National Labour Law Profile: Federal Democratic Republic of Ethiopia

Contributed by: Monika M. Sommer, April 2003

Updated by: Natacha Wexels-Riser, July 20041

Historical background

Ethiopia is the oldest independent country in Africa. Unlike most other African countries, apart from a brief Italian occupation (1936-1941) it was never occupied by an European power.

Emperor Menelik II, who reigned from 1889 to 1913, is often considered as the founder of the Ethiopian nation as it exists today. He successfully united what were previously several disparate regions and peoples, and started the modernization of the country. His successor Haile Selassie I (who reigned from 1930 to 1974), continued this modernization. He revised the Constitution and sought to bring Ethiopia closer to a European type of government, introducing various welfare programs and outlawing slavery. Ethiopia joined the League of Nations in 1923.

Ethiopia was invaded by Fascist Italy in late 1935, but was liberated in early 1941 by Haile Selassie's troops with the help of the British Army.

Following much political unrest (conflict with Eritrea, severe famine), a military rebellion made a coup d'état in 1974, and Lieutenant Colonel Mengistu Haile Mariam became the head of state. The constitution was suspended and the parliament was dissolved. The monarchy was replaced by a Provisional Military Administrative Council, called the Dergue, which soon diverted from its announced socialist cause. The re-orientation of the government and national economy from capitalism to Marxism led to the Mengistu's military dictatorship until its fall in 1991. In addition to the suppression of personal liberties, this regime aggravated the economy and domestic difficulties (ethnic tensions, droughts and famine, widespread flights to Djibouti, Somalia and Sudan). In 1987, a new Marxist-based constitution was approved. With the fall of Communism and Soviet support, a coalition of rebel organizations led by Meles Zenawi, was able to conduct a revolution in 1991. The transitional government of Meles Zenawi sought to stabilize and strengthen Ethiopia, although certain human rights abuses continued (imprisonment of political opponents, journalists and trade union leaders).

Eritrea established its own provisional government in 1991 and became an independent nation in 1993.

A new Ethiopian constitution, drafted by an elected constituent assembly and approved in 1994, set up a bicameral legislature and a judicial system, as well as it guaranteed equal rights and freedom of expression to all Ethiopian citizens. In May 1995, free and democratic elections were held and Meles Zenawi was elected Prime Minister. Parliamentary national multiparty elections were held again in May 2000. Prime Minister Meles was re-elected to his post in October 2000 and a new president, Lieutenant Girma Wolde-Giorgis, was elected in October 2001.

A border war between Ethiopia and Eritrea broke out in 1998 when Eritrean forces occupied disputed territory. A cease-fire agreement was signed in June 2000, and a treaty was ratified in December 2000. The border was established by the Hague Permanent Court of Arbitration in April 2002, but Ethiopian rejection of the ruling has delayed finalization of the border, prolonging the war between the two countries, and with it, the flow of refugees.

Constitutional framework

The Constitution of the Federal Democratic Republic of Ethiopia (Proclamation No. 1/1995 hereinafter "the Constitution") was adopted on 8 December 1994 and came into effect in August 1995, creating the second republic, formally known as the Federal Democratic Republic of Ethiopia ( F.D.R.E .) Under this constitution, Ethiopia is a federation governed by two federal assemblies: the legislature, known as the Council of Peoples' Representatives (CPR), and a smaller, supervisory senate, the Federal Council (FC). First elections for fourteen newly created regional assemblies were held in July 1992. The number of regions was subsequently reduced; there are now nine autonomous regional state councils (municipal councils for Addis Ababa and Dire Dawa). The regional boundaries redraw the previous provincial divisions through which the highly centralized governments administered the country for much of the 20th century. The new regions are distinguished primarily along linguistic lines, with five ethnic groups (Oromo, Amhara, Tigrayan, Somali and Afar) having designated regional states. The boundaries of sub-regional units, woreda , remain largely unaltered.

The regional authorities have, in theory at least, wide-ranging economic powers. Since the provisional legislation in 1992 the administrative framework for a unique brand of “ethnic federalism” has been created. Ethiopia's federal constitution allows for the secession of individual regions or linguistic groups, termed nationalities.

The highest executive powers of the Federal Government are vested in the Prime Minister and in the Council of Ministers (Chapter 8 of the Constitution).

The Prime Minister is elected by the House of Peoples' Representatives from among the members of this House. He or she is the chief executive, the chairperson of the Council of Ministers and the Commander-in-Chief of the National Armed Forces. The Prime Minister ensures the implementation of laws, policies, directives and other decisions adopted by the House of People's Representatives or the Council of Ministers, as well as foreign policy.

The term of office of the Prime Minister lasts for the duration of the mandate of the House of People's Representatives.

With the consent of the House, the Prime Minister has the power to dissolve the House of People's Representatives before the expiry of its term, in order to hold new elections (Article 60). In this case, the previous governing party or coalition continues as a caretaker government, with limited powers.

The Council of Ministers

In accordance with the notion of ethnic federalism which underpins the constitution, the cabinet includes representatives from the country's principal nationalities.

The Council of Ministers ensures the implementation of laws and other decisions adopted by the House of People's Representatives. It draws up the annual budget, which shall then be approved by the same House. It formulates the country's foreign policy and implements it.

The Prime Minister and the Council of Ministers are responsible before the House of People's Representatives.

The President

The President of the F.D.R.E is the Head of State (Article 69, Chapter 7 of the Constitution). The term of his or her office is six years and cannot be elected for more than two terms. The President is elected by a two-thirds majority vote of a joint session of the House of Peoples' Representatives and the House of Federation.  

The President has limited powers. He opens the joint session of the House of People's Representatives and the House of the Federation at the start of their annual sessions. He proclaims laws and international agreements in the Negarit Gazette , after their approval by the House of People's Representatives. Upon recommendation of the Prime Minister, he or she appoints ambassadors and grants high military titles (Article 71).

Legislative power

The Constitution establishes two Federal Houses: the House of People's Representatives, and the House of the Federation (Article 53).

Legislative authority in the Federal Democratic Republic of Ethiopia is vested in the House of Peoples' Representatives, which has the power of legislation in all matters assigned to it by the constitution (Article 55). Tenure of the House is five years.

Members of the House of Peoples' Representatives are elected on the basis of universal suffrage and by direct, free and fair elections held by secret ballot. However, special representation is provided on the basis of nationalities, i.e. the different ethnic groups of Ethiopia. All decisions of the House of Peoples' Representatives are taken by majority vote of the members present and voting. Laws deliberated upon and passed in this way are submitted to the President for signature. If the President does not sign the law within fifteen days after it is submitted to him, the law takes effect without his signature (Articles 57 and 59 of the Constitution).

The members of the House of the Federation are elected by their respective State Councils. Their mandate is five years. The House of the Federation has the power to interpret the Constitution (Article 62). It deals with matters relating to the right of peoples to self-determination, and secession issues.

The Judiciary

The federal constitution provides for an independent judiciary. A notable feature of the Constitution of the Federal Democratic Republic of Ethiopia is that it accords a dignified and crucial position to the Judiciary. However, most judges serving under the Dergue were dismissed and, though in theory the regions have extensive judicial powers, devolution has tended to weaken judicial autonomy.

Ethiopia has a dual system of courts - a Federal Judiciary with the Supreme Court at the top along with a separate and parallel judicial system in each Regional State. The Federal Supreme Court, the Federal High Court and the Federal First Instance Court constitute a single Federal Judiciary, having jurisdiction over all cases pertaining to federal matters. Likewise, there is a similar court structure in each Regional State that has jurisdiction over all regional matters. The Judiciary has to dispense justice not only between individuals, but also between the state and the citizens.

Independence of the Judiciary is enshrined in the Constitution for the first time (Article 78 (1) of the Constitution ), which has been considered a historic landmark. The judges of the Federal Courts are appointed by the House of Peoples' Representatives and the Regional State judges are appointed by the Regional State Council, after consultation with the Federal Judicial Administration Commission and the State Judicial Administration Commission, on recommendation by the Prime Minister (Article 81 of the Constitution ).

Once appointed, the judges hold office until they reach pension age, which is sixty years according to the law. A special procedure has been laid down for removal of judges on the grounds of incompetence, inefficiency or misbehaviour. The decision of the Judicial Administration Commission has to be approved by the House of Peoples' Representatives or the concerned State Council in all cases (Articles 79(4) and (5) of the Constitution ).

The Federal Supreme Court draws up and submits the Federal Court budget to the House of Peoples' Representatives for approval and, upon approval, administers the budget. The Federal Judicial Administration Commission decides the transfer, salary, allowance and other benefits of federal judges.

Labour rights in the Constitution

The Constitution of Ethiopia contains a full chapter (Chapter 3) on fundamental rights and freedoms. The fundamental rights have been grouped under the headings, “Human Rights” and “Democratic Rights”. The Constitution guarantees rights and freedoms, inter alia equality before the law, equal protection under the law, freedom of speech and expression, freedom of religion, belief and opinion, freedom of assembly and association, freedom of person, freedom against jeopardy and ex post facto laws, the right to property.

Among these fundamental rights, a whole range of general principles of labour rights are firmly anchored in the constitution. The constitution provides for principles such as the right of the security of the person (Article 16 of the Constitution), the prohibition against inhuman treatment and the abolishment of slavery and servitude (Article 18 (2)) and forced and compulsory labour (Article 18 (3) and (4) of the Constitution). General Freedom of Association is laid down in the Constitution (Article 31, “for any cause or purpose”), and specified in Article 42, “Rights of Labour”, which reads: “Factory and service sector employees, peasants, agricultural workers, other rural workers, government employees below a certain level of responsibility and the nature of whose employment so requires, shall have the right to form associations for the purpose of improving their economic and employment conditions. This right shall include the right to form trade union and other associations, and to negotiate with their employers and other organizations affecting their interests”. The Right to Strike is explicitly mentioned in Article 42 (1) b) of the Constitution. This article, in its paragraph 2, also lays down the right to reasonable limitation of working hours, to rest, to paid leave and to healthy and safe working environment.

Article 35 of the Constitution deals with the rights of women, such as equality with men (Article 35(1)), in particular in employment, promotion, pay and the transfer of pension entitlements (Article 35(7), and 42 (1) d)). The Constitution grants the right to maternity leave with full pay, as well as prenatal leave with full pay, in accordance with the provisions of the law (Article 35(4) a) and b)).

Pursuant to Article 36 on the rights of children, “every child has the right not to be subject to exploitative practices, neither to be required not permitted to perform work which may be hazardous or harmful to his or her education, health or well-being”.

Labour regulation

The evolution of Labour Law in Ethiopia

Talking about Labour Law in Ethiopia means to basically review the history of the last 40-50 years. Present-day labour law, as a specialized law designed to protect employees' welfare, only came into existence as a result of the modern industrial development and with the rise of the status of the employee as wage earner. Ethiopia's process of modernization and industrialization – in contrast with other African countries with a history of colonization - continued slowly but surely since the times of Menelik II ( emperor of Ethiopia from 1889–1913) , and was only interrupted by the Italian invasion in 1935 and the following tumults of World War II. Nevertheless, only the post war years allowed the further development of individual and social rights in line with the attempt to economical development.

At the very beginning, the workers' movement in Ethiopia was rather corporative, taking the form of the traditional Ethiopian organizations, such as “ekub” and “edir”, local self-help societies that provide services and mutual aid and protection of the interest of their members. One of the first workers' organization with the pattern of a modern trade union was the “Franco-Ethiopian Railway Company Workers' Association”, founded in 1947. But it was not before 1961 that the first union was registered under the Civil Code (Civil Code Proclamation, No. 165/1960).

In 1963 the first formal labour law (on collective labour relations) was established with the “Labour Relations Proclamation No. 210/1963”. This proclamation recognized the rights of associations of employers and workers, as well as a system of collective bargaining, and it set up machinery for the settlement of trade disputes – the Labour Relation Board. Consecutively, in 1963 the “Federation of Employers of Ethiopia”, and in 1964 the “Confederation of Ethiopian Labour Unions” – CELU, were founded.

However, individual labour relations were treated exclusively like any other service contract according to the regulations of the Civil Code.

During the Dergue period (1974-91) as part of the socialist order of state and society, labour law was based on the public ownership of the means of production and was subject to central planning and central management. The Labour Proclamation No. 64 of 1975 superseded the imperial Labour Relations Proclamation, and contained almost all provisions of a socialist labour law. There was no autonomy with regard to the conclusion of collective agreements as a form of independent control over working life exercised by freely constituted trade unions. There were no employers' organizations, and no contractual freedom between employer and employee.;

Until recently, the main source of labour law, the Labour Proclamation, Proclamation No. 42/1993, was developed in the post-socialist time, marking the overcoming of the centralized state-economy towards a market oriented, pluralistic society.  

The new Labour Law

Ethiopia was criticized for several years by the ILO Committee of Experts, which noted serious discrepancies between the national legislation and the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87). It was partly in response to the observations made by the House of People's Representatives adopted Labour Proclamation No. 377/2003, effective since 26 February 2004. This text repealed Labour Proclamation No. 42/1993 (as amended by Proclamation 88/1994). It has become the principal source of labour law in Ethiopia. So far the Committee of Experts has not published its comments on the new law.

The new statute represents an important tool for unions and employers to participate in all labour matters. The innovation concerns the right of workers, without distinction whatsoever, to form organizations of their own choosing and the right of these organizations to organize their activities without interference by the public authorities and not to be dissolved by administrative authority (Article 114 (1), (2) and (7)).

Labour Proclamation 377/2003 amends the previous Labour Proclamation on the following points:

  • It defines “managerial employees” in Article 3 (2) c);
  • It introduces an obligation of employers to maintain records;
  • It tightens the legal procedure by setting several new deadlines;
  • It introduces a clear ban for compulsory HIV/AIDS testing (Article 14 (2) d);
  • It strengthens the workers' position in case of termination (Article 27 (2) and (3);
  • It clarifies regulations on severance pay and compensation, disablement payment and dependants benefits (Arts. 39, 40, 109, 110);
  • It creates the full guarantee of freedom of association by abolishing trade union monopoly (Article 114), provided that the number of members of the union is not less than ten;
  • It recommends regulations on trade union property to be included into the constitution of workers' organizations (Article 117 (12) (new));
  • It clarifies the cancellation of a union to be effective only after a court decision (new Article 120 (1));
  • It introduces a simpler system of collective bargaining and labour dispute settlement, with specified time limits to speed up the resolution of conflict (Articles 130 (2), 142 (3), 143 and 151);
  • It intends to improve the efficiency of the Labour Relation Boards (Articles 145, 1474 (4), 149 (6), 150, 153 and 154);
  • It restricts the definition of “essential services” (Article 136 (2)), excluding railway and inter-urban bus services, filling stations and banks, thereby entitling workers or employers of these undertakings to the right to strike or lockout.

Other sources of labour regulation

The major sources of labour law are federal regulations, above all the new Labour Proclamation No. 377/2003, some collective agreements, work statutes and some government's ordinances, for instance in the field of occupational Safety and Health regulations. However, as Article 3 (2) of the Labour Proclamation excludes certain groups of workers from the application of the Proclamation, the following Acts may be considered, too:

The Civil Code (Civil Code Proclamation, No. 165/1960), title XVI, “Contracts for the Performance of Services”, specifically Articles 2515 to 2639, which contain regulations on general employment contracts, specific forms of employment, such as for domestic servants living in, ed alter, and wage regulations;

Proclamation No. 260/1984 and the regulations issued by the Ministry of Education for the employees of public schools, as amended by Proclamation No. 217/2000 .

The Central Personnel Agency and Public Servants Order of 1961 (as amended by Order No. 28/1962) and the Public Service Regulations No. 1/1962 (contemporarily under review), which apply to all public servants and state employees.

Contract of employment

Permanent and fixed-term contracts of employment

As a rule, the contract of employment is concluded for an unlimited period (Article 9, Labour Proclamation, No. 377/2003),2 except for those listed under Article 10 that allows certain contracts for a definite period of time or a definite piece of work.

The duration of a fixed-term contract must be set according to objective conditions such as a specific end date, the completion of a specific task, or the occurrence of a specific event. It must also in principle be based on the justification, which are specified under Article 10 (1) to (7), which comprises among others motives like the temporary replacement of a permanent worker, urgent and abnormal pressure of work, or seasonal work.

If the employee wants to claim the ineffectiveness of a limitation, he or she must take legal action within three weeks after the agreed ending of the employment contract. An employee who is employed for a fixed-term must be given treatment equal to that given to full-time employees employed to do similar work (Articles 4 (2) and 3 (2)).

Any contract of employment shall meet the requirements of Article 4 (1) to (5), namely it shall be clear, specifying the type of employment, the rate of payment and the duration of the contract. The contract shall not lay down less favorable conditions for the employee than those provided by law, collective agreements or work rules.

There is no specific form requirement, but where the contract of employment is not made in a written form, the employer shall issue a written contract within fifteen days (Article 7(1)).

Special Contracts of employment

Article 46 defines the home work contract, and entitles the Minister to give further directives. These directives are not yet proclaimed and in force.

Contracts of apprenticeship, or vocational training, which primarily intend to train young people in a profession, are considered as special contracts of employment. Articles 46 to 51 of the Proclamation not only define the nature of these contracts, but poses a special obligation on the parties related to the nature of this contract, and specifies the grounds for termination.

Under Article 3 (1), the Labour Proclamation is applicable to employment relations based on a contract of employment that exists between a worker and an employer.

However, notwithstanding this general definition, Article 3 (2) of the Labour Proclamation excludes certain special groups from the application of the Proclamation, in particular:

  • contracts for the purpose of upbringing, treatment, care or rehabilitation;
  • contracts for the purpose of educating or training other than as apprentice;
  • contracts relating to persons holding managerial posts who are directly engaged in major managerial functions of an undertaking (...);
  • contracts of personal service for non-profit making purpose;
  • 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;
  • contracts relating to a person who performs an act in consideration of payments at his own business or trade risk or professional responsibility under a contract of service.

The Council of Ministers is also given power to determine the applicability of this legislation to workers employed in foreign diplomatic missions and international organizations within the territory of Ethiopia as well as those employed in religious and charitable organizations (Article 3 (3)).

The general exclusion of these different types of contracts surely is quite problematic in the light of the ratified ILO-Conventions . It should be mentioned that the “special laws” for civil servants, referred to in Article 3 (2) e) of the Proclamation do not provide regulations on freedom of association for this group of employees.


When concluding a contract of employment the parties may agree on a probationary period for the purpose of evaluating his or her suitability to the job (Article 11 (1)). Such an agreement needs to be done in writing and shall not exceed forty-five consecutive days (Article 11(3)). During this period, the employee enjoys the same rights and obligations that the other workers have (as defined in Articles 12 to 14), but termination is possible without notice, if he or she fails to meet the requirements (Article 11 (6)). Severance pay or compensation is not to be paid (Article 11(5)).  

Suspension of the contract of employment

The temporary suspension of a contract of employment is regulated under Articles 17 to 21 of the Labour Proclamation. During Suspension the mutual duties under the contract of employment are suspended, so that the employee does not have to work and the employer is not obliged to pay wages, allowances and other benefits (Article 17 (2)).

Article 18 defines the following grounds for suspension:

  • leave without pay on request of the worker;
  • leave of absence for the purpose of holding office in trade unions or other social services;
  • detention for a period not exceeding thirty days (provided that the employer is notified);
  • national call;
  • “force majeure” for a period of not less than 10 consecutive days; and
  • financial problems that require the suspension of the employers' activities for not less then 10 consecutive days.

In the latter two cases of suspension the Ministry has to be informed in writing about the ground of the suspension (Article 19). Articles 20 and 21 then describe the procedure of confirmation by the Ministry. When the Ministry is convinced that the employer cannot resume its activities within the maximum period of suspension of 90 days, the worker shall be entitled to severance pay (Articles 21 (2), 39 and 44).

Termination of the contract of employment

Grounds for termination and notice

Generally any contract of employment might be terminated by both parties, and in accordance with the provisions of the law or a collective agreement. Article 23 (2) states clearly that the transfer of ownership of an undertaking does not have a terminating effect.

The contract of employment can be terminated on the following grounds:

  • on expiration of the agreed period of employment (Article 24 (1));
  • by death of the worker (Article 24 (2));
  • on retirement of the worker (Article 24 (3));
  • by the insolvency of the employer; completion of the specified task (Article 24 (4));
  • by the impossibility of performance, where the worker becomes partially or permanently unable to perform his or her obligations in terms of the contract (Article 24 (5)); and
  • by mutual agreement (Article 25).

Generally a worker can terminate the contract of employment giving prior notice of fifteen days (Art. 31). Under Art. 32, 1 good causes for termination without notice from the side of the worker are:

  • criminal assault from the side of the employer against him or her;
  • if the employer has repeatedly failed to fulfill his basic obligations.

The worker shall give his reasons for the termination in writing (Art. 32, 2).

The contract of employment may not be terminated in the absence of a justified reason.

Article 26 of the Labour Proclamation expressly recognizes the following grounds for termination of the employment contract:

  • misconduct on the part of the employee;
  • the employee's poor work performance and/or incapacity;
  • the operational or organizational requirements of the undertaking.

The following grounds do not constitute legitimate grounds for termination and make any dismissal unfair (Article 26 (2)):

  • membership in a trade union or participation in its lawful activities;
  • seeking or holding office as a workers representative;
  • submission of grievance or the participation in proceedings against the employer;
  • his or her nationality, sex religion, political outlook, marital status, race, colour, family responsibilities, pregnancy, lineage or social status.

The Labour Proclamation distinguishes between termination with notice, whereby the employment relationship is ended when the period of notice expires (Article 28), and termination without notice (Article 27). In the latter type of termination, the notification effects the immediate cancellation of the employment relationship. In both cases, termination at the initiative of the employer is legitimated only under the limited grounds enumerated by the Proclamation.

Notice of dismissal

The limited grounds for termination without notice are defined in Article 27 (1) a) to k):

  • repeated and unjustified tardiness despite warning to that effect;
  • absence from work without good cause;
  • deceitful or fraudulent conduct;
  • misappropriation of the property or fund of the employer;
  • returning output which, despite the potential of the worker, is persistently below the quality stipulated;
  • responsibility for brawls or quarrels at the work place;
  • conviction for an offence where such conviction renders him or her unsuitable for the post;
  • responsibility for causing damage intentionally or through gross negligence;
  • commission of any of the unlawful activities defined in Article 14, such as reporting for work in a state of intoxication, refusal to be medically examined (except for HIV/AIDS test) or to observe Occupation Safety and Health prevention rules;
  • absence from work due to a sentence of imprisonment for more than 30 days;
  • offences stipulated in a collective agreement as grounds for termination without notice.

The new text of the Labour proclamation adds that in these cases, the employer must give written notice specifying the reasons for and the date of termination.

Furthermore, the employer has 30 working days from the day he or she knows about the ground for termination, to terminate the contract.

The grounds for termination with notice fall in 2 different groups (Article 28). The first group is composed of the grounds relating to the loss of capacity of the worker (Article 28 (1)). The second group consists of the grounds of organizational or operational requirements of the undertaking (Article 28 (2)), which constitute good cause for termination with notice.

Severance pay and compensation

Under Articles 36 to 41 any case of termination provokes payment obligations, such as wages, severance pay and – in the case of Article 32 (1) (the employee's poor work performance and/or incapacity) – an additional compensation which shall be thirty times his or her daily wages of the last week of service, for the first year of work.

If the worker has served for more than one year, payment shall be increased by one-third of the previous sum for every additional year of service, within the limit of a total amount of twelve months wages.

Large-scale dismissals

In the case of organizational or operational requirements of the undertaking, Article 29 specifies the requirements to be fulfilled in the case of a “reduction of work force” (collective redundancy). This is defined as a reduction of the work force of an undertaking affecting a number of workers representing at least 10 per cent of the number of employees,   or, in the case of an undertaking employing 20 to 50 workers, a reduction affecting at least 5 employees. In case of redundancy, Article 29 (3) stipulates rules for the selection of the workers to be dismissed.

Under this regulation workers having skills and a higher rate of productivity have priority of being retained in their posts. Only in case of equal skills and effectiveness, a selection on social grounds is due to take place (Article 29 (3) a) to f)).

Periods of notice are stipulated by Article 35 of the Proclamation. The minimum period is one month, and two months after a period of service of more than 1 year.   The period of notice can be agreed upon in the contract itself, stipulating different length.

Remedies in case of unjustified dismissal

A worker who intends to challenge the validity of his or her termination must file a submission before a regional first instance court, where a specialized labour division shall be set up (Articles 137 and 138 (1) b). (It should be mentioned at this stage that due to a severe shortage of educated legal personnel, these specialized labour divisions do not exist in every case.)

If the termination proves to be unlawful, the proclamation gives the choice of remedies.  The court may:

  • Order the employer to reinstate the employee from any date not earlier than the date of dismissal.
  • Order the employer to pay compensation to the employee.

The primary remedy in respect of an unlawful termination is to order reinstatement or re-employment (Article 43 (1) and (2)).  In the event that the employee does not wish to be reinstated or re-employed or the circumstances are such that a continued employment would be either intolerable or no longer reasonably practical and would give rise to serious difficulties, the court may award compensation rather than reinstatement/re-employment, even in cases the worker wishes to be reinstated (Article 43 (3)). 

The compensation will be paid in addition to the severance pay referred to in Articles 39 to 40. There are certain limits on compensation.  The compensation will be hundred and eighty times the average daily wages and a sum equal to the remuneration for the appropriate notice period in the case of an unlawful termination of an unlimited contract (Article 43 (4) a)), and a sum equal to the wages that the worker would have obtained until the lawful end of his contract (Article 43 (4) b)).

Compensation to be paid by the worker who has terminated his or her contract contrary to the provisions of the Proclamation shall not exceed fifteen days wages of the worker (Article 45 (2)).

Working time

Hours of work

Normal working hours are 8 hours a day or 48 hours a week (Article 61). They should be distributed evenly, but may be even calculated over a longer period of time (Articles 63 and 64).

Workers are entitled to a weekly rest period of 24 non-interrupted hours in a period of 7 days. Unless otherwise stated in a collective agreement, the weekly rest should be on Sunday, but another day may be chosen for certain services (Article 70).


Any work exceeding the normal working time of 48 hours a week is overtime. Overtime is only permissible for up to 2 hours a day, or 20 hours a month, or 100 hours a year, in the following cases (Article 67):

  • Accident, actual or threatened
  • Force-majeure
  • Urgent work
  • Substitution of absent workers assigned on work that runs continuously without interruption

The proclamation defines the overtime payment in Article 68 (1).   The overtime payment ranges from a rate of one and one quarter (1 ¼) of the ordinary hourly rate (from 6 a.m. to 10 p.m.) to two and one half (2 ½) on public holidays.

Night work

Pursuant to Article 68 (1) b), night work is work realized between 10 PM and 6 AM.

The worker is entitled to a rate of one and a half of the ordinary hourly wage.

Paid leave

Annual, uninterrupted leave with pay shall be a minimum of 14 working days, plus one working day for every additional year of service (Article 77). Additional leave is granted for employees engaged in particularly hazardous or unhealthy work. It is forbidden to pay wages in lieu of the annual leave (Article 76).

Public holidays

Ethiopia has twelve public holidays – historical memorial days and holidays of Christian and Moslem origin - described by law.

These days are: 7 January (Orthodox Christmas Day), 19 January (Timket), Eid-ul-Adha, 2 March (Battle of Adowa), Orthodox Easter Monday, Coptic Good Friday, Mulud, 5 May (Patriots Day), 28 May (National Day), 11 September (Ethiopian New Year/Coptic New Year), 27 September (Finding of the True Cross), end of Ramadan.

Under Articles 73 to 75, public holidays are paid. A worker who is paid on a monthly basis will not be subjected to a reduction in wages for not working on a public holiday. An employee who works on a public holiday is entitled to the double of his or her ordinary hourly wages.

Maternity leave and maternity protection

As mentioned in paragraph 2.5, the Constitution of Ethiopia grants the right to maternity leave with full pay.

Furthermore, the Ethiopian Labour Proclamation provides one part (Part Six) to the Working Conditions of Women and Young Workers.   Maternity leave and maternity protection are regulated in Articles 87 and 88.

There are provisions around the nature of work that a pregnant employee is not permitted to perform where it could be hazardous to her or the child's health (Article 87 (2) to (6)). Night work is generally prohibited, nor shall she be assigned to overtime-work. Moreover she shall not be given an assignment outside her permanent place of work and be granted time off for medical examinations (Article 88 (1)).

Employees are entitled to maternity leave, which is to start from 30 days prior to due date of birth, and end not less than 60 days after birth of the child. Maternity leave is classified as paid leave (Article 88 (3) to (4).

A nursing employee does not enjoy special legal protection.

Other leave entitlements

Articles 85 to 86 provide for an entitlement to sick leave after the completion of the probation period. An employee is entitled to a maximum of 6 months of sick leave within 1 year of service. An employer will only be obligated to grant paid sick leave for the first months, whereas the wage is reduced to 50 % for the second and third month, and reduced to zero for the third to the sixth month of sick leave within a year. For any absence for longer than one day the employee has the obligation to produce a valid medical certificate.

Moreover, Article 81 to 84 of the Proclamation provide for special leave for family events, union activities and other special purposes, such as for hearings before bodies competent to hear labour disputes, to exercise civil rights, and for training purposes according to collective agreements or working rules.  

Minimum age and protection of young workers

Under Article 89 of the Labour Proclamation the statutory minimum age for young workers is 14 years. Beyond the age of 14 years, no person may employ a child for work that is inappropriate or that endangers his or her life or health (Article 89 (2) and (3)). Special measures of protection of young workers (e.g. work in transport, night work, work in arduous, hazardous or unhealthy activities, such as mining) may be taken by the Minister. Work performed under the regime of a vocational training course is exempted from this protection (Article 89 (5)).

As shown above, the Ethiopian Constitution gives children general protection from exploitative labour practices – Article 36 – Rights of Children.

Ethiopia ratified the ILO Worst Forms of Child Labour Convention, 1999 (No. 182), in September 2003.


The Constitution guarantees the right to equality in employment, promotion, pay and the transfer of pension entitlement (Article 35 (8) of the Constitution).  

The Labour Proclamation in its Article 14 (Unlawful Activities) penalizes any discrimination against female workers in matters of remuneration, on the ground of sex (Article 14 (1) b)) and contains a general provision of anti-discrimination on the basis of sex, religion, political outlook “or any other condition” (Article 14 (1) f)).

Even though the Constitution recognizes the given historical disparities, an obligation on certain employers to implement affirmative action measures to advance women participation is not imposed. The world of work is still far from substantive equality.

Pay issues

Ethiopian law does not prescribe minimum wages through statute. Usually wages are fixed by the employer or by collective agreements or by the employee's contract of employment.  

Articles 53 and 54 of the Proclamation define “Wages” as the regular payment to which the worker is entitled in return for the performance of the work that he performs under a contract of employment. Overtime pay, allowances, bonuses, etc are not considered as “wages”. The Proclamation establishes the principle that wage is only paid for work done, except in cases, when the source of the impossibility to work was in the sphere of the employer (i.e. non supply of working material).

Under Article 162 (2), claims for payment of wages, overtime and other payments shall be barred after six months from the date they became due. In case of bankruptcy of the employer, wages enjoy priority. If an insolvency proceeding has been opened over the employer's assets, the employees' claims of wages are treated with priority over other payments or debts in accordance with Article 167 of the Labour Proclamation and Article 1025 of the Commercial Code, Proclamation No. 166/1966.

Workers' representation in the enterprise

The Ethiopian labour legislation has nothing like the forms of ‘worker representation' that characterize the systems of many European countries. At the workplace level, workers may be represented by trade union delegates.

Trade union regulation

Trade union structure under national law

The Constitution recognizes the right to freedom of association, the right to form and join a trade union and the right to participate in trade union activities.

Part 8, chapter 1 of the Ethiopian Labour Proclamation stipulates the right of both workers and employers to form organizations of their own and to participate in them.

Article 113 (2) lays down the trade union structure: There are trade unions (formed by workers), employer's associations, federations (organization established by more than one trade unions or employers' associations) and confederations (established by more than one trade union federations or employer federation).

The Proclamation foresees to form federations and confederations and the right to join international organizations (Articles 114 (5) and (6)).

Registration and recognition of unions

The procedure for registration and de-registration are laid down in Part 8, chapter 1 of the Labour proclamation.

A union which is independent, has a distinctive name, an address in Ethiopia and which has adopted a constitution which meets these requirements, is allowed to make application for registration. For The Labour proclamation sets out a list of topics to be included into any constitution of a union or an employers' organization, such as name and emblem, address, purpose of the organization, qualification of the leadership, contribution of the members, financial and property administration, meetings and election procedures, disciplinary measures and regulations for dissolving the organization (Art. 114,   2). Unions and employer's organizations are obliged to register; otherwise they may not perform activities set forth in the proclamation (Article 118 (4)), and do not have legal personality.  

The registration can be refused only on the grounds listed in Article 119. Subsection (4) lists a leader's conviction – within the last 10 years - for a serious (not defined) non-political offence as a ground for refusal to register the organisation.

The Proclamation allows a trade union or an employers' association to appeal the Ministry's decision to refuse to register to the competent court.

Article 120 (1) requires the Ministry to apply to the competent court for permission to cancel a registration:

  • where the certificate of registration is obtained by fraud or mistake or deceit
  • where any of the objectives or constitution of the organisation is found to be illegal or
  • where the organisation is found to have engaged in activities which are prohibited under this Proclamation or performed acts which are contrary to its purposes and constitution.

The consequence of cancellation of the registration is laid down in Article 123, namely that the organisation is dissolved from the date of the court's decision.

Articles 5 and 6 of the ILO Freedom of Association and Protection of the Rights to Organize Convention, 1948 ( No. 87), are addressed in Article 114 (3), (4), (5) and (6) of the Proclamation, permitting the establishment of federations and confederations by registered trade unions and employers' associations. Subsection 8 allows individual employers to join established employers' federations.

Prevailing patterns in practice

At the national level, the Confederation of Ethiopian Trade Unions (CETU) claims to represent about 300,000 workers organized in 431 basic unions and 9 Federations (Federation of Food Beverage, Tobacco and Allied Workers; Ethiopian Federation of Metal, Wood, Cement and other Workers; Federation of Commerce, Technical Print, and other Workers; National Federation of Farm, Plantation, Fishery and Agro-Industry; National Federation of Tourism, Hotels and Generic Service Workers; Industrial Federation of Ethiopian Textiles, Garment and Shoe Workers; National Federation of Energy, Chemical, Petroleum Workers; Transport and Communication Workers; Ethiopian Banking and Insurance Industrial Federation).

CETU main constitutional organs are the Congress, the Supreme Council, the General Council, the Executive Committee, the Audit Committee and the Branch Offices (Part 4 of the Constitution of CETU). The (General) Congress convenes once every 2 years and took place on 1-8 August 2003.

Apart from these unions under the umbrella of CETU, there are different organisations that are not recognised as unions under Article 3 (2) of the Labour Proclamation. That provision excludes from coverage workers engaged by means of the following types of contract:

  • contracts for the purpose of upbringing, treatment, care or rehabilitation
  • contracts for the purpose of educating or training other than as apprentices
  • contracts relating to persons holding managerial posts who are directly engaged in major managerial functions of an undertaking
  • contracts of personal service for non-profit making purpose
  • 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 and
  • contracts relating to a person who performs an act in consideration of payments at his own business or trade risk or professional responsibility under a contract of service.

This wide-ranging exclusion gives rise to uncertainties and problems. In particular, difficulties arise because of the insufficiently clear definition of some of the categories, such as “managerial employees”, or because of the rationale for excluding some categories, such as teachers.

The situation of the Ethiopian Teachers' Association (ETA) has been a cause of deep concern for some time.   An important step towards resuming a normal situation has been the release of Dr. Woldesemayat, President of ETA, following a decision of the Supreme Court in May 2002 after he had been arrested in 1996 and sentenced in 1999 to a prison term of 15 years. However, in March 2003, the ILO's Committee on Freedom of Association reiterated its concern on this matter and requested the Government “ to amend its legislation so that teachers, like other workers, have the right to form organizations of their own choosing and to negotiate collectively, and to keep it informed of developments in this respect, including the current status of legislative reform as regards trade union pluralism and the labour rights of civil servants” (Case 1888). In its latest communication for the 2004 report of the Committee of Experts on the Application of Conventions and Recommendations the Ethiopian Government specified that teachers are free to form associations to promote their occupational interests and that those working in Government institutions are governed by the Civil Servants Law, while those working in private undertakings are governed by the Labour Law. Clarification on the specific provisions which guarantee to teachers, both civil servants and non-civil servants, the organisational rights under ILO Convention No. 87, is being requested (See the comments made by the ILO supervisory bodies in the ILO database ILOLEX).

Union dues usually are deducted from the salary; this practice is mostly regulated in collective agreements or rather based on customary practice.

Collective Bargaining and Agreements

The Ethiopian Labour Proclamation states that one of its central objectives is to promote collective bargaining as a means of maintaining industrial peace and of working in the spirit of harmony and cooperation towards the all-round development of the country (Preamble).

Details are regulated in Chapter 2 of the Labour Proclamation. Article 124 defines “collective agreement” and “collective bargaining”. The first is “… an agreement concluded in writing between one or more representatives of trade unions and one or more employers or agents or representatives of employers organizations”, whereas the latter is defined as “negotiation made between employers and workers organizations or their representatives concerning conditions of work or collective agreements or the renewal and modifications of the collective agreement”. Article 125 (1) grants the right to collective bargaining to trade unions on the one hand and to employers or employers' organizations on the other hand.

De facto, collective bargaining takes place at the company level, even though the approach of the Labour Proclamation is different and leaves the choice of the appropriate level of collective bargaining to the parties and their judgment. According to Article 130 any party may request the other party in writing. There are an estimated 450 collective agreements in Ethiopia, mostly dealing with subject matters as benefits and increments (information given by the Ministry).

The proclamation defines the question of representation on the trade union's and on the employer's side (Art. 126). Any party may be assisted by advisors (Article 127). Articles 128 and 129 of the Labour Proclamation define the subject matter and the content of a collective agreement, as “matters concerning the employment relationship and conditions of work as well as relations of employers and their organizations with workers' organizations”. Upon signature of any collective agreement, the parties shall send copies of it to the Ministry for registration (Article 131).

Collective agreements apply to all parties covered (Article 134(1)) and where their provisions are more favorable to the workers than those provided by law (Article 134 (2)). The collective agreement remains in force even after a trade union, which is party to the agreement, is dissolved.   Under Article 133 (3), the duration of an agreement is fixed at three years unless expressly stipulated otherwise.

Collective Labour disputes procedures and strikes

The Constitution recognizes basic labour rights especially the right to strike, in its Article 42.

Under the previous law, the right to strike was expressly recognized but the pre-strike process was long and made legal strike action difficult.

Labour Proclamation No. 377, Chapter Five, covers strikes and lock-outs but expressly excludes “essential public service undertakings” from this Chapter. Legal strike action continues to be hard to achieve in practice. For example, pre-strike procedures include: the party initiating the action to give advance notice to the other party – and to the Ministry - with reasons for the strike or lock-out; both parties making all efforts to settle through conciliation; cooling-off period of 30 days after the notice; a pro-strike vote by a majority of workers concerned in a meeting in which are present at least two-thirds of the members of the trade union; and maintenance of minimum services for the respect of safety regulations and accident prevention in the undertaking concerned (Article 158).

Conciliation, arbitration and the Labour Relation Board

The requirement of conciliation means that the dispute is either brought before a conciliator assigned by the Ministry (Article 142 (3)), or before an arbitrator or conciliator agreed upon by the parties (Article 143). If, in the first case, conciliation is not reached within 30 days, either party may submit the matter to the Labour Relation Board which shall give its decision within 30 days. If, in the second case, the conciliation or arbitration fails, either party may move the procedure further by taking the case to the Board or to the appropriate court. The Proclamation does not provide a time limit for reaching an agreement in these cases. Nor is there a time limit for submitting the matter to the Board, apart from the general provisions under section 162 concerning periods of limitation for lodging claims (one year from the date on which the claim becomes enforceable, three months from the date of dismissal for reinstatement claims, and six months for wages and emoluments claims).

The Federal High Court

Under Article 154 an aggrieved party may appeal the Board's decision   - on a point of law - to the Federal High Court within 30 days of handing down the decision. On appeal the Federal High Court has two options. On the one hand, it may affirm the decision of the Board in which event the union may or may not proceed with the strike action depending on the decision. It should be noted that Article 160 (2) prohibits strikes or lock-outs from continuing if in conflict with the final order of the Board, unless it is a protest action seeking to force compliance with an order. On the other hand, if the Court is of the opinion that the Board erred on a question of law, it may reverse or modify the decision.

In its 2004 Report,3 when noting the draft amendments, the Committee of Experts of the ILO explained that care should be taken to avoid establishing labour dispute settlement processes that amount to compulsory arbitration at the instigation of only one party in the dispute. It states that, except in situations concerning essential services in the strict sense of the term and acute national crises, arbitration awards should be binding only where both parties have agreed to the procedure. The Committee also recalled that arbitration procedures should not be excessively long.

Strikes in essential services

Not all kinds of workers have the right to seek, initiate and conduct strike action. First there are those who, as seen above, are excluded by section 3(a) of the Proclamation from its scope generally.   Secondly, the Proclamation specifically excludes from Chapter Five one class of workers, who consequently do not have the right to strike. These are workers who are engaged in “essential public service undertakings”. These services are defined in section 136 (3) to include:

  • air transport
  • undertakings supplying electric power
  • undertakings supplying water and carrying out city cleaning and sanitation services
  • urban bus services
  • hospitals, clinics, dispensaries and pharmacies
  • fire brigade services and
  • telecommunication services.

This definition marks a great improvement over the longer list that had existed in the old law, but still awaits full scrutiny by the ILO's supervisory bodies in the framework of the principles of the right to strike. In its 2004 Report,4 when noting the draft amendments, the Committee of Experts explained that air transport and urban bus services are not essential services in the strict sense of the term and suggested that the Government give consideration to establishing a system of minimum service in these undertakings, rather than impose an outright ban on strikes therein. Numerically, the workers engaged in these essential services represent a sizable proportion of trade union membership in the country.

Scheme of the strike procedure

Summarized, the procedure in collective disputes is designed as follows:




Voluntary concilitation/arbitration
(Art. 143)


Conciliator assigned by the Ministry
(Art. 141 (1))


In case of failure, possibility to bring the case to the Board
(Arts. 144 (1), 145) or directly to the court
(Art. 143 (2))

Conciliation not reached within 30 days → parties submit matter to Labour Relation Board, established in Regional Government. Decision with 30 days.
(Arts. 142(3), 144(1), 145)


Appeal to the Federal High Court on questions of law only, within 30 days of decision of the Board
(Arts. 153, 154(1))

In effect, lawful industrial actions are literally unknown in Ethiopia under these regulations. The regulations of the previous Proclamation – in addition to the insufficient personnel structure of the judiciary in general - lead to a situation, where labour disputes were often pending for months and years. In praxis there has never been a legal strike since the Labour Proclamation, No. 42 came into force in 1993. With the entry into force of Proclamation No. 377 which slightly reduces the procedure, and fixes more time limits, the practice might, although doubtfully,   change.

Unlawful strikes and lock-outs

Article 160 (1) prohibits a strike or lock-out initiated after a dispute has been referred to the Board or to the court and the prescribed 30 days period for decision has not elapsed. It is also unlawful to refuse to obey, or to start or continue to strike or to lock-out against the final order or decision of the Board or the court. However, a strike or lock-out, which is not in conflict with such decision, and which was initiated to seek compliance with this decision, is not unlawful (Article 160 (2)).

Pursuant to Article 160 (3), it is prohibited to use violence or threats of physical force together with a strike or lock-out.

In accordance with Article 185, violation of this procedure is an offence punishable with a fine not exceeding Birr 1,200 (about 150 USD) if committed by a union of Birr 300 if committed by an individual worker unless the provisions of the Penal Code prescribe more severe penalties in which case the punishment laid down in the alternate becomes applicable. (In practice all illegal strikes in the past 9 years were punished by imprisonment).

15 Tripartite Institutions and Participation – the National Advisory Board

The Ethiopian Labour Proclamation gives Unions and Employers an important tool to participation in all labour matters of concern. Article 170 (2) and 171 stipulate the Minister's duty to establish a Labour Advisory Board. Pursuant to Article 170 (2), the Minister shall organize, co-ordinate, follow-up and execute the labour administration system by establishing (…) a permanent Advisory Board which consists members from the Ministry, employers associations and trade unions. This Board is an organ “…which shall study and examine matters concerning employment service, working conditions, the safety and health of workers, the labour laws in general and give advisory opinion to the Minister. Its duties and responsibilities shall be determined in the directives to be issued by the Ministry” (Artcile 171).

Since the establishment of the Labour Advisory Board, this institution has become an important factor in the national decision making process. It meets frequently (at least every month), and has only recently adopted new regulations that allow the participation of other groups concerned, be it other Ministries, or other civil society groups, active in a certain area of interest for the parties.

The Labour Advisory Board also served as a forum to discuss the necessary amendments of the previous Labour Proclamation and other reform projects.

16 Settlement of individual labour disputes

Labour Disputes are generally regulated in part nine of the Ethiopian Labour Proclamation.   Individual disputes fall under the jurisdiction of labour divisions at the ordinary courts, established “as may be necessary” at each regional first instance court (Article 137(1)). Article 138(1) lists the following individual labour disputes as examples:

  • disciplinary measures including dismissal;
  • claims related to the termination or cancellation of employment contracts;
  • questions related to hours of work, remuneration, leave and rest day;
  • questions related to the issuance of certificate of employment;
  • claims related to employment injury;
  • unless otherwise provided for in this Proclamation, any criminal and petty offences under this Proclamation.

The decision is to be taken within 60 days. Appeal lies with the labour division of the regional court. The jurisdiction of the labour division of the regional court is defined in Article 139. The decision of the Court in matters of appeal is final (Article 140 (2)). The general court procedure follows the Civil Procedure, laid down in the Civil Procedure Code Decree, No.3/1965.

The procedure in individual labour conflicts is summarized as follows:

Labour Division at the Regional First Instance Court (Articles 137(1), 138(1))

Appeal to the Labour Division of the Regional Court (Articles 137(1), 138(3), 139)

18 Bibliography5

  • TilahunTeshome, “An overview of the Right to Strike in Ethiopia”, Journal of Ethiopian Law, Vol. XVI (1993), p. 216-238;
  • Marco Guadagni, “Ethiopian Labour Law Handbook, Asmara, 1972;
  • Adane Kebede, “Reading Material for the Course Employment Law”. (not published, available only in the Law Faculty of Mekele University for the Course “Employment Law”).

Useful and relevant web links

1 Natacha Wexels-Riser: Maîtrise in International Law, Diplôme d’Etudes Supérieures Spécialisées (Master of Laws) in International Administration (Paris II, Panthéon-Assas). Lectured in International Law, Paññasastra University of Cambodia.

2 Hereinafter, if not mentioned otherwise, all articles quoted are from the Labour Proclamation No. 377/2003

3 Op. cit.

4 Op. cit.

5 There are no reference books available. As Labour Law is taught at Addis Ababa University and at the Mekele University (Employment Law) some students' thesis are available in the libraries of the respective law faculties.