Employment Arrangements

There are two broad categories of employment contracts that an employer may enter into with an employee with a view to formalising an employment relationship. The proposed duration of the employment relationship is the principal distinguishing factor between these types of employment contracts.

Indefinite Employment Contracts

An indefinite employment contract has no fixed term or date on which the employment ends. During the probationary period, an indefinite contract may be terminated at will by either the employer or the employee without assigning any reason. If an employee has been in the employment of the same employer continuously for more than one month during the probationary period, the party terminating the contract must give the other party a week’s notice of the termination of employment.

Indefinite Contracts: Notice of termination

Following the lapse of the probationary period, an employment contract for an indefinite time may be terminated, by giving notice as set out below, by the employee without assigning any reason and by the employer only on grounds of redundancy. Notice of the termination of employment proposed either by the employer or by the employee under a contract of service for an indefinite time, shall be of the following respective duration:

Term of Service with the same Employer	Notice Period
more than one month but not more than six months	one week
more than six months but not more than two years	two weeks
more than two years but not more than four years	four weeks
more than four years but not more than seven years	eight weeks
more than seven years	eight weeks plus an additional one week for every subsequent year of service or part thereof exceeding seven years, up to a maximum of twelve weeks

An indefinite contract of employment with an employee who is engaged in a technical, administrative, executive or managerial post, may prescribe a longer notice period as may be agreed between the employer and the employee.

Indefinite Contracts: Notice of termination from employer

On receiving notice of termination from the employer, an employee under a contract of service for an indefinite time has the option either of continuing to perform work until the period of notice expires or, at any time during the currency of the period of notice, of requiring the employer to pay him a sum equal to half the wages that would be payable in respect of the unexpired period of notice.

Indefinite Contracts: Notice of termination from employee

On receiving notice of termination from the employee, the employer has the option either to allow the employee to continue to perform work until the period of notice expires or, at any time during the currency of the period of notice, to pay the employee a sum equal to the full wages that would have been payable in respect of the unexpired period of notice.

Indefinite Contracts: Failure to give notice

If an employee under a contract of service for an indefinite time fails to give notice as aforesaid, such employee would be liable to pay the employer a sum equal to half the wages that would be payable in respect of the period of notice. If the employer fails to give the said notice, the employer would be liable to pay to such employee a sum equal to the full wages that would be payable in respect of the period of notice.

Indefinite Contracts: Sufficient cause for dismissal or abandonment of employment

As already mentioned above, an employer may dismiss an employee, and an employee may also abandon employment with his employer, without giving notice and without liability to make any of the abovementioned payments, if there is good and sufficient cause for such dismissal or abandonment of service. The “good and sufficient cause” is not defined by the law but determined by the Industrial Tribunal.

Definite Employment Contracts

A definite or fixed term employment contract is a contract of service entered into between an employer and an employee, where the end of the contract is determined by reaching a specific date, or by completing a specific task, or through the occurrence of a specific event.

The conditions of employment in a fixed term contract may not be less favourable than those which would have been applicable had the same contract of employment at the same place of work been of an indefinite type, unless different treatment is justified on objective grounds.

Definite Contract: Retainment of fixed-term employee

A fixed term employee whose contract has expired and is retained by the employer shall be deemed to be retained on an indefinite period contract, if the employee is not given a new contract of service for a fixed term within the first twelve working days following the expiry of the previous contract.

If an employee is retained in employment in the same category after the date of termination of a definite contract, or is re-employed in the same category by the employer for a fixed or indefinite term within one year from the date of termination of the previous definite contract, the conditions of employment may not be less favourable than those which would have been applicable had the contract of service been for an indefinite time.

As a general rule, an employer may not retain an employee on a fixed term contract beyond a period of four years. In fact, a definite contract shall be transformed into an indefinite contract of employment if the employee has been continuously employed under such a contract for a fixed term, or under that contract taken in conjunction with a previous contract or contracts of service for a fixed term, once four years of continuous employment elapse.

By way of exception to the said general rule, an employer may only retain an employee on a fixed term contract beyond four years when such retention is justified by objective reasons based on precise and concrete circumstances of a given activity. Such circumstances may result, in particular, from the specific nature, or from inherent characteristics, of the tasks to be performed in the fixed term contract.

Termination before expiration of definite contract

If the employer terminates a definite contract of employment before the expiration of the time definitely specified by such contract, the employer must pay to the employee a sum equal to half the wages that would be payable to the employee in respect of the remainder of the time specifically agreed upon. If an employee abandons his employment before the time definitely specified by the contract of service, must pay to the employer a sum equal to half the full wages he would have been entitled to had he continued his services.

Definite Contracts: Sufficient cause for dismissal or abandonment of employment

Nevertheless, an employee may be dismissed, and an employee may also abandon his employment, without liability to make any of the said payments, if there is good and sufficient cause for such dismissal or abandonment of service.