Ethiopia-BPR Lay offs cause pension rethink

Thousands of state employees could lose their pensions if a new proposal is passed by the House of Peoples’ Representatives.
The Federal Government has tabled a new proposal to amend public servants’ pension proclamation, concerning employees being laid off due to the ongoing Business Process Re-Engineering (BPR).
The biggest alliance of trade unions in Ethiopia, the Confederation of Ethiopian Trade Unions (CETU), says it is not aware of the proposed amendment.
BPR is resulting in massive lay offs among federal and regional organs, worrying the government that the casualties’ claims for pensions will overstretch its funds.
The existing law entitles employees made redundant to claim their pension as long as they served for 20 years and reached the age of 45 (20/45 regulation). However, the Government says this is only relevant when employment is terminated either due to privatisation or closure, and not when it is due to institutional transformation, as in the redundancies resulting from BPR.
The Government says BPR layoffs should not be entitled to claim the 20/45 regulation, as the practice would drain pension funds, instead it proposed to parliament to have a new article inserted into the existing regulation.
Upsetting some MPs when tabled last Tuesday, the proposed article tightens the condition for the BPR causalties, requiring 25 years of public service and 50 years of age.
The House’s Business Advisory Board considering endorsing the amendment after the first reading, but a few MPs voiced concerns, resulting in the bill being sent to the relevant standing committee for scrutiny.
One of the MPs said most of the BPR lays offs are politically motivated and the proposed bill will strip them of their pensions, which is likely to result in another catastrophic crisis on top of ever worsening unemployment rates and chronic inflation.
The proposed amendment bill is now in the hands of the Social Affairs Standing Committee, which is chaired by First Lady Azeb Mesfin.
As per House procedures, the standing committee will have at least 21 days to call public hearings to hear stakeholders’ views before the bill is sent back to the House general session for a final vote.
Kassahun Follo, president of CETU explained to Capital he is yet to learn the details of the proposed bill, which is likely to concern thousands of employees that will lose their jobs in the coming months when BPR moves into top gear. Kassahun added he is not in a position to comment on the bill and CETU was not contacted by any government organ for discussion.
The bill was addressed to parliament with the Office of the Prime Minister’s stamp.
Next to the reduction of the proposed 25/50 criteria, one MP would like to see the article automatically qualifying employees for life time pensions, not only after the approval of the Council of Ministers, as both the existing and the proposed additional articles read.

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