Probation Period under Ethiopian Employment Law

Table of Contents


Amendment
Written agreement
When should the agreement be concluded?
Length of Probation Period
Extending and shortening the time
Re-employment
Same Employer
Same job
Effects of Probation Period
Rights and Duties of the employee during probation
Termination by the employer
Termination by the employee
Unlawful Termination
Severance Pay
Compensation
Expiry of probation period

Probation can be broadly defined as a trial period for newly recruited workers. [Ethiopian employment law does not differentiate between ‘worker’ and ‘employee’ therefore these two words may be used interchangeably throughout this article] Not only is the employee tested for his competence or fitness for the job, but also be evaluated for his suitability, which may include assessment of his personal traits. If he is found to be unsuitable, the employer has the right to terminate the contract without notice and without having to pay severance pay and compensation. Similarly, an employee may resign from his or her new job without prior notice.

Amendment

When the previous labour Proclamation no. 377/96 was replaced by the new labour Proclamation no. 1156/2019 (hereinafter to be referred to as LP) it brought some changes to the rules of probation. here are the key changes

  1. The length of Probation period was extended from 45 consecutive days to 60 working days. This amendment not only extended the length of probation period, but also replaced ‘consecutive days’ with ‘working days.’ Therefore, if the total consecutive days are counted the total will be 68 days. [Assuming 48 hours a week working hours]
  2. The previous proclamation was silent as to when probation period begins. LP 1156 has added ‘beginning from the first date of employment’ in article 11/3/

Written agreement

Probation is not a legal requirement for a valid employment contract. It is entirely left to the agreement of the parties. However, whenever an employer makes probation period a pre-condition for full employment and this is accepted by the worker, their agreement need to comply with the legal requirements to qualify as valid probation period. In this regard, the law stipulates that the agreement must be in writing to be effective. Such writing requirement envisages existence of written document signed by both parties.

Unilateral letter written by an employer stating the employee is under 60 working days of probationary period does not establish valid probation agreement. This is true even if there is signed acceptance of such letter by the employee. In the case between Berhe Hagos General Contractor vs. Ato Gemechu Addis (C/F/N 98052 Vol. 16) it was held receiving a ‘probation letter’ by the employee does not establish valid probation period agreement.

The need for a written agreement was also affirmed in the subsequent decisions of the bench. In C/F/N 126667 (Vol. 22) C/F/N 140781 (Vol. 21) the bench added requirement of certification by two witnesses for validity of probation agreement. In both files, the bench summarized the basic rules regarding the applicability of probation as follows.

The probationary period is a matter for the employee to be aware of, and the law stipulates that if a probation period is agreed upon, the agreement must be in writing and certified by two witnesses. If there is a valid probationary agreement, the law provides for the termination of the contract without notice if the employer does not believe that the employee is suitable for the position. Therefore, the employer can exercise this legal right only if decides to hire the employee for a probationary period, and the employee is clearly aware of this and has expressed his consent in a written contract.

When should the agreement be concluded?

Article 11 (3) only requires written agreement for a valid probation period. The proclamation does not specify the time when the parties should agree. So, how will the agreement be treated if the date of probation agreement is after commencement of work rather on the day of employment? For example, what if the employee agrees in writing to a probationary period 10 days after the start of employment (suppose the agreement is for a probationary period of 50 working days from the 10th day or for a probationary period of 60 working days from the 10th day?) Can we say that there is no probationary period because the written agreement was not made on the first day of the contract?

Since the purpose of probation is to assess the competence and suitability of the employee, there is no compelling reason to do so after employment. If there is no agreement on the first day of employment, it means in effect the employer has accepted the employee as qualified and suitable.

Length of Probation Period

Compared to other jurisdictions, the probation period limit in the previous labour proclamation (45 consecutive days) was much lower. With this in mind, the legislature made a small change and increased it to 60 working days. Although the earlier draft envisaged six months, it did not materialize due to strong opposition from trade unions especially from Ethiopian Trade Unions Confederation.

The maximum probationary period in Germany is six months, and in other European countries the average is not more than six months. In some cases, the time may vary according to the type of work assigned to the employee. In Romania and Bulgaria, for example, a probationary period of 5 to 15 days can be extended, but in the case of skilled workers, it can be extended to six months and in some cases to one year. Austria is one of the few countries in Europe that has a short probationary period. According to the country’s labour law, the probationary period should not exceed one month.

If we look at Asian countries, the maximum period in Thailand and Indonesia is 3 months, and in China it varies according to the duration of the contract. Based on the duration of the contract, length of probation may extend from ome month to six months.

Compared to civil servants and other special public employment laws, LP 1156 provides for the shortest length of probation period. The standard probationary period for government employees is six months. This may be extended for another three months if satisfactory performance is not achieved. This is also true for federal public prosecutors. However, if performance is below average, it will be extended for another three months.  For National Bank and Customs Commission employees, it is respectively six months and one year.

Extending and shortening the time

The 60 working days probationary period referred to in Article 11 (3) is the maximum time that can be determined by agreement. Although, it is not legally possible to extend the period beyond the 60-day limit set by law, shortening the time is not explicitly or implicitly prohibited by the proclamation. On the contrary, the Cassation Bench in C/F/N 101890 (Ethiopian Airlines vs. Fitsum Hailu, Vol. 17) interpreted the law as prohibiting any increment or reduction of the maximum period. Both cases, the bench reasoned, engender the employment security of employees.

Re-employment

Article 11 /2/ of LP states that a worker re-employed by the same employer for the same job shall not be subject to probation. On its face, the provision seems clear to the reader. However, reading between the lines, there are issues that need interpretation. For instance, what does ‘same employer’ mean? When do we say a job is ‘the same?’. Is the article applicable in case of assignment to a new job or a new job grade in the absence of termination? Let’s start with the last question.

Re-employment implies termination of the previous contract and formation of a new employment relationship. Therefore, there is no room to apply article 11/2/ LP during the continuity of employment. This should be considered as one of the gaps of the proclamation, because there are cases which warrant probation even in the absence of termination. Take for instance, a worker who is employed as human resource officer applies through internal vacancy for the position of attorney [let’s say he has two qualifications]. This worker has not been tested for the new position. There is no reason why he should be exempted from probation simply because there is no termination.

Same Employer

Similarity of employer poses a question in case of holding company where the worker is employed by one its subsidiaries and in case of transfer of undertaking. When the contract with one of the subsidiaries is terminated and the worker is re-employed by another subsidiary, can we say there is ‘same employer’? Article 2/1/ & /2/ of LP after defining employer and undertaking states any branch carrying on the activities of an undertaking which is designated separately and which enjoys operational or organizational autonomy shall be deemed to be a separate undertaking. As a subsidiary enjoys operational or organizational autonomy, for the purpose of Article 11/2/ a subsidiary could not be considered as ‘same employer’.

Transfer of undertaking normally will not result either in variation or termination of contract. But let’s say before transfer a worker’s contract is terminated legally and after transfer he is hired again by the new owner. Is the new owner same or different employer? The law’s assumption in prohibiting variation and termination during transfer of undertaking, is that transfer does not create a new employer, though there is a new owner. Applying this reasoning to probation, a worker whose contract has been terminated with the transferor and later is re-employed by the transferee should not be subject to probation because there is similarity of employer, even though there is change of ownership.

Same job  

Probation is prohibited when re-employment is for the same job. By ‘the same job’ if we are referring to the broad category of the job, [like engineer, attorney, driver etc…] difference in job category should not be taken into account. However, if we read the Amharic version carefully, same job means ‘work which was being performed’ by the worker before termination. Hence, probation applies when there is difference in job grade, even though the general nature of the job is the same.

Effects of Probation Period

Unless the law or work rules or collective agreement provides otherwise, the probation worker shall have the same right and obligation that a worker who has completed his probation period possesses. /Article 11 Sub-Art. 4 LP/ A collective agreement may impose limitations and restriction only on those entitlements and benefits emanating the agreement itself. In other words, the minimum labour rights of the probation worker will not be affected. Practically, as membership to trade unions is conditional upon completion of probation period, non-members are not in a position to reap the fruits of collective bargaining. Similarly, it is unlikely, work rules will treat the probation worker differently based on completion or non-completion of probation. As defined in article 2/6/ of LP, work rule are internal rules set by the employer regarding the manner of implementing employment conditions and disciplinary measures. Uniform application of such rules is to the benefit of the employer. This leaves us with what could be ‘provided otherwise’ by the labour proclamation. Below, we will look in detail how the law treats a probation worker during continuity and termination of the employment relationship.

Rights and Duties of the employee during probation

During continuity of employment, the labour proclamation does not treat workers differently based on their probation status. Rights, duties and minimum labour conditions are uniformly applicable to all workers with the exception of sick leave. The short length of service, not the law, is what differentiates workers on probation from the remaining category of workers. For instance, Although, annual leave is a right reserved to all (including probation workers), practically it is not a right to be enjoyed during early employment. Similarly, maternity leave is also difficult to implement during probation. However, upon termination, payment for annual leave not taken has to be made by the employer proportional to the length of service of the probation worker. This will be payment for leave for two months which is around two and have days.

Termination by the employer

The major effect of probation is the discretion it confers on the employer to terminate the contract. As stated in article 11/5/ of LP, if the worker, during his probation, proves to be unfit for the post, the employer can terminate the contract of employment without notice and without being obliged to pay severance and compensation. Compared to the ordinary cases of dismissal with or without notice, the provision provides for a very relaxed substantive and procedural requirement of termination. Proof of unfitness seems objective criteria, but ultimately it is the subjective assessment by the employer that determines fitness of the worker. A court will not hear contrary evidence by the worker to establish his competence.

In addition to the lax ground of termination, the employer is also relieved from the procedural requirement of notice. This is stated in article 11/5/ and 35 of LP. Notice will not be given even when termination is due to reduction of work force.

The fact that a probation worker who is proved to be unfit for the job and whose contracted is terminated without notice, will not be entitled to severance pay and compensation, is a general rule applicable to all workers. As the nature of such termination is lawful, there is no way severance pay and compensation could be paid as a result of lawful termination upon initiation of the employer. This leaves us with three related basic questions?

  1. Is there any instance in which termination of employment by the employer during probation could be regarded as unlawful?
  2. If the answer to the above question is in the positive, is the probation worker still excluded from severance pay and compensation?
  3. What is the effect of termination due to closure of undertaking and reduction of workforce in terms of payments to probation worker?

Termination by the employee

Just like the employer, a worker on probation may also terminate his contract of employment without notice. /Article 11 Sub-art. 6 LP/. He is not required to specify any reason for his decision. Here, it is important to bear in mind that termination without notice by the employee could be on valid grounds specified by law. These grounds are listed in article 32 of LP. Just to relate this to the effects of probation, let’s take sexual harassment as an example. A worker can quit her job without notice if she is a victim of sexual harassment or sexual violence by the employer or a managerial employee.

Resignation without notice on valid grounds is a remedy available to all workers alike including those on probation.

Unlawful Termination

Given the wider discretion of the employer to terminate the contract during probation, it is difficult if not impossible, to find cases of unlawful termination during this period. One narrow possibility is termination without any sort of assessment of employee’s fitness. The law does not require a formal performance appraisal report like the one applicable for termination with notice due to incompetence. /Article 28/1/ LP/ Evaluation of fitness goes beyond competence and may include personal traits of the employee. This does not mean he could be dismissed based on personal feeling /taste/ of the employer. The employer may not like him for different reasons unrelated to his fitness to the job. This is not sufficient ground to lawfully terminate his contract. In short, termination during probation in the absence of any evaluation or report from his immediate supervisors makes it unlawful.

Another instance is termination that falls under article 26 specifically on one of the grounds listed in article 26/2/ LP. Generally, A contract of employment may only be terminated where there are grounds attributed to the worker’s conduct or with objective circumstances arising from his ability to do his work or the organizational or operational requirements of the undertaking. Article 26/3/ lists grounds that shall not be deemed to constitute legitimate for the termination of a contract of employment. So, let’s say if a probation worker is dismissed based on his Nation, Sex, Religion, Political outlook, Marital status, Race, Color, Family responsibility, Pregnancy, Disablement or Social status, the measure of the employer becomes automatically unlawful.

Severance Pay

During probation the employer is relieved not only from the requirement of notice but also from payment of severance pay and compensation. But this applies if termination is on grounds of unfitness.

Article 39/1/ makes payment of severance pay conditional upon completion of probation period. This means, even if the worker qualifies the specific requirements of severance pay, by the mere fact that he is under probation he will not be eligible.

Despite clarity of plain words of the law, there are at two instances which make interpretation inevitable. In the discussion above, it was indicated unlawful termination by the employer and termination without notice by the employee on valid grounds could happen even during probation. Generally speaking, either of these two conditions (listed under article 39/1/ LP) guarantee payment of severance pay. The problem is the article makes completion of probation a universal eligibility criteria. Seen from labour law’s purpose perspective, this results in unintended by the law. To deny severance pay to a worker who has been dismissed unlawfully, is to encourage arbitrariness in the workplace. Similarly, it is not the law’s intention to deprive a probation worker who resigned for valid grounds like sexual violence.

Compensation

The law does not exclude a probation worker from getting compensation due to lawful and unlawful termination. Compensation due to closure of undertaking and reduction of workforce is equally payable to all workers irrespective of probation period]. Article 40/3/] Similarly, article 43 which determines compensation due to unlawful termination, does not exclude workers on probation. When a worker resigns due to valid reasons, he is entitled to compensation equal to thirty times his daily wages of the last week of service. When the ground of resignation is sexual harassment or sexual violence, the compensation increases three times the ordinary amount. All of these compensations are payable to all workers including those on probation.

Expiry of probation period

The effect of expiry of probation is automatic. No further action is required from the employer’s side for continuity of employment. As stated in article 11/7/ LP, upon expiry, a contract of employment for the intended period or type of work shall be deemed to have been concluded from the beginning of the probation period. The provision, in other words limits the power of the employer to terminate the contract (in the absence of valid grounds) after the date of expiry. This being clear, the question is when does exactly probation period expire?

In the previous labour proclamation, the length of probation was 45 consecutive days. Therefore, on the 46th day, it will expire. Similarly, under the current labour law, after 60 working days have elapsed, it expires on the 61st working day. Therefore, starting from this date, the probationer is a full-fledged worker.

Despite clarity of the law, the cassation bench’s interpretation in Ethiopian Airlines vs. Ms. Fitsum Hailu (C/F/N 101890 Vol. 17) is ambiguous. In this case, which was decided based on the previous labour proclamation, Ms. Fitsum’s contract was terminated the next day after she completed 45 consecutive days of probation. However, the bench reasoned, the decision of the employer to terminate the contract on the 46th day could not be considered neither too early or delayed’ decision. ‘Delay’ is not a test to determine expiry. The issue in the case could be solved by simply counting the days.

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