). Article 23-29 and 31-32 are, in one or the other, associated with
termination of contract. Article 23 provides that 1/ a contract of employment shall
only be terminated upon initiation by the employer or worker and in accordance with the
provisions of the law or a collective agreement or by the agreement of the two parties.
2. The amalgamation or division or transfer of ownership of an undertaking shall not
have the effect of terminating a contract of employment. Firstly, termination is made by
the initiation of one of the parties, the employer or the employee. Secondly, termination
is made by the operation of the law. Thirdly, termination is made by the agreement of the
parties. The agreement of the parties may be collective agreement or agreement of
termination by the parties. Termination at the initiation of the employer is technically
called dismissal. Termination at the initiation of the employee is also called resignation.
Termination at the initiation of the employer may be with or without notice. Termination
at the initiation of the employer without notice is termed as summery dismissal.
Termination at the initiation of the employer with notice is also called ordinary dismissal.
Termination at the initiation of the employee may also be with or without notice.
4
Art.27(4) LP & Art.70 FCSP.

35
Termination at the initiation of the employee without notice is termed as ordinary
resignation. If it is without notice, it will be termed as extra-ordinary resignation.
Termination by the operation of the law is of no additional requirements. The occurrence
of a certain fact will have an effect of terminating the contract of employment.
Termination by the agreement of the parties depends upon the agreement entered into by
the parties. Terminations at the initiation of the employer are elucidated under article27,
28 and 29. Termination at the initiation of the employee is listed under 31 and 32.
Article 27 is concerned with termination or
dismissal without notice. Article 28 and 29 are concerned with termination or dismissal
with notice. Resignation with notice is dealt with under article 31 and resignation without
notice is dealt with under article 32. Termination by the operation of law is dealt with
under article 24. Article 25 also deals with termination by the agreement of the parties.
Article 26 is different from the other articles dealing with termination in that the former is
concerned with unlawful termination. It reads, 1/ A contract of employment may
only be terminated where there are grounds connected with the worker’s conduct or with
objective circumstances arising out of his ability to do his work or the organizational or
operational requirements of the undertaking.
2/ The following shall not be deemed to constitute legitimate grounds for the
termination of a contract of employment. A) his membership in a trade union or his
participation in its lawful activities. B) his seeking or holding office as a workers’
representative. C) his submission of grievance or his participation in judicial or
other proceedings against the employer. D) his nationality, sex, religion, political
outlook, martial status, race, colour, family responsibility, pregnancy, lineage or social
status. Among the stages of contracting, some of them are essential while others are not.
For example, formation of a contract is essential even if it does not require a special form.
Probation in the labor law regime is not essential in the sense that an employee could be
employed with or without probation. Obligations of the parties are essential; because it is
in an anticipation of obligation that the parties are committing to each other. Suspension
is non-essential; because, it is possible for a contract to be formulated and terminated
without being suspended. Unlike marriage where the spouses commit to each other to live
together until death, in the case of employment contract, no one can commit himself as an
employee until death. Unlike any ordinary contract, the contract of employment is not to
be terminated for what ever reason. There should be reason to terminate it. In the past, the
parties would remain engaged so long as they were willing. If one of them was unwilling,
he could terminate the contract at any time. That was the period of contract, contract at
will. At the period of freedom of contract, if one of the parties, especially if the employer
is unwilling, that will be the end of the matter. This had its own danger in terms of
employment security. But now, we are very much attached for social reasons; we are very
much detached from employment at will. Rather, we are under the principle of no
termination without justified cause. For termination, Not only we need to have a justified
cause, but, that cause should be proportionate to termination. Had the contract of
employment been an ordinary contract, it can be terminated at any time and for whatever
reason. The law is not very much conservative as to the other contracts. When we come
to labor, social protection is very important; unless we protect the weaker and the
majority, at the end of the day, social stability will be negatively affected. Unemployment
will be prevalent. So, we need to have a mechanism of protection through law by creating

36
legal framework that will strict termination to the extent possible. Of course, we cannot
avoid termination altogether. There could be a llot of legitimate business reasons to
terminate the contract of employment. But, at least, it needs to be minimized. Because,
the other option, unemployment, is very much dangerous not only to the unemployed but
also to the society at large. So long as social instability exists, the natural consequence
thereof, political instability may follow. The first ground is termination by the operation
of the law (24). Article 24 as regards Termination by Law provides that a contract of
employment shall terminate on the following grounds. 1/ on the expiry of the period
or on the completion of the work where the contract of employment is for a definite
period or piece work. 2/ upon the death of the worker. 3/ upon the retirement of
the worker in accordance with the relevant law. 4/ when the undertaking ceases
operation permanently for due to bankruptcy or for any other cause. 5/ when the
worker is unable to work due to partial or total permanent incapacity. When a contract of
employment is to be terminated by the operation of the law, the occurrence of a certain
legal fact will automatically terminate the contract of employment without any
requirement from the side of the employer. For example, for terminating the contract of
employment, there are cases where the employer or the employee is required to provide
notice prior to termination. But, in the case of termination by the operation of the law,
there is no requirement of providing with notice. The mere occurrence of a certain legal
fact will put the employment relation to an end. The facts to be occurred are mentioned
under article 24 in an apparent clarity. The first element is the expiry of the period of the
contract. If the contract of employment was concluded for a definite period of time, for
example, one year, the contract shall come to an end upon the expiry of the stipulated one
year period. If the contract of employment was concluded to perform a certain job, the
completion of the job will automatically bring the relationship to an end. A controversy
arises when the contract is concluded for definite period of time. Because, it seems to be
an employment at will. The job may be there. The performance and the discipline of the
employee is fine and acceptable. But, simply because of the expiry of the stipulated
period, we are entitling the employer to terminate. If that is the case, we are going back to
the principle of freedom of contract, employment at will. So, when we come to
termination, one of the controversial areas in the labor law regime is the provision under
article 24/1. In order to illustrate 24/1, we need to go back to article 9. The principle
under the labor proclamation is the principle of indefiniteness (9). Article 9 reads, any
contract of employment shall be deemed to have been concluded for an indefinite period
except for those provided for under Article 10 hereunder. This is an important principle
for employment security. Any contract of employment is considered as if it were
concluded for indefinite period of time. Even if the contract provides a period by itself,
the principle is indefinite period. The period of the parties is not taken into account. The
reason behind is to insure employment security to the maximum possible to the
employee. Employment security is, on the other hand, one of the main objectives of the
labor proclamation. It is only when any of the conditions under article ten are satisfied
that a contract of employment will be considered as though it were concluded for a
definite period. Article ten is an exception to the general principle under article 9. It
reads, 1/ a contract of employment may be concluded for a definite period or for
piecework in the case of. a) The performance of specified piece work. b) The
replacement of a worker who is temporarily absent due to leave or sickness or other

37
causes. c) The performance of work in the event of abnormal pressure of work. d)
The performance of urgent work to prevent damage or disaster to life or property, to
repair defects or break downs in works, materials, buildings or plant of the undertaking.
e) An irregular work which relates to permanent part of the work of an employer but
performed at irregular intervals. f) Seasonal works which relate to the permanent part
of the works of an employment but performed only for a specified period of the year but
which are regularly repeated in the course of the years. g) An occasional work which
does not form part of the permanent activity of the employer but which is done
intermittently. h) The temporary placement of a worker who has suddenly and
permanently vacated from a post having a contract of an indefinite period. I) the
temporary placement of a worker to fill a vacant position in the period between the study
of the organizational structure and its implementation. 2/ A contract of employment
for temporary placement of a worker under sub-article 1(h) and (i) of this Article shall
not exceed forty five consecutive days and shall be done only once. If any of contracts of
employment cannot fall under article ten, even if the parties have stipulated period, that
will be irrelevant as far as the law is concerned. Therefore, in order to apply article 24/1,
we need to evaluate the terms of the contract in light of article ten. If the contract entered
into by the parties forms any of the conditions under article ten, the expiry of the period
will result in termination. But, if it does not fall under any of the conditions of article ten,
the general principle of article 9 will apply. Article 24/1 should, in no way, be read in
isolation. So, we need to read it in connection with article ten to understand the true
meaning of article 24/1 concerning with expiry of period and to determine whether the
terms of the contract stipulated by the parties as to period fits or not to any of the
conditions of article ten. If we understand article 24 in isolation, article 9 will
automatically be irrelevant. We’ve just seen that article 9 is laying down the general
principle. On the other hand, we cannot have an interpretation that makes a very visible
principle irrelevant. So, the best approach is to conjointly read article 24/1 with
articles9and 10. . When a contract of employment is determined in terms of job, there is
no much controversy. Assume that there is a casher in an enterprise entered into a
contract of permanent employment. But, now, she has got maternity leave(three months).
For these three months, the management of the enterprise has decided to employ another
casher. In this case, the fact that the new casher is being employed is to temporarily
replace the permanent employee. After the expiry of such three months, the original
casher will report from maternity leave for work and the enterprise shall terminate the
substitute. The new casher may object to the termination as follows. This is a service of a
casher; so long as the enterprise exists, financial transaction will be there. If there is
financial transaction, the position of the casher will also be alive. So, I will not be
terminated. I.e. the employment is a permanent activity of the enterprise. Despite such
objection, if the enterprise can show that the position is already occupied by the
employee currently under maternity leave, it can validly terminate the contract.
Otherwise, if the company employs a casher and if there is no one to replace her, even if
she is employed for a definite period, six months or 9 months or whatever, she will have
a permanent status of employment. SEBBER MEZGGEB 11924. The other ground for termination by the operation
of the law is natural attrition (sub-article two and three of 24). Of course, these sub-
articles are more or less the same. One of the natural attritions is death of the employee
and the other is retirement of the employee. It is remembered that a contract of

38
employment is for personal service. So, if the person who is expected to render service
personally dies, it will be logical to terminate the contract of employment . Of course, in
principle, death of the parties will not have an effect of terminating a contract of
employment unless the nature of the service requires the personal performance (1986).
Article 1986 reads, the heirs of the person shall be substituted for him in contracts to
which he was a party unless the contrary is stipulated or flows from the nature of the
contract. If the parties agree otherwise or if the nature of the contract requires personal
service, the heirs will not be substituted. But, in all other cases, the principle is that the
heirs will stand at the foot of the deceased and continue with the rights and obligations
emanating from the contract. But, in case of employment relationship, since the very
nature of the relationship requires personal service of the employee, the death of the
employee is a valid ground to terminate the contract. It is only the death of the employee
to be taken into account. The death of the employer may not necessarily put the
contractual relationship to an end. Because, the personal service of the employer is not
required for the performance of the job. So, the right of employment is not something that
can be inherited. Rather, it is personal to the employee. We are not required to provide
notice in advance. Because, it serves no purpose. The very purpose of providing notice is
to give an opportunity for the notified individual to look for a substitute. If the notifier is
an employee, the notice gives the employer an opportunity to look for a substitute
employee. If the notifier is the employer, the notice gives the employee an opportunity to
look for a substitute job. The other natural attrition is the attainment of retirement age.
Until recently, it was also controversial in some respects. At the time of the emperor, we
have a retirement age that had discriminatory approach. Because of the then prevailing
social attitude, female employees were retired earlier than male employees. I.e. female
were retired at the age of 55 while male employees were retired at the age of 60. At the
time of the derg regime, it was made equal; both female and male employees were retired
at the age of 55. Currently, the age of retirement for both is 60. The scope of application
of the pention proclamation no 345/2003 was very limited. It was not intended to apply
upon the private sector. It applied to civil service, state enterprises and privatized
enterprises. When privatized enterprises were state owned enterprises, they had already a
pension scheme. Even if they became privatized, that scheme would continue. These
were the three areas where the pension proclamation no 345/2003 applied. For the green
field investment and for those which remain private at the time of the derg, the pension
proclamation was not applicable. The new government liberalized the economic policy
and encouraged the private sector. some actors of the private sector bought formerly state
owned enterprises while others simply invested fresh investment. Investing fresh
investment is termed as green field investment. But, beginning from last year, two new
pension proclamations have come into picture. They are pension proclamation no 714
and 715/2011. So, in the current case, even, the private sector has been covered by the
pension scheme. Therefore, the retirement age, 60, is now horizontally applicable for
both sectors. What is the rationale behind the retirement age? One rationale is deemed to
be that productivity diminishes with the attainment of certain age. Of course, some
people argue that retirement age should be job specific. It must be noted that the
retirement age for lay soldiers is the age of 45 while that of military members with the
rank up to colonel is 52 and above is 55. The retirement age for military members is
earlier because the military job requires physical strength. The other rationale could be

39
employment creation. As long as a person is getting old, the power of Training and
imformation retention rate could be reduced. On the other hand, modern industrial
relation requires modern technological development. In order to operate these
technological facilities, we need trainings. But, when people attain a certain age, their
capacity to observe training will also diminish. Absenteeism may also occur repeatedly
due to the fact that the older the man, the more vulnerable to various diseases he will be.
The degree of social instability involved in youth unemployment is higher than that of
unemployment of old age. Some of the above rationales are legitimate business concern
while others such as employment creation are legitimate social concern. The other ground
for termination by the operation of the law is bankruptcy. Competition is the vital feature
of business. If competition exists, some of the enterprises may stand as winners while
others will stand as losers. So the losers may go bankrupt. If the business is bankrupt,
there may not be further transaction. It is not only bankruptcy but also any other causes
may be ground for termination. Among other causes, the employer may decide to shift
business. In this case, the employees of the former enterprise may not easily transfer to
the new business enterprise due to non-compatibility of their profession to the latter
business. Cassation bench case number 3314. An oil producing factory borrowed some
amount of money from commercial bank of Ethiopia. The factory was, however, unable
to pay the loan back on the due date. Hence, the bank attached the factory and made it
open to sell by auction. But, no buyer was found to purchase the factory with the
minimum price the bank determined. So, the bank decided to hold the factory with
minimum price by itself and told the employees of the factory that their contract of
employment was terminated from then on wards. The employees took the case to court.
They argued that they should continue working there or should their contract of
employment be terminated, they should get severance pay. The first instance court
decided that the bank should pay severance pay for them if the contract should be
terminated. The high court also approved the decision of the first instance court. The
bank appealed to federal Supreme Court. Then, the cassation bench decided that the bank
should not pay severance pay for the employees since their relation is not with the bank
but with the former owner of the factory. Secondly, the bank owned the factory not to
have the factory continued working the same business but to earn its money by selling it.
There is no legal reason in which the bank bears any obligation as to the employees of the
factory. Partial or total incapacity could also be another ground for termination by the
operation of the law. When the employee is proved to be partially or fully incapasitated
permanently, then, it will be a valid ground to terminate the contract. It will be unfair to
require the employer continue employing unproductive individual. Some times, there is a
misunderstanding between article 24/5 and 28/1(B). 28/1(B) reads, the worker is for
reasons of health or disability, permanently unable to carry out his obligations under the
contract of employment. The terminology between the two sub-articles is more or less the
same. One of the employees is to be regulated under 24/5. In this case, no notice is
required. But, another employee with a similar problem is to be regulated under 28/1(B).
In that case, he will be entitled to notice. If the employee has worked for about 5 years,
he will be given a notice of two months. If notice is not given to him, he will provide
with a salary of additional two months instead of the notice. So, the provisions under 24/5
and 28/1(B) have different legal effects. One of the interpretations given for these
provisions is that Article 24/5 tries to regulate injuries outside of employment while the

40
article 28/1(B) regulates injuries with in employment. So, the one who sustained injury
at the time of employment should be favorable by being providing with notice. The other
interpretation is the issue of evidence. According to this interpretation, if the employee
has come up with a medical certificate proving his incapacity, there is no need to give
notice. But, if the employee is short of medical cirtification and simply reports for duty
despite illness highly diminishing his productivity, the employer has the power to give
notice on the basis of article 28/1(B) and terminate the contract. So, the difference lies on
the production and non-production of medical certificate. The English version of article
24/5 is a bit vague than the Amharic version in terms of clarity. This argument is
strengthened by the civil service proclamation article 79/2 which is counter part of article
24/5 of the LP. The strengthening sub-article reads, without prejudice to the
provisions of Article 53/2/ of this Proclamation, where a civil servant who
has sustained employment injury is medically determined to be
permanently disabled, his service shall forthwith be terminated. Unlike the
sub-article under consideration, Under 79/2 of the FCSP the word “medically”
has been clearly designed. So, the gap created by the absence of the word
“medically” under article 24/5 of the LP can be covered by the analogical
extension of article 79/2 of the FCSP to article 24/5 of the LP. We’ve already
seen that the occurrence of certain fact will have the effect of putting a contract of
employment to an end without any further proceeding. Once the occurrence of that fact is
proved, the natural consequence thereof will bring the relationship to an end. We’ve also
seen that some of the facts are natural attritions such as death and retirement while others
are associated with the enterprise such as bankruptcy, change of business and the likes.
The second possibility for termination is termination by the agreement of the parties. At
the beginning, we’ve said that contract of employment is a consensual arrangement. I.e.
the parties agree to remain engaged in that relationship. On the other hand, if they want to
put that relationship to an end by agreement, the law does have no objection. But, some
times, the agreement between the parties may put the weaker party in a detrimental
position. In such a time, the law wants to provide the disadvantaged party with some
protection. Among the different protections, one is that the agreement will not have an
effect of waving one’s right under the law. No employee can wave his right provided
under the law. For example, when a contract of employment is terminated, the employee
is entitled to get severance payment of a certain amount. This employee cannot enter into
a contract of employment by waving his right to ask severance payment (39). Secondly,
after termination of the contract of employment, unutilized annual leave, if any, could be
converted into cash (77/5). According to the above sub-article, a worker whose contract
of employment is terminated under the Labor Proclamation is entitled to his pay for the
leave he has not taken. If, prior to using to his annual leave, the contract of employment
is terminated, the law says that it needs to be converted into cash and given to the
employee. No employee can wave his right to accept an annual leave. If so, this makes
the contract of employment null and void. In short, the agreement should not have an
effect of nullifying the rights provided under the law. This is one of the protections given
to the employee. The other protection is that any agreement for termination should be
made into writing. This is because the written instrument is better considered than oral
declaration. So, in order to make sure that the parties were serious, especially, the
employee was serious at termination, it must be reduced into writing. In case

41
disagreement arises, the written instrument will be a conclusive proof. We have already
said that a contract of employment is to mean a contract either to establish or terminate
employment. On the other hand, under article 5 of the LP, we’ve stated that unless
otherwise provided by law, a contract of employment shall not be subject to any special
form. So, termination is one of the exceptional areas where a contract of employment
should be made in writing (25). Article 25 provides that 1/ the parties may terminate
their contract of employment by agreement provided, however, that waiver by the worker
of any of these rights under the law shall have no legal effect. 2/ Termination by
agreement shall be effective and binding on the worker only where it is made in writing.
It must be noted that when the law requires the contract to be made in writing, it must be
signed by both parties (1727). Article 6 with regard to written contract of employment
reads, Subject to the provisions of the relevant law, a written contract of employment
shall specify the following. 1/ the name and address of the employer. 2/ the
name, age, address and work card number, if any, of the worker. 3/ the agreement of
the contracting parties made in accordance with article 4(3) of this Proclamation. 4/
the signature of the contracting parties. The phrase “Subject to the provisions of the
relevant law” in the introductory part of article 6 refers to many laws one of which is the
general principle of contract. When we go to the general principle of contract, if the law
requires a contract to be made in writing, not only it should be signed by the parties but
also attested by two witnesses. This requirement is also implicit under article 25.
Provided that these rigorous requirements are fulfilled, the law does not have any
problem if the parties bring the relationship to an end by their bilateral arrangement. The
other ground is termination by either party. This is the most usual and controvercial
ground for termination. The most controvercial one is, however, termination at the
initiation of the employer (27, 28, 29). Grounds where the employer can terminate the
contract of employment by unilateral decision seems to be incorporated under article
26/1. It reads, a contract of employment may only be terminated where there are grounds
connected with the worker’s conduct or with objective circumstances arising out of his
ability to do his work or the organizational or operational requirements of the
undertaking. Grounds connected with the worker’s conduct, grounds associated with the
worker’s ability to perform his work or the grounds associated with organizational or
operational requirements of the undertaking are the three grounds where an employer can
validly terminate a contract of employment. Disceplinery or behavioral problem or
problems of integrity are possible problems that may be grounds for termination.
Grounds associated with the ability, skill, productivity, competence and so on are also
other causes for termination. The third ground is associated with market conditions or
companies’ structural or operational requirement. For companies, to remain competitive
in business, cost reduction is the best strategy. Companies revise their overhead cost. To
this end, they may bring structural changes. Some positions could be cancelled; new
positions could be created. When positions are cancelled, employees may be terminated
or laid off. This is what structural requirement means. Operational requirements are more
or less the same with structural requirements. Some times, a lot of the products of a
company may be at stock and remain unsold for long. In that case, the company may not
be in need of producing more prior to selling all these out. In the mean time, if the
company was operating in three shifts within 24 ours, one of the shifts could be cancelled
due to operational requirement. In that case, it may have an effect of terminating a

42
contract of employment. All these could be grounds for termination that may be initiated
by the employer. Grounds for termination associated with misbehavior are well dealt with
under article 27while those associated with employee’s ability to do his work are also
well dealt with under article 28/1. On the other hand, grounds associated with the
undertakings’ structural or operational arrangement are elucidated under article 28/2 and
29. The source for these facts of termination is ILO convention called employment
termination convention no 158 of 1982. Ethiopia is a signatory to this convention. So
article 27,28and29 must be read in line with the provision of the convention under
consideration. Termination at the initiation of the employer(dismissal) is called summery
dismissal. Article 27 as regards termination without notice is provided as 1/ unless
otherwise determined by a collective agreement a contract of employment shall be
terminated without notice only on the following grounds. a) Repeated and unjustified
tardiness despite warning to that effect. b) Absence from work without good cause for
a period of five consecutive working days or ten working days in any period of one
month or thirty working days in a year. c) Deceitful or fraudulent conduct in carrying
out his duties having regard to the gravity of the case. d) Misappropriation of the
property or fund of the employer with intent to procure for himself or to a third person
undue enrichment. e) Returning output which, despite the potential of the worker, is
persistently below the qualities and quantities stipulated in the collective agreement or
determined by the agreement of the two parties. f) Responsibility for brawls or
quarrels at the work place having regard to the gravity of the case. g) Conviction for
an offence where such conviction renders him unsuitable for the post which he holds. h)
Responsibility 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 employer. i) Commission of any of the unlawful activities referred to in Article
14(2). j) Absence from work due to a sentence of imprisonment passed against him for
more than thirty days. k) Commission of other offences stipulated in a collective
agreement as grounds for terminating a contract of employment without notice. 2/
Where an employer terminates a contract of employment in accordance with this Article,
he shall give written notice specifying the reasons for and the date of termination. 3/
the right of an employer to terminate contract of employment in accordance with this
Article, shall lapse after 30 working days from the date the employer knows the ground
for the termination. 4/ the grounds for suspension of a worker from duty before
terminating the contract of employment of the worker in accordance with this Article
may be determined by collective agreement, provided however, that the duration for
suspension shall not exceed thirty working days. The common problem is that there is
misconduct from the side of the employee. Different expressions of misconduct are put in
place under sub-article 1. These grounds can be summarized as the reason why the
employee is terminated without notice is because of the serious conduct he has been
engaged in at the place of work. So, in employment, it is not only skill or professional
qualification that gives security to employment. Conduct is also as important security as
professional qualification at the place of employment since an employee may lose his
employment if his conduct is incompatible to team work, with the orders of the employer,
in his relation with customers and the like. This aspect of termination is one of the
controversial areas under labor law. There was a practical case related to article 27/1/C.
an office had an attendance sheet which is one aspect of work rule. On this attendance

43
sheet, workers put their signature when they report for duty in the morning. They would
do the same in the afternoon to make sure their presence at work. One day, a worker put
his signature for both shifts in the morning. Then, he worked in the morning and absented
himself in the afternoon. The employer, after being informed the employee’s act, wrote a
letter to him that his employment was terminated on the basis of article 27/1/C. the
employee, on his part, took the case to court by invoking the invalidity of the termination.
While assessing the fraud committed at the place of work, the gravity of the fraudulent
act must be taken into account. On the other hand, termination is the maximum
punishment that the employer can impose against the employment. So, while deciding
termination, there must be substantive fairness. I.e. the punishment must be proportional
to the gravity of fault committed by the employee. There are so many possible
punishments that could be imposed upon the employee short of termination. Ripremand,
oral or written warnings and deduction of wage for that specific day are good examples.
Even if the employee has committed fraud, it may not lead to dismissal. Because, the law
tries to call the attention of the employer and the judge that it should be determined on
the gravity of the misleading committed. In this case, the court stated that fault or fraud
has been committed. However, this fraud may not entail termination of contract of
employment but other less serious penalties. Because, it is not a fraud committed
repeatedly. Of course, if this fraud has been committed recurrently, it could be added up
and become serious. So, both quantity and quality are important. A single act, if serious
enough, may result in termination. Small frauds could also be added up to result in
termination. But, the fraud under consideration is committed for the first time; it is
relatively minor. So, the court decided that the fraud cannot result in termination of
employment. Rather, the employer could punish the fraudster with other alternative
penalties. Case. There was a hotel Which had a cafeteria which serves food only for the
employees at low cost. But, it had a ground rule which states that no employee can invite
external guests therein. One day, a driver employed in the hotel invited a guest in the
cafeteria. Then, the employer informed the driver of the fact that his contract of
employment has been terminated on the basis of article 27/1/C. the driver, on his part,
took the case to court of law by alleging that his contract of employment should not be
terminated solely on this ground. The cassation bench rendered decision that the fraud
could not result in termination of employment. Because, the fraud committed by the
driver has no that much gravity. Secondly, the employee is a driver. So, the fraud he
committed is not associated with the work of the employee. Thirdly, the duty to control
the guests to be entertained in the cafeteria is left for the waiters working therein. case.
There was an organization which was in need of producing ice-cream for its customers. It
posted vacancy announcement therefore. Then, a man with a fraudulent certificate of ice-
cream making experience from an organization applied for the post. After employment,
the employer found that the employee committed fraud during his employment and
terminated the contract. The employee took the case to court by invoking invalidity of
termination. The first instance and the high courts rendered decision in favor of the
employee by alleging that the fraud was not committed at work place. But, the cassation
bench, however, interpreted the phrase “deceitful or fraudulent conduct in carrying out
his duties” extensively. Therefore, so long as the employee has been employed using
fraudulent document and after he began carrying out his duty on the basis of this
evidence, the employer found that he committed fraudulent act at his work place, it can

44
be interpreted as if it was committed at work place. Because, whenever each ice-cream is
produced, there is a fraud committed by the employee. So, the termination is valid. Case.
There is also another practical case connected with article 27/1/F which reads as
responsibility for brawls or quarrels at the work place having regard to the gravity of the
case. The organization was rendering a certain service to its customers. It has no meeting
hall of its own. It evaluates its activities every 6 months renting a meeting hall. During
evaluation, an employee angered with another employee’s criticism threw and hit the
criticizer with a stapler. The criticizer was too much injured. Then, the employer
terminated the employment by invoking article 27/1/F. the employee, on his part, took the
case to court of law by invoking invalidity of termination. The first instance court
rendered decision that the contract cannot be terminated due to the fact that the brawl was
not committed at work place. Case 49958. There was a trovel agency. This agency had
several drivers employed under it. One day, one of those drivers presented an
exaggerated fuel receipt. But, the manager did not receive it; rather, he ordered the driver
to produce another receipt. Then, the driver threatened the manager that he would inflict
danger against him by saying “either I or you shall live”. The frustrated manager
terminated the contract on the basis of article 27/1/F. the employee took the case to court
of law. The first instance court rendered decision by alleging that the termination is
invalid. Because the employee did not commit brawls or quarrels against the manager.
Rather, he threatened the manager instead of committing brawl or quarrel. On the other
hand, the cassation bench states that the employee’s word of threat “either I or you shall
live” is enough to urge quarrel. An employee, so long as the order of his employer is
lawful, is required to respect and implement it. As clearly designed under article 13/2, the
employee has the obligation to follow instructions given by the employer based on the
terms of the contract and work rules. The employee had to give proper explaination for
what he has been asked by the employer. The fact that the employee has committed the
fault against the manager also indicates the gravity of the fault. So, as opposed to the
decision of the lower courts, the cassation bench passed decision that the termination of
the contract is valid. From these cases, we can understand that during interpretation, not
only the letters of the law (mechanical interpretation) but also the sprit of the law should
be taken into account. Case 41 115. A driver of a heavy track was employed in an
organization. One day, this driver forgot his key as being plugged in the lock of the car
and got off. Then, the assistant opened the car and drove a few meters back. While
driving back, he collided with another car of the organization and inflicted danger against
the property thereof. The employer terminated the contract with the driver by invoking
article 27/1/H which reads as responsibility 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 employer. Now, the issue is whether there is mere
intention or gross legligence. Because, the fault was committed within the compound of
the organization; it was committed at the presence of the assistant. It is a heavy track
which is less susceptible to theft. But, the fault was commited for the second time. The
lower courts passed decision in favor of the defendant. however, the cassation bench also
agreed that the fault was not gross negligence. But, it passed decision that the driver
should terminate his contract with the employer For the sake of industrial peace and
security. We’ve just seen that dismissal is a very harsh punishment especially in
countries such as Ethiopia where employment is very scarce resource. So, it should be

45
imposed on a very serious mislead. I.e. the gravity of the mislead is highly important.
Unless and otherwise, the quantity of the mislead should be taken into account. If a
mislead has occurred repeatedly, its addition can be used to show gravity. The other point
in connection with disciplinary dismissal is the relation with criminal proceeding. Some
times, one civil incident could be a cause for both disciplinary measure and criminal
proceeding. Though, even if the disciplinary measure is finalized by dismissing the
employee, the criminal proceedings may be finalized by acquitting the employee. A
student of this University committed fraud at the clinic of the University by using forged
medical prescription. Then, the issue was brought before a disciplinary committee. The
committee rendered a decision of suspending him from learning for two years. The
student, however, was never out of the compass. He would get in and out of the compass
using an ID card of his friends. In another day, the same student was caught while tacitly
taking books out of Kenedy’s library. The fault was again presented to the disciplinary
committee. The committee, having taken the repeated faults in account, dismissed him
from schooling for ever. On the other hand, the issue was directed to the nearby police
station in the form of criminal fault. Even if the student was criminally proceeded against,
the court acquitted him due to lack of sufficient evidence submitted by the plaintiff. Then,
the student pleaded that the University passed invalid dismissal against him by using his
acquittal letter. The University also led the case to the legal service so that legal opinion
should be given thereupon. The legal service gave its opinion that the disciplinary
measure is an internal measure. The issue is whether he should continue being a student
or not with these disciplinary faults. On the other hand, the issue of crime is not about
whether the student should continue being a student or not. Rather, the issue is whether
the fault that the student committed has dangerous disposition to the public or not.
Criminal law is concerned with public interest, public peace and security. So, it must deal
with whether the student should go to prison or not. In general, the court, after taking into
account the gravity of the evidence, should only decide not whether the student should
continue being a student or not but whether he is dangerous to the public or not. Because,
criminal proceeding is different from civil proceeding in terms of purpose, gravity of
evidence and procedure. Case 345 85. The guard of electric power corporation was
caught when he tried to take out 8 gallons of transformer’s oil by the employees and
manager of the corporation. The corporation terminated the contract with him. On the
other side, the corporation had also criminally proceeded against the dismissed employee.
What would be the decision of the court? Read “Case 37.”
The other thing in connection with disciplinary dismissal but which is not found in the
labor proclamation is the issue of procedural fairness. As indicated earlier, there is a
convention called termination of employment convention no 158 1982 to which Ethiopia
is a signatory. The contents of this convention should be read into this proclamation. One
of the provisions of that convention states that the employment of a worker shall not be
terminated for reasons related to the worker’s conduct or performance before he is
provided an opportunity to defend himself. This is, as we have earlier tried to indicate, a
procedural fairness. Since dismissal is the maximum measure an employer can impose,
the employee should have the right or opportunity to be herd. It could be before a
disciplinary committee or an investigator within the internal structure of the enterprise.
Unless this situation is fulfilled, the measure could be challenged before a court of law
because of procedural irregularities. There are two issues, procedural fairness and

46
substantive fairness. In the case of substantive fairness, we are concerned with that the
punishment should be proportionate to the gravity or quantity of mislead committed. In
the case of procedural fairness, the employer is expected to give an opportunity for the
employee to defend himself. Of course, in the case of flagrant cases, or if the offender is
caught red-handed, procedural fairness may not be necessary. If the employer is
suspicious of that until such time he provides that opportunity, evidences could be
destroyed or witnesses could be convinced or persuaded to the disadvantage of the
enterprise, he can, pending investigation, suspend the employee for a maximum of 30
working days from job and wage (27/4). As per sub-article 3 of the same article, the right
of an employer to terminate contract of employment in accordance with this Article, shall
lapse after 30 working days from the date the employer knows the ground for the
termination. This is only to facilitate investigation and disciplinary proceedings within
the internal structure of the enterprise. Then, depending on the outcome of the
investigation, the employee will either be terminated or reinstated to his former position.
Some times, there are confusions between article 12/7 and 27/2. on the basis of the
former, the employer has the obligation, upon termination of a contract of employment or
whenever the worker so requests, to provide the worker, free of charge, with a certificate
stating the type of work he performed, the length of service and the wages he was
earning. The length of service, the position the employee had occupied and the wage he
was earning should be clearly mentioned in the certificate. The ground in which the
employment contract is terminated is not, however, wanted to be mentioned in the
certificate under article 12/7. The recommendation no 110 of ILO convention also states
that nothing unfavorable to the employee shall be inserted in such certificate. If the
employer wants, he can add qualified references on such certificate such as mentioning of
integrity, diligence, sociability and carefulness of the employee. on the other hand, on the
basis of article 27/2, if an employer terminates a contract of employment, he is required
to give written notice specifying the grounds for and the date of termination. If an
employee is found guilty in an enterprise, such guilt may serve as a ground for
terminating the contract. But, terminating the contract as a result of the guilt found is an
internal measure and it is meant for internal consumption. What has been indicated under
article 27/2 is a written notice which is to be addressed only to the employee. The
purpose of the written notice is to make the employee cognizant of the reasons why the
employer is terminating the contract and if the employee is to object to such decision, to
give the opportunity and plead his grievance to whom the issue may concern. The
certificate envisaged under article 12/7 is something broader and it is addressed to the
whole world using the phrase “to whom it may concern”. But, article 27/2 is applicable to
the issue of letter that is addressed particularly and directly to the employee. The other
one is termination with notice at the initiation of the employer(28&29. article 28 reads,
1/ The following grounds relating to the loss of capacity of, and situations affecting,
the worker shall constitute good cause for terminating a contract of employment with
notice. a) the worker’s manifest loss of capacity to perform the work to which he has
been assigned; or his lack of skill to continue his wor+jjjjk as a result of his refusal to
take the opportunity of training prepared 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 obligations under the
contract of employment. c) The worker’s unwillingness to move to a locality to which

47
the undertaking moves. d) The post of the worker is cancelled for good cause and the
worker cannot be transferred to another post. 2/ the following grounds relating to the
organizational or operational requirements of the undertaking, shall constitute good cause
for a the termination of a contract of employment with notice. 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 reduction of the work force. b) without prejudice to the
provisions of sub-article 6 of Article 18, fall in demand for the products or services of the
employer resulting in the reduction of the volume of the work and profit and thereby
resulting in the necessity of the reduction of the work force. c) A decision to alter
work methods or introduce new technology with a view to raise productivity resulting in
the reduction of the work force. 3/ where the cancellation of a post affects a number
of workers thereby constituting a reduction of work force in accordance with sub-article
(1) of Article 29, the termination shall take place in compliance with the requirements
laid down in sub-article (3). Some of the grounds are associated with the incompetence
of the employee while others are associated with the organizational and functional
requirements of the enterprise. In this case, the employer is required to provide notice
prior to terminating an employment contract. This enables the employee to have an
opportunity to look for alternative employment before it is too late. This is usually a case
of soft landing or safe exit. Unlike termination by the operation of the law, in this case,
even if a certain fact exists, the employer is required to notify the employee in advance as
to when his employment contract will be terminated. The duration of the notice should
also be proportionate to the length of service. The longer the period of service an
employee has, the longer the period of notice will be. For article 28 to be clear, it must be
read conjointly with article 34&35. Article 34 provides that 1/ Notice of termination
required under the provisions of this Proclamation shall be in writing. The notice shall
specify the reasons for the termination of the contract and the date on which the
termination shall take effect. 2/ Notice of termination by the employer or his
representative shall be handed to the worker in person. Where it is not possible to find the
worker or he refuses to receive the notice, it shall be affixed on the notice board in the
work place of the worker for ten consecutive days. 3/ Notice of termination by the
worker shall be handed to the employer or his representative or delivered to his office.
4/ Notice of termination given to a worker by an employer in accordance with
Article 17 during the time in which the contract of employment is suspended shall be null
and void. This article shows how notice should be served. I.e. it should be in writing; it
should be addressed or delivered to the employee personally. In short, the article under
consideration is concerned with form and content of termination notice. Article 35 is
concerned with length of time in which termination notice shall remain vibrant. It
provides that 1/ unless otherwise provided for in this Proclamation, the period of
notice given by the employer for the termination of a contract of employment shall be as
follows. a) one month in the case of a worker who has completed his probation and
has a period of service not exceeding one year. b) two months in the case of a worker
who has a period of service above one year to nine years. c) three months in the case
of a worker who has a period of service of more than nine years. d) two months in the
case of a worker who has completed his probation and whose contract of employment is
terminated due to reduction of work force. 2/ Notwithstanding the provisions of sub-
article (1) of this Article, the period of notice for a contract of employment for a definite

48
period or piece work shall be agreed upon by the parties in the said contract. 3/ the
period of notice fixed in this Proclamation shall run from the first working day following
the date which notice is dully given. 4/ the obligations of the parties deriving from
the contract of employment shall continue in force during the period of notice. As to
period of notice under Ethiopian labor law, the shortest and the longest are 1&3 months
respectively. If the contract employment of people who have a longer service period is to
be terminated some time in July, they should be notified some time in April. When the
worker shows manifaste loss of capacity, the employer is entitled to provide notice and
terminate the employment. People may lose productivity through time because of many
reasons such as old age, health problem, because of the fact that they could not adopt
themselves with the technological innovation and the likes. In that case, it would be
unfair to the employer to require him to maintain the employer-employee relationship.
The first clause“the worker’s manifest loss of capacity to perform the work to which he
has been assigned” under article 28/1/a appears to be similar with the situation under
article 27/1/e which reads as returning output which, despite the potential of the worker,
is persistently below the qualities and quantities stipulated in the collective agreement or
determined by the agreement of the two parties. In both cases, the employees have lost
productivity; they are earning low output. But, one of the employees is to be terminated
without notice while the other employee is to be terminated with notice. The difference is
that, in the case of article 27/1/e, the employee has potential. But, he is unwilling to
make his energy and knowledge available to the interest of the enterprise. For such kind
of employee, it is a behavioral problem. In such a case, the law tends to provide that such
employee should not even be given the opportunity of notice. The employee under article
28/1/a is naturally incapable of performing his duty. So, it would be unfair to terminate
the employment relationship with such employee without notice. In general, article 27/1/e
deals with issue of unwillingness while article 28/1/a deals with incapacity. Otherwise,
the outcome, in both cases, are more or the same. Both of them are underperforming.
Some times, there is a confusion in relation to article 28/1/c which reads as the worker’s
unwillingness to move to a locality to which the undertaking moves. Assume that there is
a company whose head office is located in Addis Ababa. It has branches in Hawasa,
Gondar and Harar. There is also a vacant position advertised for the Addis Ababa head
office. A candidate who met the requirement was assigned for the post. 6 months latter,
the employee was told to move to the other branch found in Gondar. The employee
refused to move there by alleging that he was employed only for the head office. He
added that if he had to move there, it should be in the form of promotion. Then, the
employee was served with a written notice stating that his employment contract would be
terminated a month latter. The confusion is that the employer interprets it by alleging that
they would terminate any employee who refused to move to any branch of the enterprise.
But, this is not the case dealt with under the sub-article in question. If they want to take
the employee to any branch of the company, they should have entered into the contract
without citing place of employment. If so happened, the employer could have moved or
assigned the employee to any place he wished. In this case, if the employee refused to
move to the alleged branch, his refusal would be valid and no termination would follow.
So, the sub-article in question is put in force when the enterprise is totally moving to
another location owing to various reasons such as market and labor conditions. The
controversial aspect of article 28 is found under its sub-article 2. In order to remain

49
competitive, cost minimization is important. In order to reduce cost, there are various
economically rational alternatives. One of them is structural arrangement. Companies
usually revise how their production process is being structured. As a result, they revise
their structure with a view to reducing the labor force. So long as the labor is reduced,
certain amount of cost is to be saved. To this end, some positions will be done away with
while others will be mixed. So, this is one way of terminating employment contract with
notice. The other one is change of work methods. Some times, companies may be active
for about three shifts. If there is a large amount of stock unsold, these companies may be
compelled to close one of the shifts. In such a time, employees of that particular shift will
be affected. The other reason is the issue of new technology. When a new technology is
introduced, it may have an effect of canceling some positions of certain employees. The
new technology may make the company capital intensive and minimize the labor
intensiveness. There is also a new method of work called outsourcing. So as to be
effective, companies may decide to contract out some of their peripheral activities to
another company. So as to concentrate on their core business, they may outsource a
certain service in the sense that it will be provided by another employer. There was a
practical case associated with a hotel. The owners of the hotel realized that the core
business of the hotel is to provide food, beverage, bed and the like services. The guarding
activity is known to be out of these services. So, they decided to give the guarding
responsibility to be served by a company. Then, the guarding employees who already had
employment contract with the owners of the hotel were terminated. The employees took
the case to a court of law by invoking that the termination was invalid.
We’ve been talking about good causes relating to the organizational or operational
requirements of the undertaking. This issue is very much associated with privatization. it
is remembered that under the military regime, almost all measurement of production were
under state ownership. As soon as the FDRE government took power, the first measure it
took was to withhold itself from economic activities. As a result of this, it has engaged in
massive privatization process. When the enterprises were under state ownership, they
were overstaffed. I.e. overstaffing was a major problem in those state owned enterprises.
While there is overstaffing, if we offer the state owned enterprises to the private sector,
the new private owner would not accept that enterprise in that condition. Because,
overstaffing, by definition, would mean high cost of production (labor cost). In such case,
there should be a need to rationalize the labor force either prior to privatization or it
should be allowed for the private owner to terminate certain number of employees.
Unless allowed, there will be no buyer despite auction every time. Because, no one dares
to take delivery of an overstaffed enterprise. This part of the labor proclamation is very
much important to the success and failure of the privatization process. So, so long as the
employer is able to show that the cost of the employee is redundant with the new
structural arrangement, termination will be validly effected, of course, by providing
notice. The way in which labor is reduced at one time and increased at the other is known
as labor market flexibility. Under article 9, we said that the employment contract is, in
principle, entered into for indefinite period. This is rigid labor market arrangement
intended to protect employment security to the employee. Though, even if the employee
is employed for indefinite period, there may be a situation where that security will be
watered down because of his disciplinary problem, incompetence, because of the
organizational or structural or operational arrangement and so on. Therefore, we can say

50
that we are making the labor market flexible even if we started with a rigid market
arrangement. We are also trying to take into account business concern. Not only from the
angle of flexibility, we need to consider article 28 in relation to article 24/4. According to
article 24/4, when the undertaking ceases operation permanently for due to bankruptcy or
for any other cause, the contract of employment shall be terminated even without being
provided with benefit of notice. Under the above sub-article, the whole employee may be
terminated. But, under 28/2, not only that employee will be terminated with notice, but
also it is not the whole employee that will be terminated. Therefore, article 28/2 is a
preventive measure. We prevent 24/4 by applying 28/2 especially, 2/b. By sacrificing the
employment securities of few employees, We are maintaining the existence of the
enterprise and employment security of substantial number of employees. Apart from
being preventive measure or creating favorable condition for privatization, article 28 is
becoming modern way of labor management. Some writers call it as decentralization of
production. Traditionally, everything was produced within premises of a company in the
form of an assembly line. This is called the fordist stile. But, under globalization,
production is becoming very much decentralized. Not only production process moves
across territories, even within the national production process, a lot of working methods
such as sub-contracting outsourcing or serving as a home worker will be coming into
picture. The very objective behind it is to be competitive and cost reduction. In the case
of operational or structural rearrangement, substantial number of employees may be
affected at once. This is termed as group termination. Group termination will have visible
social consequence. Because, behind every employee, there will be dependant family.
Therefore, the law tries to put additional safety mechanisms in this regard. I.e. the
employer cannot individually terminate the contract. It is not the unilateral decision of the
employer that makes the termination valid. In the case of group termination, the law
requires the employer to follow scertain procedures. One is that the employer should
consult with employees’ representatives. Because of the very social consequence of the
measure, it should be undertaken in consultation with the affected parties. Group
termination or reduction of work force is defined under article 29/1. it provides that
1/ In this Proclamation “reduction of work force” means reduction of the work force
of an undertaking for any of the reasons provided for in sub-article (2) of Article 28
affecting a number of workers representing at least ten percent of the number of workers
employed or, in the case of an undertaking where the number of workers employed is
between twenty and fifty, a reduction of workers affecting at least five employees over a
continuous period of not less than ten days. 2/ the phrase “number of workers
employed” referred to in sub-article (1) of this Article means the average number of the
workers employed by an employer concerned within the twelve months proceeding the
date when the employer took measures of reduction of workers. 3/ Whenever a
reduction of work force takes place according to sub-article (2) of Article 28, the
employer in consultation with trade union or representative shall give for workers having
skills and higher rate of productivity shall have priority of being retained in their posts
and, in the case of equal skill and rate of productivity, the workers to be affected first by
the reduction shall be in the following order. a) subject to the provisions of (b) — (c)
of this sub-article, those having the shortest length of service in the undertaking. b)
Those that have fewer dependants. c) Those not covered under sub-article 3 (a) and (b)
of this Article. d) Those who are disabled by an employment injury in the undertaking.

51
e) Workers’ representatives. f) Expectant mothers. If the termination affects ten% of
the employees or in enterprises having 20-50 employees, if the termination affects five
employees, then, it can be termed as group termination. In such a case, if there is trade
union, the consultation will be undertaken with the trade union. Because, it is presumed
that the trade union protects the interest of its members. If there is no trade union in that
enterprise, the employees will be required to select people as their representatives to
discuss on this issue. E.g. an employer wanted to reduce the labor force in the enterprise.
To this end, he called the employees’ representatives to consult on the reduction system.
The representatives refused to consult by alleging that since they are the employees’
representatives, they would not consult on how to reduce the labor force. Then, the
employer by himself went far and reduced the labor force. The representatives proceeded
against the employer invoking that the reduction is illegal and they took the case to the
labor relation board. But, truly speaking, the law does not want the agreement of the
representatives. It simply needs only consultation which is softer than agreement. So long
as an opportunity is given to the stake holders to consult and if they did not make use of
that opportunity, it will be up to them anyways. There are two levels. The first level is to
introduce the work method or the new technology. The second level is implementation
for reduction. The first level is a managerial issue. Whether to employ new work method
or to introduce new technology is left to the management. At the first level, what is
required is the arrival of the management at economically rational decision. Then, at the
level of reduction or damage mitigation, consultation is to be undertaken. In addition to
consultation, there are priorities of termination set by law. If it is group termination,
productivity will be taken into account. I.e. more productive employees need to be
retained. Because, productivity is beneficial not only to the employee but also the
employer and the society as a whole. If the employees are equally productive, seniority
will be taken into account. The most senior will be retained and the most junior will be
dismissed. The assumption is that the more senior has attached his life with the enterprise
than the junior one. If they are equally productive and if they are employed at equal
period, number of dependants they support will be taken into consideration. The
employer may not have sufficient evidence as to the number of dependants each
employee has. So, the representatives of both employees and employers will take the
responsibility to check the actual number. In general, in the case of termination with
notice, even if the employer is at liberty to terminate the contract by providing employees
with notice, if the notice is going to affect significant number of employees, not only the
elements under 28/2 need to be proved, but also the procedural requirements under article
29 must be complied with. The other ground for termination is resignation. This is
termination at the initiation of the employee (article 31&32). Article 31 reads, without
prejudice to Article 32 of this proclamation, any worker who has completed his probation
period, may, by giving thirty days prior notice to the employer, terminate his contract of
employment. Unlike in the probation period, if a permanent employee is to resign, one
month prior notice should be given to the employer. The purpose of this notice to enable
the employer to look for a substitute employee. Under the labor proclamation no 42 of
1993, the employee was expected to give 15 days prior notice. Employers are not
interested in this period of notice. Because, some employees are not easily substituted.
So, like the employers do for the employees, they should have given time prior notice to
their employer depending on their seniority. But, it is argued that to make an employee to

52
stay on a duty he is not interested in for more than a month amounts to be forced labor
which is prohibited under article 18 of the FDRE constitution. To make an employee to
stay on a duty he is not interested in for more than a month is also not useful for the
employer because the employee may not bring fruitful production upon a duty he does
not like to stay any more. An employee notified the employer on May 1, 2012 that he will
terminate his contract on June 1, 2012. He also added that his benefits in connection with
his termination should be maintained. However, the employer wrote a letter to the
employee that there is no need to wait until June 1 and that he has been terminated
starting from May2 2012. Does it seem to be valid? No, it is not valid; because, on the
basis of article 35/4, the obligations of the parties deriving from the contract of
employment shall continue in force during the period of notice. The employer should
either tolerate the employee until June 1, 2012 or he may terminate him on May 2 2012
provided that he has paid him in advance for the coming one month. Otherwise,
employment relationship will remain intact within the period of notice. The other ground
for termination is resignation without notice. In fact, for resignation with notice, the
employee is not required to provide reason for termination. I.e. unlike the employer, he
can resign or terminate with or with no cause. Resignation without notice under article 32
is the mirror reflection of article 27. Article 32as to termination without Notice provides
that 1/ the following shall be good cause for a worker to terminate his contract of
employment without notice. a) If the employer has committed against him any act
contrary to his human dignity and morals or other acts punishable under the Penal Code.
b) if, in the case of imminent danger threatening the worker’s or health, 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 appropriate trade
union or the worker himself to avert the danger. c) If the employer has repeatedly
failed to fulfill his basic obligations towards the worker as prescribed under this
Proclamation, collective agreements, work rules or other relevant laws. 2/ Where a
worker terminate his contract of employment for the reasons referred to under sub article
(1) of this Article, he shall inform the employer in writing the reasons for termination and
the date on which the termination is to take effect. On the basis of article 27, the serious
misbehavior of the employee may result in termination at the initiation of the employer
without notice. In the same way, the misbehavior of the employer also denies him of
notice by the resigning employee. The resignation under 32 is technically termed as
constructive dismissal. This is because, even if the resignation is coming from the side of
the employee, it is owing to the pressure from the side of the employer that the employee
is resigning. It is termed as constructive dismissal because the mislead committed by the
employer has caused the employee to resign indirectly. For this reason, the employer is
denied with notice or advance preparation. On the basis of article 12/3, respecting human
dignity is one of the obligation of the employer. Failing that, the employee may be
compelled to resign without giving notice. Even, he may require compensation at a later
stage. Sexual harassment is usually seen to be causing constructive dismissal. But, the
limitation of this sub-article is that if an employee has a ground for resignation without
notice, he must act as soon as possible, within 15 days as of the time the mislead
occurred. But, if the employee remains in his employment for more than 15 days, the
assumption is that the employee has tolerated the misconduct. So, after such period of
time, if the employee is in need of terminating the contract, he cannot terminate on the

53
basis of article 32 but on the basis of article 31. It is remembered that under article 27, the
employer should act within 30 days as of the time he came to know of the mislead.
Failing that, he is presumed to have waived his right of dismissal. The same logic shall
apply to the employee. All these are the grounds for termination under the labor
proclamation. On the other hand, Article 78-86 under FCSP are the counterpart
provisions of those of the labor proclamation. Grounds for termination under the FCSP
are more or less similar to those of the labor proclamation. One of those grounds for
termination is resignation treated under 78 of the FCSP. It reads, 1) Without
prejudice to the obligations provided in laws and contracts any civil servant
may, by giving a one month prior notice, resign at any time. 2) Any civil
servant, who has terminated his service without giving a one month prior
notice, provided in Sub- Article /1/ of this Article, may be subjected to
civil and criminal liability. 3) Where the service of the civil servant is
indispensable and he could not be replaced easily, the Head of the government
institution may delay his release for a period not exceeding three months
including the date of application. Any civil servant, by giving one month prior
notice may resign at any time. The principle of giving notice is enshrined in the
same way both under the labour proclamation and the federal civil service
proclamation. But, the phrase “Without prejudice to the obligations provided in
laws and contracts” is a special qualification included in the introductory part
of article 78. if there is a provision in any law which requires the civil servant
to provide more than one month prior notice or if there is a provision in the
contract that may provide additional period of notice, that provision will be
given precedence of applicability. So, the one month prior notice is not deemed
to be a maximum ceiling of notice period. If the contract that the civil servant
entered into provides for a longer period of notice, depending on the nature of
service, it will be applicable. It is in cases where there is no contractual
arrangement or contrary provision provided by the relevant law that article 78
is made applicable. For example, Addis Ababa University is a government
organ financed by government annual budget. The workers thereof are also
under the category of civil servant. The contract of academic staff, not only in
the University under consideration but also in all public Universities, is to be
renewed evry two years. One of the terms of the contract states that if
academic staffs are in need of resigning, he is required to provide six months
prior notice. This period of notice is designed on the basis of semester
arrangement. When an instructor is assigned, the assumption is that he is
going to complete that course for the entire semester. On the contrary, if an
instructor is allowed to resign with one month prior notice, then, the students
will be subject to an examination which is prepared and corrected by an
instructor by which they were never taught. Under article 35 of the labor
proclamation, when a contract is concluded for a definite period, it is possible
in the contract, to provide self made period of notice. Teachers of private high
school or college are entering into a contract for indefinite period. So, the
contract in which they are undertaken cannot be for definite period and the
notice period which they are required to give cannot be contractually
arranged. Even though the civil servant is required to resign by providing one

54
month prior notice, he may be subject to an exception. When the service of the
civil servant is indispensable or cannot be easily replaced, the government
office has been given the power to extend his release to a maximum of three
months including the date of application. The assumption is that public
interest is involved; so, for the benefit of the public, it is possible to detain the
civil servant for an additional period of two months. Under the labor
proclamation, non-compliance with the requirement of notice (31&35/2)
results in civil liability under article 45. Article 45 provides that 1/ a worker who
terminates his contract of employment contrary to the provisions of Article 31 or 35(2)
shall be liable to pay compensation to the employer. 2. The compensation payable by the
worker in accordance with sub-article (1) of this Article shall not exceed thirty days
wages of the worker. If an employee fails to provide with one month notice, as a
maximum compensation, one month wage will be deducted from the payment that will be
due to the employee. But, in the case of civil service, if any civil servant has
terminated his service without giving a one month prior notice, not only civil
but also criminal liability may follow. In general, the difference between the resignation
under the civil service proclamation and the resignation under the labor proclamation is
that in the case of the former, the period of notice could at least be longer if the
service of the civil servant is indispensable and he could not be replaced
easily. Secondly, in the case of civil service, the liability is not limited to civil
liability (the wage that should have been paid during the period of notice). i.e. it
goes further to the extent of criminal liability. The other ground for termination is
the case of illness under article 79 of the FCSP. It reads, 1) Where a civil
servant is unable to resume work with in the time specified under Article
42/2/ and /4/ of this Proclamation, he shall, be deemed unfit for service
and be discharged. 2) Without prejudice to the provisions of Article
53/2/ of this Proclamation, where a civil servant who has sustained
employment injury is medically determined to be permanently disabled, his
service shall forthwith be terminated. 3) If a civil servant who has
completed his probation period does not agree on the transfer that could be
undertaken in accordance to Article 26/3/b/ of this Proclamation, his
service shall be terminated. Under the labor proclamation, it is allowed to
have sick leave which may be as long as six months within the budget year
(85). In the case of sick leave under the labor proclamation, the first month is
paid with 100% of wages of the employee, the next two months with 50% of his wage,
the next three months without pay. After the expiry of the period of six months, if the
employee does not report back, even if the code is silent, at least in terms of
interpreetation, the employer is not expected to wait longer than the period of six months.
I.e. he can terminate the contract validly. But, the period of sick leave under the civil
service is a little bit longer. Article 42 provides that 1) any civil servant shall be
entitled to sick leave where he is unable to work due to sickness. 2)
The duration of sick leave to be granted to a permanent civil servant in
accordance with Sub-Article (1) of this Article shall not exceed eight
months in a year or twelve months in four years, whether counted
consecutively or separately starting from the first day of his sickness. 3)
Sick leave to be granted in accordance with Sub-Article (2) of this Article shall

55
be with full pay for the first three months, half pay for the next three months
and without pay for the last two months. 4) A Civil Servant on probation
shall be entitled to one month sick leave with pay. 5) Where any civil
servant is absent from work due to sickness. a) He shall, as soon as
possible, notify the government institution unless prevented by force majeure.
b) He shall produce a medical certificate in case of absence for three
consecutive days or for more than six days within a budget year. The
employee who alleges to be sick is entitled to a sick leave of 8 months. In such
a case, the employee is paid the first three months with 100%, the next three
months with 50% and the last two months with zero payment. It seems to be
generous vis a vi the labor proclamation. After the expiry of the 8 months, if
the employee does not report back or if he continues with his illness, the
employer will terminate the contract. The reason, as a ground for termination,
shall be transformed to being unfit to the government service. Inefficiency is
also another ground for termination (80). Article 80 provides that 1) The
service of a civil servant who has completed his probation period may
be terminated due to inefficiency where his performance evaluation
result is below satisfactory for two successive evaluation periods despite
exerting all his knowledge and ability to accomplish his work. 2)
Notwithstanding the provisions of Sub-Article/1/ of this Article, a civil
servant whose performance evaluation result is above satisfactory for five
successive years may not be dismissed on grounds of inefficiency unless his
performance result becomes below satisfactory for the following three
successive evaluation periods. 3) The termination of service of a civil
servant under Sub-Article/1/ and /2/ of this Article shall only be effected
for the achievement of the purpose of performance evaluation under Article 31
of this Proclamation where it is deemed necessary. In the case of the labor
law regime, inefficiency, as a ground for termination with notice, is dealt with
under article 28 of the labor proclamation. In the civil service law regime, we
have a requirement of performance evaluation every six months. The
immediate boss of each civil servant is expected to fill performance evaluation
report every six months. The maximum performance evaluation report is five.
If an employee registers performance evaluation report below 2.5, it is
considered to be unsatisfactory. So, if an employee registers this lower
performance for two consecutive evaluation periods, then it becomes sufficient
to be ground for termination. Unlike that of the labor proclamation,
inefficiency under the civil service proclamation is a ground for termination
without notice. The other ground for termination is force majeure (81). Article
81 reads, 1) A civil servant who has completed probation and is absent
from work due to force majeure, shall inform the situation within one month
to the respective government institution. 2) The government institution
that has received the reasons of absence of a civil servant in accordance with
sub-Article (1) of this Article shall, after verifying the validity of the reason,
keep the post of the civil servant vacant for six months. Provided, however,
that the service of a civil servant may be terminated if he is unable to
resume work within the six months. 3) Without prejudice to the provision
56
of Sub-Article (1) of this Article, when a civil servant who has completed his
probation is absent from his work for ten consecutive working days due to
unknown reasons the government institution may terminate the employment
after calling him in two notices in ten days’ interval. 4) Notwithstanding
the Provisions of Sub-Article (3) of this Article, a government institution
may reinstate the civil servant to his job if the civil servant applies for his job
within six months after the termination of his employment, produces sufficient
evidence to prove that his reasons of absence was due to force majeure and
there exists a similar vacant position within the institution. 5) A civil
servant who responded to the notices made in accordance with Sub-Article (3)
of this Article within a month from the first day of absence shall be placed on
his job and the Head of the government institution shall decide afterwards on
the case after examining the reasons and the supporting evidence causing
the absence. 6) The service of a civil servant who has not completed his
probation shall be terminated without any additional formality, where he is
absent from work for one month due to force majeure. People may be absent
from job due to force majeure situation. For example, they may be
imprisoned for whatever reason. In such a case, the government office is
also entitled to terminate the contract of employment provided that the
non-appearance is lasting for a very prolonged period. On the basis of
article 27/1(j), court conviction which may last for more than one month
may automatically result in termination. It provides that absence from work
due to a sentence of imprisonment passed against him for more than thirty days may
bring about termination. But, in the case of the civil service, it does not presuppose court
conviction; it would be a police detention for that matter. From this point of view, we can
understand that the government office appears to be much more tolerant than that of the
private sector. The other ground for termination under the civil service proclamation is
Nullification of Appointment (82). It reads, Any appointment obtained
on the basis of false representation regarding educational qualification or
work experience or made by unauthorized person or in contravention of this
Proclamation, regulations and directives issued hereunder or any other law
shall be nullified by the decision of the head of the government institution or
the Agency. This article strengthens the prominent maxim “no one shall
benefit from his fault”. If any one has been employed using falsified document,
as far as the fact has been detected, he may be terminated at any time
whether he served for long or not. But, the labor proclamation is devoid of
such provision. Another ground for termination can be structural
arrangement. This adjustment under the civil service proclamation is termed
as Retrenchment (83). It reads, 1) any civil servant shall be
retrenched where. a) His position is abolished. (In the case of the
labor proclamation, 28/1(D). b) The government office is closed in the
case of the labor proclamation, 24/4). . Or c) redundancy of man
power is created. (This is the issue of group termination)(In the case of the
labor proclamation 29). and where it is not possible to reassign him in
accordance with Article 30/1/ of this Proclamation or where he is
reluctant to accept a position of a lower grade. 2) Retrenchment of a civil
57
servant in accordance with Sub-Article (1) (c) of this Article shall be made
when it is proved that his performance and qualification are lower when
compared with other civil servants holding the same position. Structural
arrangement, as a ground for termination, has been inserted not only in the
labor proclamation, but also in the civil service proclamation. In a government
office, if we consider that there is an overstaffing the consequence of which is
inefficiency, then a type of structural arrangement called public service reform
will follow. Termination may also follow for disciplinary reasons (84). It
provides that 1) the service of a civil servant shall be terminated
where. a) A disciplinary penalty under Sub-Article 1/f/ of Article 67 of this
Proclamation is imposed on him. And b) the penalty is not revoked on
appeal made under Article 76 of this Proclamation. 2) Where the
penalty is mitigated or revoked on appeal the civil servant shall be entitled to
without interest, the payment of his unpaid salary withheld during the
appeal. In the case of the labor proclamation, this issue is dealt with under
article 27 as termination without notice (summery dismissal). Under the labor
proclamation, we don’t have a clear procedure how disciplinary investigation
is to be undertaken. Of course, in principle, we need to arrange the right to be
herd. But, when we come to the civil service, disciplinary committee should
be established. Pending investigation, the government office may also
suspend the suspected employee for a maximum of two months (70). Article
70 reads, 1) any civil servant will be suspended from duty if it is
presumed that. a) He may obstruct the investigation by concealing,
damaging or destroying evidence related to the alleged offence. Or b) he
may commit additional offence on the property of the government institution.
Or c) the alleged offence is so grave as to demoralize other civil
servants or negatively affect the public trust towards civil servants. d) The
disciplinary offence may lead to dismissal. 2) A civil servant can be
suspended from duty and may not get his salary according to Sub-article (1) of
this Article only for a maximum period of not exceeding two months. 3)
The decision given in accordance with Sub-article (2) of this Article shall be
notified to the civil servant in writing, with the grounds and duration of his
suspension signed by the Head of the government institution. 4) Unless a
decision of dismissal is rendered against a suspected civil servant, the salary
withheld at the time of suspension shall be paid to him without interest. 5)
The suspension of a civil servant shall not deprive him of other rights
and duties that are not affected by the suspension. In the case of the labor
proclamation, the duration for suspension is to be lasting for only one month
(27/4). After the investigation has been carried out, dismissal may/may not
follow depending on the outcome of the investigation. If the employer has not
taken the measure within the period specified, the employee shall proceed
with working. But, the employer never escapes from liability. Otherwise,
alternative measures listed under 67 will be taken against the suspected
employee. Article 67 provides that 1) Depending on the gravity of the
offence; one of the following penalties may be imposed on a civil servant for
breach of discipline. a) Oral warning. b) Written warning. c)
58
 Fine up to one month’s salary. d) fine up to three moth’s
salary. e) Down grading up to the period of two years. f )
d i s m i s s a l . 2) The penalties specified under Sub-Article (1) (a)-(c) of
this Article shall be classified as simple disciplinary penalties. 3) The
penalties specified under Sub-Article (1) (d) – (f) of this Article shall be
classified as rigorous penalties. 4) A civil servant who is demoted in
accordance with Article (1) (e) of this Article and upon the lapse of his
period of punishment, shall be reinstated. a) To a similar available
vacant post, without any promotion procedures. b) In absence of a vacant
post, he shall be reinstated to a similar post without any promotion
procedures when it becomes available at a later time. 5) After a
disciplinary measure has been taken on a civil servant, such measure shall
remain in his record. a) For two years, where the penalty is simple. b)
for five years, where the penalty is rigorous. The other ground for
termination under the civil service is retirement (85) which, under the labor
proclamation, the issue of article 34/3. The employment of a civil servant, if
the service he is rendering is not extended beyond retirement age in
accordance with article 89, shall be terminated on the last date of the last
month in which he attained the retirement age determined by law. To this
end, the civil servant shall be notified of his retirement in writing three
months prior to his retirement. All these provisions depict us that employment
security is not an absolute security.
Effects of termination. Effects of termination may be divided into effects of
lawful termination and effects of unlawful termination. We’ve just seen that
lawful terminations are dealt with in the above articles we discussed so far. In
the case of lawful termination, the law entitles the employee, depending on the
nature of the ground of termination, with a certain entitlements. This situation
has been treated under 39 of the labor proclamation and the following. Article
39 reads, 1/ a worker who has completed his probation. a) When his contract of
employment is terminated because the under taking ceases operation permanently due to
bankruptcy or for any other reason. b) When his contract is terminated by the initiation
of the employer. c) When he is reduced as per this proclamation. d) When he
terminate his contract because his employer did things which hurts the workers human
honor and moral and the thing done by the employer is deemed as offence under penal
code. e) When he terminate his contract because the employer being informed of the
danger that threats the security and health of the worker did not. f) When his contract
of employment is terminated because of reason partial or total disability and is certified
by medical board. 2/ where a worker dies before receiving severance pay, the
severance pay shall be paid to his dependants mentioned under Article 110 (2). 3/
the distribution of payment of severance pay to dependents in accordance with this article
shall be affected in the same manner as the payment of disablement benefit. Under the
civil code, in the case of lawful termination, the parties will be separated for hood. I.e.
there was no additional entitlement that was available to the terminated employee. It was
only in the case of unlawful termination that the terminated employee was entitled to
compensation. The maximum amount of compensation to be given was the employee’s
six month wage on the basis of the English version and three months wage on the basis of

59
the Amharic version. Under proclamation no 64 of 75, there was a concept of severance
payment. When the employment relation is terminated for whatever lawful reason, the
employee was entitled to severance payment. If the termination was unlawful, the
employee was to be reinstated. But, if the termination was lawful, the employee was
entitled for severance payment. On the other hand, severance payment is a certain amount
of sum which may assist the terminated employee to cope with the effects of termination.
This entitlement was also incorporated into the labor proclamation no 42 of 1993. On the
basis of these proclamations, the terminated employee with one year service was paid his
one month wage as a severance payment. If the terminated employee had more than one
year service, he would, as a severance payment, be paid his one month wage+one third
thereof for every additional year service. This severance payment was, however, not free
of tax. Of course, under the labor proclamation no 377 of 2003, the same rate somehow
goes on. But, unlike the previous proclamations, the severance payment under
proclamation no 377 of 2003 is ground based entitlement. One of the grounds where the
employee may be entitled to a severance payment is the termination of the employment
due to the cessation of the undertaking or bankruptcy thereof. The issue is that when the
enterprise go bankrupt, there may be no fund enabling the employer to reimburse the
employee severance payment. But, when we say that the enterprise go bankrupt, it does
not mean that there is nothing in the bank account. It only means that the liability of the
enterprise outweighs the asset thereof. In the case of bankruptcy, the labor law has put
priority provisions of its own (167). Pursuant to article 167, any claim of payment of a
worker arising from employment relationship shall have priority over other payments or
debts. So, even if the enterprise goes bankrupt, because of the right to have priority of
claims, the employee will still get severance payment. But, there seem to be
contradictions among various legal and contractual provisions. For example, apart from
the labor proclamation, the tax law provides that any tax payment should be paid prior to
any other debts. On the other hand, banks enter into a contract of loan with enterprises
that in the case of bankruptcy, their debt should be given priority. Of course, the Supreme
Court has rendered decision that the legal priority prevails over the contractual priority.
But, in the case of the labor and tax proclamations, which of the two laws prevails over
the other? To solve such a problem one solution is that the saurce of authority should be
taken into account. I.e. it must be found from which the priority claim has come into
existence. So, the priority claim that has come from any proclamation, if any, prevails
over that of the regulation. But, in our case, both instruments are proclamations. If the
instruments are of equal hierarchy, we must see which instrument has been issued at a
latter stage. In our case, tax proclamation was issued in 2002 while the labor
proclamation was issued in 2003. In such a case, the latter prevails over the former. Safe
and healthy working environment is becoming one of the fundamental rights in the
current word. Industrialization, even if it makes life easier and comfortable, has risks of
its own in connection with health, life and the likes. Even if the risk is said to be available
to all, the most proximate and potential victims of this risks are employees. So, there is a
need to prevent or minimize such risks if they are preventable. Unless they are
preventable with at most care, there is a need to remedy at a later stage where they have
materialized. Traditionally, risks involved in work or employment were associated with
pure bad luck or any other assumptions in order to exempt employers from being
responsible. In the US legal system, there was a theory called contributory negligence by

60
which employers were escaping from liability. According to this theory, when an
employee sustained damage at work, the assumption was that the employee had his
contribution to the occurrence of the accident if the accident was to happen as a result of
a man’s fault or negligence. So long as he contributed something to the occurrence of
such accident, he was made to be his own insurer regardless of the degree of contribution
to the occurrence of the damage. If the employee contributed to the occurrence of the
damage through his own negligence, there was zero compensation available to him. The
other theory was voluntary assumption of risks. When an employee decides to work in a
certain environment, it is deemed that he has already assumed a certain risk. Of course,
under this theory, the wage was made to include the risks. The wage was negotiated and
determined not only for the service that might be rendered, but also the risk that might be
involved in it. So, it was argued that the risk was paid in the form of wage. There was
also another theory called follow-servant rule. When certain damage occurs in a work
place, it is either the employee’s negligence that has contributed to the occurrence or it
could be the negligence of other employee, a work mate. So, as long as he decided to
work with his workmate, he needs to accept the risk that would be associated with social
production. The solution was that if the employees felt uncomfortable to work in that
dangerous work environment, they could peacefully leave out. Hence, employers were
not obligated to provide preventive tools or to compensate the employee in the event of
an accident. But, at a latter stage, especially, at the time of the industrial revolution, there
were a lot of accidents occurring now and then. Then, leaving the employment
relationship to market was ignored and the government was made to intervene in the
sphere of employment relationship. From then on wards, the assumption of employers’
liability was considered appropriate. In some legal systems, laws were introduced to
make employers liable at two levels, at the level of prevention and at the remedial level.
Prevention refers to making the necessary preventive measures so as to avoid or
minimize accident or occupational diseases. Remedial refers to the actions taken
postfacto. If the employer do not succeed at the level of prevention and the accident
occurs, remedial or compensatory measures will be taken into account. In our case, until
the adoption of the civil code of 1960, employees were made their own insurer
irrespective of the justification for their being insurers of themselves. Of course, in 1944,
there was a factories proclamation issued immediately after independence. That
proclamation gave power to the prevailing ministry of commerce and industry to come up
with rules in order to protect safety and health in factories. Because, at that time, it was
assumed that only factories were dangerous. And the other areas of activities were not
taken into consideration. But, the ministry did not discharge its obligation of coming up
with rules. In the civil code of 1960, employers’ liability for safe and healthy working
conditions has been introduced. Apart from statutory obligation, in 1991, Ethiopia ratified
the ILO convention no 155 of 1981 on occupational safety and health. The FDRE
constitution, under sub-article 1 of article 42, also states that all persons have the right to
a clean and healthy environment including not only living environment but also working
environment. The current labor proclamation has also come up with a prescription by
which employers will be responsible. Needless to say, it is an issue of bilateral care. The
base for such type of obligation is laid down under article 12/4. As per this sub-article,
the employer is obligated to take all the necessary occupational safety and health
measures. The general formulation of article 12/4 has been elaborated under article 92-

61
112. Article 92 provides that an employer shall take the necessary measure to safeguard
adequately the health and safety of the workers; he shall in particular. 1/ comply with
the occupational health and safety requirements provided for in this Proclamation. 2/
take appropriate steps to ensure that workers are properly instructed and notified
concerning the hazards of their respective occupations and the precautions necessary to
avoid accident and injury to health; ensure that directives are given and also assign safety
officer; establish an occupational, safety and health committee of which the committee’s
establishment, shall be determined by a directive issued by the Minister. 3/ provide
workers with personal protective equipment, clothing and materials instruct them of their
use. 4/ register employment accident and occupational diseases and notify the labor
inspection of same. 5/ arrange; according to the nature of the work, at his own
expenses for the medical examination of newly recruited workers and for those workers
engaged in hazardous work, as may be necessary. 6/ ensure that the work place and
premises do not cause danger to the health and safety of the workers. 7/ take
appropriate pre-executions to insure that all the processes of work shall not be a source or
cause of physical, chemical, biological, ergonomically and psychological hazards to the
health and safety of the workers. 8/ obey the directives issued by the appropriate
authority in accordance with this Proclamation. In the case of the civil service
proclamation, the verbative reproduction of the labor proclamation in this regard has been
enshrined under article 47-57. The principle seems to be more or less similar. However,
we need to agree to that the occupational safety and health is more at risk in industries
than the civil service. The job in the civil service is usually associated with pens and
pencils. So, the issue of occupational safety and health is more of a concern in the labor
law regime than the civil service law regime. At the level of prevention, the employer is
required to provide with safety tools in the form of clothing’s, gloves, goggles, boots and
so on depending on the nature of the work. In addition to provision of these safety tools,
employers are obligated to train and instruct employees how and when to make use of
those safety tools. The employers are required to supervise as to whether the employees
are making use of the safety equipments appropriately and at the proper time and place.
Article 93 reads, a worker shall:
1/ co-operate with the employer in the formulation and implementation of work rules
to safeguard the workers health and safety. 2/ inform forthwith to the employer any
defect related to the appliances used and injury to health and safety of the workers that
he discovers in the undertaking. 3/ report to the employer any situation which he may
have reason to believe could present a hazard and which he cannot remedy on his own
any accident or injury to health which arises in the course of or in connection with work.
4/ make proper use of all safeguards, safety devices and other appliance furnished for
the protection of his health or safety and for the protection of the health and safety of
others. 5/ obey all health and safety instructions issued by the employer or issued by
the competent authority. Once we impose an obligation on the employer, there is a
corresponding duty to be discharged from the side of the employee. Because, in this kind
of situation, prevention or avoidance of risk requires bilateral care. So, the employees are
required to comply with safety rules. It is economically rational that the employer bears
the cost of accidents. The employer is in a better position to pass of the costs to
consumers. Even if that cost may not be passed of to society, the employer is of a deeper
pocket to incur the cost by him. In the mean time, behavioral adgestment(compliance

62
with safety rules) which incurs no cost is expected from the side of the employee. If an
employee fails to comply with such rules, the employer will be exonerated from being
liable at the remedial level. Despite the fact that the at most care has been taken from
both sides, there may be no success in preventing accidents and occupational diseases.
So, we will have to move further to the remedial level from which the employer is, in
principle, liable to the accident or occupational diseases. The rationale therefor is still that
the employer can pass it off to other parties such as insurance companies. But, there are
cases in which the employer may not cover the loss. If the employee intentionally causes
the damage upon himself, he will be his own insurer(96/2). Because, the employer shall
not be liable for any injury intentionally caused by the injured worker himself. If
the employee inflicts danger upon him as a result of his non-obedience of express safety
instructions or non-observance of the provisions of accident prevention rule specifically
issued by the employer; or because, he has reported to work in a state of
intoxication that prevents him from properly regulating his conduct or understanding, the
law takes a presumption that the employee did it intentionally. This presumption helps
the employer be exonerated from being liable. At the remedial level, the employer is
expected to cover cost of hospitalization. But, the scope of the cost of hospitalization is
highly controversial. Assume that an employee was injured while working at work place.
The injured was taken to black lion hospital to see a doctor. The medical board in such
hospital stated that abroad medication is the weigh out. Should the employer cover the
cost for such non-national hospitalization? There are two court decisions in connection
with this issue. One of such decisions was rendered at the imperial period by the
prevailing Supreme Court. The civil code, under its article 2556/1, seems to have
obligated the employer to cover the cost of abroad hospitalization. The supreme court of
1964, by interpreting article 2556/1 very broadly, rendered decision that the injured
employee had to be hospitalized abroad as far as it was certified that he was unable to be
treated domestically. The second decision was rendered by the cassation bench in May,
19 2002. The cassation bench has a stand that the legislator did not insert article 105 in
the labor proclamation believing that all employers are on an equal footing to cover the
cost of abroad hospitalization for their employees. The minimum labor condition is the
minimum right given by the law. An Employee, if he is of high bargaining power, can
acquire rights beyond the minimum labor condition through contract or collective
agreement. So, if abroad hospitalization is taken to be minimum labor condition, what is
the maximum hospitalization to be acquired through contract or collective agreement? If
the abroad hospitalization is taken to the minimum labor condition, it means that we have
left no room for the individual contract and collective agreement. Hence, the cassation
bench rendered decision that the employer is not required to cover the cost of abroad
hospitalization. In labor law regime, in adddition to individual relation, there is also the
so-called collective labor relation. By collective labor relation, we mean that employees
in collectivity will transact or relate with the employer as an individual or with the
employers in collectivity. Collective labor relation presupposes formation of association.
The usual way of establishing collectivity is through association of the employees and the
employers technically called trade union or labor union and employers associations
respectively. At the time of freedom of contract or free market philosophy, the employees
were not allowed to form an association. The reason behind it was that if they are
allowed to form an association, they will propose a monopoly price to labor against

63
employers. This disallowment was termed as labor cartain. The association was taken to
be against the free market philosophy. It was argued that Individual laborors should
compete individually. At times, it was considered as labor conspiracy. But, at a latter
stage, it was realised that labor should not treated as a comodity and regulated with
supply and demand rules. Because, behind each laborer, there is a human dignity. So, it
was allowed for laborers to form an association. The Convention on freedom of
association no 87 and convention on the recognition of the right to collective bargaining
no 98 are important instruments for collective legal relation. Ethiopia became a member
of ILO in 1923. But, despite her membership to the ILO, until 1963, freedom of
association was not allowed. It was with the coming into force of labor relation
proclamation no 2010 of 1963 that freedom of association was permitted in the Ethiopian
labor history. The civil code of 1963 came into practice to deal with individual labor
relation and did not address the issue of union formation. The 1955 revised constitution
had also a provision on freedom of association. It was declared that every subject had the
right to form an association. But, there was no emplimenting legislation; it remain
passive principle in the constitution. In 1963, the above two conventions were ratified by
Ethiopia. These conventions obligates member states to come up with a legal framework
for the implimentation of those conventions. As a result, the proclamation no 210 of 1963
was adopted with a view to implimenting freedom of association. In general, 1960 is an
important period for individual labor relation while 1963 is an important period for
collective labor relation. The proclamation no 210 of 1963, under its article 20/1(C), set
out the minimum number of membership for the formation of trade union to be 50,. This
provision was criticised in that it required a higher number of membership for the
formation of trade union. Because, at this jancture, in Ethiopia, there were few enterprises
that employed 50 and more employees. There was a special arrangement for this under
the prevailing proclamation. There were two mechanisms of forming associations. There
are basic labor union and general labor union. Basic labor union is a union that will be
established in a single enterprise having 50 and more employees. Employees of Smaller
enterprises having less than 50 employees were not allowed to form a basic union. These
employees of various enterprises were, however, allowed to form general labor union.
This arrangement was difficult in practice. So long as the employees are from different
enterprises, they may not have an opportunity to meet. Because they have different
employers, they are given diferent instructions; they had different working conditions.
Then, we had a labor proclamation No 64 of 1975. Under this proclamation, the
minimum treshhold that was required to form an association was reduced to 20
employees. This proclamation was criticised in that it did not allow the formation of
employers’ association. As a result of the then socialist idiology, employers were denied
of the right to form an association. Then, the labor proclamation 42 of 1993 of the
transitional government came up with a provision that allowed association for both
employees and employers. This proclamation maintained the minimum treshhold of the
labor proclamation 64 to form an association. Under proclamation 64, the principle was
unitary or monopoly union principle. Employees in a certain enterprise were allowed to
form a single labor union. In an enterprise, it was one union that could be allowed to
function. This principle was transplanted to proclamation 42 of 1993. This was being
criticised to be undemocratic. Because, so long as the freedom of association is for
employees, the way how to associate and how many trade unions should be established in

64
an enterprise should be left for the employees. One of the reasons to ament the labor
proclamation 42 of 1993 was this limitation which did not get along with the ILO
prescription. Note must be taken that ILO never objects to setting minimum treshhold to
form an association in an enterprise. Its objection is usually directed towards excessive
treshhold requirement for the formation of trade union in an enterprise. Under labor
proclamation 377 of 2003, the principle of plurality of unions was incorporated. Provided
that freedom of association is for employees, they can form more than one unions even in
an enterprise. This is criticised in that it undermines the unity among the employees. But,
the employees must be pursuaded that even if the law allows it, the formation of
fragmented unions in an enterprise is disadvantagious for them because it undermines
their unity. On the other hand, as far as the formation of fragmented unions is allowed,
there may be the opportunity for the occurrence of interunion rival positions. This
pursuation can be analogised with article 39 of the constitution which allows secession
for the nations and nationalities. However, it is also argued that the existence of varrious
unions is helpful in that it restricts leaders of unions from being dictator. Each union will
work very democratically and transparently so as to gain a strong representative support
better than its counterparts, other unions, from the employees of the enterprise. One of
the advantages of the current proclamation is that it tries to become more democratic by
allowing diverse views at the level of unions. And again, with the introduction of this
proclamation, the minimum number of membership to form a labor union was reduced to
ten(114). It reads, 1/ A trade union may be established in an undertaking where the
number of workers is ten or more; provided however that the number of members of the
union shall not be less than ten. 2/ Workers who work in undertakings which have less
than ten workers may form a general trade union, provided, however, that the number of
the members of the union shall not be less than ten. 3/ Trade unions may jointly form
federations and federations may jointly form confederations. 4/ Employers associations
may jointly form employers federation and employers federations may jointly form
employers confederation. 5/ No trade union or employers association may form a
confederation without forming federations. 6/ Any federation or confederation of trade
unions or employers associations may join international organizations of trade unions or
employers. 7/ No worker may belong to more than one trade union at any given time for
the same employment. Where this provision is not observed, the latest membership shall
cancel any previous membership, and the formalities of membership were simultaneous
or it is impossible to determine which is the latest, they shall all be without effect. 8/
Notwithstanding sub-article 4 of this Article, any employer may join an established
employers federation. The area where we imply the possibility for the existence of the
principle of pllurality of unions is indicated under 114/7 and 115/1(A). 115/1(A) reads as
where there exist more than one trade union organizations at a given enterprise, the trade
union which is going to bargain a collective agreement and consult with authorities, is the
one which gets 50%+1 or more support by all employees of the enterprise. The fact that
the formation of plural unions is allowed does not mean that an employee can join more
than one union at the same time for the same employment. There may be more than one
union; but, a single employee remain to be a member for a single union at the same time.
If an employee is found to be member for more than one union, the latter decision is
made to prevail over or to cancel the former decision. If the same employee is found to be
a member for more than one union on the same date, his membership will not be

65
recognised at all. According to 115/1(A), the most representative union will the exclusive
bargaining agent. The collective agreement entered into between that trade union and the
employer is to be binding upon all members and non-members of the union. This is
somehow exceptional to the general principle of the law of contract(1675&1731/1). The
employer is not expected to negotiate with each and every trade union. Because, it would
be administratively expensive, and inconvinient for the management of the enterprise.
Secondly, it will be difficult to come up with uniform working standard. This is because
each and every trade union will come up with its own proposal that may be entirely
different from one another. This oppens the room for the existence of hetro-genious
working conditions and working systems. the collective agreement is made to be
applicable upon third parties, non-members of the agreement. From this point of view, we
can understand that the way that collective agreement opporates is some times against the
basic principle of the law of contract. The reason why this deviation is important is to
maintain industrial peace and stability and to address the legitimate business concern of
the employer. On one hand, we have the democratic approach and on the other we have
the legitimate business concern of the employer. So, in order to reconcile this conflict,
collective agreement is made to affect non-members. Some times, employers are unhappy
when associations are formed in their premises. Because, at the end of the day, they are
going to demand benefit for the employees. So, for the non-formation of unions,
employers may intimidiate employees; dismiss organisers; promote people who do mnot
want to be organised and etc. Because of this, trade unions have the tendency to form an
association very secretly. After the formation, they go to the civil and social affairs office
to be registered and given a cirtificate therefor. Then, if the employer tends to dismiss
them, the employees institute an action against the employer by alleging that he has
dismissed them owing to their membership for a union. Because, in the case of such
ground for termination, the employee has the right to be reinstated even at the objection
of the employer(43). After formation takes effect, registration is mandatory by the above
office. Registration may take effect into ways. Article 118 provides that 1/ Every
organization shall be registered by the Ministry in accordance with this Proclamation.
2/ Every organization shall, upon its establishment, submit to the Ministry for
registration the following documents:a) constitution of the organization. b) a document
containing the names; address and signatures of its leader. c) in the case of a general
union, the names of undertakings where members are working. d) where the
organization is a federation or a confederation, the names, address and signatures of their
leaders and the member trade unions or employers associations. e) name and emblem of
the organization. 3/ The Ministry shall, after examining the documents and
ascertaining that they are duly completed, issue a certificate of registration within fifteen
days of receiving the application. Where the Ministry does not notify its decision within
this period, the organization shall be deemed registered. 4/ An organization which is
not registered in accordance with the provisions of this Proclamation may not perform
activities set forth in this Proclamation. 5/ A trade union or employers association
registered by the Ministry in accordance with this Proclamation shall have legal
personality and in particular, have the capacity to undertake the following activities:a) to
enter into contract. b) to sue and be sued. c) to own, use and transfer property. d) to
represent members at any level. and e) to perform any legal act necessary for the
attainment of its purposes. The first scenario is that if the registering organ accepts the

66
documents as completed, it will register and issue a cirtificate of registration. The second
scenario is that the registering organ may examine the documents and it may consider
that there are still documents that are not submitted. In such a time, it may send back
requests to the association. The third scenario is that despite the submission of the
application with documents attached, there may be silence of the registering organ. If the
registering organ is silent for more than 15 days without registering or sending back
requests for the fulfillment of the remaining documents, default registration shall follow.
Once it is registered, cirtificate of legal personality will be issued. Once such cirtificate is
issued, it can oporate many lawful activities. One of such lawful activities is the operation
of undertaking collective bargaining with the employer. Collective bargaining is basically
protection of the labor force by seating and bargaining with an employer(s). If it is at
enterprise level, the bargaining will be with a single employer. But, if the bargaining is at
an industrial level, the bargaining will be undertaken between the whole employers
association and the confederation of trade unions. Bargaining may be made with respect
to various working conditions. Usually what is done is that the trade unions will initiate
negotiation by submitting proposal for negotiation. Under the current labor proclamation,
availability for negotiation is within ten days(130). 1/ A party wishing to conclude a
collective bargaining may request the other party in writing. It shall also prepare and
submit draft necessary for the negotiation.
2/ The requested party shall within ten days of receiving the request, appear for
collective bargaining.
3/ The parties shall before commencing collective bargaining draw up the rules of
procedure.
4/ Each party shall have the duty to bargain in good faith.
5/ Issues on which the parties could not reach agreement by negotiations in good faith
shall be submitted to the competent labour disputes settlement tribunal.
6/ Parties to a collective agreement that is enforce shall decide to amend or replace their
collective agreement with in 3 months before the validity date expires. Each party, after
having decided to amend or replace the collective agreement, shall finalize it within 3
month as of the date of its expiry. If the negotiation is not finalized with the said period
of time the collective agreement whose validity date is expired shall cease to be effective.
Failure to make oneself available within ten days or to negotiate in good faith may be
considered to be unfair labor practice. This may entail punishment in the form of fine
which goes as high as 10,000 birr under the amended labor proclamation 494. Article
185/2 reads, 2/ An employer, a trade union, a worker or representative of employer which
contravenes Sub-Article (2) or (4) of Article 130 of this Proclamation shall be liable to a
fine not exceeding Birr 10,000 birr. If they negotiate in good faith, the assumption is that
it is highly probable that they will reach at an agreement. The natural course, the
expectation and the desire of the law is that collective bargaining will lead to collective
agreement. Once a collective agreement is reached, it will be signed by the negotiating
parties. Then, it will be registered by the public organ And it will be binding upon
members and non-members as though it is law. In the majority of the cases, the duration
will be determined by the collective agreement. Article 133 reads, 1/ Any provision of
a collective agreement which provides for conditions of work and benefits which are less
favorable than those provided for under this Proclamation or other laws shall be null and
void.

67
2/ Unless otherwise decided therein, a collective agreement shall have legal effect as
from the date of signature.
3/ unless expressly stipulated otherwise in a collective agreements, no party may
challenge the collective agreement before three years from the date of its validity,
provided, however, that;
a) upon the occurrence of a major economic change, a challenge to the collective
agreement may be submitted to the Minister by either party before the expiry of the fixed
time.
b) The Minister shall, upon receipt of a challenge to a collective agreement in
accordance with this sub-article 3(a), assign advisor with a view to enabling the two
parties settle the matter by agreement. If the two parties fail to settle the matter by
agreement, Article 142 of this Proclamation shall apply.
c) the parties may at any time change or modify their collective agreement, provided,
however, that without prejudice to the special conditions set forth in sub-article 3(a) and
(b) of this Article, a party may not be obliged without his consent to bargain a collective
agreement to change or modify it before the said time limit expires. If the duration or the
period of legal validity of the collective agreement is not determined in the collective
agreement, it will be considered as though it is valid for three years. the period of three
years shall be counted as of not registration but signature of the collective agreement. In
this case, the law is serving as gap filling instrument. The very purpose of formation of
trade union is to arrive at a collective agreement. Formation of an association is not an
end by itself. The assumption is that collective agreement will result in benefits above the
minimum labor condition. If a term of collective agreement brings a benefit below that of
the minimum labor condition, only that part of the collective agreement will be nul and
void. On the other hand, article 134 provides that 1every collective agreement shall be
applicable to all parties covered by it. 2. Where the collective agreement is more
favorable to the workers in similar matters than those provided for by law, the collective
agreement shall prevail. However, where the law is more favorable to the workers than
the collective agreement the law shall be applicable. The formation of association or
collective agreement does not apply to the civil service. It is only the labor law regime
relevant to this topic. Because, Ethiopian law does not allow civil servants to associate. If
they are not allowed to be associated, they cannot have a collective agreement. The
reason is that the constitution has a provision not yet implimented. Article 42 /1(C) of the
constitution speaks about the right to form an association and the right to bargain
collectively. It provides that government employees who enjoy the right provided under
paragraphs a and b of this sub-article shall be determined by law. But, up to now, the law
to determine those rights is not issued. Because of this non-issuance of the law, the
discussion on freedom of association and collective agreement is limited to the labor law
employment regime. With a conviction that labor is not a commodity, labor was allowed
and tolerated to be organized. The first effort to be unionized was to compensate
inequality. Compensation of inequality is to mean that when an individual employee
enters into negotiation with an individual employer, the individual employee is a weaker
party. Therefore, in order to maintain the balance between the two parties, it was argued
that labor should be unionized. Hence, the limitation of the individual bargaining will be
somehow balanced when organised voice is directed against the employer. So, the first
justification for unionization was to create a sort of power balance between on the one

68
hand and employees on the other. At a latter stage, it was also considered as a human
right. With the coming into force of the different human right instrument, freedom of
association was incorporated as one type of human right. Then, the conventions 87&98
on freedom of association and collective bargaining brought this fundamental right into
the labor or employment territory as a work place human right. The other theory is that it
was considered as industrial democracy. When employees in an enterprise are allowed to
associate or express their voice, it is considered as a democracy at the level of that
enterprise. Because, we can consider the enterprise as a state, the employees as subjects
and the employer as a government. Recently, there is another theory called stake holder
theory. According to this theory, stake holders should have a say on issues that directly
affect them. On the other hand, in work place, employees have a stake on working
conditions. Therefore, they should have an opportunity to express their view as to how
the enterprise should operate. This theory seems to be following participatory approach.
And it seems to have been recognized under article 92/3 of the FDRE constitution. This
sub-article as to environmental contents, states that people have the right to full
consultation and to the expression of views in the planning and implitation of
environmental policies and protects that affects them directly. Actually, it is not only to
air their view but also it is considered for industrial peace, productivity and smooth
management relationship. Some writers argue that democratic states are prospores; the
same logic shall apply to democratic enterprises. Employees of democratic enterprises
will create a sense of belongingness in their job and discharge their contractual obligation
in a motivated manner and in a sense of urengcy. ILO has identified convention, 87, 98,
29 on abolishment of forced labor and slavery, 100 and 111 on elimination of
discrimination, 173(minimum age convention) and 99 on abolishment of worest form of
exploitation of child labor as 8 fundamental conventions of the 193 ILO conventions.
originally, their scope of application was limited to employment relation in the private
sector. But, at a latter stage, with the adoption of convention 87, the prevailing
application of those conventions was broadened. One of its provisions states that workers
and employers without any distinction whatsoever are entitled to form an association.
This means that workers whether they are employees of government or private sector or
whether they are temporary or permanent shall be no subject to distinction to form an
association. The only restriction convention 87 puts is as regards to the police and the
armed force. Article 9 of the same convention states that the extent to which the
guarantees provided for in this convention shall ply to the armed forces and the police
forces shall be determined by nation laws or regulations. Once a collective agreement is
reached, it will have an effect upon both members and non-members of the union. Even,
there will be a process of accession. Article 132 reads, A collective agreement which has
already been signed and registered may be acceded to by others. There enterprise level
bargaining, industrial level bargaining sectorial level bargaining and some times regional
level bargaining. For example, the Akaki foctory trade union may enter into a collective
agreement with the akaki factory share company. Sectorial level bargaining will mean
bargaining at the level of a sector. There are 9 sectors in Ethiopia. Some of them are
factory and lezer sector, food and bereverage sector agriculture and animal rearing and
etc. the textile and lezer federation wil cover the employees in textile and lether factories.
So, it wil bargain with employers of lether and textile factories. Note must be taken that
in Ethiopia, the only available is enterprise level bargaining. If the akaki textile factory

69
has entered into collective agreement with akaki textile share company, the combelcha
textile factory will directly reproduce what has been reproduced by akaki textile trade
union and the emplouyer thereof thereby acceding to that collective agreement without
going into detailed negotiation. From this point of view, we can understand that one way
of extending collective agreement is through a process of accession. In other countries
such france, they have a process of extension. If a dominant factory has concluded a
collective agreement with a dominant association, the government will pick that
collective agreement and make law. Employment dispute settlement mechanism. Prior to
the coming into force of the civil code, the dispute resolution mechanism was dependant
upon the mercy of the employer. In the civil code, employment dispute was resolved as
any civil dispute. When it is handled like a civil dispute, the employee can take his case
to regular court. And the procedure was to be regulated by the civil procedure code.
Adversial system was the mechanism to resolve a dispute. Three after the coming into
force of the civl code, there was a fine distinction as to the resolusion of dispute. The
civil code was concerned with individual labor dispute. On the other hand, the dispute
resolution mechanism for individual labor dispute is different from that of collective
labor dispute. This distinction was created as of the coming into force of the labor
proclamation no 210 of 1963 which for the first time allowed unionization and collective
agreement. There are various dispute settlement mechanisms. Some among them are
amekable settlement, judicial settlement, industrial settlement(labor matter) and so on. In
the case of amekable settlement, the parties will settle their dispute amekably through
win-win solution. This means that the disputants will appear winners from the
transaction. Modalities of amekable settlement could be dispute prevention(contract or
collective agreement) negotiation( the best way of settling dispute), conciliation some
times arbitration and etc. dispute is inevitable as far as the conflicting interest of the
employees and the employer exists. The parties usually make co-operation at the level of
production and confrontation at the level of profit distribution. For such confrontation,
the negotiated settlement is required. The trade union through its representatives will seat
and negotiate with the employer and resolve the dispute for once and for all. This is
beneficial in that when both parties consider themselves as winners, their future
relationship will be unaffected. When the parties are unable to resolve the dispute through
negotiation, they may resort to a third party of their own choice to come in between. This
is what we call as conciliation. The concilator is not going to impose his terms on the
parties. He simply assists them in arriving at an amekable settlement. The third aspect,
arbiteration, is a grey area between amekable settlement and judicial settlement. In this
case, the parties will appoint an arbitrator(s). the arbitrator will act as a judge and after
giving the opportunity to be herd, he will render decision which is binding upon all
parties. Judicial settlement ishowever, a winner-loser determination. This is unadvisable
because it affects the future relationship between the parties. Individual labor disputes are
listed illustratively under 138. it reads, 1/ The labour division of the regional first
instance court shall have jurisdiction to settle and determine the following and other
similar individual labour disputes;
a) disciplinary measures including dismissal;
b) claims related to the termination or cancellation of employment contracts;
c) questions related to hours of work, remuneration, leave and rest day;
d) questions related to the issuance of certificate of employment and release;

70
e) claims related to employment injury;
f) unless otherwise provided for in this Proclamation, any criminal and petty offences
under this Proclamation.
2/ The labour division of the regional first instance court shall give decisions within 60
days from the date on which the claim is lodged.
3/ The party who is not satisfied with the decision of the regional first instance court
may, within 30 days from the date on which the decision was delivered, appeal to the
labour division of the regional court which hears appeals from the regional first instance
court. In the case of individual labor dispute, the jurisdiction is left for regional first
instance court labor division. Collective labor dispute is also listed illustratively under
142/1. it provides that 1/ The conciliator appointed by the Ministry shall endeavor to
bring about a settlement on the following, and other similar matters of collective labour
disputes:
a) wages and other benefits;
b) establishment of new conditions of work:
c) the conclusion, amendment, duration and invalidation of collective agreements:
d) the interpretation of any provisions of this Proclamation, collective agreements or
work rules;
e) procedure of employment and promotion of workers;
f) matters affecting the workers in general and the existence of the undertaking;
g) claims related to measures taken by the employer regarding promotion, transfer and
training.
h) claims relating to the reduction of workers.
2/ The conciliator shall endeavor to bring about a settlement by all reasonable means
as may seem appropriate to that end.
3/ When the conciliator fail to give solution to case submitted to him within 30 days he
shall report to the ministry, and a copy to each pleading parties. Without prejudice to
provision of this Article Sub Article 1(a) on of the party may take his case to board. But
if the despitute submitted pursuant to Article 136 (2) one of the party may submitted his
cases to the temporally instituted board. In the case of individual labor dispute, the parties
can negotiate or if they want, they appoint a conciliator by themselves. But, in the case of
collective labor dispute, if the parties can have a conciliator, it is good. If they do not
have a consiliator, they can approach to the government, the ministery of social and labor
affairs or the regional bureau of social and labor affairs to appoint them a consiliator.
This shows that the government has more concern on labor dispute for the fact that the
impact of labor dispute is higher than the individual one. If the parties are not ready to
agree by the proposal of the consiliator, any of them can take the collective labor relation
board. Collective labor dispute dispute is referred to a regular court. This is because the
law does not want collective labor dispute to be resolved in a winner-loser mechanism.
The labor relation board was introduced in the labor proclamation of 1963 and withdrawn
with labor proclamation of 1975. it was reintroduced in the labor proclamation of 1993
and continues in the current proclamation with a minor modification. In the first historical
labor proclamation, there was a labor relation board introduced by the emperor. The final
decision was left for the emperor. Two representatives of the trade union, two
representatives of the employer association and a chair man appointed by the emperor
were submitted for nomination for the labor relation board. So, in effect, it was a team of

71
five persons of entergrity and knowledge on industrial relation. When parties bring their
dispute to this labor relation board, they were highly required to resolve their dispute
amekably through a win-win solution. From this point of view, it can be said that it was a
quasi-judicial organ. Because, it had a nature of a consiliator ordinarily and at the end of
the day, it had a nature of a judge. Under the labor proclamation 64 of 1975, every
dispute was taken to court. It was resolved through winner-loser solution and the courts
were excessively pro-labor. Under the labor proclamation of 1993, freedom of
employer’s association was introduced. As a result, the labor relation, as an institution,
was reintroduced. It was composed of two representatives of the confederation of trade
unions, two representatives of employers’ association and a charman appointed by the
emperor. It was similar with that of the labor proclamation of 1963 except with the
absence of approval by the emperor. Article 150 provides that 1/ The permanent or
the adhock Board shall endeavour to settle by agreement Labour disputes submitted to it,
and to this end it shall employ and make use of all such means of conciliation, as it deems
appropriate.
2/ The permanent or the adhoc Board may in appropriate circumstances consider not
only the interest of the parties immediately concerned but also the interest of the
community of which they are apart and the national interest and economy as well, and
may in such circumstances grant a motion to intervene by the government as amicus
curiae.
3/ In reaching any decision, the Board shall take into account the substantial merits
of the case, and need not follow strictly the principles of sustantive law followed by civil
courts. Unlike that the labor relation board is doing in practice, amekable settlement
requires significant time of consultation, dialogue and so on. Under the current
proclamation, the members of the board was enhanced to seven. The two additional
members are those with high knowledge of employer-employee relationship. This mainly
done to mitigate the very judicial nature of the board. Artile 145 reads, 1/ The
permanent and adhoc Board shall consist of a chairman, two qualified members who have
the knowledge and skill on labour relation, appointed by the Minister, four members of
whom two represent the trade unions and two represent employer’s associations, and two
alternate members one from the workers side and one from the employers side.
2/ Employers representatives shall be appointed from the most representative of
employers associations and workers representatives shall be appointed from the most
representative of trade unions.
3/ The Minister shall assign a secretary and such other necessary staff to the Board.
4/ Members and alternate members of the Board shall serve on part time basis without
remuneration, provided, however, that the Minister may fix standard fees for attendances
at meetings of the Board.
5/ Members and alternate members of the Board shall be appointed for a term of three
(3) years; provided, however, that in making the initial appointments, the terms of one
(1), two(2) and three (3) years, respectively, shall be specified so that in each subsequent
year the terms of not more than one-third (1/3) of the members and alternate members
then serving shall expire in any one calendar year.
6/ The Minister shall dismiss a member in case of negligence of duty or meifeasance
in office and shall arrange for the appointment of a substitute for the remaining,
unexpired term.

72
73