Private International Law and Transnational Employment Relationships

Transnational employment relationships—where employer-employee connections span multiple countries—are increasingly common in today’s globalized world. These relationships arise in various contexts. For example, employees working for the Commercial Bank of Ethiopia in Djibouti are employed by the bank in Ethiopia, but they work abroad. Similarly, Ethiopians seeking better opportunities abroad may work in foreign countries, while foreign nationals may take up employment in Ethiopia. In these and other similar cases, employment disputes raise significant issues in private international law. These issues include:

1. The jurisdiction of the court where the dispute will be heard
2. Which country’s employment laws will govern the dispute
3. Whether a judgment from a foreign court can be recognized and enforced

Before addressing these points, a court must first determine whether the case presents a private international law issue. This is typically done by examining whether there are ‘foreign elements’ in the case, which can be categorized in three ways:

• Personal elements: If one of the parties involved is a foreign national
• Local elements: If the transaction related to the dispute occurred partially or entirely outside the country
• Substantive elements: If the cause of the dispute (e.g., property) is located in another country

If any of these elements are present, the case is considered to raise a question of private international law.

Jurisdiction vs. Private International Law

In both civil and labor disputes, Ethiopian courts often confuse jurisdictional issues with private international law. While both ultimately concern the question of jurisdiction, their origins differ. The jurisdiction of the Federal High Court of Ethiopia is not limited by the amount of the case. All cases involving private international law fall under the jurisdiction of this court, irrespective of the case's monetary value. Thus, when a jurisdictional objection is raised, the court must first assess whether the case involves a foreign element and then decide accordingly.

For instance, if a dispute arises between an Ethiopian and a Kenyan (who resides permanently in Kenya), and the contract in question was signed in Malawi, the Ethiopian plaintiff could file the case in Ethiopia’s federal courts, arguing that the contract was not performed as agreed. However, before hearing the case on its merits, the court must first determine which of the three countries—Ethiopia, Kenya, or Malawi—has jurisdiction. Since the defendant is based in Kenya and the contract was signed in Malawi, Ethiopian courts may not have jurisdiction over the case.

This confusion about jurisdiction can lead to unnecessary complications in labor disputes, potentially victimizing the employee. This issue can be seen in the case of S/M/Q. 50923 (Applicant: Foundation Africa; Respondent: Ato Alemu Tadesse), decided on May 19, 2002.

Case Study: Cassation Case No. 50923

In this case, the applicant and respondent entered into an employment contract for work in Ethiopia, which was governed by Dutch law. After the termination of the contract, the respondent sought compensation for wrongful dismissal. Although the dispute was initiated in the Federal High Court, the case was remanded to the Supreme Court, which ruled that the dispute should be governed by Ethiopian labor law, finding the dismissal to be illegal.

The confusion in this case arose from the misapplication of jurisdictional principles. The court did not first determine whether the case involved private international law, resulting in an unnecessary delay and procedural confusion. The Federal High Court should have examined the personal, local, and substantive elements of the case to decide whether it raised a question of private international law. If the case did, the court should have then determined whether Ethiopian or Dutch courts should hear the dispute.

Case Study: S/M/N/A 50923

This case further illustrates the lack of understanding of private international law across multiple levels of the judiciary. When a jurisdictional objection was raised, the court erroneously passed the matter to a higher court instead of ruling on it directly. The court should have either accepted or rejected the objection based on its analysis of the case’s foreign elements, as outlined in Article 12/2 of the Federal Courts Proclamation No. 25/1988.

The Supreme Court ultimately ruled that the dispute should be resolved under Ethiopian labor law, disregarding the Dutch jurisdictional provision in the employment contract. This decision was not properly grounded in the correct application of private international law principles.

Correcting the Approach: Cassation Case No. 60685

A more accurate application of private international law principles is evident in the case of Cassation Case No.. 60685 (Applicant: Ato Bezabih Eshete; Respondent: Salini Construction), decided on February 21, 2003. In this case, the parties had entered into a contract governed by the employment and labor law of the United Arab Emirates (UAE), with work taking place in the UAE. The Federal High Court correctly determined that the dispute involved private international law and therefore ruled that it lacked jurisdiction, in line with Article 12/2 of the Federal Courts Proclamation No. 25/1988. The case was then transferred to the appropriate court, resolving the issue of jurisdiction properly