M07-Legal Requirements of Building

STRUCTURAL CONSTRUCTION
WORKS
LEVEL – IV
Based on October 2023 Version - II Curriculum
Picture
Module Title: Legal requirements to building and
construction projects
Module code: EIS SCW4 M07 1023
Nominal duration: 60 Hours
Prepared by: Ministry of Labor and Skill
October 2023
Addis Ababa, Ethiopia
Author/Copyright : Version - I
Page 1 of 89 Ministry of Labor and Skills Apply legal requirements to building October 2023
and construction projects
Table of Contents
Acknowledgment.........................................................................................................................................4
Acronyms....................................................................................................................................................5
Unit One: Laws relating to builder licensing or registration........................................................................9
1.1. Licensing or registration legislation...........................................................................................10
1.2. Classifications of builder, supervisors and managers.................................................................15
Self-Check 1.1...........................................................................................................................................21
Unit Two: OHS legislation and provisions on site.....................................................................................23
2.1. Main provisions of OHS Legislation.........................................................................................24
2.2. On-site construction Regulations and codes..............................................................................25
2.3. Site safety signage requirements................................................................................................27
Self-Check 2.1...........................................................................................................................................29
Unit Three: Construction Codes, Acts, Regulations and Standards...........................................................31
3.1. Current codes, acts, regulations and standards...........................................................................32
3.2. Carrying out construction process..............................................................................................33
Self-Check 3.1...........................................................................................................................................36
Unit Four: Insurance and regulatory requirements for housing construction.............................................38
4.1. Insurance cover..........................................................................................................................39
4.2. Contract law...............................................................................................................................43
Self-Check 4.1...........................................................................................................................................46
Unit Five: Legislation to financial transactions.........................................................................................48
5.1. Payroll systems..........................................................................................................................49
5.2. GST (Goods and Service Tax) systems......................................................................................50
Self-Check 5.1...........................................................................................................................................52
Unit Six: Building contract obligations.....................................................................................................54
6.1. Correct form of building project contract...................................................................................55
6.2. Conditions of the contract..........................................................................................................58
Self-Check 6.1...........................................................................................................................................60
Unit Seven: Industrial relations policies and obligations relevant to housing Construction.......................62
7.1. Industrial Relation policies and Obligations..............................................................................63
7.2. Subcontract companies comply.................................................................................................65
7.3. Contracts Awards.......................................................................................................................66
7.4. Workplace agreements...............................................................................................................67
7.5. Proactive measures in the workplace.........................................................................................69
7.6. Provisions of training agreements..............................................................................................70
7.7. Reference Material to Industrial Relations.................................................................................71
Self-Check 7.1...........................................................................................................................................74
Unit Eight: Dispute resolution processes...................................................................................................76
8.1. Organizational dispute resolution processes..............................................................................77
8.2. Customer complaints with company policy...............................................................................79
8.3. Documenting & Recording of disputes......................................................................................81
8.4. Maintaining of disputes.............................................................................................................82
Self-Check 8.1...........................................................................................................................................85
Reference...................................................................................................................................................87
Acknowledgment
Ministry of Labor and Skills wish to extend thanks and appreciation to the many representatives
of TVT instructors, respective of MoLS experts and regional labor and skill bureaus who
donated their time and professional experience to the development of this Teaching, Training and
Learning Materials (TTLM) for structural construction work level III Trainees.
Acronyms
EIS..........................................Economic infrastructure
SCW.......................................Structural Construction Works
LAP........................................ Learning Activities Performance
ASAP.....................................As Soon As Possible
FAQ........................................Frequently Asked Questions
CEO:..................................... Chief Executive Officer
FYI: .......................................For Your Information
RSVP: ...................................Répondez s'il vous plaît (French for "Please respond")
ETA: .....................................Estimated Time of Arrival
DIY: ......................................Do It Yourself
VIP:........................................ Very Important Person
NGO: .....................................Non-Governmental Organization
GPS: .....................................Global Positioning System
HR:......................................... Human Resources
CEO........................................: Chief Executive Officer
CFO: .....................................Chief Financial Officer
IT: ..........................................Information Technology
URL: .....................................Uniform Resource Locator
HTML:................................... Hypertext Markup Language
NASA:.................................... National Aeronautics and Space Administration
FBI: ......................................Federal Bureau of Investigation
CIA: .......................................Central Intelligence Agency
AIDS: ....................................Acquired Immunodeficiency Syndrome
Introduction to the module
In construction work apply legal requirements to building and construction projects are essential
to be considered & ensure compliance with local regulations and standards. The most common legal
requirements listed in this module are Building Permits, Zoning and Land Use Regulations, Building,
Codes and Standards, Environmental Regulations, Health and Safety Regulations, Insurance and
Liability, Contracts and Legal Agreements & Accessibility Requirements. The goal is to Equips
the trainees with skill knowlogy and altitude in apply legal requirements to building construction
projects.
This module covers the units:
 Laws relating to builder licensing or registration.

 OHS legislation and provisions on site.
 Construction Codes, Acts, Regulations and Standards
 Insurance and regulatory requirements for housing construction.
 Legislation to financial transactions.
 Building contract obligations.
 Industrial relations
 Dispute resolution processes
Learning Objective of the Module
 Apply the laws relating to builder licensing or registration.

 Apply OHS legislation and provisions on site.
 Apply the codes, Acts, regulations and standards relevant to construction.
 Comply with insurance and regulatory requirements for housing construction.
 Apply legislation to financial transactions.
 Meet building contract obligations.
 Apply industrial relations Module Instruction
 Apply dispute resolution processes
Module Instruction
For effective use this modules trainees are expected to follow the following module instruction:
1. Read the information written in each unit

2. Accomplish the Self-checks at the end of each unit
3. Perform Operation Sheets which were provided at the end of units
4. Do the “LAP test” giver at the end of each unit and
5. Read the identified reference book
Unit One: Laws relating to builder licensing or registration.
This unit is developed to provide trainees the necessary information regarding

the following content coverage and topics:
 Licensing or registration legislation
 Classifications for builders, supervisors and managers.
This unit will also assist trainees to attain the learning outcomes stated below. Specifically, upon
Completion of this learning guide, the trainees will be able to:
 Identify licensing or registration legislation
 Apply Classifications for builders, supervisors and managers.
1.1. Licensing or registration legislation
1.1.1. Introduction
When it comes to applying legal requirements to building and construction projects, there are
several key considerations to keep in mind:
1. Building Codes and Regulations: Every jurisdiction has specific building codes and
regulations that must be followed during the construction process. These codes dictate various
aspects of the project, including structural integrity, fire safety, electrical and plumbing systems,
accessibility, and more. It is essential to ensure that all work carried out on structural walls
adheres to these codes and regulations.
2. Permits and Approvals: Before starting any construction project, it is necessary to obtain the
required permits and approvals from the local building authority. This typically involves
submitting detailed plans and specifications for review and obtaining clearance to proceed with
the work. Failure to obtain the necessary permits can result in fines, penalties, or even stop-work
orders.
3. Environmental Considerations: Building and construction projects must also comply with
environmental regulations. This includes proper disposal of construction waste, adherence to
energy efficiency standards, and minimizing environmental impact during the construction
process. For example, using eco-friendly materials or implementing sustainable design practices
may be required by local laws or regulations.
4. Health and Safety Regulations: The health and safety of workers and occupants are
paramount in any construction project. Compliance with occupational health and safety
regulations is crucial to ensure a safe working environment. This includes providing appropriate
protective equipment, implementing safety protocols, and regularly inspecting the construction
site for potential hazards.
5. Contractual Obligations: Building and construction projects typically involve contracts
between various parties, such as the owner, contractor, subcontractors, and suppliers. These
contracts outline the responsibilities, timelines, and deliverables of each party involved. It is
important to ensure that all work on structural walls aligns with the contractual obligations and
specifications outlined in the agreements.
6. Quality Assurance and Inspections: Regular inspections and quality assurance checks are
essential to ensure that the work on structural walls meets the required standards. This may
involve hiring independent inspectors or consultants to assess the work at various stages of the
project and provide feedback or recommendations for improvement.
By considering and complying with these legal requirements, building and construction projects
can be carried out in a safe, compliant, and efficient manner, ensuring the integrity and quality of
the structural walls and the overall project.
1.1.2. Contractor Licensing or Registration Legislation In Ethiopia
In Ethiopia, the construction industry is regulated by the Ministry of Works and Urban
Development (MOWUD), which is responsible for overseeing the licensing and registration of
construction contractors. The ministry has established a set of regulations and requirements for
contractors to obtain a license or registration before they can engage in construction activities.
The purpose of contractor licensing or registration legislation is to protect the public from
unqualified and unscrupulous contractors. By requiring contractors to meet certain standards, the
government can help to ensure that construction projects are completed safely and to a high
standard.
Some of the benefits of contractor licensing or registration legislation include:
 Reduced risk of construction defects and accidents

 Improved quality of construction work
 Increased consumer protection
 A more level playing field for legitimate contractors
However, contractor licensing or registration legislation can also have some disadvantages, such
as:
 Increased costs for contractors, which may be passed on to consumers
 Barriers to entry for new contractors
 Reduced competition in the construction industry
Overall, the benefits of contractor licensing or registration legislation outweigh the drawbacks.
The licensing and registration requirements aim to establish standards, promote professionalism,
and protect the interests of both clients and contractors.
To register as a contractor in Ethiopia, you must meet the following qualifications:
 Be a citizen or resident of Ethiopia
 Be at least 18 years old
 Have a valid business license
 Have a valid tax clearance certificate
 Have a valid insurance policy
 Have a valid professional qualification from a recognized institution (for construction

contractors)
The licensing and registration process in the construction sector of Ethiopia formulated by the
following authorized group
1. .Ethiopian Construction Works Licensing Proclamation No. 624/2009: This proclamation
establishes the legal framework for licensing construction works in Ethiopia. It sets out the
criteria, procedures, and conditions for obtaining a license to engage in construction activities.
The proclamation also outlines the responsibilities of licensed contractors and the penalties for
non-compliance.
2. Ethiopian Ministry of Urban Development and Construction (MoUDC): The MoUDC is
responsible for overseeing the licensing and registration process in the construction sector. It
plays a crucial role in implementing and enforcing the licensing legislation. The ministry
ensures that contractors meet the necessary qualifications, experience, and financial capacity
before issuing licenses.
3. Ethiopian Construction Contractors Association (ECCA): ECCA is an industry
association that represents licensed contractors in Ethiopia. It works closely with the
government to promote professional standards and ethical practices in the construction sector.
ECCA provides guidance to contractors on licensing requirements, facilitates training
programs, and advocates for their interests.
To obtain a license in the construction sector of Ethiopia, contractors must fulfill certain
criteria, including:
1. Qualifications: Contractors must have the necessary technical qualifications and expertise
in their respective fields of specialization. This may include academic degrees, professional
certifications, or relevant work experience.
2. Financial Capacity: Contractors are required to demonstrate sufficient financial capacity
to undertake construction projects. They must provide evidence of financial stability, such as
bank statements or audited financial reports.
3. Technical Resources: Contractors must possess adequate technical resources, including
equipment, machinery, and skilled personnel, to carry out construction works effectively.
The licensing and registration process typically involves the following steps
1. Application: Contractors must submit a formal application to the MoUDC, providing all
the necessary documents and information as per the requirements outlined in the licensing
proclamation.
2. Evaluation: The MoUDC evaluates the application based on the criteria specified in the
licensing legislation. This evaluation may include a review of qualifications, financial
capacity, technical resources, and past performance.
3. Site Inspection: The MoUDC may conduct site inspections to verify the contractor's
capabilities and assess their compliance with safety and quality standards.
4. License Issuance: If the contractor meets all the requirements, the MoUDC issues a license
authorizing them to engage in construction activities within the specified scope of work.
5. Renewal and Compliance: Licenses are typically valid for a specific period and need to be
renewed periodically. Contractors are also required to comply with ongoing regulatory
obligations, such as submitting progress reports and adhering to safety regulations.
It is important for contractors in Ethiopia's construction sector to comply with licensing and
registration legislation to ensure their credibility, protect clients' interests, and contribute to
the overall development of the industry.
Registration Requirements
In addition to licensing, construction companies may also need to register with various
government agencies to ensure compliance with regulations. The registration requirements
typically include
1. Business Registration: Construction companies are required to register their businesses
with relevant authorities such as the Ministry of Trade and Industry or regional trade bureaus.
This registration process verifies the legal existence of the company and its compliance with
business
2. Tax Registration: Construction companies must register for tax purposes with the
Ethiopian Revenue and Customs Authority (ERCA). This registration ensures that companies
fulfill their tax obligations and contribute to the country's revenue.
3. Construction Project Registration: Depending on the scale and nature of the construction
project, companies may need to register their projects with the appropriate authorities. This
registration process helps monitor and regulate construction activities, ensuring compliance
with safety standards and building codes.
To obtain a license as a construction contractor in Ethiopia, the following requirements must be
met:
1. Education and Training: The contractor must have a minimum of a high school diploma or
equivalent. Additionally, they must have completed a training program in construction
management, engineering, or a related field.
2. Experience: The contractor must have at least three years of experience in the construction
industry, with a proven track record of successful projects.
3. Financial Requirements: The contractor must have a minimum of 500,000 Ethiopian Birr
(approximately $20,000 USD) in net assets or a guarantee from a reputable financial
institution.
4. Business Registration: The contractor must register their business with the appropriate
authorities, including the Ministry of Trade and Industry and the Federal Revenue Authority.
5. License Examination: The contractor must pass a written examination administered by the
MOWUD to demonstrate their knowledge and understanding of construction laws,
regulations, and standards.
1.2. Classifications of builder, supervisors and managers.
1.2.1. Classifications of builder

Contractors registered under this Regulation shall have the following categories
1. General Contractors: These contractors are typically capable of undertaking a wide
range of construction projects across different sectors and scales. They have the expertise
and resources to
2. Building contractors: are professionals who are responsible for overseeing and
managing construction projects. They play a crucial role in the construction industry by
coordinating various activities, ensuring that projects are completed on time, within
budget, and according to the specified quality standards. Building contractors work
closely with architects, engineers, subcontractors, and other stakeholders to ensure the
successful completion of a construction project
3. Road Contractors: These are contractors who are qualified to undertake construction
of roads and other related civil engineering works. Road works include gravel, asphalt,
asphalt concrete and reed roads and bridges.
4. Specialized Contractors: These are contractors who are qualified to undertake
construction activities in specialized trades such as electro mechanical installation works,
painting and decorations, sanitary installation works, wood and metal works and
landscaping and other related activities.
According to Directive No. 648/2021 in Ethiopia, builders are classified into different categories
based on their qualifications and experience. The directive provides a comprehensive framework
for classifying builders and ensuring the quality of construction projects in the country
Table1.Minimum requirements for a building contractor in Ethiopia as per Directive No. 648/2021
Requirement ( Turnover or Manpower or Unit `Grade
Machinery) 1 2 3 4 5 6 7
1 Yearly maximum turnover within the last mill 200 150 70 40 25 10

five year greater than or equal to birr
2 Practicing professional (Civil Eng'r or No 1 1 1
COTM fields)
3 Professional (Civil Eng'r or COTM No 1 1 1 1 1 1 1
fields)
4 Graduate Engineer No 3 2 2 2 2 2 1
5 Associate Engineer IV No 1 1 1 1
6 Junior Assistant Engineer III No 1 1 1 1
7 Engineer Aid II No 2 2 1 1 1
8 Tower crane with minimum height 30m, No 1

lifting capacity min 1 ton or Telescope
mobile crane with boom extendable up to
20m & lifting capacity min 5 ton
9 Excavator mini. 20 ton No 2 1
10 Excavator mini. 15 ton No 1
11 Dump truck min 10 m3 2 2 2
12 Dump truck min 7 m3 1

Table2.Minimum requirements for General Contractors in Ethiopia as per Directive No.
648/2021
No Requirement ( Turnover or Unit Grade

. Manpower or Machinery 1 2 3 4 5 6 7
1 Yearly maximum turnover within the last five mill

year greater than or birr
350
300
140
equal to
70
50
20
2 Practicing professional (1 in building & 1 in No 2 2 2
road field)
3 Professional (1 in building & 1 in road field) No 2 2 1 1 1 1 1
4 Professional surveyor(location Eng'r) No 1 1
5 Graduate Engineer No 3 2 2 2 2 2 1
6 Graduate surveyor or Engineer No 1
7 Associate Engineer IV No 3 2 1 1 1
8 Engineer Aid II No 3 1 1 2 2
9 Junior Assistant Engineer III No 1 1
lifting capacity min 2 ton
or Telescope mobile crane with boom
extendable min up to 30 m &
or Telescope mobile crane with boom
extendable up to 20m &
12 Asphalt Paver paving width min 4m paving No 1 1
thickness min 15 cm
13 Pneumatic Roller min 10 Ton No 1 1
14 Crusher min 60 Ton No 1
15 Grader min 120 HP No 1 1 1
16 Grader min 100 HP No 1
17 Excavator mini. 20 ton No 1 1
18 Loader min 3 m3 No 1
19 Loader min 2m3 No 1
20 Roller min 10 Ton (Static oribratory) No 1 1 1
21 Roller min 8 ton (Static or vibratory) No 1 1
22 Dump truck min 10 m3 No 2 1
23 Dump truck min 7 m3 No 1
1.2.2. Classifications of Supervisors

Directive No. 648/2021 in Ethiopia provides classifications for supervisors. The directive aims to
establish a clear framework for the classification and grading of supervisory positions in various
sectors and organizations within the country. These classifications help ensure consistency,
fairness, and transparency in the employment system.
According to Directive No. 648/2021, supervisors in Ethiopia are classified into three main
categories: Junior Supervisors, Middle Supervisors, and Senior Supervisors. Each category has
specific criteria and responsibilities associated with it.
1. Junior Supervisors:
Junior Supervisors are entry-level positions in the supervisory hierarchy. They are responsible
for overseeing a small team or a specific department within an organization. The main criteria for
this classification include:
 Educational Qualifications: Junior Supervisors are required to have a minimum of a

diploma or equivalent qualification related to their field of work.
 Experience: They should have at least two years of relevant work experience.
 Scope of Responsibility: Junior Supervisors typically have limited decision-making
authority and are responsible for implementing the instructions and policies set by higher-
level supervisors
2. Middle Supervisors:
Middle Supervisors hold positions that require more experience and responsibility compared to
Junior Supervisors. They oversee larger teams or multiple departments within an organization.
The criteria for this classification include:
 Educational Qualifications: Middle Supervisors are required to have a bachelor's degree
or equivalent qualification related to their field of work.
 Experience: They should have at least five years of relevant work experience, including
two years in a supervisory role.
 Scope of Responsibility: Middle Supervisors have more autonomy and decision-making
authority compared to Junior Supervisors. They are responsible for planning, organizing,
and coordinating the activities of their teams or departments.
1.2.3. Classifications of managers
Managers play a crucial role in the construction industry, overseeing various aspects of a project from
planning to completion. There are several classifications of managers in construction, each with their own
unique responsibilities and areas of expertise. Here are some of the most common classifications of
managers in construction
1. Project Manager: The project manager is responsible for overseeing the entire construction project,
from start to finish. This includes developing the project plan, setting timelines, and managing budgets.
They work closely with other managers and team members to ensure that the project is completed on
time, within budget, and to the satisfaction of the client.
2. Site Manager: The site manager is responsible for the day-to-day operations of the construction site.
This includes managing the labor force, ensuring that materials are delivered on time, and coordinating
the work of subcontractors. They also ensure that the project is built according to the plans and
specifications, and that all safety protocols are followed.
3. Cost Estimator: The cost estimator is responsible for determining the cost of materials, labor, and
other expenses associated with the construction project. They work closely with the project manager to
develop a detailed project budget and ensure that the project stays within budget throughout its duration.
4. Scheduling Manager: The scheduling manager is responsible for creating and managing the project
schedule. This includes developing a timeline for the project, identifying critical path activities, and
coordinating the work of various teams and subcontractors.
5. Quality Control Manager: The quality control manager is responsible for ensuring that the
construction project meets the required standards of quality. They work closely with the project manager
and site manager to ensure that all materials and workmanship meet the project specifications, and that
any defects or issues are addressed promptly.
6. Safety Manager: The safety manager is responsible for ensuring that the construction site is safe for
all workers and visitors. They develop and implement safety policies and procedures, conduct regular
safety inspections, and provide training to all workers on safety protocols.
7. Materials Manager: The materials manager is responsible for procuring and managing all materials
needed for the construction project. This includes developing relationships with suppliers, negotiating
prices, and ensuring that materials are delivered on time.
8. Equipment Manager: The equipment manager is responsible for managing the equipment and tools
used on the construction site. This includes developing an equipment inventory, maintaining equipment,
and ensuring that all equipment is properly calibrated and in good working condition.
9. Environmental Manager: The environmental manager is responsible for ensuring that the
construction project complies with all environmental regulations and standards. They work closely with
the project manager and site manager to minimize the project's impact on the environment, and to ensure
that all waste is disposed of properly.
10. Community Relations Manager: The community relations manager is responsible for maintaining
positive relationships with the local community and stakeholders. They work closely with the project
manager and site manager to address any concerns or issues that may arise during the project, and to
ensure that the project has a positive impact on the community.
Self-Check 1.1
Part I: Multiple choices
Instruction: I. Select the correct answer for the give choice. You are provided a minute for
each question and each carry 3 Points.
1. Which government body in Ethiopia is responsible for overseeing the licensing and
registration of construction contractors?
a) Ministry of Works and Urban Development (MOWUD)
b) Ethiopian Revenue and Customs Authority (ERCA)
c) Ethiopian Construction Contractors Association (ECCA)
d) Ministry of Trade and Industry
2. What is one of the benefits of contractor licensing or registration legislation?
a) Increased costs for contractors
b) Reduced competition in the construction industry
c) Improved quality of construction work
d) Barriers to entry for new contractors
3. What is one of the qualifications required to register as a contractor in Ethiopia?
a) Valid passport from any country
b) Valid professional qualification from a recognized institution
c) Minimum age requirement of 16 years old
d) Valid driver's license
4. Which government agency in Ethiopia is responsible for implementing and enforcing the
licensing legislation in the construction sector?
a) Ethiopian Construction Contractors Association (ECCA)
b) Ministry of Urban Development and Construction (MoUDC)
c) Ethiopian Revenue and Customs Authority (ERCA)
d) Ministry of Works and Urban Development (MOWUD)
5. What is one of the registration requirements for construction companies in Ethiopia?
a) Registration with the Ministry of Education
b) Registration with the Ethiopian Construction Works Licensing Proclamation
c) Registration with the Ethiopian Ministry of Trade and Industry
d) Registration with the Ethiopian Ministry of Health
Part II: True or False Questions
Instruction: Say True or False. You are provided 2 minute for each question and each has
5Points.
1. Contractor licensing or registration legislation in Ethiopia aims to protect the public
from unqualified and unscrupulous contractors.
2. Contractor licensing or registration legislation in Ethiopia reduces competition in the
construction industry.
3. To register as a contractor in Ethiopia, you must have a valid tax clearance certificate.
4. The Ethiopian Ministry of Urban Development and Construction (MoUDC) is
responsible for overseeing the licensing and registration process in the construction
sector.
5. Construction companies in Ethiopia are not required to register their projects with the
Part III: Short Answer
Instruction: Give short Answer for the following question and write your Answer on your
answer sheet. You are provided 5 minute for each question and each has 5Points.
1. What are some of the benefits of contractor licensing or registration legislation?
2. Name three qualifications required to register as a contractor in Ethiopia.
3. What are the steps involved in the licensing and registration process for contractors in
Ethiopia?
4. What are the registration requirements for construction companies in Ethiopia?
5. What are the classifications of supervisors according to Directive No. 648/2021 in
Ethiopia?
You can ask you teacher for the copy of the correct answers.
Name: _________________________ Date: _______________

Unit Two: OHS legislation and provisions on site

 Main provisions of OHS legislation

 On-site construction Regulations and codes.
 Site safety signage requirements
 Identify main provisions of OHS legislation
 Applied on site construction Regulations and codes.
 Apply site safety signage requirements.
2.1. Main provisions of OHS Legislation
Occupational Health and Safety (OHS) legislation varies from country to country. However, it
can be provide with some general provisions that are commonly found in OHS legislation related
to construction sites. Please note that these provisions may not be specific to any particular
country or jurisdiction. It's always important to consult the relevant OHS regulations and laws
specific to any location. Here are some main provisions commonly found in OHS legislation for
construction sites:
1. Workplace Safety: The legislation typically requires employers to provide a safe and healthy
work environment for their employees. This includes ensuring that construction sites are free
from hazards that could cause harm or injury.
2. Risk Assessment and Hazard Control: Employers are often required to conduct risk
assessments to identify potential hazards at the construction site. They must then implement
appropriate measures to control those hazards and minimize risks to workers.
3. Personal Protective Equipment (PPE): Regulations commonly require employers to provide
and ensure the use of appropriate personal protective equipment, such as hard hats, safety
goggles, gloves, and safety footwear, to protect workers from potential hazards.
4. Training and Information: Employers are typically mandated to provide adequate training
and information to workers regarding the hazards associated with their work tasks, as well as the
safe work practices and procedures they need to follow.
5. Emergency Preparedness: Construction site regulations often require employers to have
emergency plans and procedures in place, including evacuation plans, first aid facilities, and fire
safety measures, to respond to emergencies effectively.
6. Machinery and Equipment Safety: Legislation usually covers the safe operation and
maintenance of machinery and equipment used at construction sites. This can include
requirements for regular inspections, proper guarding, and training for equipment operators.
7. Fall Protection: Construction sites often involve working at heights, so OHS legislation
typically includes provisions for fall protection systems, such as guardrails, safety harnesses, and
safety nets, to prevent falls and protect workers
8. Health and Hygiene: OHS legislation often addresses the provision of adequate sanitary
facilities, clean drinking water, and measures to control exposure to hazardous substances, such
as dust, chemicals, or asbestos, to protect workers' health.
9. Workplace Inspections and Reporting: OHS legislation commonly empowers regulatory
authorities to conduct inspections of construction sites to ensure compliance. Employers may be
required to report accidents, injuries, and dangerous occurrences to the relevant authorities.
These provisions are provided as a general guideline, and it's crucial to refer to the specific OHS
legislation and regulations in your jurisdiction to understand the exact requirements and
obligations for construction site safety.
2.2. On-site construction Regulations and codes.

On-site construction regulations and codes are essential for ensuring the safety, quality, and
sustainability of building projects. These regulations and codes are put in place by government
agencies, professional organizations, and industry associations to protect the public, workers, and
the environment. In this answer, we will provide a comprehensive overview of on-site
construction regulations and codes, including their purpose, types, and importance.
2.2.1. Purpose of On-site Construction Regulations and Codes
The primary purpose of on-site construction regulations and codes is to establish minimum
standards for the design, construction, and maintenance of buildings and structures. These
regulations and codes aim to protect the public, workers, and the environment from potential
hazards and risks associated with building projects. They also ensure that buildings and
structures are safe, durable, and meet the needs of their intended users.
2.2.2. Types of On-site Construction Regulations and Codes
There are several types of on-site construction regulations and codes that govern building
projects. These include:
1. Building codes: These codes establish minimum design and construction standards for
buildings and structures. They cover aspects such as structural integrity, fire safety, accessibility,
and energy efficiency.
2. Zoning regulations: These regulations dictate how property can be used and developed. They
are typically enforced by local governments and are designed to ensure that buildings and
structures are compatible with the surrounding area.
3. Environmental regulations: These regulations aim to protect the environment and public
health by regulating the impact of building projects on the surrounding ecosystem. They cover
aspects such as air and water quality, waste management, and hazardous materials handling.
4. Workplace safety regulations: These regulations are designed to protect workers from
hazards and risks associated with building projects. They cover aspects such as fall protection,
electrical safety, and personal protective equipment.
5. Accessibility regulations: These regulations ensure that buildings and structures are
accessible to people with disabilities. They cover aspects such as wheelchair ramps, elevators,
and accessible restrooms.
2.2.3. Importance of On-site Construction Regulations and Codes

On-site construction regulations and codes are essential for several reasons:
1. Public safety: On-site construction regulations and codes help ensure that buildings and
structures are safe for occupants and the surrounding community. They prevent accidents and
minimize the risk of injury or death.
2. Environmental protection: On-site construction regulations and codes help protect the
environment by regulating the impact of building projects on the surrounding ecosystem. They
prevent pollution, minimize waste, and promote sustainable development.
3. Workplace safety: On-site construction regulations and codes protect workers from hazards
and risks associated with building projects. They prevent accidents, minimize the risk of injury
or death, and promote a safe and healthy work environment.
4. Quality control: On-site construction regulations and codes ensure that buildings and
structures meet minimum standards for quality and durability. They prevent defects, minimize
the risk of structural failure, and promote long-term value.
5. Legal compliance: On-site construction regulations and codes are enforced by government
agencies and professional organizations. Failure to comply with these regulations and codes can
result in legal penalties, fines, and even criminal prosecution.
2.3. Site safety signage requirements
Site safety signage is a crucial component of maintaining a safe and healthy work environment
on construction sites. While specific requirements may vary depending on the jurisdiction and
the nature of the construction project, here are some common site safety signage requirements
that are often found in construction regulations and standards:
1. Mandatory Signs: These signs convey mandatory instructions or actions that must be
followed for safety. Examples include "Hard Hat Area," "Safety Glasses Required," "Ear
Protection Must Be Worn," or "No Smoking."
2. Prohibition Signs: These signs indicate actions or behaviors that are prohibited for safety
reasons. Examples include "No Entry," "No Trespassing," "No Smoking," or "No Unauthorized
Personnel Allowed."
3. Warning Signs: These signs alert individuals to potential hazards or dangers in the area.
Examples include "Caution: Construction Zone," "Danger: Falling Objects," "Warning: High
Voltage," or "Beware of Moving Equipment."
4. Emergency Signs: These signs provide information about emergency procedures, equipment,
or exits. Examples include "Emergency Exit," "Fire Extinguisher," "First Aid Station," or
"Assembly Point."
5. Directional Signs: These signs help direct individuals to specific locations, facilities, or areas.
Examples include "Toilets," "Break Room," "Office," or "Safety Equipment."
6. Informational Signs: These signs provide general information that is relevant to safety and
health on the construction site. Examples include "Safety Rules," "Emergency Contact
Numbers," "Site Contact Information," or "Safety Committee Information."
Some key considerations for site safety signage requirements include:
 Visibility: Signs should be easily visible and legible, using appropriate colors and fonts.
They should be positioned at eye level or in locations where they can be easily noticed.
 Size and Format: Signage should be of an adequate size to be read from a reasonable
distance. Standard sizes and formats may be specified by regulations or industry
standards.
 Language and Symbols: Signs should be in a language that is understood by the workers
on the site. The use of universally recognized symbols can enhance comprehension,
especially in multicultural work environments.
 Durability: Signs should be made of durable materials that can withstand the outdoor
conditions of the construction site, including exposure to weather, sunlight, and potential
impacts.
 Regular Maintenance: Signs should be regularly inspected to ensure they remain in good
condition and are not obstructed or faded. Damaged or illegible signs should be promptly
replaced.
It is important to consult the specific regulations and standards applicable to your jurisdiction to
ensure compliance with the precise requirements for site safety signage. Additionally, engaging
with safety professionals or regulatory authorities can provide further guidance on the specific
signage requirements for your construction project.
Self-Check 2.1
1. Which of the following is not a common provision in OHS legislation for construction sites?
a) Workplace Safety
b) Risk Assessment and Hazard Control
c) Personal Protective Equipment (PPE)
d) Environmental Protection
2. Which type of on-site construction regulation covers aspects such as structural integrity, fire
safety, accessibility, and energy efficiency?
a) Building codes
b) Zoning regulations
c) Environmental regulations
d) Workplace safety regulations
3. What is the primary purpose of on-site construction regulations and codes?
a) To protect the environment

b) To ensure quality control
c) To establish minimum standards for building projects
d) To promote sustainable development
4. Which type of site safety sign conveys mandatory instructions or actions that must be followed
for safety?
a) Warning signs
b) Prohibition signs
c) Directional signs
d) Mandatory signs
5. What is one key consideration for site safety signage requirements?
a) Visibility
b) Complexity
c) Decorative design
d) Temporary installation
5Points.
1. True or False: On-site construction regulations and codes are the same worldwide.
2. True or False: Workplace safety regulations cover aspects such as fall protection,
electrical safety, and personal protective equipment.
3. True or False: On-site construction regulations and codes help protect the environment
by regulating the impact of building projects.
4. True or False: Site safety signage should be regularly inspected to ensure it remains in
good condition.
5. True or False: Environmental regulations for construction sites typically focus on noise
pollution control.
1. What is the purpose of workplace inspections and reporting in OHS legislation?
2. Name two types of on-site construction regulations other than building codes.
3. Why are on-site construction regulations and codes important for public safety?
4. Provide an example of a mandatory site safety sign.
5. What are some key considerations for site safety signage requirements?
Name: _________________________ Date: _______________

Unit Three: Construction Codes, Acts, Regulations and Standards

 Current codes, acts, regulations and standards

 Carrying out construction process
 Research current codes, acts, regulations and standards
 Carry out construction process
3.1. Current codes, acts, regulations and standards
Building codes, acts, regulations, and standards are a set of rules and guidelines that govern the
design, construction, maintenance, and use of buildings and structures. These codes and
regulations are put in place to ensure the safety, health, and welfare of the occupants and the
general public. They provide a framework for architects, engineers, builders, and other
professionals involved in the construction industry to follow when designing and constructing
buildings.
3.1.1. Building codes

Building codes are a set of regulations that specify the minimum requirements for building
design, construction materials, structural integrity, fire safety, electrical systems, plumbing
systems, accessibility, energy efficiency, and other aspects of building construction. These codes
are typically enforced by local or national government authorities responsible for building
control.
3.1.2. Acts
Acts refer to legislation enacted by governmental bodies that establish legal requirements for
building construction and safety. Acts may include provisions related to building codes and
regulations as well as other aspects such as zoning regulations, land use planning, environmental
protection, and public health.
3.1.3. Regulations
Regulations are specific rules or directives issued by government agencies or regulatory bodies
to interpret and enforce the provisions of acts or laws. These regulations provide more detailed
guidance on how to comply with the requirements set forth in the acts. They often include
technical specifications, procedures for obtaining permits or approvals, inspection requirements,
and penalties for non-compliance.
3.1.4. Standards
Standards are voluntary technical documents developed by professional organizations or
standards development organizations (SDOs). They provide industry best practices and
guidelines for various aspects of building design, construction materials, systems installation,
testing methods, maintenance procedures, and performance criteria. Standards are often
referenced in building codes and regulations as a means of compliance.
The purpose of building codes, acts, regulations, and standards is to ensure that buildings are safe
to occupy and use. They aim to protect occupants from hazards such as structural failures, fire
outbreaks, electrical shocks, gas leaks, poor indoor air quality, inadequate sanitation facilities,
and other potential risks. These regulations also promote energy efficiency, accessibility for
people with disabilities, and sustainable building practices.
Compliance with building codes, acts, regulations, and standards is typically mandatory and
enforced through inspections, permits, and certifications. Failure to comply can result in
penalties, fines, or even legal action. Building officials, inspectors, and other regulatory
authorities are responsible for enforcing these requirements and ensuring that buildings meet the
prescribed standards.
In summary, building codes, acts, regulations, and standards are essential components of the
construction industry. They provide a framework for ensuring the safety, health, and welfare of
building occupants and the general public. Compliance with these regulations is crucial to
creating buildings that meet minimum safety requirements and adhere to industry best practices.
The main concept of the Ethiopian Building Code of Standard for Design of Concrete Structures
is to provide guidelines and regulations for the design, construction, and maintenance of concrete
structures in Ethiopia. The code aims to ensure the safety, durability, and functionality of
concrete structures while considering the local conditions and materials available in the country.
3.2. Carrying out construction process

Carrying out the construction process involves a series of steps and activities aimed at
transforming a design concept into a physical structure. This process requires careful planning,
coordination, and execution to ensure the successful completion of the project. In this
comprehensive response, we will outline the key stages involved in carrying out the construction
process.
1. Pre-construction Phase
The pre-construction phase is crucial for setting the foundation of a successful construction
project. It involves several important activities, including:
a. Project Planning: This stage involves defining project objectives, scope, budget, and timeline.
It also includes conducting feasibility studies and obtaining necessary permits and approvals
b. Design Development: During this phase, architects and engineers work on developing detailed
construction drawings and specifications based on the initial design concept. These documents
serve as a guide for the construction team.
c. Procurement: The procurement process involves sourcing and acquiring materials, equipment,
and services required for the construction project. This includes obtaining bids from suppliers
and subcontractors, negotiating contracts, and ensuring timely delivery of materials.
d. Site Preparation: Before construction can begin, the site needs to be prepared. This may
involve clearing vegetation, leveling the ground, installing temporary facilities (such as fencing
or site offices), and conducting surveys to establish property boundaries.
2. Construction Phase
Once the pre-construction phase is complete, the actual construction work begins. This phase
typically involves the following steps:
a. Mobilization: The construction team sets up on-site facilities, including temporary utilities
such as electricity and water supply. They also establish safety measures to ensure a secure
working environment.
b. Foundation Construction: The foundation is critical for providing stability to the structure.
This step involves excavating trenches or drilling piles to support the building's weight.
Reinforcement bars are installed, followed by pouring concrete to create a solid foundation.
c. Structural Construction: Once the foundation is in place, the structural elements of the
building are constructed. This includes erecting columns, beams, and slabs according to the
design specifications. Structural systems such as steel frames or reinforced concrete are used,
depending on the project requirements.
d. MEP Systems Installation: Mechanical, electrical, and plumbing (MEP) systems are
essential for the functioning of any building. This step involves installing HVAC (heating,
ventilation, and air conditioning), electrical wiring, plumbing pipes, and other necessary systems.
e. Finishing Works: After the structural elements and MEP systems are in place, finishing
works begin. This includes interior and exterior finishes such as painting, tiling, flooring, and
installation of fixtures and fittings.
f. Testing and Commissioning: Once construction is complete, various tests are conducted to
ensure that all systems are functioning properly. This includes checking electrical connections,
plumbing fixtures, HVAC systems, fire safety measures, and other components.
3. Post-construction Phase
The post-construction phase involves activities that take place after the completion of the
construction process. These activities include:
a. Handover: The project is handed over to the client or end-user after obtaining necessary
certifications and approvals from regulatory authorities. This includes providing operation
manuals, warranties, and maintenance schedules.
b. Defects Rectification: Any defects or issues identified during inspections or after occupancy
are rectified during this phase. The construction team addresses these concerns promptly to
ensure the building meets quality standards.
c. Maintenance and Facility Management: Once the project is handed over, ongoing
maintenance and facility management become crucial for the longevity of the structure. Regular
inspections, repairs, and preventive maintenance activities are carried out to ensure optimal
performance.
In conclusion, carrying out the construction process involves a series of well-defined stages that
require careful planning, coordination, and execution. From pre-construction activities such as
project planning and design development to actual construction work and post-construction tasks
like handover and maintenance, each step plays a vital role in the successful completion of a
construction project.
Self-Check 3.1
1. Which of the following is not a common provision found in OHS legislation for construction
sites?
a) Workplace inspections and reporting

b) Training and information
c) Quality control
d) Risk assessment and hazard control
2. What is the primary purpose of on-site construction regulations and codes?
a) To protect workers' health and hygiene

b) To establish minimum standards for building design and construction
c) To regulate the impact of building projects on the environment
d) To ensure workplace safety on construction sites
3. Which type of on-site construction regulation covers aspects such as wheelchair ramps and
accessible restrooms?
a) Building codes
b) Zoning regulations
c) Environmental regulations
d) Accessibility regulations
4. What is the importance of on-site construction regulations and codes?
a) To promote sustainable development

b) To ensure public safety
c) To protect workers' rights
d) All of the above
5. What are some common site safety signage requirements?
a) Mandatory signs
b) Prohibition signs
c) Warning signs
d) All of the above
5Points.
1. True or False: OHS legislation requires employers to provide personal protective
equipment to workers.
2. True or False: On-site construction regulations and codes help protect the environment.
3. True or False: Workplace safety regulations cover aspects such as fall protection and
electrical safety.
4. True or False: Site safety signage requirements include only mandatory signs and
warning signs.
5. True or False: It is important to regularly inspect and maintain site safety signage.
1. Name three main provisions commonly found in OHS legislation for construction sites.
2. What is the purpose of building codes in on-site construction regulations?
3. Provide an example of an environmental regulation related to construction projects.
4. How do on-site construction regulations and codes ensure workplace safety?
5. What are some key considerations for site safety signage requirements?
Name: _________________________ Date: _______________
Unit Four: Insurance and regulatory requirements for housing
construction

 Insurance cover.
 Contract law.
 Arrange Insurance cover.

 Apply contract law.
4.1. Insurance cover
Insurance in construction work refers to the coverage and protection provided by insurance
policies specifically designed for the construction industry. It is a crucial aspect of construction
projects as it helps mitigate risks, protect stakeholders, and ensure financial stability in case of
unforeseen events or accidents.
Construction insurance encompasses various types of coverage that address different aspects of
construction projects. These policies are typically tailored to meet the unique needs and risks
associated with construction work. The most common types of insurance in construction include:
1. General Liability Insurance: This type of insurance provides coverage for third-party claims
arising from bodily injury, property damage, or personal injury caused by the construction
activities. It protects contractors, subcontractors, and other parties involved in the project from
potential lawsuits and financial liabilities.
2. Workers' Compensation Insurance: Workers' compensation insurance is essential for
construction projects as it covers medical expenses, lost wages, and rehabilitation costs for
workers who sustain injuries or illnesses on the job. It ensures that employees are protected and
compensated in case of work-related accidents or occupational diseases.
3. Builder's Risk Insurance: Builder's risk insurance, also known as course of construction
insurance, provides coverage for damages or losses to a building under construction. It protects
against risks such as fire, theft, vandalism, and natural disasters during the construction phase.
This type of insurance typically covers the structure itself, as well as materials, equipment, and
fixtures on-site.
Additionally, there are other types of insurance that may be necessary depending on the specific
nature of the project:
 Professional Liability Insurance: Also known as errors and omissions insurance,
professional liability insurance protects architects, engineers, and other design
professionals from claims related to errors or omissions in their professional services.
 Contractor's All Risks Insurance: Contractor's all risks (CAR) insurance provides
comprehensive coverage for all risks associated with a construction project. It typically
includes coverage for property damage, third-party liability, and delay in completion.
 Environmental Liability Insurance: This type of insurance covers the costs associated
with environmental damage caused by construction activities, such as pollution or
contamination. It helps protect contractors from potential legal and financial
consequences.
Insurance in construction work is essential for several reasons:
1. Risk Management: Construction projects involve various risks, including accidents, property
damage, and legal liabilities. Insurance helps manage these risks by providing financial
protection and coverage for potential losses. It allows contractors and project owners to transfer
some of the risks to insurance companies, reducing their exposure to financial uncertainties.
2. Legal Requirements: In many jurisdictions, certain types of insurance are mandatory for
construction projects. Contractors may be required to provide proof of insurance before
commencing work or obtaining permits. Compliance with these legal requirements ensures that
all parties involved are adequately protected and minimizes the potential for legal disputes.
3. Financial Stability: Construction projects often involve significant investments of time,
money, and resources. Insurance provides a safety net in case of unforeseen events that could
disrupt the project or result in financial losses. It helps maintain financial stability by covering
damages, liabilities, and other costs that may arise during construction.
In conclusion, insurance plays a vital role in construction work by mitigating risks, protecting
stakeholders, and ensuring financial stability. General liability insurance, workers' compensation
insurance, and builder's risk insurance are among the most common types of insurance in
construction. By providing coverage for various risks and potential losses, insurance enables
contractors and project owners to focus on completing projects successfully while minimizing
financial uncertainties.
4.1.1. Home owner's warranty
A home warranty, also known as a home owner's warranty or a home protection plan, is a type of
service contract that provides coverage for the repair or replacement of major systems and
appliances in a home. It is designed to help homeowners manage the costs of unexpected repairs
or replacements that may arise due to normal wear and tear.
Here are some key points to understand about home warranties:
1. Coverage: Home warranties typically cover major systems such as heating, ventilation, and
air conditioning (HVAC), plumbing, electrical, and appliances like refrigerators, ovens,
dishwashers, and washers/dryers. The specific items covered can vary depending on the warranty
plan and the provider.
2. Cost: Home warranties are generally purchased for a specific period, typically one year, and
the cost of the warranty varies depending on the coverage level and the provider. There is
typically an annual fee, as well as service call fees or deductibles for each repair visit.
3. Claims Process: When a covered item breaks down or malfunctions, the homeowner can
contact the warranty provider to request service. The provider will dispatch a licensed technician
from their network of approved service providers to diagnose and repair the problem. The
homeowner usually pays a service call fee or deductible for each visit.
4. Limitations and Exclusions: Home warranties have limitations and exclusions that
homeowners should be aware of. Pre-existing conditions, improper maintenance, and certain
types of damage may not be covered. Additionally, there may be limits on the maximum
coverage amounts or specific items that are not included in the warranty.
5. Benefits: The main benefit of a home warranty is financial protection against unexpected
repair or replacement costs. It can provide peace of mind to homeowners, especially for older
homes or homes with aging systems and appliances. Home warranties can also be beneficial for
buyers of pre-owned homes as they may offer coverage during the initial period of
homeownership.
6. Different from Homeowners Insurance: It's important to note that a home warranty is
different from homeowners insurance. Homeowners insurance covers damages and losses due to
perils like fire, theft, or natural disasters, while a home warranty covers the repair or replacement
of systems and appliances due to normal wear and tear.
When considering a home warranty, it's essential to carefully review the terms and conditions of
the contract, including coverage, limitations, and exclusions. It's also advisable to research
different warranty providers, read reviews, and compare pricing and coverage options before
making a decision.
4.1.2. Superannuation
Superannuation is a retirement savings system that exists in various countries, including
Australia. It is designed to help individuals save and accumulate funds to support them
financially during their retirement years. Here's how superannuation generally works:
1. Contributions: Both employers and employees make contributions to a superannuation fund
on behalf of the employee. The contributions are generally a percentage of the employee's salary
or wages. In Australia, the minimum contribution rate is known as the Superannuation Guarantee
(SG), which is currently set at 10% of an employee's ordinary earnings.
2. Investment: The money contributed to a superannuation fund is invested in various assets
such as stocks, bonds, property, or cash, depending on the individual's investment preferences
and the options provided by the fund.
3. Tax advantages: Superannuation enjoys certain tax advantages. Contributions made by
employees are generally taxed at a concessional rate (known as the concessional contributions
cap), which is lower than their marginal tax rate. Investment earnings within the superannuation
fund are also taxed at a concessional rate. However, there are limits to how much can be
contributed each year without incurring additional tax.
4. Preservation: Superannuation is a long-term savings vehicle, and generally, the funds are
preserved until the individual reaches their preservation age (which is currently between 57 and
60, depending on the individual's date of birth) and meets a condition of release, such as
retirement or reaching a certain age.
5. Withdrawals: Once an individual meets the conditions of release, they can access their
superannuation savings. Withdrawals can be made as a lump sum, regular income stream
(pension), or a combination of both, depending on the rules of the superannuation fund and the
individual's preferences.
It's important to note that the details of superannuation can vary from country to country, so it's
always advisable to consult the specific rules and regulations of the relevant jurisdiction.
4.1.3. Workers’ compensation
Workers' compensation is a form of insurance that provides benefits to employees who suffer work-
related injuries or illnesses. It is designed to protect both employees and employers by providing financial
support and medical care for injured workers, while also limiting the liability of employers.
The concept of workers' compensation dates back to ancient times, with some of the earliest recorded
instances found in ancient Sumeria and ancient Greece. However, modern workers' compensation systems
began to emerge in the late 19th and early 20th centuries as industrialization led to an increase in
workplace injuries.
The primary purpose of workers' compensation is to provide prompt and fair compensation to employees
who are injured or become ill due to their work. This includes not only physical injuries, such as broken
bones or burns, but also occupational diseases like lung cancer caused by exposure to hazardous
substances.
4.1.4. Professional Indemnity
Professional indemnity insurance, also known as professional liability insurance or errors and omissions
insurance, is a type of insurance coverage that protects professionals from financial losses resulting from
claims of negligence, errors, or omissions in the performance of their professional duties. This insurance
is typically purchased by professionals who provide services or advice to clients, such as doctors,
lawyers, architects, engineers, consultants, and accountants.
The main purpose of professional indemnity insurance is to provide financial protection to professionals
in case they are sued by a client for alleged mistakes or failures in their work. It covers the costs
associated with defending against such claims, including legal fees, court costs, and settlements or
judgments that may be awarded to the claimant. Without this insurance coverage, professionals would be
personally liable for these expenses, which can be substantial and potentially devastating to their finances.
4.2. Contract law

Contract law in construction refers to the body of legal principles and rules that govern
contractual relationships within the construction industry. It encompasses the formation,
interpretation, performance, and enforcement of contracts related to construction projects.
Contract law provides a framework for parties involved in construction projects to establish their
rights, obligations, and remedies, as well as the mechanisms for dispute resolution.
Construction contracts are legally binding agreements between various parties involved in a
construction project, such as owners, contractors, subcontractors, architects, engineers, suppliers, and
other stakeholders. These contracts outline the rights, responsibilities, and obligations of each party, as
well as the terms and conditions under which the project will be executed.
One of the key aspects of construction contract law is contract formation. For a contract to be valid and
enforceable, it must meet certain requirements. These include an offer and acceptance, consideration (i.e.,
something of value exchanged between the parties), mutual agreement on all essential terms, capacity of
the parties to enter into a contract, and legality of the contract's purpose.
4.2.1. Elements of Contract Law in Construction
1. Formation of Contracts: Contract formation involves offer, acceptance, consideration, and
an intention to create legal relations. Construction contracts can be written, oral, or implied, but
written contracts are generally preferred to avoid disputes over terms and conditions.
2. Contract Documents: Construction contracts typically consist of various documents,
including the agreement, specifications, drawings, general conditions, and any supplementary
conditions. These documents collectively define the scope of work, project requirements, and the
rights and responsibilities of the parties involved.
3. Performance and Delivery: Contract law governs the performance of construction contracts,
including quality standards, completion timelines, and payment terms. It also addresses issues
such as variations or changes to the scope of work, delays, and extensions of time.
4. Payment and Pricing: Contract law regulates the payment provisions in construction
contracts, including the agreed-upon price, payment schedule, progress payments, retention
amounts, and mechanisms for resolving payment disputes. It may also cover issues related to
pricing adjustments, such as changes in material costs or unforeseen circumstances.
5. Risk Allocation: Construction contracts allocate risks between the parties involved. Contract
law provides rules for determining responsibility and liability for defects, delays, accidents, and
other issues that may arise during construction. These provisions often include indemnification
clauses, insurance requirements, and limitation of liability clauses.
6. Dispute Resolution: Contract law provides mechanisms for resolving disputes that may arise
during construction projects. These mechanisms may include negotiation, mediation, arbitration,
or litigation, depending on the terms set out in the contract
It's important to note that contract law in construction can vary depending on the jurisdiction and
the specific contractual arrangements. Construction contracts often incorporate industry-standard
forms, such as those published by organizations like the American Institute of Architects (AIA)
or the International Federation of Consulting Engineers (FIDIC), which provide standardized
contract templates and clauses. Additionally, specific construction laws and regulations may
apply to certain types of projects or jurisdictions.
4.2.3. Importance of Contract Law in Construction Work

Contract law plays a crucial role in construction work for several reasons
1. Legal Protection: Construction contracts provide legal protection for all parties involved by clearly
defining their rights and obligations. They help prevent misunderstandings and disputes by establishing a
clear framework for project execution.
2. Risk Management: Construction projects involve various risks, such as delays, cost overruns, design
errors, and unforeseen conditions. Contracts help allocate these risks among the parties involved and
establish mechanisms for managing them.
3. Enforceability: Construction contracts are legally binding agreements that can be enforced in court if
necessary. They provide a means for parties to seek remedies in case of breach or non-performance.
Self-Check 4.1
1. Which type of insurance provides coverage for damages or losses to a building under
construction?
a) General Liability Insurance
b) Workers' Compensation Insurance
c) Builder's Risk Insurance
d) Professional Liability Insurance
2. What is the main purpose of a home warranty?
a) Cover damages and losses due to perils like fire or theft
b) Provide financial protection against unexpected repair or replacement costs
c) Cover medical expenses and lost wages for injured workers
d) Protect professionals from financial losses resulting from claims of negligence
3. In which country is superannuation a retirement savings system?
a) United States
b) United Kingdom
c) Australia
d) Canada
4. What is the primary purpose of workers' compensation?
a) Provide financial protection to professionals in case of negligence claims
b) Cover damages or losses to a building under construction
c) Provide benefits to employees who suffer work-related injuries or illnesses
d) Govern contractual relationships within the construction industry
5. Professional indemnity insurance protects professionals from financial losses resulting from:
a) Claims of negligence in the construction industry
b) Claims related to errors or omissions in their professional services
c) Accidents or property damage caused by construction activities
d) Work-related injuries or illnesses
5Points.
1. General Liability Insurance covers third-party claims arising from bodily injury or
property damage in construction activities. (True/False)
2. A home warranty covers the repair or replacement of major systems and appliances in
a home due to perils like fire or theft. (True/False)
3. Workers' compensation provides financial support and medical care for injured
workers but does not limit the liability of employers. (True/False)
4. Professional indemnity insurance is typically purchased by professionals who provide
services or advice to clients in various industries. (True/False)
5. Contract law governs the formation, interpretation, performance, and enforcement of
contracts in the construction industry. (True/False)
1. Name two common types of insurance in construction.
2. What is the purpose of a builder's risk insurance?
3. Explain the concept of superannuation.
4. What does workers' compensation provide to employees?
5. Briefly describe the purpose of professional indemnity insurance.
Name: _________________________ Date: _______________
Unit Five: Legislation to financial transactions

 Payroll systems
 GST (Goods and Service Tax) systems
 Set up and administer payroll systems

 Set up and administer GST (Goods and Service Tax) systems
5.1. Payroll systems
Payroll systems are software applications or platforms that automate and streamline the process
of calculating and managing employee salaries, wages, taxes, and other related financial tasks
within an organization. These systems help businesses efficiently handle payroll processes,
ensure accurate and timely payment to employees, and comply with legal and tax requirements.
5.1.1. Key Features of Payroll Systems
1. Employee Data Management: Payroll systems store and manage employee data, including
personal information, employment details, tax information, and salary components.
2. Time and Attendance Tracking: Many payroll systems integrate with time and attendance
systems to accurately track employee working hours, overtime, leaves, and absences.
3. Calculation of Wages and Deductions: Payroll systems perform automated calculations,
taking into account factors such as regular and overtime hours, rates of pay, taxes, benefits, and
deductions (e.g., for taxes, insurance, retirement plans, and loan repayments).
4. Tax Compliance: Payroll systems help organizations comply with tax regulations by
automatically calculating and withholding the required taxes from employee wages and
generating reports for tax filings.
5. Direct Deposit and Payment: Payroll systems facilitate direct deposit, enabling employers to
electronically transfer funds directly to employees' bank accounts. They can also generate pay
stubs and other payment-related documents.
6. Reporting and Analytics: Payroll systems generate various reports, such as payroll
summaries, tax filings, and labor cost analysis, to provide insights into payroll expenses and help
with financial planning.
7. Compliance and Security: These systems ensure compliance with labor laws, tax regulations,
and data security standards by implementing necessary controls and encryption measures to
protect sensitive employee information.
8. Integration with HR and Accounting Systems: Payroll systems often integrate with other
software solutions, such as human resource management (HRM) systems and accounting
software, to streamline data exchange, eliminate duplicate entries, and maintain data consistency.
9. Employee Self-Service: Many modern payroll systems provide employee self-service portals
where employees can access their pay stubs, tax forms, and update personal information,
reducing administrative burdens
5.2. GST (Goods and Service Tax) systems

GST, which stands for Goods and Services Tax, is a value-added tax levied on the supply of goods and
services in many countries around the world. It is a comprehensive indirect tax that aims to replace
multiple cascading taxes levied by the central and state governments. The introduction of GST is
considered a significant tax reform as it simplifies the taxation system, promotes ease of doing business,
and reduces tax evasion.
The key objective of implementing the GST system is to create a unified and simplified tax
structure that eliminates the cascading effect of taxes and promotes a common market across the
country or region. By consolidating multiple taxes into a single tax, GST aims to streamline the
tax administration process, enhance tax compliance, and boost economic growth.
The GST system typically operates on a destination-based principle, where the tax is levied at the
final consumption point. It follows a multi-stage tax collection mechanism, where taxes are
levied at each stage of the supply chain, with credit for taxes paid at the previous stage.
Under the GST system, businesses are required to register and obtain a unique Goods and
Services Tax Identification Number (GSTIN). They need to maintain records of their purchases,
sales, and other relevant transactions. The tax liability is determined based on the value of the
goods or services supplied, and businesses are required to file periodic GST returns.
The GST rate structure can vary from country to country or region to region. It may include
different tax rates for different categories of goods and services, such as essential commodities,
standard-rated items, and luxury goods. Some countries also have zero-rated and exempt supplies
that attract no GST or are exempt from GST.
One of the advantages of the GST system is that it helps reduce the cascading effect of taxes by
allowing businesses to claim input tax credits for taxes paid on inputs. This mechanism ensures
that taxes are levied only on the value added at each stage of the supply chain, thereby avoiding
double taxation.
The implementation of GST systems can vary across countries. Some countries have a dual GST
structure, where both the central and state governments levy and administer separate GSTs.
Others may have a single GST system administered by the central government or a centralized
authority.
It's important to note that specific details of the GST system, including tax rates, exemptions,
registration requirements, and compliance procedures, can vary significantly from one country to
another. Therefore, it's advisable to refer to the specific GST laws and regulations applicable in
your jurisdiction for accurate and up-to-date information.
Self-Check 5.1
1. What is the main purpose of payroll systems?
a) Automate and streamline employee salary calculations
b) Track inventory and sales in an organization
c) Generate financial reports for tax filings
d) Manage customer data and orders
2. Which feature of payroll systems helps organizations comply with tax regulations?
a) Employee self-service portals
b) Direct deposit and payment
c) Calculation of wages and deductions
d) Reporting and analytics
3. What is the objective of implementing the GST system?
a) Simplify the taxation system and reduce tax evasion
b) Increase the number of cascading taxes
c) Complicate the tax administration process
d) Promote individual tax collection mechanisms
4. Under the GST system, businesses are required to:
a) Register for a Goods and Services Tax Identification Number (GSTIN)
b) Maintain records of employee salaries and wages
c) File payroll reports with the tax authorities
d) Implement direct deposit for employee payment
5. What is the advantage of the GST system in terms of taxes?
a) It increases the cascading effect of taxes
b) It allows businesses to claim input tax credits
c) It eliminates the need for tax compliance
d) It reduces the tax rates for luxury goods
5Points.
1. Payroll systems automate and streamline the process of managing employee salaries.
2. Payroll systems do not integrate with time and attendance tracking systems.
3. The GST system aims to simplify the taxation system and reduce tax evasion.)
4. Under the GST system, businesses are not required to register and obtain a unique
GSTIN.
5. Input tax credits are not allowed under the GST system
1. What are two key features of payroll systems?
2. Explain the concept of input tax credits in the context of the GST system.
3. What is the objective of implementing the GST system?
4. What are businesses required to do under the GST system?
5. How does the GST system help reduce the cascading effect of taxes?
Name: _________________________ Date: _______________
Unit Six: Building contract obligations

 Correct form of building project contract

 Carrying out contracted work in building construction
 Conditions of the contract
 Select correct form of building project contract.

 Carry out contracted work in building construction
 Meet conditions of the contract.
6.1. Correct form of building project contract
In building project contracts, there are several important elements that should be included to
ensure a clear and comprehensive agreement between the parties involved. The correct form of a
building project contract may vary depending on the specific project and jurisdiction, but there
are some common components that are typically included. It is important to note that while this
response provides general information, it is always recommended to consult with a legal
professional to ensure compliance with local laws and regulations.
1. Parties Involved: The contract should clearly identify the parties involved in the agreement.
This includes the names and contact information of the owner or client, as well as the contractor
or construction company responsible for carrying out the project.
2. Scope of Work: The contract should outline the scope of work in detail. This includes a
description of the project, specifications, plans, and any other relevant documents that define
what is expected to be delivered. It is crucial to be as specific as possible to avoid any
misunderstandings or disputes later on.
3. Project Timeline: The contract should include a timeline for the project, including start and
completion dates. This helps establish expectations and allows both parties to plan accordingly.
It may also include milestones or deadlines for specific phases of the project.
4. Payment Terms: The contract should clearly state the agreed-upon payment terms. This
includes the total contract price, any progress payment schedule, and any additional costs or
allowances that may apply. It is important to specify how and when payments will be made, as
well as any penalties for late payments.
5. Change Orders: A provision for change orders should be included in the contract. Change
orders refer to any modifications or additions to the original scope of work that may arise during
the course of the project. This provision should outline how changes will be requested, approved,
and documented, as well as any impact on cost or timeline.
6. Insurance and Liability: The contract should address insurance requirements for both parties.
This may include general liability insurance, workers' compensation insurance, and any other
relevant coverage. It is important to clearly define each party's responsibilities and liabilities in
case of accidents, damages, or delays.
7. Dispute Resolution: The contract should include a clause that outlines the process for
resolving disputes that may arise during the project. This may include mediation, arbitration, or
litigation. Including a dispute resolution clause can help avoid costly legal battles and encourage
amicable resolutions.
8. Termination Clause: It is important to include a termination clause that outlines the
conditions under which either party can terminate the contract. This may include non-
performance, breach of contract, or other specified circumstances. The clause should also specify
any remedies or penalties that may apply in case of termination.
9. Governing Law: The contract should specify the governing law that will apply to the
agreement. This helps determine which jurisdiction's laws will govern the interpretation and
enforcement of the contract.
10. Signatures: Finally, the contract should be signed by both parties to indicate their agreement
and acceptance of the terms and conditions outlined in the document.
It is worth noting that building project contracts can be complex and may require additional
provisions depending on the nature of the project. Consulting with legal professionals who
specialize in construction law is highly recommended to ensure all necessary elements are
included and to address any specific requirements or regulations applicable to the project.
6.1. Carrying out contracted work in building construction
Carrying out contracted work in building construction involves the process of executing
construction projects based on a contractual agreement between a client and a contractor. This
type of work encompasses various stages, including planning, design, procurement, construction,
and project management. The contractor is responsible for overseeing the entire construction
process, ensuring that the project is completed according to the agreed-upon specifications,
budget, and timeline.
A. Planning and Design:
The initial stage of carrying out contracted work in building construction involves planning and
design. This phase includes assessing the client's requirements, conducting site surveys,
preparing architectural and engineering drawings, obtaining necessary permits and approvals,
and developing a comprehensive project plan. The contractor works closely with architects,
engineers, and other professionals to ensure that the design meets the client's needs while
adhering to building codes and regulations.
B. Procurement:
Once the planning and design phase is complete, the contractor proceeds with procuring the
necessary materials, equipment, and labor required for the construction project. This involves
sourcing suppliers, obtaining competitive bids or negotiating contracts with subcontractors, and
managing the procurement process to ensure timely delivery of materials and services. Effective
procurement management is crucial for maintaining project schedules and controlling costs.
C. Construction:
The construction phase is where the actual building work takes place. The contractor coordinates
all activities on-site, including site preparation, foundation work, structural framing, installation
of utilities (such as electrical systems, plumbing, and HVAC), interior finishing work (such as
flooring, painting, and cabinetry), and exterior finishes (such as roofing and cladding). The
contractor must ensure that all work is carried out in compliance with building codes and
industry standards while maintaining quality control and safety measures.
During construction, the contractor manages subcontractors and workers, oversees progress on-
site, resolves any issues or conflicts that may arise during construction, and ensures that the
project remains on schedule. Regular communication with the client is essential to provide
updates on progress, address any concerns, and make necessary adjustments to the project plan.
D. Project Management:
Throughout the entire construction process, effective project management is crucial. The
contractor is responsible for managing the project's budget, schedule, and resources. This
includes monitoring costs, tracking progress, coordinating subcontractors and suppliers,
managing change orders, and ensuring that all contractual obligations are met. Project
management software and tools are often utilized to streamline communication, document
control, and scheduling.
Additionally, the contractor is responsible for ensuring compliance with health and safety
regulations on-site. This involves implementing safety protocols, conducting regular inspections,
providing appropriate training to workers, and addressing any potential hazards or risks
In conclusion, carrying out contracted work in building construction involves a comprehensive
process that encompasses planning, design, procurement, construction, and project management.
The contractor plays a pivotal role in overseeing all aspects of the construction project to ensure
its successful completion within the agreed-upon parameters.
6.2. Conditions of the contract

When entering into a contract, there are several conditions that need to be considered. These
conditions help define the rights and obligations of the parties involved and ensure that the
contract is legally enforceable. The specific conditions of a contract can vary depending on the
nature of the agreement, but there are some common elements that are typically included. It is
important to note that this response is a general overview and not legal advice. Consulting with a
legal professional is recommended for specific contract-related inquiries.
1. Offer and Acceptance: The first condition of a contract is the presence of an offer made by
one party to another. An offer is a clear expression of willingness to enter into an agreement on
specific terms. It must be communicated to the other party and should be sufficiently definite so
that the other party can accept it without further negotiation. The acceptance of the offer must
also be communicated to the offering party, creating a mutual understanding between both
parties.
2. Consideration: Consideration refers to something of value exchanged between the parties as
part of the contract. It can take various forms, such as money, goods, services, or even a promise
to do or refrain from doing something. Consideration is essential for a contract to be legally
binding and signifies that both parties have given something in exchange for what they receive
under the contract.
3. Intention to Create Legal Relations: For a contract to be enforceable, there must be an
intention by both parties to create legal relations. This means that they intend for their agreement
to have legal consequences and be subject to legal remedies in case of breach. In some cases,
such as agreements between family members or friends, there may be a presumption against an
intention to create legal relations unless evidence suggests otherwise.
4. Capacity: The parties entering into a contract must have the legal capacity to do so. This
means they must be of sound mind and at least the age of majority (usually 18 years old). If a
party lacks capacity, such as being mentally incapacitated or a minor, the contract may be
voidable or unenforceable.
5. Consent: Consent refers to the voluntary agreement of both parties to enter into the contract.
It must be free from any form of duress, undue influence, fraud, misrepresentation, or mistake. If
consent is obtained through any of these means, the contract may be voidable.
6. Legality: The subject matter and purpose of the contract must be legal. Contracts that involve
illegal activities or go against public policy are generally unenforceable. For example, a contract
to engage in illegal drug trafficking would be considered void.
7. Certainty: A contract must have clear and certain terms. The essential terms, such as the
price, quantity, quality, and time of performance, should be sufficiently defined to avoid
ambiguity or misunderstanding. Vague or uncertain terms may render the contract
unenforceable.
8. Writing (Statute of Frauds): Some contracts are required to be in writing to be enforceable
under the Statute of Frauds. This typically includes contracts involving real estate, marriage,
goods over a certain value, and agreements that cannot be performed within one year. The
writing requirement varies by jurisdiction.
9. Entire Agreement/Integration Clause: An entire agreement clause is often included in
contracts to ensure that all prior negotiations and agreements between the parties are contained
within the written contract. This clause helps prevent disputes arising from oral or written
statements made before the contract was formed.
10. Performance and Termination: The conditions for performance and termination of the
contract should be clearly outlined. This includes specifying deadlines, milestones, payment
terms, and any conditions that would allow either party to terminate the agreement.
It is important to note that these conditions may vary depending on the jurisdiction and specific
circumstances surrounding the contract. Consulting with legal professionals or referring to
authoritative sources is recommended for accurate and up-to-date information
Self-Check 6.1
1. Which of the following is NOT a common component of a building project contract?
a) Parties Involved
b) Scope of Work
c) Change Orders
d) Project Management
2. What is the purpose of a termination clause in a building project contract?
a) To outline the payment terms
b) To specify the governing law
c) To address insurance requirements
d) To define the conditions under which either party can terminate the contract
3. What is the role of a contractor in carrying out contracted work in building construction?
a) Overseeing the entire construction process
b) Managing the project's budget and schedule
c) Procuring necessary materials and labor
d) All of the above
4. Which stage of carrying out contracted work in building construction involves planning and
design?
a) Procurement
b) Construction
c) Project Management
d) Planning and Design
5. What is one of the conditions that need to be considered when entering into a contract?
a) Safety protocols on-site
b) Entire Agreement/Integration Clause
c) Intention to Create Legal Relations
d) Project timeline
5Points.
1. The contract should clearly identify the parties involved in the agreement.
2. Change orders refer to modifications or additions to the original scope of work.
3. Consideration refers to the exchange of money only in a contract.
4. The subject matter and purpose of the contract must be illegal.
5. The writing requirement for enforceable contracts is consistent across all jurisdictions.
1. Why is it important to be specific in the scope of work section of a building project
contract?
2. What are some common insurance requirements in building project contracts?
3. What are some methods of dispute resolution that can be included in a contract?
4. What is the purpose of a termination clause in a contract?
5. Why is consideration an essential element in a contract?
Name: _________________________ Date: _______________
Unit Seven: Industrial relations policies and obligations relevant to
housing Construction.

 Industrial relations policies and Obligations
 Subcontract companies comply
 Contracts Awards.
 Workplace agreements.
 Proactive measures in the workplace
 Provisions of training agreements.
 Reference material to industrial relations
 Identify and apply industrial policies and obligations

 Identify subcontract companies comply
 Apply Contracts Awards.
 Use workplace agreements.
 Take proactive measures in the workplace
 Identify and apply provisions of training agreements.
 Make reference material to industrial relations
7.1. Industrial Relation policies and Obligations
In Ethiopia, the construction industry plays a significant role in the country's economic
development. To ensure a harmonious and productive working environment, various industrial
relations policies and obligations are in place. These policies aim to protect the rights of workers,
promote fair employment practices, and establish mechanisms for dispute resolution. This
comprehensive response will delve into the key aspects of construction industrial relations
policies and obligations in Ethiopia.
1. Labor Laws and Regulations:
Ethiopia has enacted several labor laws and regulations that govern industrial relations in the
construction sector. The primary legislation is the Ethiopian Labor Proclamation No. 377/2003,
which provides a legal framework for employment relationships, working conditions, and
dispute resolution. This proclamation covers various aspects such as recruitment, wages, working
hours, leave entitlements, occupational safety and health, termination of employment, and
collective bargaining.
Under this proclamation, employers are required to provide written contracts to their employees
specifying terms and conditions of employment. The law also mandates employers to pay fair
wages based on job classification, experience, and productivity. Additionally, it sets limits on
working hours and requires employers to provide annual leave, sick leave, maternity leave, and
other statutory benefits.
2. Collective Bargaining Agreements:
Collective bargaining agreements (CBAs) play a crucial role in regulating industrial relations in
the construction industry. CBAs are negotiated between employers or employer associations and
trade unions representing workers. These agreements cover various aspects such as wages,
working conditions, job security, training programs, grievance procedures, and dispute resolution
mechanisms.
In Ethiopia, the Construction Employers Federation (CEF) represents employers in the
construction industry, while different trade unions represent workers' interests. The CEF
negotiates CBAs with trade unions to establish industry-wide standards for wages and working
conditions. These agreements help maintain stability in labor relations by providing a platform
for dialogue and addressing workers' concerns.
3. Health and Safety Regulations:
Ensuring a safe working environment is a crucial aspect of construction industrial relations in
Ethiopia. The government has implemented various health and safety regulations to protect
workers from occupational hazards. The Occupational Safety and Health Proclamation No.
1016/2016 sets out the legal framework for workplace safety and health standards.
Under this proclamation, employers are required to provide a safe working environment,
including proper training, protective equipment, and measures to prevent accidents and injuries.
Employers must also establish health and safety committees to monitor compliance with
regulations and address workers' concerns. Inspections are conducted by the Ministry of Labor
and Social Affairs to ensure compliance with health and safety standards.
4. Dispute Resolution Mechanisms:
To address conflicts that may arise between employers and workers in the construction industry,
Ethiopia has established dispute resolution mechanisms. The Labor Proclamation No. 377/2003
provides for both conciliation and arbitration processes to resolve labor disputes.
Conciliation involves the intervention of a neutral third party, such as a labor officer or
conciliator, who facilitates negotiations between the parties to reach a mutually acceptable
solution. If conciliation fails, the dispute can be referred to arbitration, where an arbitrator or
panel of arbitrators makes a binding decision based on the evidence presented by both parties.
5. Obligations towards Foreign Workers:
Ethiopia welcomes foreign investment in its construction sector, leading to the employment of
foreign workers in various projects. The government has established specific obligations
regarding the employment of foreign workers to protect their rights and ensure fair treatment.
Foreign workers must obtain work permits from the Ethiopian Ministry of Labor and Social
Affairs before commencing employment. Employers are responsible for ensuring that foreign
workers have valid work permits and comply with immigration laws. Additionally, employers
must provide appropriate accommodation, medical insurance, and repatriation arrangements for
foreign workers.
In conclusion, Ethiopia has implemented various industrial relations policies and obligations to
regulate the construction industry. These policies encompass labor laws, collective bargaining
agreements, health and safety regulations, dispute resolution mechanisms, and obligations
towards foreign workers. By adhering to these policies, the construction industry in Ethiopia can
foster a productive and harmonious working environment while protecting the rights and welfare
of workers.
7.2. Subcontract companies comply

In Ethiopia, subcontract companies are expected to comply with various regulations and
guidelines to ensure ethical business practices and protect the rights of workers. Compliance
requirements cover a wide range of areas, including labor laws, health and safety standards,
environmental regulations, and tax obligations.
Labor Laws: Subcontract companies in Ethiopia must adhere to the country's labor laws, which
are primarily governed by the Ethiopian Labor Proclamation No. 377/2003. This legislation sets
out provisions related to employment contracts, working hours, minimum wages, leave
entitlements, termination procedures, and other aspects of employment. It is crucial for
subcontract companies to comply with these laws to avoid legal repercussions and maintain fair
working conditions for their employees.
Health and Safety Standards: Ensuring a safe and healthy work environment is a fundamental
requirement for subcontract companies in Ethiopia. The Occupational Health and Safety
Proclamation No. 101/1994 establishes the legal framework for workplace safety in the country.
It outlines obligations related to risk assessments, hazard identification, provision of personal
protective equipment (PPE), emergency preparedness, training programs, and reporting of
accidents or incidents. Subcontract companies must implement appropriate measures to prevent
workplace injuries and illnesses and regularly assess compliance with these standards.
Environmental Regulations: Subcontract companies operating in Ethiopia are also subject to
environmental regulations aimed at minimizing their impact on the environment. The
Environmental Impact Assessment (EIA) Proclamation No. 299/2002 mandates that certain
projects undergo an assessment process to evaluate potential environmental effects before they
can proceed. Compliance with this regulation involves conducting thorough assessments,
obtaining necessary permits, implementing mitigation measures, and monitoring ongoing
operations to ensure adherence to environmental standards.
Tax Obligations: Subcontract companies in Ethiopia are required to fulfill their tax obligations
as per the country's tax laws. The Ethiopian Revenue and Customs Authority (ERCA) oversees
tax administration in the country. Subcontractors must register with ERCA, obtain a taxpayer
identification number, and comply with tax filing and payment requirements. Failure to meet tax
obligations can result in penalties and legal consequences.
Other Compliance Considerations: In addition to the aforementioned areas, subcontract
companies in Ethiopia may need to comply with other regulations specific to their industry or
sector. For example, if a subcontractor operates in the construction industry, they must adhere to
the Construction Industry Registration Proclamation No. 624/2009, which requires registration
with the appropriate authority. Similarly, if a subcontractor engages in manufacturing or
importing goods, they must comply with relevant product standards and regulations enforced by
the Ethiopian Standards Agency (ESA) and other regulatory bodies.
Overall, subcontract companies in Ethiopia are expected to comply with labor laws, health and
safety standards, environmental regulations, tax obligations, and any other applicable industry-
specific requirements. Compliance is essential not only for legal reasons but also for maintaining
ethical business practices and ensuring the well-being of workers and the environment.
7.3. Contracts Awards

In Ethiopia, construction contracts awards are an important aspect of the country's infrastructure
development. These awards play a crucial role in facilitating the construction of various projects,
including roads, bridges, buildings, and other infrastructure facilities. The process of awarding
construction contracts in Ethiopia involves several steps and is governed by specific regulations
and procedures.
The Ethiopian government is actively involved in awarding construction contracts through
various entities and agencies. One of the key organizations responsible for this process is the
Ethiopian Roads Authority (ERA). ERA is responsible for planning, designing, and supervising
road construction projects in the country. It plays a significant role in awarding contracts for road
construction projects to qualified contractors.
The process of awarding construction contracts in Ethiopia typically begins with the
identification of a project and the preparation of detailed project plans and specifications. Once
these documents are ready, the government or relevant authority will issue a tender notice
inviting interested contractors to submit their bids for the project. The tender notice includes
information about the project scope, requirements, evaluation criteria, and submission deadline.
Interested contractors are required to prepare and submit their bids according to the instructions
provided in the tender notice. The bidding process usually involves submitting technical
proposals, financial proposals, and other relevant documents as specified in the tender
documents. The technical proposals outline the contractor's approach to executing the project,
including methodologies, equipment, and personnel to be used.
After the submission deadline has passed, a bid opening ceremony is conducted where all
submitted bids are publicly opened and recorded. This ensures transparency and fairness in the
evaluation process. The evaluation of bids is carried out by a committee or panel appointed by
the relevant authority. The evaluation criteria typically include factors such as technical
competence, experience, financial capability, and compliance with legal requirements.
Once the evaluation process is complete, a contract award decision is made based on the highest-
ranked bidder who meets all the necessary requirements. The contract award decision is
communicated to the successful bidder, and negotiations may take place to finalize the terms and
conditions of the contract. Once the contract is signed, the construction work can commence.
It is important to note that the awarding of construction contracts in Ethiopia follows a
competitive bidding process to ensure fairness and transparency. This process allows qualified
contractors to compete for projects based on their capabilities and merits. The government aims
to select contractors who can deliver high-quality work within the specified timeframe and
budget.
7.4. Workplace agreements

In Ethiopia, workplace agreements in the construction industry are governed by various laws and
regulations. These agreements aim to ensure fair and safe working conditions for employees, as
well as to establish guidelines for wages, working hours, and other employment-related matters.
The main legislation that governs workplace agreements in Ethiopia includes the Ethiopian
Labor Proclamation No. 377/2003 and the Ethiopian Civil Code.
The Ethiopian Labor Proclamation No. 377/2003 is the primary law that regulates labor relations
in Ethiopia. It provides a framework for collective bargaining and the negotiation of workplace
agreements. According to this proclamation, workers have the right to form trade unions and
engage in collective bargaining with employers. Workplace agreements can be negotiated
between employers and trade unions or workers' representatives, and they cover a wide range of
issues such as wages, working hours, leave entitlements, health and safety standards, and dispute
resolution procedures.
Under the Ethiopian Labor Proclamation, workplace agreements can be concluded at various
levels, including enterprise-level agreements, sectoral agreements, and national-level
agreements. Enterprise-level agreements are negotiated between individual employers and their
employees or their representatives. Sectoral agreements are negotiated between employers'
associations or trade unions representing workers in a specific sector of the economy. National-
level agreements are negotiated between the government, employers' associations, and trade
unions representing workers across different sectors.
The Ethiopian Civil Code also plays a role in regulating workplace agreements in the
construction industry. The Civil Code provides general rules on contracts and obligations, which
are applicable to employment contracts and workplace agreements. It sets out principles such as
freedom of contract, good faith in negotiations, and the binding nature of contractual obligations.
In addition to these laws, there are also specific regulations that apply to the construction
industry in Ethiopia. For example, the Ethiopian Construction Industry Registration
Proclamation No. 624/2009 requires construction companies to register with the relevant
authorities and comply with certain standards and regulations related to health, safety, and
environmental protection. These regulations may also include provisions on workplace
agreements specific to the construction industry.
Overall, workplace agreements in the construction industry in Ethiopia are governed by the
Ethiopian Labor Proclamation No. 377/2003, the Ethiopian Civil Code, and specific regulations
applicable to the construction sector. These agreements are negotiated between employers and
trade unions or workers' representatives and cover various aspects of employment, including
wages, working hours, leave entitlements, and health and safety standards. The Ethiopian
government plays a role in facilitating collective bargaining and ensuring compliance with labor
laws and regulations.
7.5. Proactive measures in the workplace

In Ethiopia, proactive measures in the workplace are crucial for ensuring a safe and productive
environment for employees. These measures encompass various aspects of construction,
including safety protocols, employee training, risk assessment, and compliance with regulations.
By implementing proactive measures, employers can prevent accidents, reduce injuries, and
promote a culture of safety within the construction industry.
Safety Protocols: One of the key proactive measures in the workplace is the establishment and
enforcement of safety protocols. This involves developing comprehensive safety policies and
procedures that address potential hazards and risks specific to the construction industry. These
protocols may include guidelines for working at heights, handling heavy machinery, using
personal protective equipment (PPE), and implementing proper scaffolding practices. Regular
safety inspections should be conducted to ensure compliance with these protocols.
Employee Training: Adequate training is essential to equip employees with the necessary
knowledge and skills to perform their tasks safely. Employers should provide comprehensive
training programs that cover various aspects of workplace safety, including hazard identification,
emergency response procedures, proper use of equipment, and safe work practices. Training
sessions should be conducted regularly and tailored to the specific needs of each job role within
the construction industry.
Risk Assessment: Conducting regular risk assessments is another proactive measure that
employers should undertake. This involves identifying potential hazards in the workplace and
evaluating their likelihood of occurrence and potential impact on employees' health and safety.
Risk assessments help employers prioritize safety measures and allocate resources effectively to
mitigate identified risks. It is important to involve employees in this process as they can provide
valuable insights based on their firsthand experiences.
Compliance with Regulations: Employers must ensure compliance with relevant laws and
regulations governing workplace safety in Ethiopia. This includes adherence to national
occupational health and safety standards as well as any specific regulations applicable to the
construction industry. Employers should stay updated on any changes or updates to these
regulations and make necessary adjustments to their proactive measures accordingly.
Promoting a Safety Culture: Creating a culture of safety is crucial for the long-term success of
proactive measures in the workplace. Employers should foster an environment where employees
feel comfortable reporting hazards, near misses, and accidents without fear of reprisal. Regular
safety meetings and toolbox talks can be conducted to reinforce safety practices and encourage
open communication regarding safety concerns. Recognizing and rewarding employees who
demonstrate exemplary safety practices can also help promote a positive safety culture.
In conclusion, proactive measures in the workplace are essential for ensuring a safe and
productive construction industry in Ethiopia. By implementing safety protocols, providing
comprehensive employee training, conducting regular risk assessments, complying with
regulations, and promoting a safety culture, employers can significantly reduce the risk of
accidents and injuries in the workplace.
7.6. Provisions of training agreements

In Ethiopia, training agreements are provisions that outline the terms and conditions of a training
program between an employer and an employee. These agreements serve as a legal framework to
ensure that both parties understand their rights and obligations during the training period. The
construction provisions of training agreements in Ethiopia typically cover various aspects such as
the duration of the training, the responsibilities of the employer and employee, compensation,
termination, and dispute resolution mechanisms.
Duration of Training: The training agreement should clearly specify the duration of the training
program. This includes the start and end dates of the training period. It is important to note that
the duration should be reasonable and relevant to the nature of the training.
Responsibilities of the Employer: The employer has certain responsibilities towards the trainee
during the training period. These may include providing necessary resources, facilities, and
equipment for effective training. The employer should also assign a qualified supervisor or
mentor to guide and monitor the trainee's progress. Additionally, the employer should ensure a
safe working environment for the trainee.
Responsibilities of the Employee: The employee undergoing training is expected to actively
participate in the training program and follow all instructions provided by the employer or
designated supervisor. They should demonstrate commitment, punctuality, and professionalism
throughout the training period. The employee should also maintain confidentiality regarding any
sensitive information they may come across during their training.
Compensation: The issue of compensation during a training period can vary depending on the
nature of the agreement. In some cases, trainees may receive a stipend or allowance to cover
their basic expenses. However, it is important to note that trainees are not entitled to regular
employee benefits such as salary, overtime pay, or other employment-related benefits unless
explicitly stated in the agreement.
Termination: Training agreements should include provisions for termination by either party. This
could be due to various reasons such as unsatisfactory performance, breach of agreement terms,
or mutual consent. The agreement should outline the procedures and notice periods required for
termination.
Dispute Resolution: In the event of any disputes or disagreements between the employer and
employee during the training period, the agreement should specify the preferred method of
dispute resolution. This could include negotiation, mediation, or arbitration.
It is important to note that the specific provisions of training agreements in Ethiopia may vary
depending on the industry, sector, and individual circumstances. Therefore, it is advisable for
both employers and employees to seek legal advice or consult relevant labor laws and regulations
to ensure compliance with applicable requirements.
7.7. Reference Material to Industrial Relations

Industrial relations in Ethiopia refer to the study and management of the relationship between
employers, employees, and the government within the construction industry. It encompasses
various aspects such as labor laws, collective bargaining, dispute resolution mechanisms, and
social dialogue. To understand industrial relations in Ethiopia's construction sector, it is essential
to examine the legal framework, labor organizations, and key issues affecting this field.
Legal Framework:
The legal framework governing industrial relations in Ethiopia's construction industry primarily
consists of the Labor Proclamation No. 377/2003. This proclamation provides guidelines for
employment relationships, working conditions, and dispute resolution mechanisms. It establishes
the rights and obligations of employers and employees, including provisions on minimum wages,
working hours, leave entitlements, occupational safety and health standards, and termination
procedures
Additionally, the Ethiopian Constitution guarantees workers' rights to form trade unions and
engage in collective bargaining. The Trade Union Proclamation No. 377/2003 allows workers to
establish trade unions freely and participate in collective bargaining with employers. This
legislation also outlines the registration process for trade unions and their rights and
responsibilities
Labor Organizations:
In Ethiopia's construction industry, labor organizations play a crucial role in representing
workers' interests and negotiating with employers. The Confederation of Ethiopian Trade Unions
(CETU) is the largest umbrella organization representing various trade unions across different
sectors, including construction. CETU advocates for workers' rights, promotes social dialogue,
and engages in collective bargaining on behalf of its members.
Furthermore, sector-specific trade unions exist within the construction industry to address the
unique challenges faced by workers in this sector. For instance, the Construction and Wood
Workers Trade Union (COWWTU) represents construction workers' interests and works towards
improving their working conditions through negotiations with employers.
Several key issues affect industrial relations in Ethiopia's construction industry:
1. Wages and Working Conditions: Ensuring fair wages and decent working conditions is a
significant concern in the construction sector. The government sets minimum wage rates, but
there may be discrepancies in their implementation. Issues such as long working hours, lack of
safety measures, and inadequate access to social protection are also prevalent.
2. Informal Employment: The construction industry in Ethiopia has a significant informal
sector, where workers lack formal employment contracts and social security benefits. This
informal nature of employment poses challenges in terms of organizing workers and ensuring
their rights and protections.
3. Dispute Resolution: Resolving labor disputes effectively is crucial for maintaining
harmonious industrial relations. Ethiopia has established labor tribunals and arbitration
mechanisms to address disputes between employers and employees. However, the accessibility
and efficiency of these mechanisms can vary, leading to delays in resolving conflicts.
In conclusion, industrial relations in Ethiopia's construction industry are governed by the Labor
Proclamation No. 377/2003 and the Trade Union Proclamation No. 377/2003. Labor
organizations such as CETU and COWWTU play a vital role in representing workers' interests
and engaging in collective bargaining. Key issues include wages and working conditions,
informal employment, and dispute resolution mechanisms.
Self-Check 7.1
1. Which organization is responsible for awarding construction contracts in Ethiopia?
a) Ethiopian Roads Authority (ERA)
b) Ethiopian Labor Proclamation No. 377/2003
c) Construction Employers Federation (CEF)
d) Ethiopian Standards Agency (ESA)
2. What are the primary legislation governing labor relations in the construction sector in
Ethiopia?
a) Occupational Safety and Health Proclamation No. 1016/2016
b) Ethiopian Civil Code
c) Ethiopian Labor Proclamation No. 377/2003
d) Environmental Impact Assessment (EIA) Proclamation No. 299/2002
3. What is the purpose of collective bargaining agreements in the construction industry?
a) To establish industry-wide standards for wages and working conditions
b) To ensure compliance with health and safety regulations
c) To address conflicts between employers and foreign workers
d) To regulate subcontract companies in Ethiopia
4. Which government agency conducts inspections to ensure compliance with health and safety
standards?
a) Ministry of Labor and Social Affairs
b) Ethiopian Revenue and Customs Authority (ERCA)
c) Ethiopian Roads Authority (ERA)
d) Construction Employers Federation (CEF)
5. What is the role of subcontract companies in Ethiopia?
a) To negotiate collective bargaining agreements
b) To award construction contracts
c) To comply with labor laws and regulations
d) To supervise road construction projects
5Points.
1. The Ethiopian Labor Proclamation No. 377/2003 covers various aspects of
employment, including recruitment, wages, and collective bargaining.
2. Subcontract companies in Ethiopia are not required to comply with tax obligations.
3. The Occupational Health and Safety Proclamation No. 101/1994 establishes workplace
safety standards in Ethiopia.
4. Workplace agreements in Ethiopia can only be negotiated between employers and
trade unions.
5. The Ethiopian Standards Agency (ESA) is responsible for awarding construction
contracts in Ethiopia.
1. What are the key aspects covered by the Ethiopian Labor Proclamation No. 377/2003?
2. How is collective bargaining agreements negotiated in the construction industry in
Ethiopia?
3. What obligations do subcontract companies in Ethiopia have regarding health and
safety standards?
4. What is the purpose of the Environmental Impact Assessment (EIA) Proclamation No.
299/2002?
5. What is the role of the Ethiopian Roads Authority (ERA) in the awarding of
construction contracts?
Name: _________________________ Date: _______________
Unit Eight: Dispute resolution processes

 Organizational dispute resolution processes.

 Customer complaints with company policy.
 Record & Maintain disputes
 Apply organizational dispute resolution processes.

 Deal customer complaints with company policy.
 Record & Maintain disputes
8.1. Organizational dispute resolution processes
In the construction industry, disputes are common and can arise from a variety of sources,
including contractual issues, changes in project scope, delays, and defective workmanship.
Organizational dispute resolution processes are essential for resolving these disputes in a timely
and cost-effective manner. In this answer, we will discuss the different types of dispute
resolution processes available in construction, their advantages and disadvantages, and best
practices for implementing an effective dispute resolution process.
8.1.1. Types of Dispute Resolution Processes in Construction
1. Negotiation: Negotiation is the most common dispute resolution process used in construction.
It involves discussions between the parties to resolve the dispute without involving a third party.
Negotiation can be done informally, through phone calls or meetings, or formally, through a
structured negotiation process.
2. Mediation: Mediation is a process in which a neutral third party helps the parties to resolve
their dispute. The mediator does not make a decision or impose a solution but rather facilitates
communication and negotiation between the parties. Mediation can be done in person or through
video conferencing.
3. Arbitration: Arbitration is a process in which a neutral third party hears evidence and
arguments from both parties and makes a binding decision. Arbitration can be either binding or
non-binding, depending on the parties' agreement.
4. Litigation: Litigation is the process of taking a dispute to court. It is a formal process that can
be time-consuming and expensive.
5. Dispute Review Boards (DRBs): DRBs are independent panels of experts who are appointed
at the beginning of a project to monitor progress and help resolve disputes as they arise. They
provide non-binding recommendations based on their expertise and knowledge of the project.
8.1.2. Advantages and Disadvantages of Dispute Resolution Processes in Construction

1. Negotiation:
Advantages:
 Quick and cost-effective
 Parties maintain control over the outcome
 Can be done at any time during the project
Disadvantages:
 May not be effective in high-stakes disputes
 Parties may not be willing to compromise
2. Mediation:
Advantages:
 Faster and less expensive than litigation
 Preserves relationships between parties
Disadvantages:
3. Arbitration:
Advantages:
 Faster and less expensive than litigation
 Binding decision
Disadvantages:
4. Litigation:
Advantages:
 Provides a final and binding decision
 Can be used to resolve high-stakes disputes
Disadvantages:
 Time-consuming and expensive
 Can damage relationships between parties
Best Practices for Implementing an Effective Dispute Resolution Process in Construction4
1. Define a clear dispute resolution process in the contract: The dispute resolution process should
be clearly defined in the construction contract, including the types of disputes that can be
resolved through the process and the timelines for resolving disputes.
2. Establish a neutral third party: The dispute resolution process should include a neutral third
party, such as a mediator or arbitrator, who can facilitate communication and negotiation
between the parties.
3. Provide training for all parties: All parties involved in the dispute resolution process should
receive training on the process and their roles and responsibilities.
4. Use technology to facilitate communication: Technology, such as video conferencing, can be
used to facilitate communication between parties and to conduct dispute resolution proceedings.
5. Foster a culture of collaboration: A culture of collaboration should be fostered among all
parties to encourage open communication and cooperation.
8.2. Customer complaints with company policy

Customer Complaints with Company Policy: Understanding the Process and Your Rights
When a customer has a dispute with a company, they may file a complaint with the company's
customer service department or through a government agency. Understanding the process and
your rights as a consumer is essential in resolving the issue. In this answer, we will discuss the
steps involved in filing a complaint with a company, the rights of consumers, and the role of
government agencies in resolving customer disputes.
Step 1: Gather Information
Before filing a complaint, it is essential to gather all relevant information about the issue. This
includes the date of purchase, the product or service involved, and any correspondence with the
company. It is also helpful to have any receipts, invoices, or warranties related to the product or
service.
Step 2: Contact the Company
The first step in filing a complaint is to contact the company directly. This can be done through
their customer service department, either by phone, email, or through their website. When
contacting the company, it is essential to be clear and concise about the issue and the desired
resolution. It is also helpful to have all relevant information ready to provide to the customer
service representative.
Step 3: Escalate the Complaint
If the customer service representative is unable to resolve the issue, the next step is to escalate
the complaint to a supervisor or manager. This can be done by asking to speak with a supervisor
or by following up with an email or phone call. When escalating the complaint, it is essential to
be persistent and clear about the desired resolution.
Step 4: File a Complaint with a Government Agency
If the company is unable or unwilling to resolve the issue, the next step is to file a complaint with
a government agency. In the United States, the Federal Trade Commission (FTC) and the
Consumer Financial Protection Bureau (CFPB) are two agencies that handle consumer
complaints. To file a complaint with these agencies, visit their websites and follow the
instructions for submitting a complaint.
Someone Rights as a Consumer

As a consumer, someone have several rights that are protected by law. These include the right to
truthful advertising, the right to fair and honest business practices, and the right to dispute errors
on your credit report. Additionally, many states have their own consumer protection laws that
provide additional protections for consumers.
Government Agencies and Dispute Resolution

Government agencies play a crucial role in resolving customer disputes. The FTC and CFPB are
responsible for enforcing consumer protection laws and regulations. These agencies also provide
resources and information to help consumers resolve disputes with companies. Additionally,
many states have their own consumer protection agencies that handle complaints and disputes
within their jurisdiction.
Conclusion
Filing a complaint with a company can be a daunting task, but it is essential to understand your
rights as a consumer and the process for resolving disputes. By gathering information, contacting
the company, escalating the complaint, and filing a complaint with a government agency, you
can resolve issues with companies and protect your rights as a consumer. Remember to be
persistent and clear about the desired resolution, and don't be afraid to seek help from a
government agency if necessary.
8.3. Documenting & Recording of disputes

Documenting and recording of disputes in construction is a crucial aspect of the dispute
resolution process. It involves the systematic recording of all disputes that arise during the
construction project, including the details of the dispute, the parties involved, and the resolution
methods employed. This information is essential for several reasons:
1. Evidence: Documenting and recording disputes provides evidence of the dispute, which can
be used to support claims or defenses in legal proceedings. This evidence can include emails,
letters, meeting notes, photographs, videos, and other relevant documents.
2. Communication: Documenting and recording disputes helps to promote clear and effective
communication between the parties involved. It ensures that all parties are aware of the dispute,
the issues involved, and the resolution methods employed.
3. Accountability: Documenting and recording disputes helps to promote accountability among
the parties involved. It ensures that all parties are held responsible for their actions and decisions,
which can help to prevent future disputes.
4. Transparency: Documenting and recording disputes promotes transparency in the dispute
resolution process. It ensures that all parties have access to the same information, which can help
to build trust and confidence in the process.
5. Learning: Documenting and recording disputes provides valuable lessons for future
construction projects. It can help to identify common causes of disputes, which can be addressed
in future projects to prevent similar disputes from arising.
There are several key steps involved in documenting and recording disputes in construction:
1. Identify the dispute: The first step is to identify the dispute and determine its scope and
impact. This involves gathering information about the dispute, including the parties involved, the
issues at stake, and the potential resolution methods.
2. Document the dispute: Once the dispute has been identified, it must be documented in
writing. This involves preparing a detailed written record of the dispute, including the facts and
circumstances surrounding the dispute, the parties involved, and the resolution methods
employed.
3. Record the dispute: In addition to documenting the dispute, it is also essential to record the
dispute. This involves creating a permanent record of the dispute, which can be used in future
legal proceedings or for reference purposes.
4. Notify the parties: Once the dispute has been documented and recorded, the parties involved
must be notified. This involves sending a formal notice to the parties, which outlines the details
of the dispute and the resolution methods employed.
5. Monitor the dispute: Finally, it is essential to monitor the dispute to ensure that it is resolved
in a timely and effective manner. This involves tracking the progress of the dispute resolution
process, identifying any issues or obstacles that may arise, and taking corrective action as
needed.
In conclusion, documenting and recording disputes in construction is a critical aspect of the
dispute resolution process. It provides evidence, promotes clear communication, promotes
accountability, transparency, and learning. By following the key steps outlined above,
construction professionals can ensure that disputes are documented and recorded in a manner
that is fair, transparent, and effective.
8.4. Maintaining of disputes

Disputes in the construction industry are a common occurrence due to the complex nature of
construction projects, involving multiple parties, intricate contracts, and various technical and
legal issues. Effective dispute resolution is crucial to ensure that projects are completed on time,
within budget, and to the satisfaction of all parties involved. This comprehensive response will
discuss the various aspects of maintaining disputes in construction, including the causes of
disputes, methods of dispute resolution, and strategies for preventing disputes from arising in the
first place
8.4.1. Causes of Disputes in Construction:

There are several common causes of disputes in the construction industry
1. Contractual Issues: Disputes often arise due to disagreements over contract terms, scope of
work, payment terms, change orders, delays, and performance issues. Ambiguities or gaps in
contract documents can lead to differing interpretations and conflicting expectations.
2. Design Errors or Changes: Design-related issues such as errors, omissions, or changes can
cause disputes between owners, contractors, and design professionals. Changes in design during
construction can lead to delays, cost overruns, and disagreements over responsibility for
additional work.
3. Delays and Time Extensions: Construction projects are susceptible to delays caused by
factors such as weather conditions, unforeseen site conditions, labor shortages, or late delivery of
materials. Disputes may arise when parties disagree on the causes of delays or entitlement to
time extensions.
4. Payment Disputes: Disagreements over payment are a common source of disputes in
construction. These may include non-payment or underpayment for work performed, disputes
over change order pricing or extra work claims, or disagreements over the release of retainage.
5. Quality and Defects: Disputes can arise when there are disagreements regarding the quality
of workmanship or materials used in construction. Defects discovered during or after completion
of a project can lead to claims for repairs or replacements.
6. Safety and Regulatory Compliance: Disputes may occur when there are disagreements over
compliance with safety regulations or building codes. Failure to meet safety standards can result
in work stoppages, fines, or legal actions.
8.4.2. Strategies for Preventing Disputes:
Preventing disputes is often more efficient and cost-effective than resolving them after they arise.
Here are some strategies for preventing disputes in construction:
1. Clear and Comprehensive Contracts: Well-drafted contracts that clearly define the rights,
obligations, and responsibilities of all parties can help prevent disputes. Contracts should address
potential issues such as scope changes, payment terms, dispute resolution mechanisms, and
project schedules.
2. Effective Communication: Open and transparent communication between all parties
throughout the project can help identify and address issues before they escalate into disputes.
Regular meetings, progress reports, and documentation of discussions can help ensure that
everyone is on the same page.
3. Risk Management: Identifying and managing risks early in the project can help prevent
disputes. This includes conducting thorough due diligence, performing site investigations,
addressing design issues upfront, and implementing appropriate risk allocation mechanisms in
contracts.
4. Collaborative Project Management: Encouraging collaboration and cooperation among all
project participants fosters a positive working environment and reduces the likelihood of
disputes. Establishing effective project management processes, including regular coordination
meetings and timely decision-making, can help keep the project on track.
5. Dispute Avoidance Mechanisms: Incorporating dispute avoidance mechanisms into
contracts, such as mandatory negotiation or mediation clauses, can encourage parties to resolve
their differences amicably before resorting to more formal dispute resolution methods.
In conclusion, maintaining disputes in construction requires a proactive approach that addresses
the causes of disputes, utilizes appropriate dispute resolution methods when necessary, and
implements strategies to prevent disputes from arising in the first place. By understanding the
common causes of disputes, employing effective dispute resolution methods, and implementing
preventive measures, construction projects can be better managed to minimize conflicts and
ensure successful outcomes.
Self-Check 8.1
1. Which type of dispute resolution process in construction involves a neutral third party who
facilitates communication and negotiation between the parties?
a) Negotiation
b) Mediation
c) Arbitration
d) Litigation
2. What is the advantage of using technology to facilitate communication in the dispute
resolution process?
a) It is cost-effective
b) It ensures a binding decision
c) It promotes collaboration
d) It saves time
3. Which step in filing a complaint with a company involves gathering all relevant information
about the issue?
a) Step 1: Gather Information

b) Step 2: Contact the Company
c) Step 3: Escalate the Complaint
d) Step 4: File a Complaint with a Government Agency
4. What is the purpose of documenting and recording disputes in construction?
a) To provide evidence for legal proceedings

b) To escalate the complaint to a supervisor
c) To foster a culture of collaboration
d) To define a clear dispute resolution process in the contract
5. What is one advantage of effective dispute resolution in construction?
a) It increases project delays

b) It damages relationships between parties
c) It ensures projects are completed on time
d) It prevents customer complaints
5Points.
1. Dispute Review Boards (DRBs) provide binding recommendations based on their
expertise in construction projects.
2. Mediation is a more time-consuming and expensive process compared to litigation.
3. Technology, such as video conferencing, cannot be used to facilitate communication in

the dispute resolution process.
4. Filing a complaint with a government agency is the final step in resolving a customer
dispute with a company.
5. Documenting and recording disputes in construction can help identify common causes
of disputes for future projects.
1. What are the advantages of negotiation as a dispute resolution process in construction?
2. Name one disadvantage of arbitration in the construction industry.
3. What is the role of government agencies in resolving customer disputes with
companies?
4. Why is documenting and recording disputes important in the construction industry?
5. What are the steps involved in maintaining disputes in construction?
Name: _________________________ Date: _______________
Reference
1. Ethiopian Construction Works Corporation (ECWC) –
2. Ethiopian Architects Association
3. Ministry of Trade and Industry
4. Ethiopian Construction Professionals Registration Council (ECPRC) -.
5. Ethiopian Gazette - The official publication where government directives and regulations,
including the Ethiopian Construction Certification and Registration Regulation Directive No.
648/2021, are published.
6. Ethiopian Construction Works Licensing Proclamation No. 624/2009 - Official
Government Publication
7. Ministry of Urban Development and Construction (MoUDC) - Official Website:
http://www.moudc.gov.et/
8. . Ethiopian Construction Contractors Association (ECCA) - Official Website:
http://www.ecca.org.et/
9. Ethiopian Legal Brief (https://chilot.me/): This website provides access to various legal
documents, including directives and regulations in Ethiopia.
10. Ethiopian Legal Information Portal (https://www.ethiolawinfo.com/): This portal offers
comprehensive information on Ethiopian laws, regulations, and legal resources
11. Ethiopian Ministry of Labor and Social Affairs (https://www.molsa.gov.et/): The official website
of the Ministry of Labor and Social Affairs in Ethiopia provides information on labor-related
policies, directives, and regulations.
12. Occupational Safety and Health Administration. (2020). Construction Industry. Retrieved from
https://www.osha.gov/construction
13. Construction Risk Management: www.constructionrisk.com
14. International Risk Management Institute (IRMI): www.irmi.com
15. National Association of Home Builders (NAHB): www.nahb.org
16. American Payroll Association (APA) - americanpayroll.org
17. American Institute of Architects (AIA) - www.aia.org
18. Construction Industry Institute (CII) - www.construction-institute.org
19. International Federation of Consulting Engineers (FIDIC) www.fidic.org
20. Construction Management: A Guide to the Management of Building Projects" by R. W. Grieve
and J. M. G. P. B. Kernan. Published by Routledge, 2018.
21. Ethiopian Labor Proclamation No. 377/2003
22. Occupational Safety and Health Proclamation No. 1016/2016
23. Construction Employers Federation (CEF) of Ethiopia official website
Participants of this TTLM (training material) preparation
Trainer Address
Educational
No Name of Se
Background In Level
. Trainer x
And Profession Region College Phone E-Mail Address
Federal Technical
Bekalu M.Sc. in Structural Addis
1 M and Vocational 0921988863 fikruyibeltal@gmail.com
Yibeltal Engineering Ababa
Training Institute
Desalegn B.Sc. in Construction Woliso Polytechnic
2 M Oromia 0926771683 dasalegnalemu&gmail.com
Alemu Management College
Muluken M.Sc. in Construction Batu Polytechnic
3 M Oromia 0912289146 mulecot99@gmail.com
Solomon Management College
B.Sc. in Building
Solomon Woliso Polytechnic samuelsolomon071@gmail.co
4 M Construction Oromia 0921207462
Urga College m
Technology
M.Sc. in Construction Central Butajira
Tesfaye
5 M Technology & Ethiopi Polytechnic 0913442444 tesfayeassegidew@gmail.com
Assegidew
Management a College
Tibebnesh Hawassa
M.Sc. in Construction
6 Gebremichae F Sidama Polytechnic 0916116049 tibebineshg1@gmail.com
Management
l College
General Wingate
Zekarias B.Sc. in Civil Addis
7 M Polytechnic 0912421317 zekarias1502@gmail.com
Gebre Engineering Ababa
College

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STRUCTURAL CONSTRUCTION

 Laws relating to builder licensing or registration.

Learning Objective of the Module

 Apply the laws relating to builder licensing or registration.

1. Read the information written in each unit

This unit is developed to provide trainees the necessary information regarding

Some of the benefits of contractor licensing or registration legislation include:

 Reduced risk of construction defects and accidents

 Have a valid business license

 Have a valid tax clearance certificate

 Have a valid insurance policy

 Have a valid professional qualification from a recognized institution (for construction

1.2. Classifications of builder, supervisors and managers.

1.2.1. Classifications of builder

1 Yearly maximum turnover within the last mill 200 150 70 40 25 10

6 Junior Assistant Engineer III No 1 1 1 1

8 Tower crane with minimum height 30m, No 1

10 Excavator mini. 15 ton No 1

11 Dump truck min 10 m3 2 2 2

12 Dump truck min 7 m3 1

No Requirement ( Turnover or Unit Grade

1 Yearly maximum turnover within the last five mill

1.2.2. Classifications of Supervisors

 Educational Qualifications: Junior Supervisors are required to have a minimum of a

Name: _________________________ Date: _______________

This unit is developed to provide trainees the necessary information regarding

 Main provisions of OHS legislation

2.2. On-site construction Regulations and codes.

2.2.3. Importance of On-site Construction Regulations and Codes

Some key considerations for site safety signage requirements include:

a) To protect the environment

Name: _________________________ Date: _______________

This unit is developed to provide trainees the necessary information regarding

 Current codes, acts, regulations and standards

3.1.1. Building codes

3.2. Carrying out construction process

a) Workplace inspections and reporting

a) To protect workers' health and hygiene

a) To promote sustainable development

This unit is developed to provide trainees the necessary information regarding

 Arrange Insurance cover.

4.2. Contract law

4.2.3. Importance of Contract Law in Construction Work

Name: _________________________ Date: _______________

This unit is developed to provide trainees the necessary information regarding

 Set up and administer payroll systems

5.2. GST (Goods and Service Tax) systems

Name: _________________________ Date: _______________

This unit is developed to provide trainees the necessary information regarding

 Correct form of building project contract

 Select correct form of building project contract.

6.2. Conditions of the contract

Name: _________________________ Date: _______________

This unit is developed to provide trainees the necessary information regarding

 Identify and apply industrial policies and obligations

7.2. Subcontract companies comply

7.3. Contracts Awards

7.4. Workplace agreements

Name: ___________ Date: _

Name: ___________ Date: _

Name: ___________ Date: _

Name: ___________ Date: _

Name: ___________ Date: _

Name: ___________ Date: _

Name: ___________ Date: _