Today’s changing world is requiring graduates of universities to possess skills that are relevant for the world of work. Hence, the purpose of this research was to understand the underlying principles of the acquisition of employability skills in some Public Ethiopian Universities. In the context of this research, employability skills are generic, transferable skills that are considered outcomes of university education. These skills are becoming vital for employers. Conceptualizing the problem from critical realism paradigm perspective, the study used Legitimation Code Theory to analyze the acquisition of employability skills. The purpose of this research was to analyze the practice of employability skills acquisition and there by reveal new insights. A questionnaire adapted from Maton and Howard (2016) was used to reveal legitimation codes underlying practices of employability skills acquisition. 180 university instructors participated in the study. Data was also collected from 394 graduating students in the year 2021 from three Ethiopian Public Universities- Addis Ababa University, Arsi University, and Bahir Dar University. A set of questions adopted from Nebraska University Transferable skills assessment was used to measure employability skills of students. The questionnaire’s reliability coefficient was 0.96. Analysis of data was made through one sample t- test to check the status of employability skills acquired on different dimensions of employability skills. And independent sample t- test and ANOVA were conducted to see whether there is statistically significant mean difference between students in their acquisition of employability skills based on gender and department. The results of the study showed that students perceived that they are skilled above average in their overall employability skills with male and female students showing statistically significant mean difference in some set of employability skills. The findings of the study revealed that all the four dimensions of specialization codes (knowledge, knower, élite, and relativist codes) are evident in the Universities with regard to different sets of employability skills. The regression analysis has shown that employability skills of students can be explained by their legitimation codes. In spite of the pressures that are posed on universities to develop employability skills of graduates; university students and instructors do not believe that all the different sets of employability skills are developed best through the teaching and learning process in university classrooms. The reason why higher education institutions are blamed for not incorporating/ teaching employability skills could be due to the fact that there is no consensus on how the generic skills / employability skills are best developed. The study recommends that students’ attention should be drawn to the importance of extra-curricular activities in order to develop employability skills. Training should be developed to university instructors so as to show them the potential that degree programs can afford the development of employability skills through the curriculum and pedagogy.