Berhan Bank Allowance Dispute Shifts from Pay Claim to Union Standing Fight

Berhan Bank Allowance Dispute Shifts from Pay Claim to Union Standing Fight

Jun 14 , 2026. By NAHOM AYELE ( FORTUNE STAFF WRITER )

Three years after Berhan Bank's managment enacted its initial cost-of-living allowance policy, non-clerical workers are still waiting for their retroactive back pay for 2023 to 2025. The High Court-ordered recalculation is completely stalled while judges weigh the older Union's legal authority to litigate on behalf of workers who may now belong to the new Union. Institutional delays and representation challenges can effectively defer economic restitution, even after the core policy grievance has been deemed unjustified.

Berhan Bank’s three-year dispute with thousands of non-clerical workers over a housing allowance has shifted from a claim for arrears into a contest over union representation. Leaders of a newly formed labour union appealed to the Federal High Court Labour Dispute Bench to stop the Addis Abeba City Labour Relations Board from deciding the case without hearing their intervention request.

The latest turn came when the Berhan Family Basic Labour Union (BFBLU), a new union that did not exist when the dispute began, appealed to the Federal High Court Labour Dispute Bench to stop the Addis Abeba City Labour Relations Board from deciding the case without first hearing it. The appeal followed the Board’s rejection of its request to intervene in a case filed by the older Berhan Bank Basic Labour Union (BBBLU), which has been pressing the Bank to extend a cost-of-living housing allowance to workers excluded from the benefit.

The older Union obtained legal recognition in January 2023, with the signature of Kassa Seyoum, then the Industrial Relations Director at the Addis Abeba City Administration Labour, Enterprise & Industry Bureau.

The Board had been preparing to decide whether Berhan Bank should pay arrears dating back to 2023 when the new Union entered the proceedings. It argued that the outcome would affect its members and that the older Union lacked legal authority to litigate on behalf of workers now represented by the new Union. The Board dismissed the request, stating the matter had already been decided and that BFBLU had no right to join the litigation. The appeal has blocked the Board’s proceedings.

The Court accepted the appeal, ruled that it falls under its jurisdiction, and ordered Berhan Bank and the older Union to submit responses.

The dispute goes back to January 2023, under former Berhan Bank President Girum Tsegaye. The Bank issued a letter to more than 5,000 employees announcing that, as part of cost-control measures, it would introduce a housing allowance as a cost-of-living buffer. The payment was set between 800 Br and 10,000 Br a month, depending on job level.

Workers waited for that month’s salary and saw the allowance added. But about thousands employees in non-clerical jobs, including cleaners, messengers, security guards and drivers, did not receive the adjustment. When they asked the Bank through their Union, management responded that the payment had been intended to reduce turnover among clerical staff.

“We initiate the payment to stop the turnover of the clerical staff," the Bank’s management told them, according to the Union’s account. "We'll not pay the other bank workers.”

That response turned an allowance into a legal test. The older Union's leaders argued that a housing allowance introduced as a living-cost buffer should not exclude thousands of employees working for the same employer. The Bank's managment maintained that it should not be compelled to extend the benefit to workers it did not intend to cover.

The disagreement moved first to the Addis Abeba City Labour Relations Board. Under the labour law, collective disputes involving large numbers of workers fall within the mandate of the Labour Relations Board. Yet the Board declined to hear the grievance, ruling that it lacked jurisdiction.

The file then entered the regular court procedure, beginning at the Federal First Instance Court, Bole Division, Labour Bench, and moving through higher courts. Judgments shifted between the Bank and the Union, with one ruling in favour of the employer and another of the workers. The case eventually reached the Supreme Court Cassation Bench, where the central issue was not only whether the allowance should have been paid, but which institution had the legal mandate to adjudicate.

Justices at the Cassation Bench ruled that the regular courts were not the proper venue. They found that the dispute belonged to the Labour Relations Board and sent the file back, directing the Board to examine the dispute. The same Board that had previously declined to hear the case on jurisdictional grounds began attending to the claim.The Board found Berhan Bank’s decision to exclude non-clerical workers from the allowance unjustified.

In August last year, the Labour Board ordered the Bank to pay the affected workers the minimum allowance of 800 Br each, starting from the date of the Board’s decision.

The ruling did not end the matter, however. Berhan Bank's management was reluctant to make the payments, while the older Union argued that the Board had failed to address the core demand. According to the Union, the workers had not asked for payments starting in 2025. They wanted arrears from 2023, when the allowance began.

The older Union pursued the arrears issue before the Bole High Court. Its leaders opened an enforcement file to secure payment of the amount already ordered by the Board from August 2025 onward. That enforcement dispute also climbed through the court system and reached the Cassation. It ended when Berhan Bank agreed to make the payments. The amounts ordered from the Board’s decision date were paid, and the enforcement issue was closed.

However, the arrears claim remained unresolved. The High Court accepted the older Union’s appeal and returned the file to the Board to decide whether the allowance should be paid retroactively from 2023 and how the amount should be calculated.

By then, the labour landscape inside Berhan Bank had changed. The BFBLU was formed and granted recognition last September by the Bole District Labour & Skills Bureau. BFBLU its leaders claim to represent more than half of the Bank’s 5,800 employees, deployed in 376 branches and at its headquarters off the Cameroon St., near Brass Hospital.

PUBLISHED ON Jun 14,2026 [ VOL 27 , NO 1363]