The Workers Rights 
Ethiopia is proposing radical reforms on the use of expatriates for foreign investors and multinational companies. The Ministry of Labour and Skills is transitioning to more specific rules for foreign employees through the Draft Expatriate Employment and Work Permit Issuance Directive (Directive No. 772/2021) which replaces the current Expatriate Rules.
The “One-to-One” Strict Position Rule is at the heart of the proposed framework. The draft would not allow an enterprise to employ more than one foreign national at the same position, which means that the company’s executive roles could change for companies doing business in Ethiopia.
What does the One-to-One Rule mean?
The proposed rule would allow a company to appoint one incumbent from overseas to fill a designated “foreign senior officer” role at the company. The system outlined would not allow for more than one foreign co-director, or even two earmark foreign coaches who had distinct duties.
The approach also focuses on Ethiopian understudies. If a foreign national is in an authorized management position, the secondary and/or deputy management tasks should be handled by Ethiopian nationals thus enhancing the structured transfer of knowledge and skills.
Clearer Pre-Operational and Operational Phases
The draft directive would also help to create the separation between pre-operational and operational activities more clearly. The pre-operational phase would start from the time when an investor has been issued with the Investment Permit and end with the Business License.
Prospective foreign Finance Manager during this set up time exists as well as Project Manager and Deputy Project Manager. May be able to give more financial supervision in capital intensive project development to investors.
Business License will be the operational one in the latter days. Investors would thus have to align the timing of foreign work permits and staffing placements with their business licensing.
What Investors Should Do?
Organizations should use their organizational structures and see if there are duplicate foreign management titles. On top of that, they ought to devise succulent and development plans for understudies from Ethiopia that are documented.
The proposed infrastructure and/or manufacturing-based or other capital intensive project investors might also want to look at how the proposed pre-operational Finance Manager provision is included within their staffing strategy.
FAQs
What is Ethiopia’s One-to-One foreign management rule?
It is a proposed restriction which stipulates that companies shall have only one foreigner in each of its particular management duties or designations.
At what point will the operational phase kick in?
The draft framework starts the operational stage with the issuance of the Business License to the enterprise.
Is it possible for a foreign Finance Manager to operate prior to the start of operations?
Yes. The draft outlines several proposals, one of which is to grant a foreign FIM in the pre-operational period.
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