Accommodating Employee Participation Under Ethiopian Corporate Gevernance

Abstract

Employee protection and participation in corporate governance is becoming beyond the academic discourse and becoming important trend within the context of sustainability and specifically productivity of the business at present. Employee participation with in corporate governance framework has proved to be important tool of making industrial relation healthy and peaceful. In such a mechanism the business and the worker are able to come up with sustainable relations that they cooperate in running the business objectives for common good. They are able to exchange information and make consultation, reach an agreement thereby fostering industrial peace. Policy considerations and legal responses towards that are already put on the table. Thus there is tendency for special regulation in the interest of both the business and the workers of the company especially within the ambits of labor proclamation and commercial law too. This research explores the problems of lack of employee participation by examining and evaluating possible legal frameworks of employee participation available under the Ethiopian Corporate Governance regime. Towards this effect this paper investigated the possible mechanisms for employee participation in corporate governance in Ethiopia and analyzed the provisions of Labor Proclamation as well as the New Commercial Code of Ethiopia on employees participation. Accordingly, the work reveals that the inadequacy of the existing legal framework for employee participation, lack clarity and comprehensiveness of the approach towards employee participation. And also besides the inadequacy of the existing legal framework in implementing the labor law based approach itself there is lack of coordinated response from the relevant Ministry of Labor and Skill and reluctance as well. That is though supposed to enact decrees and initiating legislative responses the Ministry did very insignificant moves yet. Therefore, a coordinated response from the Ministry, the scholars and the business community under the existing legal framework as well as introduction of additional legislative solutions, more specifically, by enacting necessary regulations as well as directives in order to implement the labor law approach in a way that can create industrial peace, moreover by devising both legal and institutional frameworks that can help the implementation of employee participation in corporate governance in Ethiopia through the enactment of an independent proclamation; and to this end making some consultations with the business community and workers so as to make come up with viable mechanisms of employee participation by drawing important lessons from the EU legal systems of the information and consultation mechanisms, works council approaches practiced in Member Countries of European Union such as UK and Germany and adjusting them to the need of Ethiopia, and to this end undertaking extensive research by the Ministry of Labour and Skill as well as by both legal and other scholars in picking important participation mechanism of participation, is recommended