A new directive is on the horizon to make workers' compensation insurance policies mandatory for companies hiring seasonal workers. Drafted by experts of the Ministry of Labour & Social Affairs, the directive will compel employers to pay for the insurance coverage.

The directive is expected to significantly impact industries that rely heavily on daily workers, such as the agriculture sector and the construction industry. It also demands employers provide free shelter, transportation, and medical treatment to seasonal labourers and includes a clause that dictates payment to next of kin in the case of work-related deaths. According to the directive, employers are required to submit the insurance policy for their seasonal workers to authorise within three days after recruitment.

Officials hope it will provide temporary workforces and their families with more comprehensive protection against work-related injury, disability or death. The insurance industry, which contributes less than one percent of the country's GDP, also gains if the directive goes through.

Despite legal provisions holding employers liable for work-related accidents and occupational ailments, no laws commit them to pay for insurance policies covering the workforce. The directive aims at asserting the rights of labourers, including their entitlement to insurance, overtime payments and forming labour unions, according to Dereje Taye, communications director at the Ministry.

"If the directive sees a green light, it'll give regional authorities the mandate to intercede when laws are not complied with," Dereje said. "It'll also place tighter regulations on employment agencies."

Millions of people in Ethiopia rely on seasonal labour to make a living, most of which are engaged in agricultural work, mostly in rural areas. In urban settings like Addis Abeba, construction workers would be the directive's biggest beneficiaries.

"We don't even get our salaries properly, let alone being secured with insurance," said Zeleke Sewmehon, a daily labourer working on a construction site in the Gotera area, welcoming the Ministry's attempt to make the policy compulsory.

The insurance industry hopes to capitalise on the policy, which will create a significant source of revenues for the country's fledgling industry.

"It provides a golden opportunity for the insurance industry," said Ebsa Mohamed, an insurance expert and manager at Alpha Consultancy Plc.

Ebsa recalled how the third-party liability coverage expanded after the government made it compulsory eight years ago.