Fixed-term and open-ended employment contracts
The Law Office of Ali Barakat, from Baghdad, al-Yarmouk, sets out the fixed-term employment contract and the open-ended employment contract under Labour Law No. 37 of 2015. The source is articles 37 to 43, especially article 38 on the distinction and the effect of renewal.
How is the contract concluded, and what is the limit on a fixed term?
An employment contract is concluded orally or in writing by agreement of the parties, under article 37. If it is in writing, it is drawn up in three copies and the third is lodged with the Department of Employment and Loans, and it contains the minimum particulars the text lists, including the nature, type and duration of the work and the date it starts. It may begin with a probationary period of not more than three months, once only with the same employer, if the worker does not hold a vocational certificate that establishes skill, and the employer may end the contract during probation on not less than seven days' notice if the worker is shown not to be fit for the work. The absence of writing does not negate the contract, but both parties bear the burden of proof. What is reviewed in the file is set out on the page Reviewing the contract, the permit and social security.
Article 38, First, provides that a fixed-term employment contract is concluded to carry out particular work or to provide a defined service connected with work or a project that ends on a stated or expected date, and that the duration of that contract may not exceed one year. A term may not be fixed for work of a continuous nature except where the requirements of the work call for additional workers for a defined period and task, under the second clause. A worker on a fixed-term contract enjoys the same rights as a worker on a permanent employment contract, under the third clause. The contract is open-ended if it is renewed more than once, under the fourth clause.
Those rules fix three controls: the reason for a fixed term is work or a service that ends on a known or expected date; the term itself may not exceed one year; and renewal more than once changes the description to an open-ended contract. A statement in the document that the contract is for a fixed term is not enough if the nature of the work is continuous, unless the case falls within the exception for additional workers for a defined period and task.
What follows from expiry of the term, or from renewal?
A fixed-term contract ends on expiry of its term, or on completion of the work or of the service if it was for defined work or a defined service, under article 43, First, (f) and (g). That ending is a cause distinct from ending by the employer in the cases in the second clause of article 43, and from resignation on thirty days' notice. If the contract has become open-ended by renewal more than once, expiry of a term written in the first copy is no longer enough, on its own, to end the relationship. Ending is then read from the other causes in article 43 and from the notice and challenge procedures set out on the page Ending an employment contract.
Equal rights between a worker on a fixed-term contract and a worker on a permanent contract cover wages, leave, safety and what the Law fixes as a minimum, not the heading of the contract. The end-of-service gratuity when service is ended is read from article 45 and its exceptions, as on the page End-of-service entitlements. A worker on a fixed-term contract is entitled to paid annual leave in proportion to the entitlement for the term of the contract and before it ends, under article 74, Fourth, together with a trainee. The shortness of the term is not used as a pretext to reduce these rights.
A part-time employment contract may be concluded, subject to the conditions of an employment contract, under article 39, for weekly hours the text fixes. The worker enjoys the rights and is subject to the duties, and financial rights and leave are calculated in proportion to the hours and the wage. Part-time work is a separate page in this practice area; a shorter working week is distinct from fixing the term of the contract at one year or less.
How is the description read in the file?
The description of the term is reviewed from the wording of the contract, from the nature of the work, from the number of renewals, and from the start and end dates in each copy. If it is alleged that the work is continuous and that fixing a term was not permitted, the test is what the facts of the employment establish and what article 38, Second, draws. A dispute over the description is a dispute over an existing right connected with the application of the Law, and it is referred to the Department of Employment and Loans and then to the Court of Labor under articles 157 and 166.
The office follows this reading from Baghdad, al-Yarmouk.
Legal basis and sources
Frequently asked questions
What is the maximum duration of a fixed-term employment contract?
One year, under article 38, First. It is concluded to carry out particular work or to provide a defined service that ends on a stated or expected date.
May an employment contract be made for a fixed term where the work is continuous?
No, except where the requirements of the work call for additional workers for a defined period and task, under article 38, Second.
What happens if a fixed-term contract is renewed more than once?
The contract is open-ended, under article 38, Fourth. After that, reliance on expiry of the term written in the first copy is no longer enough, on its own, to end the relationship.
Are the rights of a worker on a fixed-term contract less than those of a worker on a permanent contract?
No. Article 38, Third, confers the same rights as those enjoyed by a worker on a permanent employment contract, within the limits the Law provides.
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