Guide to Termination of Employment Under Ethiopian labour law: Understanding the Various Grounds
Termination of employment is a critical aspect of the employer-employee relationship. Understanding the different types of termination and the legal grounds that justify them is essential for both parties. This comprehensive guide explores the various grounds for terminating an employment contract, ensuring clarity and compliance with the law.
General Grounds for Termination
The termination of employment can be initiated by either the employer or the employee. According to the law, a contract of employment may only be terminated upon the initiative of either party and must comply with legal provisions or a collective agreement. The merger, division, or transfer of ownership of a company does not terminate employment contracts.
TERMINATION OF CONTRACT BY OPERATION OF LAW
- Completion of Specified Work
An employment contract set for a specific task automatically ends upon the completion of that work.
- Death of the Employee
An employment contract terminates upon the death of the employee.
- Retirement
Retirement according to relevant laws leads to the termination of the employment contract.
- Permanent Closure of the Undertaking
If a company ceases operations permanently due to bankruptcy or any other reason, employment contracts are terminated.
- Incapacity to Work
Employment contracts terminate if an employee is unable to work due to partial or total permanent incapacity.
TERMINATION BY AGREEMENT
Mutual Agreement
Parties may mutually agree to terminate the employment contract. However, any waiver of the worker’s legal rights is ineffective.
Written Agreement
For the termination by agreement to be binding on the worker, it must be documented in writing.
TERMINATION BY THE EMPLOYER
Legitimate Grounds
An employer can terminate an employment contract on legitimate grounds related to the worker’s conduct, ability to perform the job, or the operational requirements of the company. However, certain conditions do not constitute legitimate grounds for termination, such as:
- Membership or activities in a trade union.
- Holding office as a workers’ representative.
- Submitting a grievance or participating in legal proceedings.
- Discrimination based on nation, sex, religion, political outlook, marital status, race, color, family responsibility, pregnancy, disablement, or social status.
Without Prior Notice
An employer may terminate employment without prior notice for specific reasons, including:
- Repeated lateness or absenteeism.
- Deceitful or fraudulent conduct.
- Misappropriation of company property.
- Persistent underperformance.
- Involvement in brawls or serious misconduct.
- Conviction of an offense rendering the employee incompatible with their role.
- Intentional or gross negligence causing damage to company property.
- Violations as stipulated in the collective agreement.
Employers must provide a written statement detailing the reasons and date of termination, and they must act within thirty working days of discovering grounds for termination.
With Prior Notice
Termination with prior notice is warranted in cases such as:
- Manifest loss of capacity to perform assigned work.
- Permanent inability to work due to health or disability.
- Unwillingness to relocate with the company.
- Cancellation of the employee’s position without the possibility of reassignment.
Reduction of Workforce
Reduction of the workforce occurs due to operational changes affecting at least ten percent of the workforce or a minimum of five employees in smaller undertakings. Employers must consult with trade unions or workers’ representatives to retain skilled and productive workers. Priority for retention is given to those with longer service, more dependents, or specific protected categories such as disabled employees, those injured at work, and expectant mothers.
TERMINATION BY THE EMPLOYEE
With Prior Notice
Employees who have completed their probation period can terminate their employment contract by giving thirty days’ notice to the employer.
Without Prior Notice
Good causes for an employee to terminate without prior notice include:
- Acts contrary to human dignity or punishable under criminal law committed by the employer.
- Sexual harassment or violence by the employer or managerial staff.
- Imminent danger to the employee’s safety or health, unaddressed by the employer.
- The employer’s repeated failure to meet basic obligations.
Employees must inform the employer in writing of the reasons and effective date for the termination.
Period of Limitation
An employee’s right to terminate contract of employment for the reasons mentioned above expires fifteen working days after the incident occurred or ceased to exist.
Thus, understanding the various grounds for the termination of employment is crucial for maintaining a fair and compliant workplace. Whether you are an employer or an employee, being aware of these regulations helps to ensure that employment relationships are ended with transparency and respect for legal standards.
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