Rivermate | Albania flag


Employment Agreement Essentials

Understand the key elements of employment contracts in Albania

Types of employment agreements

In Albania, the labor law framework recognizes two main categories of employment contracts based on their duration: Fixed-Term Contract (FTC) and Indefinite-Term Contract (ITC).

Fixed-Term Contract (FTC)

A Fixed-Term Contract (FTC) specifies a predetermined start and end date for the employment relationship. These contracts are suitable for temporary positions, project-based work, or seasonal needs.

  • Maximum Duration: An FTC cannot exceed a total of two years, including any renewals.
  • Renewal: The contract can be renewed by mutual agreement between the employer and employee, as long as the total duration doesn't surpass two years.
  • Termination: Early termination before the expiry date requires a mutual agreement or a valid reason with justification according to labor law (e.g., serious misconduct by the employee).

Indefinite-Term Contract (ITC)

An Indefinite-Term Contract (ITC), also known as an unspecified-term contract, has no predetermined end date. This is the most common type of employment contract in Albania and offers greater job security for the employee.

  • ITCs provide ongoing employment until terminated by either party with proper notice periods outlined in the Labor Code.

While verbal contracts hold some legal weight, it's highly recommended to have a written contract in Albanian, the official language, for clarity and to avoid misunderstandings. The written contract should detail various employment terms like salary, benefits, working hours, and leave policies. For a comprehensive understanding of employment contracts in Albania, consulting with a local labor lawyer is always advisable.

Essential clauses

An employment agreement in Albania should clearly identify both the employer and employee, including their full names, addresses, and identification details. The type of employment contract, whether a Fixed-Term Contract (FTC) or an Indefinite-Term Contract (ITC), should be specified, outlining the duration if applicable.

The employee's job title, duties, and responsibilities should be clearly defined, along with the primary work location. Details on remote work arrangements should be included if applicable.

The agreement should outline the employee's gross salary, payment frequency, and any allowances. Any benefits offered, such as health insurance, paid leave entitlements, and mandatory social security contributions should be detailed.

Standard working hours per day and week, including rest periods, should be clearly defined, as stipulated by Albanian labor law. Procedures and compensation rates for overtime work should be established if applicable.

The agreement should define the probation period duration, adhering to the legal maximum of two months. Procedures for requesting and obtaining paid leave, including annual leave, sick leave, and maternity/paternity leave as mandated by law should be outlined.

The agreement should address ownership of intellectual property created by the employee during their employment. A clause regarding confidentiality of sensitive company information should be included.

Grounds and procedures for termination by either party, adhering to Albania's Labor Code, should be outlined in the agreement. Any required severance pay or compensation due in case of termination should be specified.

The agreement should be drafted in Albanian, the official language. It's recommended to include dispute resolution procedures in the contract.

Probationary period

In Albania, the probationary period serves as an initial assessment phase for both employers and employees within an employment relationship. This period allows both parties to evaluate suitability before committing to a long-term arrangement.

The foundation for probationary periods in employment contracts is established by Albania's Labor Code. The law dictates a uniform maximum duration applicable to both Fixed-Term Contracts (FTCs) and Indefinite-Term Contracts (ITCs):

  • Maximum Duration: Two Months.

It's important to note that employers cannot extend the probationary period beyond the legal limit of two months.

Purposes of the Probationary Period

The probationary period offers benefits for both employers and employees:

  • Employer Perspective:
    • Evaluate the employee's skills, knowledge, and work ethic to ensure they meet job requirements.
    • Assess the employee's fit within the company culture and team dynamics.
  • Employee Perspective:
    • Gain a deeper understanding of the job duties and responsibilities.
    • Determine if the work environment aligns with their expectations and career goals.

Key Points to Remember

  • During the probationary period, the dismissal process can be simpler for both parties compared to a confirmed employee. This means shorter notice periods or termination without requiring justification might apply (Articles 54-55 of the Labor Code).
  • Open communication regarding expectations and concerns is crucial for a successful probationary period.
  • Employers should provide adequate training, support, and feedback during the probationary period to help new hires succeed.

Effectively utilizing the probationary period allows Albanian employers to make informed decisions about confirming employees and build a strong foundation for successful long-term working relationships.

Confidentiality and non compete clauses

In Albania, employment agreements may incorporate confidentiality and non-compete clauses to safeguard sensitive data and potentially curb competition from ex-employees. However, the enforceability of these clauses varies.

Confidentiality Clause

A confidentiality clause prevents employees from revealing confidential business data to unauthorized third parties. This could include trade secrets, client lists, marketing strategies, or unpublished inventions.

Key Points:

  • The agreement should unambiguously define what is considered confidential information.
  • The clause should specify the duration of the confidentiality obligations, which could extend beyond the employment term.
  • Albanian law, through the Labor Code (Article 34), safeguards confidential business data. Courts can enforce this clause as long as it's reasonable and protects legitimate business interests.

Non-Compete Clause

A non-compete clause limits an employee's capacity to work for a competitor or establish a competing business after leaving the company.

Legal Considerations in Albania:

  • Unlike confidentiality clauses, non-compete clauses are not explicitly addressed in Albanian labor law.
  • Due to this absence of clear legal precedent, the enforceability of non-compete clauses in Albania is uncertain. Courts may view them as an unreasonable restriction on an employee's right to work.

Alternatives to Non-Compete Clauses:

  • Employers might consider non-solicitation clauses, which prevent employees from soliciting the company's clients or employees for a certain period after departure.
  • Compared to non-compete clauses, these clauses have a higher likelihood of being enforceable in Albania.
Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.