A fixed-term employment contract can soon be made without a justified reason

The Government has proposed a law reform to relax the rules on fixed-term employment contracts, shorten the notice period for lay-offs and limit the obligation to re-employ dismissed employees to employers with at least 50 employees. If the proposal passes, the changes would take effect on 1 April 2026.

Under the current rules, employees can only be contracted on a fixed-term basis for a justified reason, at the employee’s request or if the new hire is classified as long-term unemployed. The Government is now proposing to introduce a new option alongside the existing categories of fixed-term employment, i.e. to remove the need to justify fixed-term contracts. The proposed changes to the rules regarding fixed-term employment contracts would only apply to these new kinds of fixed-term employment contracts for which there is no justified reason. The aforementioned other kinds of fixed-term employment contracts in the public or private sector would not be affected.

Contracting employees on a fixed-term basis would no longer require a justified reason 

Going forward, employers would be able to contract an employee for up to one year without a justified reason in two scenarios: if there has been no previous employment contract between the employer and the employee in question or if more than two years have passed since the most recent employment contract between them. 

Employers would be able to conclude a single fixed-term employment contract of up to one year or up to three separate fixed-term employment contracts as long as the combined total duration of the contracts would not exceed one year with each employee. A fixed-term employment contract without a specific justification could, in practice, be renewed as long as the renewal takes place within one year from the start date of the first fixed-term contract.

Both parties would have the right to terminate a fixed-term employment contract concluded without a justified reason at any time after the first six months. Termination would need to be justified and effected in the same manner as with permanent employment contracts.

Although fixed-term employment contracts could, in the future, be concluded without a specific reason, concluding one on discriminatory grounds would not be allowed. Such a fixed-term employment contract made contrary to the conditions stated in the law must, by law, be regarded as valid until further notice.

The law reform would also impose certain obligations on employers who wish to contract employees on a fixed-term basis without a justified reason. For example, employers would be required to consider, before the expiry of each fixed-term employment concluded without a justified reason, the possibility of hiring the employee on a permanent basis or giving them a fixed-term employment contract with a justified reason. Employees would have the right to request a written record of this assessment. 

In addition, employers would be required to offer work to employees whose fixed-term employment contract concluded without a justified reason is about to end. This would apply, firstly, if the employer was looking to hire a new employee that would increase the total number of people employed by them. Secondly, the new position would need to be exactly the same or very similar to the job that the fixed-term employee was performing.

If both these conditions were satisfied, the employer would have to give the position to the fixed-term employee even if more qualified candidates applied for the position. The fixed-term employee would not, however, have priority over other applicants who are already employed by the employer.

The obligation to offer work would last for a period corresponding to one third of the total duration of the fixed-term employee’s contract, starting from the end of the employment relationship. In practice, the employer would need to notify their former employee if work became available during this period.

The employee would have two weeks to respond before the position could be offered to someone else. The obligation to offer work would not apply if the contract was cancelled during the probation period, if the employer terminated the employment contract or if the contract was dissolved. 

The notice period for lay-offs would be shortened

The new law would halve the notice period for lay-offs. Going forward, employees would need to be notified of a lay-off no later than seven days in advance. If a longer notice period had been stipulated in the applicable collective agreement, employers could agree with the relevant shop steward, employee representative or other representative of their employees to apply the seven-day notice period locally. Such agreements would need to be in writing, and they would override the terms of the collective agreement. 

The re-employment obligation would no longer apply to all employers

If the proposal passes, the obligation to re-employ dismissed employees would only apply to employers with at least 50 regular staff. In practice, smaller employers would no longer be required to re-employ people whom they had dismissed for financial or production-related reasons.