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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.
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