This study has tried to overview the general trends of employee relations in the Ethiopian construction sector. Employee relation issues have been of great importance in all organizations in general and the construction industry in particular. The general purpose of the study was to assess the practices and related challenges of employee relations in the sector. As such, it addressed such issues as collective bargaining, union representation, safety and health, pay and benefits/social security, dispute handling, labour inspection, etc. As far as data methodology was concerned, mainly secondary sources were adopted. However, some interviews with representatives of Ministry of Labour and Social Affairs, Ministry of Construction, and Confederation of Ethiopian Trade Unions were conducted for this study. The findings of the study showed that while the socio-economic role of the sector is growing significantly (employment, national income, capital contribution, investment, etc.), the overall employee relations trend of the construction sector is defined with disproportionate high rate of work place accidents, inadequate leave days even after facing work place injuries, lack of representation of construction employees regarding their rights and benefits, insufficient coverage of employees under legally binding collective agreements, high rate of labour disputes and lack of proper dispute handling mechanisms, inadequate labour inspection from regulatory agencies, and finally declining coverage of employees through comprehensive social security/benefit package. As such, it was recommended that policy as well as administrative support must be significantly provided from stakeholders such as trade union confederations and ministries of labour and social affairs and construction to improve the employee relations practices in the Grade 1 construction firms in Ethiopia.