When can employers conclude fixed-term contracts?

A fixed-term contract is one that is drawn up for a limited period and for performing a specific task. In no case may it be used to fill a job related to the normal and ongoing business of the company on a permanent basis, as such a job must be filled by offering a permanent employment contract.

A few examples of fixed-term contracts include to deal with the temporary absence of an employee due to illness, a temporary and exceptional increase in the volume of work or carrying out seasonal work.

If the employment contract is not linked to a specific, non-durable task or to a possible start-up phase of the employing company, it must be concluded that the employment contract does not comply with the stipulations laid down by the law and that it should be reclassified as a permanent contract.

How is a fixed-term employment contract concluded?

A fixed-term contract must be concluded in writing and apart from a statement outlining its purpose, shall include special information, such as the expiry date of the term or the minimum duration for which it is concluded, the name of the employee replaced, the renewal clause, etc.

The Labour Code explicitly states that a fixed-term contract must be in writing, otherwise it will be reclassified as a permanent contract.

What is the maximum duration of a fixed-term contract?

A fixed-term contract can run for a maximum of two years, with some legal exceptions. It may be renewed twice, but the total duration of the contract, including renewals, may not exceed 24 months.

It ends automatically on the expiry date agreed by the parties, so there is no need to give notice.

If the contract is continued after the expiry date, the fixed-term contract is transformed into a permanent contract.

Can a fixed-term contract be terminated before it expires?

Except for serious misconduct, the fixed-term contract cannot be terminated before its expiry date, otherwise the employee is entitled to damages of a maximum lump sum of two months’ salary.0

In case of early termination by the employee, the employer may claim damages of up to one month’s salary if it sustains damages as a result of the early termination.

Fixed-term contracts can always be terminated by mutual agreement of the parties.