Introduction to Employment Law in Somaliland

Prepared By:
Somlegal Services

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Introduction to Employment Law in Somaliland

This memorandum focuses on following areas: recruitment, selection, training, employment, temporary employment, disciplinary process and termination of service. We have categorized our analysis into three general areas: (1) pre-employment and early-employment considerations, (2) determination of employment relationship, and (3) discipline and termination.

Pre-Employment & Early-Employment Considerations

The Act provides a small amount of guidance to employers seeking to recruit employees. The Act requires that open positions be advertised for two weeks in the local media. There is no limitation within the Act as to which positions need be advertised. It is Somlegal's opinion that any position which is opening for full employment should be advertised – except where the employer is seeking to promote someone to a new position from within the company. Casual laborers need not be advertised.

The Act also provides guidance for the recruitment of employees. The Act requires that an employment review committee be formed with a minimum of three (3) people – two (2) from the Company and one (1) from the Department of Labor. This committee should review each of the applications as well as any oral or written examinations required by the company. At least two of the members of the committee need to agree on the person(s) to be hired for the position(s) and sign a declaration as such.

One option for the early phase of the employment relationships could utilize a probationary period. The first contract should be a probationary contract. The probationary contract is authorized for two months, with an additional extension of two months possible, at the employer's discretion. While in the probationary period, either party may terminate the entire contract without notice, and without reason. During the probationary period, the employee has the following rights only: remuneration in the agreed amount and weekly rest days. The employee is entitled to no additional payment, such as severance pay, when the contract ends for any reason whatsoever.

Determination of the Employment Relationship

Determining whether a person who is performing work for a company should be classified as a contractor, day laborer, or temporary employee, or whether the person should be classified as a full employee is rarely an easy determination. Few states are able to clearly draw this distinction, and Somaliland is no different. There are three provisions of the Act which regulate laborers. However, none of these give clarity to the making the determination of the classification of personnel as employees or as laborers.

Somlegal’s advice to its clients is to provide a clear definition to employees within the various contracts which it presents to its personnel and to define the rights of all but the most irregular of its personnel within the contract. Laborers are limited in that they may work up to 10 hours each day and up to 60 hours each week. Additionally, laborers must be given some contract in writing which should state that they are not employees of the company but are laborers. The contract need contain no more than the wages, taxes to be deducted, hours and job description only in order to satisfy the terms of the Act.

Discipline and Termination

When it comes to this area of employment law, the two overriding considerations which Somlegal advises our clients to keep in mind are: documentation and ensuring employees have an opportunity to be heard. Encouraging employees to bring any complaints to the proper party in-house will keep the organization's name off the dockets at the Department of Labor's Employment Dispute Tribunals.

Discipline. The Act provides employers with a fairly significant level of discretion as to disciplining employees. The two most often utilized discipline methods are docking pay and suspension of the employment contract. Each violation should be properly documented and the employee should sign this documentation. Any warning letters which are given to employees must be given to employees within seven (7) days of the incident, and must also be given to the Department of Labor.

Employers may not dock the pay of an employee without one of the following have occurred: the employee signs for the deduction, the deduction is approved by a court, or there has been a loss of company money or equipment. Employers must also give the employee a reasonable time to challenge the deduction. In certain cases (e.g., where a violation has occurred near payday) this may require that the deduction be delayed until the next month. In any given pay period the deduction from the employee's salary should not be more than 25% of the salary normally payable to the employee for that pay period. Where the amount to be deducted from the employee's salary is more than 25% of the salary, the deduction should be spread over two or more months.

Where the employer seeks to suspend employment, the following conditions must be met. Suspensions, as with any warnings or other disciplinary measures, should be noticed to the Department of Labor. Suspensions should be for a maximum of 30 days. It should be noted that the employer has an opportunity to present their case for suspension to the Department of Labor, rather than taking their decision in-house, who has the ability to give a suspension of up to 90 days. Such an activity is a possible way to transfer the liability for employment decisions to the Ministry from the organization. If the employee is accused of a crime and placed on remand, or is called up to for national defense purposes, the employment relationship may be suspended for the entire length of the relevant period at no cost to the employer.

Termination. The key provision for termination is Article 26.6 of the Act which reads, “If the employee commits a misconduct that could terminate his/her job or if any of the events mentioned in Article 37 of this Act occur.” This provision gives a reasonable amount of flexibility to Employers to craft their employment contracts and / or their employment manual in a way that will sufficiently protect the organization against the type of behavior which the organization is unwilling or unable to accept from its employees. Article 37 of the Act is the Dismissal without Notice provision and allows employers to terminate employees immediately and without compensation when any of the following events occur:

• employee refuses lawful orders,
• employee fights,
• employee commits fraud or theft,
• employee discloses confidential information,
• employee commits any crime related to their employment, or
• employee intentionally destroys company property.

This list covers many of the common reasons why employers would terminate employees without notice.

Employers are given additional flexibility to terminate without notice by the first clause of Article 26.6. The clause reads in a way which gives employers the ability to draft into the employment agreement, as well as the employment policy manual, additional criteria, besides those from the Act, which enable the employer to terminate the contract. These additional termination reasons, if any, should be detailed in writing and signed by the employee.

Somlegal’s advice is that a list of termination offenses should be kept in the employment policy manual or an equivalent document which is signed by each employee. That list can be updated as necessary with sufficient notice given to the employees of the changes. Under this regime it would be advisable, but not strictly required under most common law interpretations of contract law, to attain additional signatures.

In any case of a bad-conduct termination, whether with or without notice, whether with or without compensation, the employee must be given an opportunity to present their case to a relevant decision maker (preferably a neutral decision maker, if one exists such as a different department head from the supervisor of the employee) the organization. Somlegal advises all of its clients to fully integrate opportunities for employees to be heard whenever there is any dispute at all in the employment area.