Corporate Ethiopia: How Employment Law has Developed

There are topical discussions to how Africa is becoming the hub for corporations and development, and though the continent’s constant battle with poverty and economic development is not yet over, many countries in Africa have come a substantial way. We speak to Taffesse Yirga on employment law in Ethiopia, the challenges it presents and how the country’s legislation has developed.


How has your international business from the US shaped you the way you practice law?

The business oriented program of the academy of American and international law was a very good opportunity for me to improve and broaden my knowledge in business law. Participants of the training were drawn from various jurisdictions and thus, l got the opportunity to be familiar with legal systems of various jurisdiction in general, and the American system in particular. I found it very important for my career as a practicing lawyer in my home country.


What are common problems of international corporations face when investing or setting up business in Ethiopia? What can be done to reduce the effects of this?

Ethiopia is the second most populated nation in Africa with 95 million people, and one of the fastest growing economies in the region; booming middle class Ethiopia is as an attractive investment destination with immense potential. Foreign Direct Investment (FDI) has been growing over the past two decades. The country’s energy capacity is growing from time to time, however, there are some problems in which investors are complaining. A major complaint is that Ethiopia is landlocked and relies on sea access from the port of Djibouti, which is described as one of the most expensive ports in the world. Other investors’ concerns are: lack of good governance, prevalence of the rule of law – including bureaucracy, difficulty in accessing foreign currency and so forth.

To solve these problems, the government gave due attention and remarkable measures have taken place over the past two years. However, a lot still must be done in order to overcome these problems.


You have been practicing in Ethiopia for several years – how has the countries legal sector developed? How does this compare to neighboring countries, what makes Ethiopia more appealing for international and national corporations?

The justice system in Ethiopia was very traditional; this has resulted in outdated and inefficient methods and procedures of the system. It has generally been characterised by delays in dispensation and a lack of institutional capacity in both law enforcement and the judiciary. Dispositions of cases were so delayed that rights granted by the constitution could not be implemented. Some of the most crucial problems included severe shortages of trained professionals and qualified personnel (lack of career judges), lack of essential facilities in institutions of justice and the inability of law schools to produce competent lawyers in the desired numbers. To address these and other issues facing the justice system, the Ethiopian government supported by the World Bank and several bilateral donors initiated the Justice System Reform Program and significant changes have since been achieved. The annual clearance rate reached up to 80 % and this was much better than neighboring and other African countries, as well as the crime rate being significantly lower. Favorable investment climate, 12 months of sunshine, broad investment opportunities with different incentives; all these make Ethiopia appealing for international corporations for investment.


Following from the previous question-what do you think can be changed in employment law for the legal sector to advance?

The Ethiopian employment law is considered as one of the best in Africa, in terms of compatibility with the fundamental ILO conventions. However, there some limitations of the Ethiopian labour and it is under the process of amendment. Currently, the amendment process is finalised and will be sent to the parliament for promulgation.

In my view, the legal sector is not efficient in disposing labour disputes timely, due to a lack of well trained professionals in the judiciary disposition. Labour disputes are one of the most sensitive disputes by its nature.


What are common misconducts performed in the work place that have led to cases you dealt with?

The following misconducts were most frequently observed whilst working in judicial capacity:

  • Tardiness and misusing company time;
  • Absence from work without good cause;
  • Abusive and violent behavior, towards other employees and the employer in the work place;
  • Misappropriation of the employee’s property;
  • Sexual harassment, and;
  • Theft and fraud.


What are the most vital improvements that could be made in regards to employment law?

In my view, the most vital improvements that could be made in regards to employment law is to maintain a strong employer and employee relationship. If there is a strong relationship, the employee will be become more productive, more loyal toward the employer and this eventually leads to an increase of business profit. Moreover, if a work environment is friendly, the conflict in the work place is reduced, whereby peace will prevail.


1 Comment
  1. Lynda Carew-Jones says

    I have a young friend in Barhir Dar who wishes to change jobs to a better one having successfully completed a Masters Degree. Before he can take the job, he must provide a guarantor who resides in the country or find money to pay for it. Even though he will receive back the money he paid for his first job, he will have to pay more and this he does not have. He has only got as far as he has by outside help.
    Why cannot a good reference from the first job be sufficient guarantee for the second?
    I feel this must be a problem for many young people trying to get out of the poverty trap but being hampered but what seems to be an unnecessary rule.

    Thank you so much for reading this and I look forward to your reply,
    Lynda Carew-Jones ( from the UK.)

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