Terminating Limited or Unlimited Contract

MOL Decree 765 – Rules and Conditions for Termination of Employment Relations

An employment contract between the employer and employee can be terminated with the following conditions:

Fixed-Term Contracts (e.g. Limited Contracts) can be terminated as follows:

– The duration of the contract has finished and was not renewed

– Both the employer and employee mutually agrees to end the contract

– Either the employer or worker decides to terminate the contract by following the legal steps below:

  • Notice period of not less than 1 month but not more than 3 months
  • Continue to follow the contractual obligation during the course of the notice period
  • Compensate the other party as agreed by both parties but must not exceed 3 month’s wages.

– The employer can act to end the contract if the worker has committed violations under Article 120 of the Federal Labour Law

– The terminating party shall bear the legal consequences for the early termination of the contract

For Non-Fixed Term Contracts (Unlimited Contracts) can be terminated as follows:

– Both the employer and employee mutually agrees to end the contract

– Either the employer or employee decides to terminate the contract but provides a notice period of not less than 1 month and not exceeding 3 months

– If the employee violates any violations under Article 120 of the Federal Labour Law

 

For more information, please read the MOL Labour Law here.

 

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