Introduction
The modern economy, with its gig-based projects and flexible work arrangements, has increasingly led employees to seek supplemental income streams. This practice, often referred to as “dual employment” or “moonlighting,” occupies a complex and often contentious space within the landscape of labour relations. In Ethiopia, the Labour Proclamation does not contain an outright ban on an employee holding a second job. However, this absence of a direct prohibition should not be mistaken for unconditional permission. The legality of dual employment is not a simple yes-or-no question; rather, it is a nuanced issue governed by foundational legal principles, specific contractual obligations, and a growing body of judicial interpretation from Ethiopia’s highest courts.
At its core, the debate over dual employment balances two competing interests: the employee’s fundamental right to utilize their personal time and skills to improve their livelihood, and the employer’s legitimate expectation of loyalty, undivided attention during working hours, and the protection of its business interests. When an employee’s secondary employment compromises their duties to their primary employer, this delicate balance is broken, leading to disciplinary action and, frequently, termination of employment.
This chapter delves into the legal framework surrounding dual employment in Ethiopia. It will begin by exploring the foundational principles of the employment relationship, such as the duty of fidelity and the freedom of contract. It will then analyze the specific circumstances under which dual employment transitions from a private matter to a terminable offense, drawing heavily on the binding legal interpretations of the Federal Supreme Court Cassation Division. Through an examination of these key cassation rulings, we will uncover the critical distinctions the Court has made regarding concurrent employment, conflicts of interest, and the procedural obligations that both employers and employees must navigate.
1. Foundational Principles of the Employment Relationship
Before analyzing specific prohibitions, it is essential to understand the underlying principles that shape the employment contract. These principles form the bedrock upon which the rules against certain forms of dual employment are built.
The Duty of Fidelity and Good Faith
An employment contract is more than a simple economic transaction of labour for wages. It establishes a relationship founded on mutual trust and confidence. Central to this is the employee’s duty of fidelity, an implicit obligation to act in good faith and to be loyal to the employer’s interests. This duty requires an employee to prioritize their employer’s welfare in all matters related to their job. Working for two employers simultaneously, especially during the same working hours, is often seen as a fundamental breach of this duty, as it is impossible to give full attention and loyalty to two masters at once.
The Employer’s Right to Productivity and an Employee’s Time
When an employer pays a salary, they are purchasing not just the employee’s skills, but also their time and productive capacity during agreed-upon working hours. The employer has a right to expect that during this period, the employee’s focus and energy are directed towards fulfilling their contractual duties. Dual employment can directly undermine this right by causing fatigue, reducing focus, and leading to a decline in performance and productivity, even if the second job is performed outside of official hours.
The Principle of Freedom of Contract
The Ethiopian law of contracts, which underpins the Labour Proclamation, is grounded in the principle of freedom of contract. This means that parties are generally free to agree to any terms and conditions they see fit, as long as those terms are not illegal, immoral, or contrary to public policy. In the context of dual employment, this principle allows an employer to include a clause in the employment contract or collective agreement that explicitly prohibits the employee from taking up any other employment. If an employee willingly signs such a contract, they are legally bound by its terms, and a violation of that clause constitutes a breach of contract, which is a legitimate ground for termination.
2. When Dual Employment Becomes a Terminable Offense
The Ethiopian Cassation Court has, through numerous rulings, clarified the specific scenarios where dual employment crosses the line into illegality. These decisions have established binding legal interpretations that lower courts must follow, creating a clearer, albeit strict, set of rules.
A. Undisclosed, Concurrent Employment as an Act of Fraud
The most unambiguous ground for termination is when an employee works for two different employers during the same, overlapping hours without the knowledge and permission of the primary employer. The Cassation Court has consistently and forcefully interpreted this act not merely as a breach of duty, but as an act of fraud.
In its landmark ruling in Cassation Case No. 41767, the Court established a powerful precedent. It stated, “Unless the employer gives explicit permission, if it is discovered that an employee is working in two places at the same time, the act constitutes fraud committed on the job, and carries no other meaning.” This interpretation was later reinforced in Cassation Case No. 140457, where the Court described undisclosed simultaneous employment as a “serious act of fraud” that has a “great negative impact on… production and productivity.”
Perhaps the most critical development in this area came from Cassation Case No. 225138. The lower courts had ruled that the employer needed to prove that the dual employment caused actual damage to its business. The Cassation Court forcefully rejected this, creating a mandatory legal interpretation: proving actual damage is not a prerequisite for establishing fraud in cases of undisclosed dual employment. The Court reasoned that the act of concealing the truth to gain an unfair advantage (i.e., receiving salary from two employers for the same time) is inherently fraudulent. The deception itself is the offense. This principle was again upheld in Cassation Case No. 234344, which confirmed that such an act justifies immediate dismissal without notice under Article 27(1)(c) of the Labour Proclamation.
B. Conflict of Interest and Unfair Competition
A more nuanced situation arises when the second job is performed outside the primary employer’s working hours but creates a conflict of interest. This typically occurs when an employee:
- Works for a direct competitor.
- Uses confidential information (e.g., customer lists, trade secrets, marketing strategies) from their primary job to benefit their secondary employment.
- Starts a business that directly competes with their employer.
Here, the Cassation Court has adopted a more balanced approach that requires a factual investigation into the actual impact of the employee’s actions. The ruling in Cassation Case No. 170425 is instructive. An employee of a café was terminated for making and selling similar cakes for personal benefit in his spare time. The Court found that merely performing similar work is not automatically fraud. It established a crucial distinction: for such an act to be a terminable offense, the employer must prove that the employee’s actions damaged the property interest of the employer. The Court stated that there is “no law prohibiting the Applicant from working during his spare time to improve his livelihood,” but this work “should be done in a way that does not harm the property interests of the Respondent organization.”
This ruling places an evidentiary burden on the employer. Unlike cases of concurrent employment where the act itself is fraud, in cases of potential conflict of interest, the employer must demonstrate actual or potential harm to its business.
C. Breach of an Explicit Contractual Prohibition
As noted under the principle of freedom of contract, an employer can make the prohibition of dual employment an explicit term of the employment relationship. This can be done through:
- An Individual Employment Contract: A specific clause stating the employee shall not engage in other work.
- A Collective Agreement: A provision that applies to all employees covered by the agreement.
In Cassation Case No. 234344, the employer’s collective agreement explicitly defined performing similar work for another enterprise as an offense warranting termination without notice. The Court upheld the termination on this ground, demonstrating that a clear and agreed-upon prohibition in a collective agreement is a legally enforceable basis for dismissal, separate from but often overlapping with the concept of fraud.
3. Procedural Rules and Limitations
Even when an employer has a valid reason to terminate an employee for dual employment, they must adhere to strict procedural rules and time limits set by the Labour Proclamation. Failure to do so can render an otherwise lawful dismissal illegal.
The 30-Day Statute of Limitations for Dismissal
Article 27(3) of the Labour Proclamation states that an employer’s right to terminate an employment contract for misconduct is forfeited if not exercised within thirty working days from the day the employer became aware of the misconduct.
This rule is strictly enforced. In Cassation Case No. 202393, the employer was aware of the employee’s alleged offenses but waited much longer than 30 working days to terminate her. The Court ruled that the employer had lost its right to dismiss the employee on those grounds, rendering the termination unlawful. Conversely, in Case No. 41767, the Court meticulously calculated the days between the employer’s discovery of the dual employment and the dismissal, finding it fell within the 30-day limit, thus making the termination timely and lawful. This highlights the critical importance for employers to act promptly upon discovering grounds for dismissal.
The One-Year Statute of Limitations for Claims
A different time limit applies when an employer seeks to file a claim against an employee arising from the employment relationship, such as the recovery of unduly paid salary. Article 163(1) of the Labour Proclamation sets this limitation period at one year.
The key question is: when does this one-year period begin? Cassation Case No. 229247 provided a definitive answer. An employer terminated an employee for dual employment and later sued to recover the salary paid during that period. The employer argued the one-year clock started when they received a formal confirmation letter from the other company. The Cassation Court disagreed, ruling that the limitation period begins “from the date on which it became possible to assert the right.” In this case, that was the date the employer first learned of the dual employment and acted upon it by terminating the employee. The subsequent letter was merely the collection of evidence, not the creation of the right to sue. Because the employer waited more than a year from their initial discovery to file the claim, it was ruled to be statute-barred.
Conclusion
The legal landscape of dual employment in Ethiopia is a tapestry woven from principles of loyalty, contractual freedom, and precise judicial standards. While the Labour Proclamation does not explicitly forbid holding two jobs, the jurisprudence of the Federal Supreme Court Cassation Division has made the boundaries clear.
The key points for employees and employers are:
- Undisclosed Concurrent Employment is Fraud: Working for two employers during the same hours without permission is considered an act of fraud justifying immediate termination. The employer does not need to prove they suffered a specific loss.
- Spare-Time Work Requires Proof of Harm: Engaging in similar work during one’s spare time is not automatically a terminable offense. The employer bears the burden of proving that this activity creates a conflict of interest that causes actual damage to its property or business interests.
- Contracts are Binding: A clear clause in an employment contract or collective agreement prohibiting dual employment is legally valid and enforceable.
- Time Limits are Absolute: Employers must act decisively. The right to dismiss for misconduct expires 30 working days after its discovery, and the right to file a financial claim expires one year after the right to sue arises.
For employers, the path to protection lies in clear, well-drafted employment contracts and prompt, decisive action based on solid evidence. For employees, the guiding principles must be transparency and a clear understanding of their contractual obligations. An open conversation with a primary employer before taking on secondary work, while potentially difficult, is far less perilous than the legal consequences of concealed dual employment.