Termination of Contract of Employment Under Ethiopian Law

Do want to know when you can validly terminate a contract of employment as per the Ethiopian Labour Law? If so here are the main points.

In Ethiopia the employment relationship between an employer and an employee is governed by The Ethiopian Labour Proclamation 377/2003. According to this proclamation the contract of employment may be terminated by the following different reasons.

  1. By the initiation of the employer or worker,
  2. In accordance with the provisions of the law,
  3. By the collective agreement or by the agreement of the two parties.

This article is basically concerned on discussing the basic grounds of termination under Ethiopian Labour Proclamation. According to the Ethiopian Labour Proclamation, a contract of employment may be the terminated on grounds connected with the worker’s conduct, skill, objective circumstances arising out of his work or the organizational or operational requirements of the undertaking.Now we will observe the legal grounds that give the employer the opportunity to terminate an employment contract.

A.  Termination of the contract of employment with out notice

A contract of employment shall be terminated without notice on the following grounds only. If any of the following things happen the employer is entitled to terminate the employment of a worker without being required to give the employee a notice period(i.e. from one to three months period based on the workers service period).

  1. Repeated and unjustified tardiness despite warming to that effect,
  2. Absence from the work without good cause for a period of five consecutive working days or ten working days in any period of one month or 30 working days in a year,
  3. Deceitful or fraudulent conduct in carrying out his duties having regard to the gracing of the case,
  4. Misappropriation of property or fund of the employer,
  5. Producing a work output below the qualities and quantities agreed which, despite the potential of the worker is persistently,
  6. Responsibility for brawls or quarrels at the work place,
  7. Conviction for an offence where such conviction renders him incapable for the post which he holds,
  8. 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 undertaking;
  9. Intentionally commit in the place of   work any act which is endangers life and property
  10. Take away property from the work place with out the express authorization of the employer
  11. Report for work in a state of intoxication
  12. Except for HIV/AIDS/ test, refuse to submit himself for medical examination when required by law or by the employer for good causes.
  13. Refuse to observe safety and accident prevention rules and to take the necessary safety precautions
  14. Commission of other offences stipulated in a collective agreement as grounds for terminating a contract of employment without notice.
  15. Absence from work due to a sentence of imprisonment passed against the worker for more than 30 days;

Where an employer terminates a contract of employment because of the above reasons, he shall give written notice specifying the reasons for and the date of termination with ion 30 days

B.  Termination Of Contract Of Employment With Notice

The following are sufficient grounds for the termination of a contract of employment with notice.

  1. The worker’s manifested loss of capacity to perform the work to which he has been assigned or his lack of skill to continue his work,
  2. If the worker, for reasons of health or disability, permanently, is unable to carry out his obligations under the contract of employment,
  3. The worker’s unwillingness to move to a locality to which the undertaking moves,
  4. When the post of the worker is cancelled for good cause and the worker cannot be transferred to another post.

The notice of termination by the employer 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.

Period of Notice

Period of notice means the number of days the employer should give for the worker before the termination of the contract. This Period of notice ranges from one to three months based on the period of service of the worker.

  1. One month in the case of a worker who has completed his probation and has a period of service not exceeding one year,
  2. Two months in the case of  a worker who has a period of service a above one year to nine years,
  3. Three months in the case of a worker who has a period of service of more than nine years,
  4. To months in the case of a worker who completed his probation and whose contract of employment is terminated due to reduction of work force.

C.  Reduction of workers

The other ground of termination of an employment contract in Ethiopia is Reduction of Workers. Reduction of workers can be made when the following requirements are fulfilled.

  1. Fall in demand for the products or services of the employment resulting in the reduction of the volume of the work and profit of the undertaking & there by resulting in the necessity of the reduction of the work force,
  2. 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. 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.

If the above grounds occur,

  1. A number of workers representing at least ten percent of the number of workers employed or,
  2. In the case of an undertaking where the number of employees is 20-50 a reduction of workers affecting at least 5 employees over a continuous period of not less than 10 days can be made.

The employer in consultation with the trade union or its representative shall give priority of being staying in job, for those workers having higher rate of productivity and best skills.

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.

  • Those  having  the shortest term of service in the undertaking,
  • Those who have fewer dependants,
  • Those who are disabled due to an employment related injury in undertaking,
  • Workers’ representatives,
  • Expectant mothers,

D.  Termination by the worker

The other cause for terminating the contract of employment is termination by the worker himself. With out considering his period of service, any worker who has completed his probation period may be giving 30 days prior notice to the employer terminate his contract of employment.

Fikadu Asfaw practices law in Addis Ababa, Ethiopia and is a member of the LawGuru Attorney Network.

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