Three Decrees to Boost Employer-Employee Relationship

By March 18, 2016 News

Ministerial Decrees 764, 765 and 766 will enhance the labour market by ensuring transparency and encouraging more flexible labour mobility

1) Ministerial Decree 764 of 2015

Standard work contract

Ministerial Decree 764 of 2015 on ministry-approved standard employment contracts states that a worker must be presented with an employment offer that conforms to the unified contract and then must be signed by the worker.

All contract renewals in force beforehand must use the new unified contract which, in addition to the employment offer, the terms of which cannot be altered or substituted unless approved by the ministry.

2) Ministerial Decree 765 of 2015

Terminating work contract

Within Ministerial Decree 765 of 2015 on terminating employment, a series of articles outline conditions when a contract can be terminated for term and non-term contracts.

Under term contracts of no more than two years, an employee contract is terminated if the term of the contract expires, if an employer and employee mutually agree to end the contract, if either party acts unilaterally to terminate the contract or renewal, but complies with legal consequences of early termination including notification in writing at least one month in advance and no longer than three months.

A contract can also be terminated if a worker commits violations prohibited under Article 120 of the Federal Labour Law.

Non-term contracts can be terminated if both parties consent to termination, one party gives notice of termination at least one month in advance and not exceeding three months or if one party unilaterally acts to terminate but bears consequences of early termination.

The non-term contract can also be terminated if an employee violates labour law rules under Article 120.

Note: The decrees will see the creation of a new unified, standard labour contract.

The first decree requires an employee’s signature preceding a contract renewal to obtain a new work permit, something which will be hereby terminate procedures currently implemented to renew work permits after only receiving a notification through the employer stating that both parties agreed to renew the contract, stating all privileges and requirements enclosed in the contract to be renewed.

Workers, under the new procedures, shall enjoy better options of either accepting to renew the contract according to marked privileges and stipulated requirements in the new contract, or amend these privileges and conditions upon agreement by both parties, which actively contributes to promoting a strong working relationship. On the other hand, employees are able to completely end the contract and search for alternatives or return back home.

The second decree points six cases of labour contract termination for fixed-term contracts and four cases for non-term contracts.

3) Ministerial Decree 766 of 2015

Granting a new work permit

Under Article 1 of Ministerial Decree 766 of 2015, rules and conditions for granting a permit to a worker for employment by a new employer must meet a set of new rules, the ministry said.

For both term and non-term contracts, a new permit may be granted upon termination of the worker’s employment when the term of the contract has expired.

A new permit can be granted when both worker and employer mutually consent to terminating the contract during the term provided that the worker has completed at least six months employment or if workers qualify for a skill set series classified by the ministry.

The decree also notes that a new permit can be issued for a worker whose employer terminated him or her without reason provided the worker has completed six months.

The six-month rule is waived if the worker has skill levels classified by the ministry as 1, 2, and 3 meaning those who hold a university degree, post-secondary diploma or high school diploma, respectively.

Term contracts can be terminated with notice periods of between one and three months if the terminating party continues to honour contractual obligations for the term duration or if the terminating party indemnifies the other party in the amount not exceeding the equivalent of three months’ gross wages.

Meanwhile, a worker may be granted a work permit for all term and non-term contracts if it is determined that the employer has failed to meet legal and contractual obligations, including but not limited to when the employer fails to pay the worker’s wages for more than 60 days.

A worker may also be granted a permit if the labour ministry confirms that the employing company has not provided work due to the firm being inactive for more than two months and, if the worker reports to the ministry during the company shutdown.

Work permits may also be issued in cases in which a labour complaint is referred by the ministry to the labour court and final ruling is in favour of the worker who is terminated early or is owed outstanding wages less than two months of dues for end of service.

Additionally, the third decree sets out terms and conditions of granting new work permits to workers who choose to end a working relationship with their employers.

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