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Employment Agreement Essentials

Understand the key elements of employment contracts in Algeria

Types of employment agreements

In Algeria, labor law recognizes several types of employment agreements, each with distinct characteristics.

Fixed-Term Contracts (CDD)

Fixed-term contracts, also known as CDD, are employment contracts with a predetermined end date. They are suitable for temporary, seasonal, or project-specific work. Algerian law generally does not specify a maximum duration for fixed-term contracts. However, courts may reclassify a contract as indefinite if renewals become excessive. Fixed-term contracts can be renewed but must remain within reasonable limits.

Indefinite-Term Contracts (CDI)

Indefinite-term contracts, or CDI, are employment contracts without a predetermined end date. This is considered the standard form of employment in Algeria. Indefinite term contracts can be terminated by either party with proper notice and adhering to legal grounds for dismissal.

Apprenticeship Contracts

Apprenticeship contracts are specialized contracts combining on-the-job training with theoretical education for young workers. The duration of the apprenticeship contract is linked to the duration of the training program. They are primarily aimed at young people who want to acquire vocational skills and qualifications.

Part-Time Contracts

Part-time contracts are employment contracts where the working hours are less than the standard full-time work week, which is 40 hours in Algeria. Pay is prorated based on the number of hours worked compared to a full-time equivalent.

Other Specialized Contracts

Other specialized contracts include internship contracts, designed for students or recent graduates to gain practical work experience, and subcontracting agreements, where work is performed by a subcontractor under the supervision of a primary contractor.

The primary legal source governing employment contracts in Algeria is Law 90-11 of April 21, 1990, relating to labor relations. While oral employment agreements are permissible in Algeria, it's strongly recommended to have written contracts. These provide clarity on terms like job duties, compensation, working hours, termination procedures, and other essential elements of the employment relationship.

Essential clauses

An employment agreement in Algeria should include key clauses to protect both the employer and employee.

Identification of Parties

The agreement should clearly state the full legal name, address, and registration information of the company or organization. It should also include the full legal name, address, and national identification number of the employee.

Job Description & Duties

The agreement should specify the position the employee will hold, outline the employee's primary responsibilities and tasks, and identify to whom the employee will report.

Working Conditions

The agreement should state the primary work location(s), standard working hours and days, and specify any overtime arrangements and compensation.

Compensation & Benefits

The agreement should detail the gross monthly or weekly salary amount, the frequency of salary payments, any performance-based incentives and how they are calculated, and additional benefits like health insurance and retirement plans.

Leave Entitlements

The agreement should specify the number of paid annual leave days per year, provisions for sick leave and any required documentation, and stipulations for any other applicable leave types.

Termination Provisions

The agreement should state the required notice period for both employer and employee in the case of termination, outline valid reasons for termination, and detail any severance pay entitlements in accordance with Algerian laws.

Other Clauses

The agreement should specify that it is governed by the laws of Algeria and indicate the preferred method for resolving disputes.

Probationary period

Probationary periods are a standard part of employment contracts in Algeria. They serve two main purposes: allowing employers to assess an employee's suitability for the role, and providing the employee time to adjust to the job expectations and work environment.

Probationary periods in Algeria are regulated by the Labor Code (Law 90-11 of April 21, 1990). The law stipulates that probationary periods are generally limited to six months. However, for positions requiring specialized skills or managerial responsibilities, they can be extended up to twelve months. During the probation, either the employer or the employee can terminate the contract with shorter notice periods than those typically required. Severance pay may not be applicable in these cases.

When including probationary periods in contracts, it's important to specify the length of the probationary period, ensuring it aligns with the legal limits based on the position. Optionally, specific performance goals or metrics that will be used for evaluation during the probationary period can be defined. The notice requirements for both parties, as well as the possibility of immediate termination during the probation period, should also be clarified.

Confidentiality and non compete clauses

In Algerian employment agreements, employers often include clauses to protect their sensitive information and business interests. Two such clauses are confidentiality and non-compete clauses.

Confidentiality Clauses

Confidentiality clauses oblige employees to safeguard confidential company information, such as trade secrets, client data, financial information, and intellectual property. These clauses usually define what constitutes confidential information and may include restrictions on its use and disclosure both during and after employment. Algerian law generally supports confidentiality provisions to protect legitimate business interests.

Non-Compete Clauses

Non-compete clauses aim to prevent an employee from immediately working for a competitor or starting a competing business after leaving the company. These clauses often include limitations on the geographic area where the employee cannot work for a competitor, the period during which the restriction applies, and the specific types of work or business activities the employee cannot engage in.

Algerian law acknowledges non-compete clauses but with strict conditions. They must be limited in time, geographical scope, and scope of activity. Additionally, the employer must provide the employee with financial compensation for the restriction.

Key Considerations

Both confidentiality and non-compete clauses must be reasonable in their scope and limitations to be enforceable in Algeria. These clauses should be clearly outlined in written employment contracts.

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