Duration of employment contract

Duration of employment contract - Alasivu

A justifiable reason must be given if an employment contract is signed for a fixed term at the employer’s request.

An employment contract is by default valid indefinitely, unless there is particular reason to define it as a fixed-term contract. An employment contract signed for a fixed term at the employer’s initiative and without justifiable cause shall be regarded as being valid indefinitely. By comparison, no particular cause need be given for an employment contract signed for a fixed term at the employee's initiative.

The employer must consider the impact of several back-to-back fixed-term contracts on the determination of employee benefits. As far as the determination of employee benefits is concerned, an employment relationship is considered to have been continuous if employer and employee have signed fixed-term employment contracts such that:

  • there have been several back-to-back contracts
  • the employment has continued uninterrupted, or
  • the employment has continued with only brief interruptions.

Consecutive fixed-term employment contracts at the employer’s initiative are disallowed when the number of contracts, their combined duration and the total employment thereby created clearly demonstrate that the employer's labour need is a permanent one.

What is a justifiable cause for a fixed-term employment contract?

A fixed-term employment contract at the employer’s initiative is allowable for instance because of:

  • a substitution
  • a project of fixed duration
  • a one-off task
  • seasonal work
  • an internship related to studies at an educational institution
  • the fixed term of an apprenticeship, or
  • some other characteristic of the employer’s operations or the work to be done that motivates its fixed-term nature.

No reason needed for a fixed term contract not exceeding one year for long-term unemployed persons

A long-term unemployed person can be hired on a fixed-term basis for a period of up to one year without specifying a reason for the fixed-term nature of the contract. Employees can also be given multiple consecutive fixed-term contracts of less than one year each. However, these kinds of employment contracts can be renewed no more than twice within a period of one year from the start of the first fixed-term contract. The combined length of the contracts must not exceed one year.

A jobseeker who have been unemployed for at least one year is considered a long-term unemployed. The unemployed person may have had one employment relationship of at most two weeks during this time.


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