The Legal Framework on Letters of Termination
A termination letter, also known as a letter of dismissal, is a formal written document that an employer provides to an employee to inform them that their employment is being terminated. It is a vital document that formalizes the end of an employment relationship, protecting both the employer and the employee by providing clear communication, outlining important details, and serving as a legal record of the termination. It serves as official confirmation that the working relationship has ended.
Under Article 27(2) of the Labour Proclamation No. 1156/2019, employers are required to adhere to specific procedural steps when terminating an employment contract for reasons outlined in the article. A key obligation is to provide the employee with a written letter specifying the reason and date of termination. Beyond its role as evidence, a dismissal letter is essential for clarifying the termination’s specifics, such as the effective date and the rationale behind the decision.
If a dismissal is communicated orally, it creates the possibility for the employer to deny the termination. Moreover, it limits the employee’s ability to present sufficient evidence to challenge the dismissal, thereby restricting their ability to exercise their legal rights. Requiring written notification not only provides a formal record but also ensures that the employee is fully informed of the termination’s details. This obligation is most effective when consistently implemented in writing.
Cassation Bench’s Stance on the Legal Implications of Missing Termination Letters
Issuing a termination letter is a legal duty for employers. But what happens when this obligation is not met?
In Case No. 49797 (Applicant: Al-Habesh Sugar Mills Private Limited Company, Respondent: Tegene Gebre Hawariyat, March 30, 2002, Volume 9), the lower court ruled that a verbal dismissal without a written termination letter rendered the dismissal unlawful. However, the Cassation Bench provided a nuanced interpretation of Article 27(2).
The Cassation Bench held that failing to provide written notice does not automatically render the dismissal unlawful. Under Article 27(2), even if an employer terminates an employment contract verbally or through actions without a written explanation, the employer is not barred from presenting evidence to justify the dismissal. Thus, the absence of a written termination letter does not inherently invalidate the dismissal, provided the employer can substantiate the decision with sufficient evidence.
In Cassation Case No. 49797, the Cassation Bench clarified that the absence of a written dismissal notice does not automatically render a dismissal unlawful, provided that the termination of the employment contract itself is not contested.
In Cassation Case No. 104862, the Bench reasoned that if an employee is absent from work for five consecutive working days without a valid excuse, the employer’s failure to issue a written dismissal notice does not invalidate the termination of the employment contract under Article 27(1)(b) of the Proclamation.
In Cassation Case No. 213201, the Bench further elaborated on oral dismissals:
The termination letter primarily serves as a formal notification to the employee, detailing the reason and date of the employment contract’s termination. While such a letter provides evidence of termination, the Bench has consistently held that the lack of this document does not, by itself, make the dismissal unlawful. The employer’s initiation of the termination can still be substantiated through other forms of evidence. (See Cassation Case No. 104862, Volume 18, and other cases.)
Cassation Bench’s Stance on Dismissal Grounds Not Stated in the Dismissal Letter
The Federal Supreme Court of Ethiopia’s Cassation Bench has consistently ruled in three cases that alleged misconduct committed by an employee cannot be considered during a trial unless it was mentioned in the letter of termination issued to the employee.
The main rulings and reasoning of the Bench in these cases are presented below:
Cassation Case No. 227779
The Bench indicated that, as stipulated under Article 27(2) of Proclamation No. 1156/2019, when an employer terminates an employee’s employment contract, they must provide the employee with a written notice stating the reason and date of termination. The purpose of this written notice, as prescribed by law, is twofold: to enable the employee to understand the reason and date of dismissal and to enforce their rights, and to serve as evidence in the event of a dispute over the termination or non-termination of the employment contract.
In this regard, the Federal Supreme Court, in its judgments in Cassation Case No. 213201 and Cassation Case No. 219526 (unpublished), has given a mandatory interpretation that any reason the employer raises during the dispute, other than the reason stated in the dismissal letter, shall not be accepted. Therefore, it is not necessary to examine reasons for dismissal if they are not included in the termination letter.
Cassation Case No. 227768
In Cassation Case No. 227768, the Bench stated that the law mandates the employer to provide the employee with written notice specifying both the reason for the dismissal and the date of termination, as set forth in Article 27(2) of Proclamation No. 1156/2019.
The purpose of this provision is twofold:
Employer’s Expectations: It ensures that employees perform their work diligently and responsibly, thereby contributing to the employer’s productivity and competitiveness.
Employee Protection: It protects the employee from arbitrary dismissal, ensuring that the employer can only terminate the contract for serious misconduct, based on the severity of the offense. This system prevents dismissals for trivial reasons and safeguards job security.
Thus, the legal requirement for the employer to provide written notice of termination serves important functions: it informs the employee of the reasons for dismissal, helping them understand their rights, and it ensures that, when the termination is disputed, the dismissal letter serves as formal evidence.
The Cassation Bench has addressed the legal consequences of failing to include the dismissal grounds in the written termination notice, particularly regarding the employer’s burden of proof in establishing the employee’s fault and the existence of a valid dismissal. Key rulings, such as Cassation Case No. 43610 (Volume 8) and Cassation Case No. 49797 (Volume 9), have emphasized that if the reason for dismissal is not explicitly stated in the dismissal letter, the employer is unable to introduce new justifications during a labor dispute. The Court has consistently ruled that any reasons not included in the dismissal letter cannot be considered valid grounds for dismissal (see Cassation Case No. 213201, March 2014; Cassation Case No. 219526, June 2014 (unpublished); and other cases).
Cassation Case No. 202235
In Cassation Case No. 202235, the Bench rejected the employer’s argument that grounds for dismissal not stated in the written letter of termination could be considered for determining whether termination occurred before the lapse of the 30-day period set by the Proclamation.
One of the employer’s obligations when an employee’s employment contract is terminated due to misconduct is to notify the employee in writing, stating the reason and date of termination (see Article 27(2) of the Proclamation). This requirement ensures that the employee, understanding the situation, can file a complaint with the relevant body through the legal system. Furthermore, the document (letter) can be used as evidence when the termination of the employment contract or the reason for the termination is disputed.
In the case at hand, the applicant notified the respondent in writing on 28/12/2011 of the reasons for terminating the employment contract. The last violation listed in the termination letter was committed on 29/10/2011. Consequently, the 30-day period for dismissal had expired. The issue debated in this case, however, is whether alleged misconduct—committed on 09/12/2011 but not disclosed in the termination letter—can be considered. The applicant referenced the Supreme Court Cassation Bench’s decisions in Cassation Case Nos. 43610 and 49797 to support this argument.
Upon examining these cases, the core issue was whether evidence other than written documentation can be used to prove an employer’s termination of an employment contract. Specifically:
If the employer denies terminating the employee’s contract, can the employee rely on other evidence to prove the existence of termination?
If the employer admits to orally dismissing the employee, does the burden of proving the reason and legality of the dismissal shift to the employer?
The Cassation Bench concluded in those cases that if the employer denies issuing written notice, the employee must prove the termination through other evidence. However, if the employer admits to dismissal, they must prove its justification and legality (see Cassation Case Nos. 43610, Volume 8; 49797, Volume 9; and 104862, Volume 18).
These decisions clarified that when no written dismissal letter is provided, other evidence may be used to establish the termination. However, the Bench did not permit employers to introduce new grounds for dismissal during dispute proceedings after initially stating reasons in writing.
Therefore, the cited decisions are not applicable to the present dispute. The lower court rejected the claim that the respondent caused damage to the applicant’s property on 09/12/2011, as this reason was not included in the dismissal letter. The applicant’s petition, challenging this rejection, fails to align with the intent of the Cassation Bench’s rulings or the provisions of Article 27(2) and (3) of the Proclamation.
Are the Two Stances Reconcilable?
The Cassation Bench appears to adopt two seemingly contradictory positions.
On the one hand, it allows an employer to prove, by any means, the legality of a termination even if they failed to meet the legal obligation of issuing a termination letter. On the other hand, it bars an employer who complies with this obligation from introducing new grounds for termination that were not included in the written dismissal letter.
This creates an apparent imbalance: an employer who neglects the legal requirement to issue a written termination letter is, paradoxically, in a more advantageous position than one who fulfills their obligation. By evading the issuance of a letter, the employer gains the flexibility to raise any ground for termination during disputes, provided it is supported by evidence.
The implication is troubling. The Bench’s stance sends an unintended message to employers:
If you issue a written dismissal letter, your ability to argue the legality of the termination is restricted to the reasons explicitly stated in that document.
If you avoid issuing a written letter, you retain the opportunity to present any grounds for termination later, as the specific reasons cited at the time of termination become irrelevant.
This discrepancy undermines the principle of fairness and could incentivize non-compliance with legal obligations. Employers may be tempted to sidestep the requirement of providing a written termination letter to preserve their flexibility in disputes.
To reconcile these stances, the Bench could establish a consistent approach that balances accountability with procedural fairness. One solution might be to regard any termination of employment without a written letter of termination as automatically unlawful. This would ensure that employers are not rewarded for evading their legal obligations and that employees are protected from arbitrary or post hoc justifications for termination.
Such a recalibration would align with the broader objectives of labor law: promoting transparency, accountability, and fairness in employment relationships while discouraging legal loopholes that could be exploited to the detriment of employees.