18 November 2012

Ethiopia: Ex-CEO, Oromia Insurance Employment Litigation Pushed to December

The Federal High Court appointed for the morning of December 17, 2012 to hear the statement of defense of Oromia Insurance Company (OIC) for the appeal filed by its former CEO, Mitiku Abdissa about two and half months ago on September 3, 2012.

This case has been proceeding in court since June 2011 when Mitiku sought reversal of the decision of the company's board firing him from his job after first sending him on forced leave. Mitiku had been CEO of the insurance company from its establishment in 2009 to March 30, 2011.

Mitiku appealed to Federal High Court claiming the decision of the lower court to be quashed and he should be paid his uncollected salary from the day he was suspended until the court gives the final decision on the issue. He also requested to present additional evidences which he was unable to present to the lower court, claiming that he was unable to get the documents at the time.

The OIC had formed an investigation committee immediately after sending him on forced leave, which recommended his expulsion without Mitiku having the opportunity to be heard by the board, according to Mitiku's statement of claim. He argued that the lower court's decision is illegal as it did not consider that he did not have the chance to defend himself before the board.

He also claimed that the court failed to consider Article 2576 of the Ethiopian Civil Code, which justifies cancelation of the contract without notice if only a serious cause was involved. The lower court also considered Saturday afternoon and Sunday as working days, leading to him getting lower compensation.

The company's accusations against him included inappropriate employment and creating poor office organization that led to the loss of documents. OIC had made a profit before tax of 2.15 millionBr profit before tax for 2010/11 fiscal year, when Mitiku was in charge.

Mitiku had asked for a compensation of 238,454 Br or his job back. The OIC had argued that Article 2570(1) of Civil Code mandated it to fire without prior notice. Judge Brehanu Mengistu awarded Mitiku 21,848 Br for month and half salary from the day he was suspended, 49,905Br for 100 days of annual leave which he has not taken and 45,218 Br provident fund, but otherwise ruled in favour of the company, leading to Mitiku's appeal to the higher court on July 6, 2012.

The third bench of the higher court considered Mitiku appeal, submitted in September, and decided to hear the statement of defence of the OIC on December 17, 2012.

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