On July 5th, 2019, the House of People’s Representatives approved a draft Labour Proclamation

(“Proclamation”) that will repeal Labour Proclamation No. 377/2003 (“Labour Proclamation”)
together with its amendments. The Proclamation replaces a law that has been in place for the last 16
years. This has been a period where Ethiopia saw major shift in investment and business
environment as well as the overall labour market.  The new Proclamation acknowledges the key role
of a skilled and disciplined workforce to Ethiopia’s industrialization efforts and improve its global
competitiveness by expressly stating in its preamble the need to create a favorable environment for
investment. In this issue of our legal update, we present some of the key changes introduced by the
new law with our observations included at the end.
More obligations to Employers: The new Proclamation maintains the obligations of the employer
under the existing law, such as providing work to the employee, paying wages, respecting the dignity
of the employee etc. In addition, the new law obligates the employer to: a) deduct union dues from
the employee’s regular wage, and transfer the cash into the trade union’s bank account, if so
requested by the employee b) raise awareness of employees on work rules of the organization c)
register information on workplace location and work-related data and transfer to the Ministry of
Labour and Social Affairs (“MoLSA”).
New Rules on Minimum Wage: the idea of introducing a minimum wage has been a topical issue
for the Ethiopian government for quite some time. Previous administrations have commissioned
studies on minimum wage, though none of these were able to see the light of day. Under the new
Proclamation, the government has gone one step forward to establish a Wage Board comprising of
representatives of government, employees and trade unions together with other stakeholders that
will carry out studies for setting and periodically revising minimum wages.
Increased Minimum Working Age: the Proclamation raises the minimum working age from
fourteen years of age to fifteen while maintaining the list of tasks and conditions permitted to young
workers.
Added Employee Benefits: The new Proclamation extends existing maternity leave from 90
consecutive days to 120 consecutive days. The 30 working days are granted prior to the mother
giving birth and 90 consecutive days subsequent to birth. Furthermore, the law introduces, for the
first time, paternity leave of three consecutive days for male employees. This is less generous from
the 5 working days paternity leave that is granted to civil servants under the Civil Service law. Note
to our Readers: the draft version of the Labour law amended the 90 Consecutive days to
90 working days.  However, under the published version of the new Labour Law, clause 88(3) was
amended providing that a maternity leave 120 consecutive days. However, clause 88 (4) of the
draft law was maintained which refers to working days.  We will update this note if there is an
amendment to the law or a revised version of the law is published.)
Amendment to Annual Leave Entitlements:  The new Proclamation increases employees’ annual
leave days from 14 working days on the first year of service to 16 working days. An additional one
leave day will be granted for every two years of services as opposed to every year of services as it
was currently provided.
Extended Probation Period:  probation period is doubled from 45 consecutive days to 60 working
days. A probation period gives an employer the opportunity to test suitability of the employee for the
position. Both employees and employers will have the right to terminate contracts without notice and
with no legal consequences prior to the expiry of the probation period. The new proclamation retains
the existing rules that a probation period must be agreed between the parties and it must be done in
writing. The law does not presume probation to exist in the absence of a written undertaking. At the
completion of a probation period, if the employment is not terminated, then a contract of employment
for an indefinite period is presumed to have been created.
Adjustment to Overtime Work and Payment: the new Proclamation retains the maximum working
hours to 8 hours a day and 48 hours a week. Work done in excess of these hours is considered as
an overtime work. Under the new law, maximum overtime work is capped at 4 hours per day and
maximum of 12 hours per week. The maximum monthly and annual overtime hours of 20 and 100
hours respectively were removed. Depending on the time of work, the rate of payment for overtime
work has also slightly increased from 1.5 multiplied by daily hourly rates to 1.75 multiplied by daily
hourly rate. As the previous legislation, the new Proclamation does not offer any flexibility for parties
to agree the extension of an overtime beyond the limit stipulated by law.
Vicarious Liability for Employers: under the existing labour law, employers will be liable for any
unlawful acts prohibited by law. These unlawful acts are those including but not limited
to, discrimination of employees based on ethnicity, sex, religion, political outlook, HIV/ AIDS or
disability or any other grounds; terminating a contract of employment contrary to the law; compelling
employees to execute any task which is hazardous to life; committing sexual harassment or sexual
assault at workplace; and physically abusing anyone in a work place. The new Proclamation holds
the employer liable if these acts are committed by any of its management employees. The effect of
commission of these acts by either the employer or the managerial employee is that it will expose
the employer, depending on the nature of the act committed, to a fine of up-to 60,000 birr or if
repeated more than three times, for closure of its organization.
Employee Liability: the Proclamation expands the list of unlawful acts by employees (which under
existing law include endangering life and property of the employer, taking away properties, reporting
to duty while intoxicated, refusing to observe safety and accident prevention and refusing to submit
to medical examination with the exception of HIV/AIDS),  to include the following acts: a) making use
of falsified document or an attempt thereof: b) conducting meetings during working hours in
disregard to the time assigned by the collective agreement or without obtaining the permission of the
employer; c) commit sexual harassment or sexual violence at workplace; and d) physically abusing
anyone in a work place. The implication of the above unlawful acts is that the employer will be able
to terminate the contract of employment without prior notice to the employee within 30 days of
knowing the existence of commission of such acts.
New Rules on Sexual Harassment and Sexual Violence: The Proclamation introduced a new
regime to regulate workplace sexual harassment and sexual violence. Sexual harassment includes
any act that is made to persuade or convince another through utterances, signs or any other
manner, to submit for sexual favor without his/her consent. Sexual violence includes any sexual
harassment accompanied by force or any attempt thereof. Accordingly, employees that have
suffered sexual harassment or sexual violence will be entitled to terminate their contracts without
notice, and will also be eligible for severance payment and compensation. The law provides a higher
amount of compensation payment for employees who are forced to terminate their contract, without
notice, for reasons of sexual harassment and sexual violence. Forced termination of contracts by
employees for reasons that are unlawful acts of the employer will entitle the employee to one month
compensation payment whereas sexual harassment and sexual violence victims will be granted
three months of compensation payment.
Grounds for Termination of Contracts: the existing Labour Proclamation allows employers’ ability
to terminate contract of employments only to specific conditions provided by law. Any termination
that is not in line with the labour law will be deemed as unlawful termination. An unlawful termination
of a contract by an employer may have two consequences. a) It may either allow the employee to be
reinstated to his/her previous position or b) it may entitle the employee severance and compensation
payments. Under the new proclamation, the same approach is retained and grounds for termination
of contracts (with notice and without notice) are exhaustively listed. However, there were some
adjustments made to the maximum number of days that employees may be late or absent from
work. Failure to adhere to these numbers of days will entitle the employer to a summary termination
of employment contracts. Accordingly, the new law provides that reporting late to work eight times in
six months period; and absence from work for a total of five days in six months’ period while being
warned in writing of such a problem will lead to termination of contracts without notice. Furthermore,
employers will be able to terminate contracts of employment with prior notice, if there is a manifested
loss of capacity or skills on the part of the employees. Employer must, however, prove this by
creating a performance evaluation system.
Redundancy: Under the existing law, if an organization is compelled to reduce its work-force, the
organization is permitted to prioritize and retain those employees that have the highest skills and
level of productivity. In case where there are employees with equal skills and rates of productivity,
the law provides for the order of reduction that should be made. Thus, employees that have the
shortest length of service and those having fewer dependents will be reduced first while expectant
mothers and mothers within 4 months of post-natal will be reduced last. The new Proclamation adds
those employees with disability (regardless of how the disability was acquired) not be subject to
reduction prior to others. Other than this slight amendment, the law maintains the strict rules and
procedures that must be followed in order to reduce any workforce.
Administrative penalties: the Proclamation increases the administrative penalties to be imposed
on employers violating the rules of the Labour Proclamation. Accordingly, the range for fines
attributed to various violations under the Proclamation has increased from 300-1200 to 5,000 –
70,000. In practice, these administrative penalties were seldom enforced by the MoLSA.
Observations
Revision of the labour law has gone through various drafts and discussions over the past years.
Since the enactment of the previous law in 2003, the Ethiopian labour force has dramatically
changed in the last 16 years, with new industries requiring new set of skills and a shift employer-
employee relations. A large majority of the provision of the Proclamation 377/2003 were directly
transplanted to the new law verbatim. Although the Proclamation attempts to address some practical
challenges encountered due to gaps in legislative drafting, the new law does not introduce new
conceptual framework or shift to create a more private sector/investment friendly legal regime.
Compared to the length of time it took to revise the law and the changes that were seen on the
ground, many of the revisions under the Proclamation are not fundamental in nature. The new law
does no exhibit any shift in policy, for example, in terms of relaxing some of the more restrictive rules
on the ability of the employer to terminate contracts. It does not offer contractual freedom to the
parties and flexibility to allow an employer and employee to on agreed terms different from what is
stipulated under the law.   Unless it is included in a collective agreement, the law leaves little space
for a worker and an employer to independently agree the terms of an employment.

Secondly, the scope of the labour law is applicable to all employment relations and does not offer
industry specific exceptions. With the exception of managerial employees and the diplomatic
community, the Proclamation is applicable to all sectors across the board. This does not take into
account industry specific labour needs and requirements and the different labour dynamics that
should be subject to different regulatory considerations. By way of an example, countries adopt
different labour rules for industrial undertakings and for service sectors.  Although manufacturing and
industrialization is a key development vision for the country, this is not sufficiently reflected in the
labour law.

Labor Proclamation 1156/2019

has been issued in September 2019 by the House of People’s Representatives of Ethiopia replacing
Proclamation no 377/2003, which was in force for the last 16 years. The law has been enacted with a
view to securing durable industrial peace, sustainable productivity and competitiveness that will
contribute to the overall development of the country. The Proclamation has introduced new concepts. It
has also modified some of the existing provisions which were unclear, and therefore, prone to various
interpretations. A few other provisions of Proclamation 377/2003 have been repealed altogether. The
following are among the major shifts made by the new law

1.New Rules Introduced

(a) Sexual Harassment and Sexual Violence

The new law obviates the need for interpretation of sexual harassment and sexual violence by providing
definitions. It also provides prohibitions and punishments specific to the acts. The commission of either
or both of the two acts at workplaces either by the employee or employer may be used as grounds of
termination of an employment contract without notice by the employer or the employee respectively.
Additionally, an employee who resigns on the ground of sexual harassment or violence is entitled to
severance pay as well as a compensation amounting to 90 times the daily rate of the last week of service
of the employee.

(B) Social Dialogue

Social dialogue is recognized by the new proclamation as an alternative dispute settlement mechanism
to resolve conflicts between employers and employees or their respective associations.

(C) Paternity Leave

This concept was first introduced in Ethiopia by the Civil Servants Proclamation No. 1064/2017. The new
labor law adopts the concept by granting a male worker a paternity leave for 3 working days with pay.
The English version entitles any man (married or unmarried) for paternity leave while the Amharic
version only refers to married man. The civil servants proclamation, on the other hand, makes reference
to married man both on the English and Amharic version.   The benefit is lesser compared to civil
servants who are entitled to a paternity leave with pay for 10 working days.

(D) Minimum Wage

The introduction of minimum wage may be cited as one of the major changes brought by the new law.
The Council of Ministers is mandated with issuing a Regulation to establish and determine the powers
and responsibilities of a Wage Board that will periodically revise minimum wage.

2. Added clarity to existing rules

In addition to the introduction of new rules, the proclamation has clarified existing concepts which
lacked clarity and were creating confusions.

(a) Contract of personal service

The phrase contract of personal service was unclear under the repealed proclamation. Proclamation
377/2003 neither defined the concept nor listed matters that are considered private service. With a
view to solving this issue, the new law defines private service as well as provides examples. It defines it
as an employment of a non-profit careening, cleaning, guardianship, gardening, driving for the employer
and his family consumption.

(b) Managerial Employee

Previously, a person who has power ‘to assign and take disciplinary measures against employees’ was
considered as a managerial employee. This made it harder to determine the types of disciplinary
measures that constitute managerial nature. Taking into consideration the wider scope of ‘taking
disciplinary measures’ and the associated confusion, it has been amended as a person who can ‘dismiss
or assign employees’.

Furthermore, the term ‘discrimination’ in employment relationships has been defined. Additionally,
reference has been made to the definition in the commercial code with regard to commercial travellers
and representatives.

3. Extension of Periods

(i) Probation Period

An employer and employee could agree to a probation period not exceeding 45 consecutive days under
the repealed law. This was intended to enable the employer to evaluate the ability and fitness of the
employee for the assigned task. In response to employers’ concern with respect to the shortness of the
time to assess the employee’s performance, this period has been extended to 60 working days in the
new proclamation. This may allow the employer to test the suitability of the employee within an
extended 3 months period.

(ii) Minimum Age for Employment

A worker who has attained a minimum age of 14 years was capable of being employed under the
repealed law. The minimum age for employment has now been increased to 15 years by the new
proclamation. Moreover, the definition of young workers has been amended so as to include workers
between 15 and 18 years of age. The new law prohibits employing a person under 15.

(iii) Overtime Work

The normal working hours have been maintained not to exceed eight hours a day and 48 hours a week.
Work done beyond this time limit is considered as overtime work. The 20 hours monthly and 100 hours
annual cap to overtime work have been lifted. Under the new law, a person may work overtime for
maximum of 4 hours in a day and 12 hours in a week. Certain modifications are also made to payment
for overtime work. Payment for work done between 6:00 AM and 10:00PM has been raised from (1.25 x
hourly rate) to (1.5 x hourly rate). Likewise, payment for work done between 10:00PM and 6:00 AM has
been increased from (1.5 x hourly rate) to (1.75 x hourly rate).

(iv) Amount of Annual Leave

The period of annual leave has been extended from 14 working days to 16 working days for the first year
of service. However, unlike the repealed law that granted an additional day for each additional year of
service, the current law grants 1 day for every additional two years of service.

In relation to this, the provision which entitled workers who are engaged in a work that is arduous or
unhealthy, to additional annual leave with pay to be fixed by collective agreement has been eliminated.

(v) Maternity Leave

An extension of 30 days post natal maternity leave is allowed by the new law. Thus, a pregnant woman
is granted a total of 120 days of maternity leave; 30 consecutive days of prenatal and 90 consecutive
days of post natal leave. In case where a woman encounters miscarriage of pregnancy and it is
confirmed by a medical certificate, the provisions for reduction of wage upon sickness will not apply.
However, unlike the civil servants’ law, the Labor Proclamation fails to specify the amount of leave the
woman who encounters miscarriage of her pregnancy is entitled to. The provision might be interpreted
as, despite the reduction of wage applicable on a worker who has been sick for more than a month, a
woman who encounters miscarriage will be entitled to 6 months sick leave with payment of 100% of her
salary.

4. Additional Obligations of the Employer

In addition to the existing obligations in the repealed law, an employer has obligations to: a) deduct
union dues from the worker’s regular wage, upon the worker’s request of such deduction in writing, and
transfer the amount into the trade union’s bank account; b) keep a register containing health conditions
of the employees Except HIV AIDS; c) Undertake registration of information on workplace location
and work related data as per the form to be prepared by the Ministry; and d) arrange awareness raising
program for the concerned workers, whenever an enterprise has work rules.

Moreover, the list of prohibited acts by the employer also includes: a) discrimination based on HIV or
disablement; b) unduly delaying collective bargaining by withholding   relevant information for the
negotiation or performing any other act contrary to good faith; c) committing   sexual harassment or
sexual assault at workplace; d) physically abusing anyone in a work place and e) coercing a worker in any
manner to work or discharge an obligation

(a) Modifications on Reinstatement of a Suspended Employee

An employer is obliged to reinstate an employee, who has been suspended and reports for work, in a
relevant position to his profession without adversely affecting his job position and wage before his
suspension. The law has added an emphasis on the conditions of reinstatement securing the employee’s
right to be reinstated in a position relevant to his profession without affecting his wage.

(B) Termination of Contract based on Loss of Capacity

An employer’s action of termination of a worker due to loss of capacity must be verified by periodical
performance assessment unless the conditions are stated in a collective agreement.

Moreover, with regard to weekly rest of a worker, where the nature of the task do not enable the
worker to make use of his weekly rest day, the employer is obliged to grant 4 working days of rest in a
month.

5. Rights and Obligations of the Employee

In addition to matters that were listed under the repealed law, the following have been newly added to
prohibitions addressed at a worker. a) Making use of falsified document or an attempt thereof; b) using
drugs; c) conducting meeting during working hours in disregard to the time assigned by the collective
agreement or without obtaining the permission of the employer; d) committing sexual harassment or
sexual violence at workplace and e) physically abusing anyone in a workplace.

(a) Repeated and Unjustified Tardiness

Repeated and unjustified tardiness was a ground for termination without notice failing a satisfactory to
explanation under the repealed law. The new law clearly specifies that being late from duty 8 times in
six months ignoring written warning may be a ground for termination. Additionally absence from work
for 5 working days in six months period may be a ground for termination without notice. This provision
has amended the previous calculation which was 5 consecutive days or 10 working days in a month.

(b) Compensation due to an Employer

The law retains the principle that a worker who terminates a contract without giving notice in
accordance with the law should pay compensation to the employer. The new law clearly states that the
amount of compensation should not exceed 30 days’ wage to be payable from the remaining amount
due to the worker. This provision seems to emphasize that the employer may not claim compensation
where there is no outstanding payment due to the employee and the later terminates the contract
without giving notice.

6. Provisions Related to Women

The new proclamation recognizes further benefits addressing the special needs of women including
provisions related to maternity leave, sexual harassment and violence. A provision acknowledging
affirmative action to women is included. Accordingly, women candidates who score equal points with
men will have right to priority in competitions for employment, promotion and related opportunities.

7. Content of Collective Agreement

In addition to the contents provided in the repealed law, conditions on the establishment and working
system of bipartite social dialogue and establishment of daycare may be determined by collective
agreement.

8. Labor Courts

(a) Labor Divisions of Federal and Regional Courts

Unlike Proclamation No. 377/2003, the new law stipulates that labor divisions may be established both
at federal and regional courts at different levels. The mandates which were given to labor divisions of
regional first instance courts under the old law are now shared with the Federal First Instance Courts as
well. In addition to the previously given mandates, the labor divisions of the federal or regional first
instance courts may entertain issues related to transfer, promotion, training and other matters of similar
nature. Similarly, the mandates of labor divisions of regional appellate courts under the repealed law are
shared /with divisions under federal appellate courts. These divisions may additionally hear and decide
on appeals against the decisions of the Board on question of law. The provision defining the jurisdiction
of labor divisions of High courts has been deleted.

9. Establishment of Labor Relations Board

Under the repealed law, permanent or ad-hoc labor relations Board could be established in regional
states to entertain cases specified under the proclamation. Currently, federal governments are allowed
to establish permanent and ad hoc labor relations board to entertain cases involving undertakings
owned by the Federal government in Addis Ababa and Dire Dawa city administration. These Boards will
be established and be accountable to the Ministry of Labor and Social Affairs.

With regard to appeal, in any labor disputes, a party dissatisfied by the decisions may lodge an appeal to
High court (both Federal and Regional). The repealed law stated that appeal may be made to Federal
High courts.  

10. The New Powers of the Ministry of Labor and Social Affairs

In addition to the powers that were listed in the repealed law, the Ministry has new mandate to issue :
a) directive on conditions of operation for private employment agencies; b) procedures on the
establishment of Permanent Advisory Board and the duties and responsibilities thereto; c) conditions for
private employment agency to participate in local employment service; d) procedures on the
requirements for the certification of private labor inspection service providers and e) procedures on the
establishment of occupational safety and health committee in undertakings.

11. Private Inspection Service

As per the new law, private labor inspection, i.e. technical inspection, consultancy or training, may be
undertaken by any person upon obtaining certificate of competence from the Ministry or another
appropriate organ. This is a newly introduced inspection system.

12. Increased Penalty for Non-compliance

The new law has provides graver penalties for acts done in violation of the provisions of the
proclamation. The amount of penalty imposed on persons who violate the provisions of the law has
been revised. The new law has increased the penalty of Birr 1200 and 10,000 limit for administrative
penalty under Proclamation No. 377/2003 and its amendment significantly. Accordingly, an employer
who fails to observe the provisions of the proclamation as listed under Art 186(1)(a-e) may be fined Birr
5000 up to 20,000 where the violation is for the first time; Birr 20,000 up to 40,000 if the violation is for
a second time and a fine up to 70,000 if committed for a third time. Where violation is repeated more
than three times closure of the undertaking could be the penalty.  

Any employer, trade union, trade union leader or a representative of an employer who fails to appear
for collective bargaining within 10 days of receiving a request or a party who does not bargain in good
faith are liable to fine from Birr 5000 up to 20,000 for violation for the first time; From Birr 20,000 up to
40,000 for violation for the second time and a fine of Birr up to 70,000 where violation is committed
more than twice.  In this case the amount of penalty is fixed in consideration to the economic and
organizational standing of the undertaking or the trade union’s general set up and the manner the fault
was committed.

A private employment agency that engages in private employment exchange service without obtaining a
license from the competent organ may be punished by 5 years to 10 years imprisonment and a fine of
Birr 100,000. Moreover, engaging in any employment exchange activity while its license is suspended is
punishable with imprisonment for a term not less than three years and not exceeding five years and
with a fine of Birr 75,000. Additionally, violation of other provisions of regulations and directives is
punishable with imprisonment of up to two years or a fine of up to Birr 75,000.

13. The Power to Institute Cases

The repealed law empowered labor inspectors to file criminal suits against violators of the proclamation.
The new law gives them the power to institute both civil and criminal action against those who
transgress the provisions of the proclamation and regulation and directives to be issued under it.

Conclusion

In general, the new law does not make a sea change to the regulation of labour relationship.  It does not,
in particular, address a number of issues that were raised by many stakeholders engaged in various
sectors. It does, however, introduce provisions that obviate some confusion and ambiguity that
surrounded some of the provisions of the repealed law.  It also introduces new rules to govern matters
that had not been addressed under Proclamation No 377/2003.

That being said, it is hard to say that all the main concerns have been addressed and major changes
introduced, especially considering the time taken for the amendment of the law. The new proclamation
still falls short of allowing employers and employees to freely determine conditions of work by their
mutual agreement. In particular, it does not leave space to parties to an employment contract to
regulate their relationship in view of the peculiarities of the sector, the type of work required and even
the need of some employees, perhaps. Moreover, modern elements of the industry, such as technology
transfer and intellectual property rights have not been addressed in the law. Besides, unlike the Civil
Servants’ Proclamation, the new labor law

PROCLAMATION NO. 104/1998

PRIVATE EMPLOYMENT AGENCY PROCLAMATION

WHEREAS, The participation of individuals and private entities in the employment services has become
necessary;

WHEREAS, it has particularly become necessary to protect the rights, safety and dignity of Ethiopians
employed and sent abroad

NOW, THEREFORE, in accordance with Article 55(1) of the Constitution of the Federal Democratic
Republic of Ethiopia, it is hereby proclaimed as follows:
1. Short Title

This Proclamation may be cited as the “Private Employment Agency Proclamation No. 104/1998”.

2. Definitions

In this Proclamation, unless the context otherwise requires;

1) “Private Employment Agency” means any person, independent of government bodies, which
performs one or two of the following employment services without directly or indirectly receiving
payments from the worker;

(a) services of matching offers of and application for local employment without being a party to the
employment contract;

(b) services of making a worker available locally or abroad to a third party by concluding a contract of
employment with such a worker.

2) “License” means a certificate of competence issued by the competent authority to a private

employment agency enabling the agency to engage in employment service activities;

3) “Worker” shall have the meaning as defined in the Labour Proclamation No. 42/1993.

4) “Competent Authority” means the Ministry or a Regional Authority responsible for the
implementation of labour laws in the Region;

5) “Minister” or “Ministry” means the Minister or Ministry of Labour and Social Affairs respectively.
6) “Person” means any natural or juridical person.

7) Provisions of this proclamation set out in the masculine gender shall also apply to the feminine
gender.

3. Scope of Application

1) Notwithstanding the provisions of Article 3(2)(d) of the Labour Proclamation No. 42/1993,
Proclamation No. 42/1993 shall, for the purpose of this proclamation, be applicable to an Ethiopian
employed to work abroad for personal services of non-profit making purposes.

2) Without prejudice to Article 172 of the Labour Proclamation No. 42/1993, any Ethiopian may be
allowed to go and work abroad only through the private employment agency unless the Minister
permits the direct recruitment by an employer.

3) Any labour dispute and other dispute arising under Article 15 of this Proclamation between the
agency providing a service specified in Article 3(1)(b) of this Proclamation and the worker may be settled
in accordance with Proclamation No. 42/1993.

4) This Proclamation shall not relieve any private employment agency of its obligations imposed by
other laws.

4. Requirement of License

Any person who wishes to operate a private employment agency shall have to obtain a license from the
following authorities;1) without prejudice to Sub-Article 3 of this Article, from the Regional Authority
responsible for the implementation of labour laws, if the employment service is confined within that
region;

2) from the Ministry if the employment service is to be rendered in two or more regions;

3) from the Ministry if the employment service is to hire and send abroad an Ethiopian worker to a third
party.

5. Condition required to obtain a licenseAny person who applies to operate a private employment
agency in accordance with this Proclamation shall fulfill the following:

1) present a document that shows he has a business registration for the operation of a private
employment service;
2) if he is providing a service of hiring and sending a worker abroad in accordance with this proclamation
to present a document that shows he has fulfilled the obligations of guarantee specified in Article 14 of
this Proclamation;

3) pay a license fee to the competent authority the amount of which shall be determined by the
regulation issued in accordance with this Proclamation;

4) present a chart that shows the organizational structure and the list of members involved in the
employment service activities;

5) notify the address of his office and of his representative;

6) present other relevant documents as may be required by the competent authority.

6. Issuance of License

The competent authority shall, upon the fulfillment of the required conditions to obtain a license under
this Proclamation, issue a license to the applicant.

7. Disqualification

A person punished for his engagement in an illegal employment activity shall not qualify for a license to
operate a private employment agency.

8. Validity of License

A license issued in accordance with this Proclamation shall be valid for two years subject to renewal
every year.

9. Opening of Office

1) Any private employment agency shall open an office for the operation of its activities.

2) A private employment agency which hires and sends Ethiopians abroad for work shall have a branch
office or a representative in the country where he sends the worker.

10. Displaying of License

Any private employment agency shall display the license issued to him in accordance with this
Proclamation in his office visible to other people.

11. Transfer of Office

Any private employment agency shall notify the competent authority prior to transferring his office to
another place.

12. Obligation of a Private Employment Agency

1) In addition to the obligations specified in this proclamation and other laws, a private employment
agency shall have the following obligations:

(a) to prepare and submit for approval to the competent authority a procedure regarding the
recruitment and registration of job-seekers;

(b) to pay the required fee for issuance, renewal and replacement of the license determined by the
regulation issued in accordance with this Proclamation:

(c) notify the competent authority prior to closing his office;

(d) to submit the contract of employment to the competent authority for approval and registration of a
copy thereof if the agency provides the service specified in Article 2(1)(b) of this Proclamation.

2) In addition to the obligations provided for in sub-Article (1) of this Article, a private employment
agency which sends a worker for work abroad shall have the following obligations:

(a) to submit a legal document establishing a branch office or appointing a representative abroad in
accordance with Article 9(2) of this Proclamation and notify the address of same;

(b) provide the necessary orientation to the worker with regard to the work and the country of his
employment before the contract of employment is signed;

(c) where the worker wishes a full or partial remittance of his wage to his country, to facilitate same in
accordance with the laws of the country of employment;

(d) to submit a report to the Ministry annually or as may be required regarding the situation of the
worker in the country of employment;

(e) to respect the moral and culture of the society while performing the activity;

(e) to respect the morel and culture of the society while performing the activity;

(f) to submit for approval to the Ministry prior to extending or modifying the contract of employment
and notify the Ministry upon termination of the contract;

(g) upon termination of the 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 wage he was earning;
(h) to keep a register containing the name, age, educational level, qualification, type of work, position,
the amount of wage, duration of the validity of the contract and other particulars which may be
required by the Ministry and notify same to the Ministry as may be required;

(i) notify to the Ethiopian Embassy nearest to the country of employment of the workers sent abroad
and cause their registration by same Embassy.

13. Suspension or Cancellation of License

Without prejudice to Article 18(2) and (3) of this Proclamation, the competent authority may suspend or
cancel a license on the following grounds:

1) where it is found that the license has been issued to the private employment agency based on
deceitful document;

2) where it is found that the private employment agency or his representative has received payment in
cash or in kind from the worker; or

3) where it is found that the private employment agency has violated other provisions of this
Proclamation or regulations and directives issued in accordance wit this Proclamation as well as other
laws.

14. Requirement of Guarantee

1) Any private employment agency which sends a worker abroad for work in accordance with this
Proclamation shall, for the purpose of protecting the rights of the worker, deposits the following
amount of money in cash or its equivalent in a confirmed and irrevocable bond from a recognized
financial institutions;

(a) for up to five hundred workers 30,000 US dollar or its equivalent in Ethiopian birr;
(b) for five hundred and one to one thousand workers 40,000 US dollar or its equivalent in Ethiopian
birr;

(c) for above one thousand and one workers 50,000 US dollar or its equivalent Ethiopian in Birr.

2) Where the guarantee fund deposited in accordance with sub- Article (1) of this Article is used up or
reduced for the protection and enforcement of the rights of the worker the private employment agency
shall replenish the fund within ten days.

3) The Ministry may release the guarantee fund within 3 months upon the termination of the
employment contract and the fulfillment of the legal rights of the worker sent abroad by the private
employment agency unless a claim connected with the worker’s rights and benefits is pending before an
authorized body empowered to adjudicate such claim.

15. Protection of the Worker’s Right

1) A contract of employment concluded between the private employment agency which sends workers
abroad and a worker shall fulfill the minimum working conditions laid down in the laws of Ethiopian and
shall in no circumstance be less favorable to an Ethiopian than the rights and benefits of those who work
in a similar type and level of work in the country of employment.

2) The Private employment agency shall, in addition to the rights and benefits provided for in sub-Article
(1) of this Article, be responsible to ensure the rights, safety and dignity of the worker.

16. Inspection
1) The competent authority shall have the power to enter the office of any private employment agency
during any working hour without prior notice, to examine or inquire relevant documents.

2) The competent authority shall be responsible to supervise and control that the rights of the worker,
employed by the agency which provides a service mentioned in Article 2(1)(b) of this Proclamation, are
not infringed where the license is returned before the date of its expiry.

17. Responsibility

The private employment agency and the third party shall jointly and severally be responsible or liable for
violation of the contract of employment concluded with the worker to provide the service mentioned in
Article 2(1)(b) of this Proclamation.

18. Penalty

Unless the provisions of the Penal Code provides more severe penalties, any person:

1) without having obtained a license in accordance with this Proclamation:

(a) who performs employment services in Ethiopia, is punishable with imprisonment for a term of not
less than three years and not exceeding five years and a fine Birr 10,000 (Ten thousand Birr).

(b) who sends an Ethiopian national abroad for work, is punishable with imprisonment for term of not
less than five years and not exceeding ten years and a fine birr 25,000(twenty five thousand Birr).
2) Who violates this Proclamation and regulation and directives issued in accordance with this
Proclamation apart from what are specified in Sub-Article(1) of this Article and without prejudice to
Article 13 of this Proclamation, is punishable with imprisonment upto two years or a fine upto birr
10,000(Ten thousand Birr).

3) Where the human rights, and physical integrity of an Ethiopian sent abroad for work have been
injured, the punishment mentioned in sub-Article (1)(b) of this Article may be increased from 5 to 20
years regorous imprisonment and a fine upto Birr 50,000(Fifty thousand Birr).

19. License Fees

The amount of fees required for a license issued in accordance with this Proclamation shall be
determined by the regulations of the Council of Ministers.

20. Amendment

Article 176 of the Labour proclamation No. 42/1993 is hereby deleted and replaced by the following new
Article.

“Article 176.

176 Prohibition

“No persons or entity shall perform employment services for consideration from a worker.”

21. Power to Issue Directives

The Minister may issue directives necessary for effective implementation of this Proclamation.

22. Effective Date

This Proclamation shall enter into force as of the 5th day of March, 1998.

Done at Addis Ababa, this 5th day of March, 1998.

NEGASO GIDADA(DR.)

PRESIDENT OF THE FEDERAL DEMOCRATIC

REPUBLIC OF ETHIOPIA

does not cover arrangements such as secondment and transfers between institutions.

The Rights of Disabled Persons to Employment

We make no claims to the veracity of this law. See the full copyright / disclaimer notice. If you
find a mistake, please let us know!

WHEREAS, it is evident that there are many people within that society suffering from disabilities due to
natural and manmade causes.
WHEREAS, it has been realized that disabled persons have got less job opportunities, despite the fact that
some of them have acquired the appropriate training and skills through their own efforts and the assistance
of the Government and humanitarian organizations;

WHEREAS, it has become necessary to stop such discriminations and protect the rights of disabled persons to
compete far and get employment on the basis of their qualifications;

NOW, THEREFORE, in accordance with Article 9(d) of the Transitional Period Charter, it is proclaimed as
follows.

1. Short Title

This proclamation may be cited as “The Rights of Disabled Persons to Employment Proclamation nß
101/1994”.

2. Definitions

In this Proclamation, unless the context requires otherwise:

1. “a disabled person” means a person who is unable to see hear or speak or suffering from injuries to his
limbs or from mental retardation, due to natural or man-made causes; provided, however, that the term
does not include persons who are alcoholics, drug addicts and those with psychological problems due to
socially deviant behaviours;

2.”office or undertaking” means any government office or an undrtaking governed by the Labour
Proclaination No. 42/1993.

3. Protection of thr Rights of Disabled Persons

1. disabled person having the necessary qualifications shall, unless the nature or the work dictates otherwise
have the right to compete and to he selected for.

a) a vacant post in any office or undertaking through recruitment, promotion, placement or transfer
procedures:

b) a training programme to be conducted either locally or abroad.

2. No selection criteria shall refer to the disabilities of a candidate unless the nature of the work dictates
otherwise.

3.Any disabled person shall have the nght to get the salary and other benefits of the position he occupies.

4. A disabled person shall he provided, by his employer or the training institution as the case may be, with
equipment and materials necessary to carry out his duties or to pursue his training.

4. Vacancies to be Reserved for Disabled Persons

1. Posts suitable for disabled persons shall be identified and reserved from among vacancies created in
offices and undertakings.
2. Only disabled persons may compete for posts reserved pursuant to this Article.

5. Responsibilities of Disabled Workers

1. Any disabled worker shall assume full responsibility in discharging the functions of his position.

2. A disabled worker cannot use disability as a defense in case of failure or fault in discharging his duties.

6. Implementation of the Proclamation

1. Without prejudice to the power of the Council of Ministers to issue regulations where necessary, the
Ministry of Labour and Social Affairs and the Public Servants Administration Commission shall, as may be
appropriate, have Powers to issue directives necessary for the proper implementation of this Proclamation.

2. Any disabled person whom rights are affected because of non-compliance with the provisions of this
Proclamation and regulations and directives issued hereunder, may lodge his grievance to the organ
empowered by law to hear labour disputes.

ganization Employees Pension in Ethiopia

Private Organization Employees Pension in Ethiopia

There is a separate proclamation that provides pension for private organization employees in
Ethiopia.

Private Organization Employees Pension Proclamation No. 715/2011  (and Amendment DOWNLOAD

Proclamation No. 908/2015)

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Proclamation No. 715/2011, hereinafter the Proclamation, establishes the private organization
employee’s pension scheme which means a system established to pay benefit and provide
service to employees. The Pension Fund is administered by the Private Organization

Employees Social Security Agency

(As established by the Council of Ministers Regulation. No. 202/2011)

According to the proclamation, the retirement age of an employee of a private organization is

60 years based on the date of birth registered when he was employed for the first time.
In general, the benefits available under the proclamation are the retirement pension, invalidity
pension, incapacity pension or survivors’ pension and gratuity. Other elements of the
proclamation are discussed below particularly those relating to scope of application of the
scheme, and contribution to the private organizations pension fund.

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Persons qualified for the pension scheme

(Article 2(1), and Article 3 of the Proclamation, as amended) 

The Proclamation is applicable for private organizations employees which are salaried persons
employed in a private organization for not less than forty five days for definite or indefinite
period of time or piece of work including managerial employees. However, it doesn’t include
employees engaged in cotton collection, sugar cane cutting and such other similar works
regularly repeated in the course of the year. Please note that the term private organizations
means an organization established to engage in commerce, industry , agriculture, construction,
social service or in any other lawful activity and which has salaried employees and includes
charities and associations;

Employees, who have a pension scheme or provident fund before coming into force of the
proclamation, may either decide to continue to benefit from the pension scheme or the
provident fund or agree to be covered in the current scheme.

Employees of religious organizations and political organizations and persons engaged in the
informal sector can be, upon their consent, covered by the Proclamation.

The Proclamation doesn’t apply for domestic workers, and employees of governmental
organizations, international organizations and foreign diplomatic missions.

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Contributions
(Article 10 of the Proclamation)

The contributions payable to the Private Organizations Pension Fund is, based on the salary
(gross salary earned during normal working hours) of the employee of the private organization,
11 % by the employer and 7 % by the employee, a total of 18%.

In a transitory provision (Article 57 of the Proclamation), the total contribution is raised step by
step from 12% in the first year to 18% in the fourth year as the following table indicates:
 Year By the By the Total
Employer employee

1st 7% 5% 12%

2nd 8% 6% 14%

3rd 9% ≥3rd Year =7% 16%

4th ≥4th year=11% 18%

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Payment of pension contributions

(Article 11 of the Proclamation)

Under the scheme, every private organization deducts contributions of its employees from their
salaries and pays the amount, together with its own contributions to the Pension Fund
monthly. The contribution is paid to the Pension Fund within 30 days from the last day of the
month in which payment of salary has been effected.

Failure of the private organization to deduct contributions of its employees from their salaries is
liable for payment of the same. Where a private organization fails to pay contributions for a
period of more than three months, the Agency or the delegated body has the power to cause
the deduction of the arrear contributions and additional payments from the money deposited
in its bank account. Any bank shall, when requested by the Agency or the delegated body, have
the obligation to deduct, without any precondition, the amount of contributions to be collected
from the account of the private organization and pay to the Agency or the delegated body.

A private organization which pays salary to employees covered by pension scheme shall have
the obligation to notify, in writing, to the Agency the branch of the bank and the account
number in which it has deposited money, and any change of address of the bank and bank
account within 15 days of the occurrence of such change.
It is prohibited to deduct from pension contributions for payment of service charges, money
transfer charges or debt or for any other purpose. The payment of contributions shall have
priority over any debt.

SECTION ONE
EMPLOYMENT SERVICE
172. General
Employment services shall include the
following:
1/ Assisting persons who are capable and willing to
work to obtain employment;
2/ Assisting employers in the recruitment of suitable
workers for their job positions;
3/ Determining the manner in which foreign
national are to be employed in Ethiopia;
4/ Cooperating with the concerned offices and
organizations, in the preparation of training
programmers’;
5/ Conducting studies pertaining to the labour
market;
6/ In collaboration with the concerned offices,
conducting studies relating to the manner of
improving vocational training at the country level
and disseminating same to beneficiaries and
implementing the employment policy properly.
173. Employment Exchange
Employment exchange shall include the
following:
1/ Registration of job-seekers and vacancies; and

2/ Selecting from among the registered job-seekers

and sending those who meet the requirements to

compete for the positions notified by employers.

3/ Any job seeker who has attained the age of 15

years may up on presenting the necessary

documents be registered by the organ delegated by

the pertinent authority.

174. Conditions for the Private Employment

Agencies to participate in Provision of Local

Employment Service

With the view to promote a comprehensive

national employment service, private

Employment Agencies can participate in the

sector as per the Directive that will be issued by

the Government.

175. Licensing of Private Employment Agencies

1/ Any person who desires to engage in private

employment agency pursuant to this

Proclamation shall acquire license from the

Competent Authority.

2/ The appropriate Authority shall levy service

charge prescribed by the regulation to be

issued by the Council of Ministers for

purposes of issuance, renewal or

replacement of licenses.

176. Employment of Foreign Nationals

1/any foreigner may only be employed in any

type of work in Ethiopia where he

possesses a work permit given to him by the

Ministry.

2/a work permit shall be given for an

employment in a specific type of work

for three years and shall be renewed every

year; provided, however, that the Ministry

may vary the three years limit as required.

3/ Where the Ministry ascertains that the

foreigner is not required for the work, the

work permit may be cancelled.

4/ The Ministry may, in accordance with the

law, charge service fees for the issuance,

renewal or replacement of work permit.

በተቋሙ ውስጥ የሚታዩትን የስልጠና የሰራተኞችን አቅም ከመጎልበት አንጻር የሚታዩትን ክፍተቶች መቅረፍ
ይጠበቅበታል