Labour Proclamation No. 1156/2019 (herein after referred to as the Labour Proclamation), is published on the Federal Negarit Gazette, on its issue dated 5th of September 2019. Hence, the Labour Proclamation has entered into force as of this date. The Labour Proclamation has 12 Parts and 193 Articles, the full version of this Labour Proclamation is attached hereunder. From the review of the Labour Proclamation, the following are the salient changes:
1. Under Articles 2 (9) cum 141 of the Labour Proclamation, has defined "Social dialogue" and introduced it as one modality for resolving labour disputes that might arise between the employer and the employees through dialogue between them or by involving third parties that includes government organs. The manner of the establishment of bipartite social dialogue will be determined in the collective agreement [Article 130 (7)].
2. Articles 2 (10) cum 3(2) (c) of the Labour Proclamation have defined who managerial employees are and managerial employees are excluded from the scope of application of this Labour Proclamation. Employees who take only disciplinary measures are excluded from the definition of managerial employees.
3. Sexual harassment [Article 2 (12)] and sexual violence [Article 2 (12)] are included in the definitional part of the Labour Proclamation and also they are made as offenses that entail the termination of the contract of employment of the employee without notice [Articles 14 (2) (h) cum 27 (1) (i)]. The definition of sexual violence even includes attempts to commit such act [Article 2(12)]. In case where the employer fails to take an action on an employee who has committed sexual harassment or sexual violence will be liable to pay severance payment to the employee who has reported that she/he has suffered such acts [Article 39 (1) (d)]. In addition, to severance payment, the employee will be entitled to compensation of 3 (three) months’ salary of the employee, where the employee opts to terminate his/her contract of employment without notice and this payment will be payable to an employee who is covered by the relevant pension law [Article 32 (1) (b) cum 41 (2)].
4. The definition for private employment agency is provided under the provision of Article 2 (13) of the Labour Proclamation as legally licensed person, to provide local employment services. These services that can be given by these Agencies are: local employment exchange service without being a party to an employment relation or deploying of employees under its authority to the service of a service user enterprise, by entering into contract of employments with such employees, or combines both services [Articles 2 (13) cum 172-174]. Such Agency gives employment exchange services without receiving payments from the employees but from their employer. License is required to undertake such service is provided in this Labour Proclamation [Articles 2 (14) cum 175 (1)].
5. The Ministry of Social and Labour Affairs is empowered to decide on how these Agencies will engage in local employment exchange services [Article 171 (1) (k)]. The details of the requirements to obtain such license will be decided by the directive to be issued by the Council of Ministers [Article 175 (2)].
6. Any person who engages in providing employment exchange service in Ethiopia without getting the appropriate license, will be punished with imprisonment for a term of not less than five years and not exceeding ten years and with a fine of Birr 100,000 and any private employment agency which engages, while its license is suspended, in any employment exchange activity for imprisonment for a term of not less than three years and not exceeding five years and with a fine of Birr 75,000 [Article 187 (1) and (2)].
7. What constitutes "discrimination" among employees is widely defined in the provision of Article 2 (15) of the Labour Proclamation and it includes discrimination based on the HIV AIDS status and physical disabilities.
8. Domestic work is defined in the Labour Proclamation as “employment of private service” employment of a nonprofit that is given by someone to households like careening, cleaning, guardianship, driving and gardening; this type of services are excluded from the coverage of this Labour Proclamation [Articles 2 (16) cum 3 (2) (c)].
9. The Labour Proclamation says it is applicable to employment relations based on contract of employment that exist between a worker and an employer including "recruitment process". Although, there is no clear provision that shows how this Proclamation will be applicable to recruitment process, provisions like discrimination, sexual harassment and sexual violence that might occur during this stage of employment can be cited as examples [Articles 3 (1)].
10. The Labour Proclamation has extended the probation period from 45 (forty-five) consecutive days to 60 (sixty) working days beginning from the first date of employment and it is required to be done in writing [Article 11 (1)]. As per the judgment of the Cassation Bench of the Federal Supreme Court that is given on 26/01/2010 E.C under file no. 126667, which has legally binding effect, when it is said that the probation should be made in writing, it means that the employee should be clearly aware that his/her contract of employment is subject to probation period and such written agreement needs to be attested by two witnesses. If not the stipulation of probation will not be legally enforceable against the employee or the employer.
11. The Labour Proclamation obliges employers to deduct from the salary of employee and transfer the same amount to the account of the union of employees where the employee requests the same in writing [Article 12 (3)]. In addition, the employer is obliged to register information on work place location and work-related date as per the form to be provided to it by the Ministry of Social and Labour Affairs [Article 12 (11)]. The employer is also required to arrange awareness creation programs to its employees on its work rules [Article 12 (12)].
12. The employer and the employees are prohibited from committing sexual harassment or sexual violence against employees [Articles 14 (1) (h) cum 14 (2) (h)]. The employer is also required not to discriminate against employees based on their ethnicity, sex, religion, political outlook, HIV& AIDS or disability or any other grounds [Article 14 (1) (f)]. The employer is prohibited not to coerce a worker in any manner to work or discharge any obligation [Article 14 (1) (j)]. The prohibitions that are listed under the provision of Article 14 (1) should not be committed by either the employer itself or by its managerial employees and hence acts or omissions of the managerial employees of the employer are considered as assimilated cases. The employee is also prohibited, inter alia, to make use of falsified document or attempt to use such document or to physically abuse anyone in a work place [Article 14 (2) (c) and (i)].
13. As per Article 14 (2) (g) of the Labour Proclamation, the employees are also not allowed to undertake meetings at the work place except as allowed by the collective agreement.
14. The Labour Proclamation obliges the employee to report for work on the working day following the date of the expiry of suspension and obliges the employer to reinstate the employee to his/her position without adversely affecting his/her job position and wage [Article 22].
15. The Labour Proclamation also allows for the dismissal of employees who have a record of coming to work late 8 (eight) times or employees who are absent for 5 (five) days without cause within a six-month period and yet such warnings needs to be given in writing [Article 27 (1)(a) and (b)]. However, the reasons for termination as stated under Article 27 (1) (a) cannot be basis to terminate the contract of employment of female employee during her pregnancy and until four months after her confinement [Article 87 (7)].
16. The Labour Proclamation obliges the use of "periodical job performance evaluation" by employer to terminate the contract of employment of the employee based on his/her "any loss of capacity to work" [Article 28 (2)] and this indirectly obliges the employer to conduct periodic performance evaluation.
17. In the order of reduction of work force, disabled employees and expectant women employees and women employees within 4 (four) months post-natal are included [Article 29 (3)(d) and (g)].
18. Although there is discrepancy in its Amharic and English version (legally the prevailing version is the Amharic one), in case where the employee terminates his/her work in disregard to his/her obligation to give one prior notice he/she will be liable to pay compensation that cannot exceed 30 (thirty) days' wage of the employee and the English version of the Labour Proclamation provides that this compensation is "payable from the remaining payment due to the worker" [Article 45].
19. The Labour Proclamation envisages the establishment of Wage Board and the Council of Ministers is empowered to determine the powers and responsibilities of this Board. The Board is empowered to set and revise the minimum wage of employees based on studies which take into account the country’s economic development, labour market and other considerations. The Wage Board will be comprised of the government, employees, trade unions and other stakeholders [Article 55 (2)].
20. The Labour Proclamation has allowed the one-time deduction from the employee's salary to exceed one-third of his/her monthly salary, where the employee "expresses his/her consent in writing" [Article 59 (2)].
21. The Labour Proclamation has increased the overtime working hours from two to four hours a day and from 20 hours a month to 12 hours in a week and removed 100 hours per year [Article 67 (2)]. The overtime rate in case of work done between 6:00 am to 10:00 pm has increased from 1 (1/4th) to 1 (1/2th ) and from 1 (1/2th) to 1 (3/4th) in case of work done from 10:00 pm to 6 am [Article (68) (1)(a) and (b)].
22. The Labour Proclamation also obliges the employer to grant 4 (four) working days of rest in a month where the nature of his task did not enable the worker to make use of his weekly rest day [Article 69 (4)].
23. The annual leave threshold has been increased from 14 (fourteen) working days to 16 (sixteen) working days for the first year of service and additional of 1 (one) working day as annual leave for each 2 (two) years of services by the employee [Article 77 (1)].
24. In addition, where an employee who was on annual leave falls sick and required medical treatment as inpatient, his/her annual leave will be suspended and he/she will be entitled to take sick leave [Article 77 (1)].
25. Paternity leave of 3 (three) working days for male employee is allowed by the Labour Proclamation [Article 81 (2)]. Employees are allowed to take special leave of 3 (three) working days in case where his/her spouse, father, mother, brother, sister, aunt and uncle passes away as opposed to what the previous proclamation describes spouse and “descendants or ascendants or consanguinity upto second degree” dies [Article 81 (b)]. The exceptional leave without pay request for 5 (five) working days in case of exceptional and serious events is also allowed only twice per budget year [Article 81 (3)].
26. The Labour Proclamation entitles the employer to determine from which duly recognized medical facility the employee should present "a valid medical certificate" [Article 85 (4)].
27. The Labour Proclamation by taking into account the spirit of Article 35 (8) of the Constitution of the Federal Democratic Republic of Ethiopia, provides that women not to be discriminated against in "all respects (not on only relating to their wage but relating to their recruitment, training, promotion, disciplinary measures, etc.) on the basis of their sex" and the Proclamation also obliges the employer to give priority for women if they get equal result with men when competing for employment, promotion or any other benefit [Article 87 (1) and (2)]. The affirmative measure to which female employees are entitled as per Article 87 (2) of the Proclamation is in accord with Article 35 (3) of the Constitution of the Federal Democratic Republic of Ethiopia.
28. In addition, the Labour Proclamation has extended the maternity leave period. Female employees are entitled for maternity leave with pay of 30 (thirty) consecutive days prenatal leave and 90 (ninety) consecutive days of postnatal leave days [see Article 88 (1 to 4), as amended by Corrigendum 15/2020]. In relation to maternity leave, sub-article 5 of Article 88 states that the payment of successively reduced salary amount will not be applicable on woman employee who is given sick leave by physician due to the termination of her pregnancy.
29. The Labour Proclamation has also has increased the age of the young workers from 14 (fourteen) to 15 (fifteen) but in no case it can exceed 18 (eighteen) years [Article 89 (1]].
30. The Labour Proclamation also provides that in case where the employer opts to buy insurance policy to cover disablement benefits, then the amount of such insurance policy can in no way be less than what is provided by the law as minimum by the Proclamation [Article 109 (2)].
31. The Labour Proclamation also allows the employer and the employee to include in their collective agreement on the modality of establishment of daycare [Article 130 (8)].
32. The Labour Proclamation also requires the Ministry of Social and Labour Affairs or the concerned government organ to register collective agreements within 15 (fifteen) working days unless it has sufficient and valid reason not to do so [Article 132 (2)].
33. The Labour Proclamation has also envisaged the possibility of providing private inspection services by private companies. The requirements for the issuance of certificate of competence to private inspection service, which desire to engage in workplace technical inspection, consultancy and training on the subject and monitor their performance is to be given to the Ministry of Social and Labour Affairs or other government organ empowered to do so and the details including the fee to be charged by them will be determined by the Regulations of the Council of Ministers [Article 183].
34. The Labour Proclamation has increased the fine where the employer causes employees to work beyond the maximum working hours or contravenes in any manner the provision relating to working hours or where it infringes the provisions regulating the weekly rest days, public holidays or leaves or its duty of informing reasons of suspensions to the Ministry of Social and Labour Affairs. Accordingly, the fine has been increased from Birr 500 (five hundred) to Birr 5,000 (five thousand) up to Birr 10,000 (ten thousand) if the violation is for the first time, from Birr 10,000 (ten thousand) up to Birr 15,000 (fifteen thousand) if it is committed for the second time and from Birr 15,000 (fifteen thousand) to Birr 30,000 (thirty thousand) if it is committed for the third time and in case where such act is committed more than 3 (three) times it may result in the closure of the undertaking [Article 185 1 (a) to (c)]. This amount of the fine has significantly increased from the provision of the previous labour law.
35. Similarly, an employer who fails to take all the necessary occupational safety and health measures or fails to keep records or violates the provisions of the proclamation that are listed as unlawful if committed by the employer or terminates a contract of employment in violation of the grounds that are classified as illegitimate by the proclamation entails fine of from Birr 10,000 (ten thousand) up to Birr 20,000 (twenty thousand) if the violation is for the first time, from Birr 20,000 (twenty thousand) up to Birr 40,000 (forty thousand),if it is committed for the second time and from Birr 40,000 (forty thousand) to Birr 60,000 (sixty thousand), if it is committed for the third time and in case where such act is committed more than 3 (three) times it may result in the closure of the undertaking [Article 185 (2) (a) to (d)]. This amount of the fine has significantly increased from the provision of the previous labour law.
36. The Labour Proclamation also outlaws the unduly delaying of collective bargaining contrary to good faith by an employers’ or workers’ organization and the contravention of this fine of Birr 5,000 (five thousand) to 70,000 (seventy thousand) depending on the frequency of the contravention and where the contravention exceeds three instances it entails the closure of the undertaking of the employer [Article 117 cum 186 (1) (b)].
37. The Labour Proclamation has made them common offenses for both the employer in case where they violate regulations and directives pertaining to the safety of workers and commit an act, which expose the life and health of a worker to a serious danger or does not accord special protection to women workers or young workers as provided for in this Proclamation or strike or lockout against the provisions of the law or they fail to comply with an order given by a labour inspector or intentionally submits inaccurate information or declarations to pertinent organs. In such case the culprit will be fined Birr 5,000 (five thousand) up to Birr 20,000 (twenty thousand); where the violation is for the first time and a fine of Birr 20,000 (twenty thousand) up to Birr 40,000 (forty thousand), if the violation is for second time, and a fine of up to Birr 70,000 (seventy thousand) if it is committed for the third time and in case where such act is committed more than 3 (three) times it may result in the closure of the undertaking [Article 186 (1)]. This amount of the fine has significantly increased from the provision of the previous labour law.
38. Similarly, the fine that is to be imposed on any employer, trade union, trade union leader or a representative of an employer who fails to appear for collective bargaining within 10 (ten) working days or fails to bargain in good faith has significantly increased by the Labour Proclamation. Accordingly, Birr 5,000 (five thousand) up to Birr 20,000 (twenty thousand); where the violation is for the first time and a fine of Birr 20,000 (twenty thousand) up to Birr 40,000 (forty thousand), if the violation is for second time, and a fine of up to Birr 70,000 (seventy thousand) where the violation is committed more than twice [Article 186 (2)].
39. Finally, the Labour Inspectors are given the power to file suits against the violations committed in contravention of the terms and conditions of the Labour Proclamation and regulations and directives issued to the courts of law having jurisdiction to try them [Article 188].
Posted on September 26th, 2019.
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 Labour proclamation No.1156.pdf | 2990 kB |