The Regime of Fixed-Term Employment Contracts
An employment contract is concluded orally or in writing, for a fixed or indefinite term. Where the duration of the employment relationship exceeds 1 month, written form is mandatory. Conclusion for a fixed term is, as a rule, permissible only on a closed list of grounds — the legislator's response to the abusive use of term contracts. In other words: the rule is an open-ended contract, and the exception is a fixed term.
An employer choosing a fixed term must justify that choice by a ground provided by law. Otherwise the contract is deemed concluded for an indefinite term — an automatic consequence that does not depend on the parties' agreement. This makes the existence of a statutory ground the central question of every dispute over term contracts.
Grounds for Conclusion for a Fixed Term
Except where the term of the contract is 1 year or more, an employment contract may be concluded for a fixed term only where: work of a specific volume is to be performed; seasonal work is to be performed; the volume of work temporarily increases; an employee temporarily absent from work due to suspension of the employment relationship is replaced; the contract provides for the wage subsidy defined by the Law on the Promotion of Employment; or another objective circumstance justifies fixed-term conclusion.
Where the term of the contract exceeds 30 months, or where the employment relationship continues as a result of two or more consecutive fixed-term contracts and its duration exceeds 30 months, the contract is deemed concluded for an indefinite term. Consecutive contracts are deemed to exist where the existing contract was continued immediately upon expiry, or the next contract was concluded within 60 days of the expiry of the first.
The Start-Up Exception
The restrictions do not apply to an entrepreneur where 48 months have not passed since its state registration — a start-up enterprise — and it satisfies additional conditions set by the Government, provided that the duration of the fixed-term contract may not be less than 3 months. The exception does not extend to an entrepreneur created as a result of reorganisation, transfer of assets, or a sham transaction — the law here targets abusive schemes.
Where an employment relationship started within the 48-month period and continues after its expiry, it becomes an open-ended contract. The employer is also obliged to inform an employee hired for a fixed term about existing vacancies, so that he has, like other employees, an equal opportunity to occupy positions within the framework of open-ended contracts.