Rivermate | Cabo Verde flag

Cabo Verde

Employment Agreement Essentials

Understand the key elements of employment contracts in Cabo Verde

Types of employment agreements

In Cabo Verde, labor law permits two primary types of employment contracts based on their duration: Fixed-Term Employment Contract and Uncertain-Term Employment Contract.

Fixed-Term Employment Contract (Contrato de trabalho a prazo certo)

A Fixed-Term Employment Contract is one that has a predetermined end date. This contract type is ideal for temporary positions, project-based work, or seasonal requirements.

Key aspects of fixed-term contracts include:

  • The contract must explicitly state the reason for the fixed term.
  • The maximum duration of a fixed-term contract, including renewals, is five years.
  • Upon termination of the contract due to expiry, the employee is entitled to compensation.

Uncertain-Term Employment Contract (Contrato de trabalho por tempo indeterminado)

An Uncertain-Term Employment Contract, also known as an indefinite contract, does not have a predetermined end date. This contract type is the most prevalent in Cabo Verde and offers the employee greater job security.

Key aspects to consider for indefinite contracts include:

  • Probation periods can vary depending on the position and employee level. The standard probation period is two months for fixed contracts and can be extended up to six months for indefinite contracts in specific cases.
  • Employees under indefinite contracts are entitled to a minimum of 22 paid vacation days per year, with some exceptions depending on the industry.

It's important to note that while verbal contracts are legal, it is highly recommended to have a written contract in the local language, Portuguese. The written contract should detail various employment terms like salary, benefits, working hours, leave policies, and termination clauses to ensure clear communication and avoid misunderstandings.

Essential clauses

An employment agreement in Cabo Verde should clearly identify both the employer and employee, including their full names, addresses, and identification details. The job description and place of work should be clearly defined, including the employee's job title, duties, responsibilities, and primary work location.

Compensation and Benefits

The agreement should outline the employee's gross salary, payment frequency, and any allowances. It should also detail any benefits offered, such as health insurance and paid leave entitlements, including a minimum of 22 days of annual vacation as per law.

Working Hours and Overtime

Standard working hours per day and week, including rest periods, should be clearly defined. The agreement should also establish procedures and compensation rates for overtime work if applicable.

Leave Policies

The agreement should outline procedures for requesting and obtaining paid leave, including annual vacation, sick leave, and maternity/paternity leave.

Intellectual Property

The agreement should address the ownership of intellectual property created by the employee during their employment.

Termination Clauses

The agreement should outline the grounds and procedures for termination by either party, adhering to Cabo Verde's labor laws. It should specify any required notice periods for termination and address any severance pay or compensation due in case of termination.

Additional Considerations

The agreement should be drafted in Portuguese, the official language of Cabo Verde. It's also recommended to include dispute resolution procedures in the contract.

Probationary period

The probationary period is a critical initial phase in an employment relationship in Cabo Verde. This period allows employers to assess an employee's suitability for the role and the employee to determine if the job aligns with their expectations.

The Labour Code of Cabo Verde establishes the framework for probationary periods. The maximum duration varies depending on the type of employment contract:

  • For fixed-term contracts, the probationary period cannot exceed two months, provided it's no more than a quarter of the total contract duration.
  • For indefinite contracts, the standard probationary period is two months. However, it can be extended up to six months under specific circumstances such as the job involving technical complexity and significant responsibility, or a longer period being deemed necessary to properly evaluate the employee's capacity for the role.

It's important to note that employers cannot arbitrarily extend the probation period beyond the legal limits.

Purpose of the Probation Period

The probationary period serves several purposes for both employers and employees:

  • From the employer's perspective, it allows them to evaluate the employee's skills, knowledge, and work ethic to ensure they meet job requirements, and assess the employee's fit within the company culture and team dynamics.
  • From the employee's perspective, it provides an opportunity to gain a deeper understanding of the job duties and responsibilities, and determine if the work environment aligns with their expectations and career goals.

Key Points to Remember

During the probation period, both parties can terminate the contract with a shorter notice period compared to a confirmed employee. Probationary periods are a two-way evaluation process. It's essential for both employers and employees to openly communicate expectations and concerns. Employers should provide adequate training, support, and feedback during the probation to help new hires succeed.

Confidentiality and non compete clauses

Employment agreements in Cabo Verde often include confidentiality and non-compete clauses. These are designed to safeguard sensitive company information and reduce competition from former employees.

Confidentiality Clause

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

Key Points:

  • The agreement should clearly define what is considered confidential information.
  • The clause should specify the duration of the confidentiality obligations, which may extend beyond the employment term.
  • While Cabo Verde's Labour Code does not explicitly regulate confidentiality clauses, they are generally enforceable by courts as long as they are reasonable and protect legitimate business interests.

Non-Compete Clause

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

Legal Considerations:

  • Non-compete clauses are subject to stricter regulations compared to confidentiality clauses.
  • To be enforceable, a non-compete clause must be limited in scope (geographic area and duration) and be reasonable in protecting the employer's legitimate business interests.
  • Courts in Cabo Verde may deem overly broad non-compete clauses as invalid.

Alternatives to Non-Compete Clauses:

  • Employers may consider non-solicitation clauses, which restrict employees from soliciting the company's clients or employees for a certain period after leaving.
  • Non-disclosure of know-how clauses can prevent employees from using specific knowledge or expertise acquired during their employment for the benefit of a competitor.
Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

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