Hammering Labor Rights: Succinct Summary of the Draft Labor Proclamation

Labor is the most important activates of a human being crate both material productivity and social values. Now a day it is not a point of disagreement that the development of any given country is highly dependent upon high level of labor productivity, quality and efficiency. This being said, legally speaking labor right is one of the most fundamental human rights recognizing under various international instrument to which Ethiopia is a party. Furthermore, labor right is one of rights which patronizing to constitutional protection. The draft labor proclamation brought untold roaring from Ethiopia Workers Confederation Union (EWCU) and others stakeholders. This mini-article is meant to summarized and explore the draft labor proclamation.

Historical Background of Labor Right

Although the evolution of labor relations had witnessed considerable national varies even in Europe the general path of development display many similarities. As a general pattern of development, the landlord-tenant relationship and the guild society of the feudal mode of production gradually gave its way to capitalism.Under capitalism mode production the governing and overriding principle was freedom of contract.

During the freedom of contract period labor was seen as a commodity and its price can be determined by demand and supply mode. The then prevailing understanding was that economic affairs were matters for private actors, and the interaction of capital and labor being consider as one such economic affairs to be regulated solely and exclusively by market forces and free bargaining.As a result each party was at liberty to determine the term and conditions of the contract.  Since ever in history employers hadhighest bargaining power they dictate the term and conditions of the contract. As a result of this there were myriad human rights violationson employees.

To cure this defect, states comes up with minimum labor conditions below which it’s unacceptable and unlawful to enter in to a contact. The protection of labor rights can be ranged from the constitution, which is the supreme law of the land,to collective labor agreements.

Concise summary and reflection on the draft labor proclamation

The draft labor proclamation comes up with various amendments. It is neither important nor necessary to touch up on each and every amendment. Nevertheless, the major change brought by the draft proclamation will be assessed as follow;

1. Outsourcing: -

Outsourcing is defined as the strategic use of outside resource to perform activities traditionally handled by internal staff and resource.Thus, it is transfer of secluded area of specialization to third party. The main policy justification behind outsourcing is the company can deliver best service quality to the customer by focusing on the core and important function of the organization. The other subsidiary justifications like cost minimization, flexibility, lack of expertise are the foot note of this policy.

One of the drastic and fundamental changes brought by draft labor proclamation is the issue of outsourcing. Indeed the Federal Supreme Court Cassation Bench in various instances made it clear that outsourcing is one ground for termination of employment contract with notice. Under Article 2(14) it stated that the employmentcontract should be concluded between the employment agency and employer. As a result there will be two separate agreements. The first one is the contract concluded between employment agency with the employee (we can call this internal or subsidiary contract) and the second one is the contact between the employment agency and the employer (we can term this as external or main contract). To put differently, the employment relation will existonlybetween the employment agency and employee. Consequently there is neither contractual nor legal relation exists between the employee and the employer.

To clarify the matter let assume the following example. ABC is the employment agency and group of people, employees, will enter in to a contract of employmentwith ABC which is the internal/subsidiary contract. A separate agreement will be there between the employment agency and the CommercialBank (the employer). Therefore, there is no direct contractual link between the employee and the Commercial Bank. This will leads to bottomless inquiries. How the employee will exercise union right? How theywill bargain with the employer? What if confidential information is leaked? Who will be the responsible?This provision as stand now leads to abuse of labor rights and in few instances affect investors too. Let alone in the presence of this loophole even under the existing situation it has been reported that employee are over exploited by employment agency.

1. Extension of probation period

The probation period should be used to ensure that the selected applicant is qualified and capable of performing the job before achieving status as a permanent employee. Under Article 11(3) of the existing proclamation it stated that the probation period shall be 45 consecutivedays (emphasis supplied). It is important to notice thedifference between consecutivedays (also known as calendar days) and working days (also known as business days). If it is consecutive days, Saturday and Sunday will be counted.

Article 11(3) of the draft labor proclamation stated that the probation period shall not exceed 90 working days. For this effect the draft proclamation makes a distinction between ordinary jobs and peerless jobs (employees). For ordinary jobs (employees) the maximum period of probation is 45 working days whereas for peerless jobs the maximum probation period may lift up as high as 90 working days.

The draft proclamations not only extend the probation period but replace consecutive days with working days. This in effect means that the probation period as envisage in the draft proclamation will extend up to four months (counting Saturday and Sunday). This is unacceptable at least for two reasons.Under its preamble made it clear that job security is one of the purposes behind labor law. By extending probation period it leading to slighter the job security and hence wipe out the very purpose of the proclamation. Second as thing stand now it is unlikely to find‘suspected peerless’ job held by Ethiopian nationality. Those areas are usually held by foreigners. Furthermore, it will be very painstaking and daunting business to separate peerless jobs from ordinary one and probably it might be very problematic when it comes to its application.

1. Termination of the contract

During freedom of contract period each party were at liberty to terminate the contract of employment with good cause or without good cause.However, with the view to bring job secure the law come up with exhaustive lists of grounds for termination of employment relation.Under the operation proclamation ground for termination of the employee with notice has been exhaustively listed under Article 27.One of the grounds for termination of employment contract is absence from work without good cause for five working days or ten working days in any period of one month or thirty working days in a year. (Emphasis added).The proclamation fails to provide a yardstick for what constitute good cause. However, I personally believe that it should be assessed case by case basis.

The draft proclamation under Article 27(1) (a) made it clear that fail to observe the working hourstwice within a month or five times within any given six months automatically leads to termination of the contract.Unlike the existing proclamation the draft proclamation brought two changes in this regards. First and foremost, it lowers down the period. Second it requires not absence from work but tardiness in the working hours. Lastly but more importantly, it put without any qualification and exception. As per the draft proclamation no matter how the person has valid and convincing reasonsthere is no excuse.

True, law is projected to shape and guide the behavior of the people. Our working habit is not impressive and hence the effort of the law maker to deter and making relatable for the investors should be encouraged. Nevertheless, the law at the same time should alsoconsider the realistic situation prevailing in the community. This provision is unrealistic and difficult to implement. One of the big challenges, for instance, is high trafficjam and inaccessibility of transport. It is not uncommon to see convoy of people waiting for transportation. To fuel this problem high traffic congestion is very frustrating. Therefore, this provision should be amendment.

1. Severance payment

Severance payment is defined as money( apart from back wages or salary paid by an employer to  a dismissed employee such a payment is often made in exchange for a release of any claims that the employee might have against the employer. Also termed separation pay; dismissal compensation.

Severance payment is one of the most important rights of the employee under the amendmentproclamation I.e. proclamation no. 494/2006.Under Article 2(g) it stated that the person will get severance payment where he has no entitlement to a provident fund or pension right and his contract of employment is terminated up on attainment of retirement age stipulated in the pensionproclamation. Accordingly, for one to get severance payment two requirements should existcumulatively.First and foremost, he should not cover under pension and provident fund scheme. And second the ground for termination of employment contract is attainment of retirement age. The draft proclamation made it clear that if a person is covered under pension scheme arrangement, he will not benefit out of severance payment. This is unfair and unjust to say the least. There is colossaldisparity between the severance payment and pension/provident scheme of arrangement. This two has never been mutually exclusive.Anerudite lawyer in the area stated that ‘…notably, therefore, there had been a clear distinction in approach between a provident fund and severance payment. While the former was one variety of saving for times of distress to be kept separately from the assets of the undertaking, the latter is a payment from the assets of the undertaking to be effected during termination of the employment contract.’

1. Annual leave

Under the operating proclamation especially under Article 78(1) a worker shall be granted his first period of leave after one year of service and his next and subsequent period of leave in the course of each calendar year. As per this provision there is no utmost brim imposed by the law. The draft proclamation make far-reaching change in this regards too. As per Article 77(1) a person who works from one to five years will get 14 days benefit,a person who works from six to ten years will get 16 days benefit, a person who works from eleven to fifteen years will benefit 18 days benefit,a person who works from sixty to twenty years will benefit 20 days annual leave and finally a person who works more than twenty years will get flat rate of 30 days annual leave benefit. The draft proclamation in this regards bring two changes. First and foremost, unlike the existing proclamation it set range of years not increasing sequence and second it provide a maximum ceiling.

All in all, seemingly the draft proclamation is crafted in a manner to benefit solely the investors and leave the weaker party in bleak. This in turn will have backfire effects by crumpling the mysterious magnetism relation of labor and capital. The remaining change will be assessed in the upcoming publication.

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