What is a permanent employment contract?

An employment contract is an agreement whereby one person (the employee) undertakes to engage in activity on behalf of another (the employer), under whose subordination the employee places him or herself, in return for remuneration.

The permanent employment contract (CDI) is an employment contract with no expiry date. It is the common law employment contract which can be terminated unilaterally at any time through the will of one of the parties, subject to the existence of a real and serious reason for the termination and compliance with the dismissal procedure when the termination is initiated by the employer.

How is a permanent employment contract concluded?

The employment contract, whether permanent (CDI) or fixed-term (CDD), must be recorded in writing for each individual employee no later than by the time an employee starts work. This contract contains a minimum number of obligatory clauses (see CDI model below).

The contract must be signed by the employer and the employee and must be drawn up with two original copies, the first copy of which is given to the employer, the second to the employee.

If there is no written agreement, it may be difficult to prove the employment relationship and the terms governing of a working relationship (e.g. remuneration, working hours, etc.).

It will then be up to the person claiming to be bound by an employment contract to prove its existence and content.

Under what conditions can a permanent contract be terminated?

There are several grounds for an employer to notify employees of the termination of a permanent contract. On the one hand, there are grounds relating to the employee’s ability or conduct (dismissal on personal grounds), and on the other hand, grounds relating to the operating requirements of the company (redundancy on economic grounds). In addition, the employment contract may be terminated in the event of serious misconduct by the employee.

If the contract is terminated at the employer’s initiative, reasons must always be given, whereas an employee who resigns does not need to give reasons for terminating the contract.

The party terminating a permanent contract must keep within a certain period of notice which depends on the employee’s seniority in the company. In case of serious misconduct, the employment contract can be terminated without notice by either party.

The parties may also terminate their employment relationship by mutual agreement.

Can the permanent contract be automatically terminated?

The open-ended contract ends automatically in the following cases:

  • determination that an employee is not suited for the intended occupation during the preliminary medical examination;
  • death of the employer (if the employer is a natural person) or of the employee;
  • physical incapacity of the employer (if the employer is a natural person) leading to the cessation of the company’s business;
  • declaration of bankruptcy by the employer;
  • award of an old-age or disability pension to the employee;
  • the day on which the employee’s entitlement to sick pay is exhausted: after 78 weeks of incapacity to work in a reference period of 104 weeks;
  • in the event of inability of an employee to perform his/her last job, on the day of notification of the joint committee’s decision on outplacement.