Under Ethiopian Labour Law, one of the fundamental grounds for the termination of an employment contract is the completion of the work for which the employee was hired or the expiration of the contract period. This article delves into the principles governing such terminations, examining the legal framework and key judicial interpretations from the Federal Supreme Court Cassation Bench.
The Legal Framework: Fixed-Task Contracts
The Labour Proclamation No. 377/2003 (as amended) provides for different types of employment contracts, including those for an indefinite period and those for a definite period or specific task. Article 24(1) of the Proclamation states that an employment contract shall terminate when the period for which it was made expires or when the work for which the employee was hired is completed. Correspondingly, Article 10(1)(a) specifically allows for an employment contract to be made “until the completion of a specific task for which the employee was hired.”
When an employment contract’s duration is defined by the scope of a particular work, the completion of that work naturally leads to the contract’s termination. Crucially, if the contract is proven to have been made for a specific task, the completion of that task becomes a factual question that must be established by evidence. If the employer successfully demonstrates the completion of the work, the burden does not shift to the employee to prove that their engagement was not solely for that specific task.
Judicial Interpretation: The Burden of Proof and Factual Inquiry
The Cassation Bench of the Federal Supreme Court has provided crucial interpretations on these provisions through its decisions.
Case Study 1: Adika Tour and Travel Agency PLC vs. Asmare Belay et al. (Cassation Case No. 43848)
In this case, the employees (respondents) were engaged by Adika Tour and Travel Agency PLC (appellant) to renovate a newly purchased house. Upon the renovation’s completion, their employment was terminated. The employees challenged this, alleging unlawful termination.
The Federal First Instance Court, and subsequently the Federal High Court on appeal, ruled in favour of the employees, asserting that the employer had failed to prove a clear agreement existed limiting the employees’ engagement solely to the house renovation, thus deeming the termination unlawful.
However, the Cassation Bench overturned these decisions. It critically noted that the employees had neither claimed nor argued that they were hired for any work beyond the renovation. Furthermore, the lower courts’ decision, based on the employer’s alleged failure to prove, was deemed inconsistent with the absence of any factual inquiry by the court itself into the matter. The Cassation Bench unequivocally stated that the completion of the house renovation automatically triggered the termination of the employment contract under Article 24(1) of the Proclamation. This judgment underscores that judicial decisions must align with the pleadings and that the completion of a clearly defined task, when proven, validly terminates the contract.
Case Study 2: Hailemichael Yihdego vs. Ato Girma Ayele (Cassation Case No. 25765)
In another significant case, an employee (respondent) hired for house plastering work was terminated by the employer (appellant). The employee sought reinstatement or payment. The lower courts ruled that the employer had failed to prove the termination was due to work completion and ordered payments.
The Cassation Bench, in this instance, reversed the lower court’s decisions. It criticized the lower courts for basing their rulings solely on the premise that the contract was for a specific work, without properly investigating whether the work was actually completed. The Cassation Bench clarified that if the contract was for a specific task, such as house plastering, the contract would naturally end upon the completion of that work, in line with Article 10(1)(a). The Court highlighted that the lower courts’ error lay in concluding unlawfulness merely because the employee was dismissed before the work was complete, rather than properly verifying if the work was indeed complete.
These cases collectively emphasize that the employer bears the burden of proving that the specific work for which the employee was hired has indeed concluded. Failure to do so does not mean the contract can be terminated at any time simply because it was initially for a specific task; rather, it implies that the termination may be deemed unlawful.
Consequences of Lawful Termination Due to Work Completion
When an employment contract terminates due to the completion of the work as legally stipulated, the employer is generally not obligated to issue a termination letter or provide notice. This distinct nature of termination impacts the subsequent course of any labour dispute. An employee who feels their contract was unfairly terminated in such circumstances may file a claim asserting wrongful termination or demanding wages as if the contract were still ongoing. If the court ascertains that the contract was, in fact, for an indefinite period, the employee’s claim for payments may be upheld. Conversely, if it is confirmed that the contract was for a specific task and that the work has been completed, any claim for post-termination wages will be rejected, as the contract has legally ceased to exist.
Case Study 3: Ethiopian Electric Power Corporation vs. Ato Asfawhun Fantahun et al. (Cassation Case No. 43836)
This case involved employees hired by the Ethiopian Electric Power Corporation to lay electric lines. Despite completing the work and their probationary period, becoming “permanent,” the Corporation ceased paying wages. The employees sued for wages and per diems. The employer’s defence was that the employees were hired for a specific task (line laying), which was now completed, hence no further payments were due.
The lower courts ordered the Corporation to pay wages and benefits and even stated that the employees “could continue working if they wished.” However, the Cassation Bench overturned these decisions. It noted that the completion of the work was evident even from the employees’ own arguments. Therefore, applying Article 24(1) of the Proclamation, the Cassation Bench concluded that the employment contract had lawfully terminated, leaving no room for the employees to claim further rights. This case reinforces the principle that once the specific work is demonstrably completed, the contract terminates irrespective of other factors like probationary period completion or potential “permanence” if the initial engagement was task-specific.
Beyond Explicitly Defined Tasks: Intermittent and Occasional Work
Article 10 of the Labour Proclamation enumerates various situations where an employment contract can be made for a definite period or specific work. Beyond the explicit “completion of a specific task” under Article 10(1)(a), it includes provisions for intermittent work, seasonal work, or occasional work. Even though these types of engagements might exhibit a certain level of continuity, Article 24(1) remains applicable upon the completion of the particular work within that context. For instance, a daily labourer employed on a per-day basis for occasional work will have their contract terminated once that specific work is finished (as observed in Commercial Bank of Ethiopia vs. Ato Alemayehu Kebede et al., Cassation Case No. 29692).
The Cassation Bench’s rulings, indicating that contracts under sub-provisions of Article 10 also terminate upon work completion, serve to prevent potential disputes regarding the ongoing nature of such engagements. While intermittent or occasional work might recur throughout the year (e.g., loading and unloading operations in certain businesses), the implicit acceptance in decisions like S/N 29692 is that the periodic recurrence of work does not necessarily render a termination unlawful if it aligns with the completion of the specific task assigned at that time.
Unresolved Questions and Areas for Clarification
Despite the judicial interpretations, certain ambiguities persist, particularly regarding the precise definition of “completion” for intermittent, occasional, or seasonal work. The critique of Cassation Case No. 29692 highlights this gap: When exactly is such work deemed “completed”? If work for a daily laborer recurs every few days or weeks, and it constitutes a permanent part of the employer’s operations, does it truly “complete” or merely “interrupt”? Can it be argued that the work terminates with each interruption? Should temporary cessation of occasional work be considered its “completion” when it is only required periodically? These fundamental questions, which are crucial for contemporary employer-employee relations, were arguably not fully explored in prior judgments, warranting further judicial clarity.
Conclusion
The termination of employment contracts due to work completion or expiration of a fixed term is a well-established principle under Ethiopian Labour Law, enshrined in Article 24(1) and Article 10. Judicial interpretations by the Federal Supreme Court Cassation Bench emphasize that the burden lies with the employer to prove the actual completion of the work. While these rulings have provided valuable guidance, particularly on the distinction between a fixed-task contract and an indefinite one, the nuances surrounding “completion” in intermittent or occasional work still present complex challenges that await more definitive judicial elaboration.