Judicial Limitations on Employer’s Power of Transfer of Workers

In almost all levels of the judiciary, one could hardly find any decision interpreting or applying the provisions of the labour proclamation dealing with variation of employment contract. It is not because they didn’t encounter disputes relating to variation, rather the reason lies in their failure to relate the law with the relevant facts of the case. Variation implies making changes to the terms and conditions of the contract. Two important elements of the terms and conditions are the job duties and work location. A contract of employment is a legally binding agreement: the two parties are bound by its terms and it is enforceable in law. An employer wishing to make changes should first obtain consent of the worker. 

Article 15 of the labour proclamation provides three mechanisms by which variation could be made. These are collective agreement, work rules and written agreement of the parties. Collective agreement and work rules are the preferred methods as they enable the employer to make changes when the need arises by inserting standard clauses. For instance, a flexibility clause allows the employer to change the person’s job duties whereas mobility clause entitles the employer to change the work location. In the absence of standard clauses, obtaining written consent of the worker is mandatory to make variation valid.

The legal provision on variation is clear. What is not clear is the ‘position’ of the judiciary especially the cassation bench of the federal supreme court. A substantial proportion of labour disputes brought before the bench deal with legality of transfer of job and place. Unfortunately, none of these cases have been considered as issues of variation of contract. Though, lacking any legal basis, the bench’s rigid position is to treat the issue of transfer as managerial power of the employer. The cassation bench even [wrongly] plagiarized the concept of ‘prerogative’ from English labour law to describe the unlimited, unilateral power of the employer. Just for the bench’s reference, here is how the concept has been criticized by two English scholars:

Rather like the royal prerogative, though, management prerogative is one of those curious features of the UK workplace scene which nobody really un­derstands, but, with the assistance of the courts, has nevertheless acquired an almost mystical quality.

The truth is even an English employer does not have ‘prerogatives’ when it comes to changing job duties and place of work.

Although the Cassation's position on the transfer seems to be rigid, it recognizes the need to limit the power in some of the cases. But, they deal only with extreme instance of abuse of employer’s power.

Transfer and Constitutional Rights

In C/F/N 95252 (Awash Insurance S.C. vs. Abrha Taeme, unpublished, 2006 E.C.) transfer measure was declared illegal for violating constitutionally protected right. Respondent was assigned to the applicant's branch office, where he married a worker in the same branch. However, the employer was not pleased to see couples working in the same branch. According to the applicant's work rules, workers having first degree relationship either by marriages or blood are not allowed to work in the same branch. If they are employed, however, the work rules confer a right to the employer to relocate one of them.

Following measure of transfer by the employer, respondent filed a complaint with Labour Relations Board. The board found that the applicant's action was illegal and ordered the respondent be returned to his place of employment. An appeal by applicant to regional supreme court and cassation bench was unsuccessful.

Finally, applicant requested the federal supreme court cassation bench for review of the decision on ground of fundamental error of law. The bench, after a thorough examination of the cause of the transfer and the applicant’s internal regulations in line with the Labor Proclamation and the provisions of the Constitution, it came to the conclusion that appellant's action and the work rules clearly violate the right to marriage and family without discrimination guaranteed by Article 34, Sub-Article 1 of the F.D.R.E. Constitution. Employer’s measure and rules also violate sub article 3 of the same provision, which recognizes family as the natural and fundamental unit of society and entitled to protection by society and the State.

Oral transfer

In C/F/N. 77113 (Akiko Bodiwaz PLC vs. Geremew Abebe, Vol. 13, 2004 E.C.). transfer measure was revoked due to procedural defect. The bench criticized oral order of the employer to transfer the worker to a different work place as 'arbitrary'. According to the facts of the case, when the respondent received a transfer order orally, he requested a formal transfer letter. Subsequently, he was forced to leave the workplace by a security guard.

Following the incident, he lodged a complaint in first instance court, labour division bench. After losing the case, in first instance and high courts, applicant submitted cassation petition. Still, he was not successful. The bench while rejecting the petition stated:

Unless it is justified by the urgency of the situation, oral transfer constitutes arbitrary exercise of managerial power.

Preparation time

If the place of transfer is remote from the current workplace of the worker, the worker should be provided with adequate time for preparation. (C/F/N. 125004 Addis Fana General Commodity and Hotels Trade S.C. vs. Ato Liku Berhanu Volume 20, 2008 E.C.). It is far from the truth that sudden, ‘military-like’ transfer orders are not productive for the undertaking. Measured in terms of economic benefit oral transfer order is against employer’s interest. The underlying reason for such kind of spontaneous measure is surely to create inconvenience on the worker and force him resign ‘upon his own initiation.’

Transfer as Disciplinary Measure

In C/F/N. 105997 (w/t Lulit Ayalew Mamo vs. Ethiopian Insurance Corporation Vol. 18, 2007 E.C.) the worker was transferred from the audit department to the marketing department because she allegedly exhibited behavioural problems at work. In its ruling the cassation bench made it clear that transfer as a form of disciplinary measure will not solve disciplinary problems of workers, rather aggravates it. Applicant should adopt its own system for correcting behavioural problems and holding workers accountable. Substituting transfer for discipline is simply arbitrary use of administrative powers lacking in any purpose of connecting workers with their work.

Transfer to Sister Organization

Two companies having separate legal personality, but owned by one person are treated for the purpose of employment law as two different employers. Workers employed by one of the companies create rights and duties with that company only. Therefore, according to the cassation bench, transferring a worker from one sister company to another is automatically illegal. (DH Geda Blanket Factory Plc. vs. w/t Kidist Getachew Vol. 14, 2005 E/C.)