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Employment Agreement Essentials

Understand the key elements of employment contracts in Dominica

Types of employment agreements

In Dominica, the Labour Contracts Act forms the basis for employment relationships. This act details the various types of employment agreements that can be formed between employers and employees. The most common types are discussed below.

Unlimited-Term Contracts (Indefinite Contracts)

Unlimited-term contracts are the most common type of employment agreement in Dominica. This type of contract assumes ongoing employment with no predetermined end date. This means the employment relationship will continue unless terminated by either party following the correct legal procedures as outlined in the Labour Act.

Fixed-Term Contracts

Fixed-term contracts specify a predetermined duration for the employment relationship. These contracts are suitable for situations where employees are needed for a specific project or a temporary period.

However, Dominican law protects employees against the misuse of fixed-term contracts. If an employee continues working for the employer beyond the stipulated term of the contract, the agreement automatically converts into an unlimited-term contract.

Contracts for Specific Work or Services

Contracts for specific work or services are different from fixed-term contracts. They are designed for situations where the employment relationship is based around a specific task or service. Once the defined work or service is completed, the contract ends. Like fixed-term contracts, these agreements must be established in writing.

Essential clauses

In Dominican law, while not always mandatory, a well-defined employment agreement is beneficial for both employers and employees.

Parties to the Agreement

This section identifies the employer and the employee, including their respective details.

Job Description and Duties

This clause outlines the employee's position, duties, responsibilities, the nature of the work, reporting hierarchy, and any specific qualifications required for the role.

Remuneration and Benefits

This section details the employee's compensation package, including base salary, overtime pay, bonuses, and social security contributions. It also specifies the mode and frequency of payment.

Work Schedule and Leave Entitlements

This clause outlines the employee's expected working hours, including regular workdays, start and end times, and breaks. It also specifies leave entitlements such as vacation leave, sick leave, and maternity/paternity leave.

Termination Clause

This clause outlines the grounds and procedures for termination of employment by either party. It references the notice period required for termination and can specify severance pay obligations under specific circumstances.

Dispute Resolution

This clause outlines the process for resolving any disagreements arising from the employment relationship. It can specify attempts at internal resolution before resorting to external mechanisms.

Probationary period

The Dominican Labour Contracts Act recognizes the concept of a probationary period for new employees. This period allows employers to assess an employee's suitability for the role and vice versa.

Duration of the Probationary Period

The Act restricts the probationary period to a maximum of six months, following any initial training period. This ensures a reasonable timeframe for evaluation without extending an indefinite trial period.

Termination During Probation

During the probationary period, either the employer or the employee can terminate the employment relationship with no obligation to provide notice or severance pay. This allows for flexibility in the assessment phase.

Probationary Period Not Mandatory

It's important to note that Dominican law doesn't mandate the inclusion of a probationary period in every employment agreement. Employers have the discretion to decide whether to incorporate a probationary period based on their specific needs.

Benefits of a Probationary Period

For employers, a probationary period offers a chance to evaluate the employee's skills and job fit, assess the employee's work ethic and cultural fit within the organization, and mitigate risks associated with a poor hiring decision.

For employees, the probationary period provides an opportunity to determine if the work environment and job duties align with their expectations and assess the company culture to decide if it's a good fit for them.

Considerations During Probation

While the probationary period offers advantages, both employers and employees should approach it fairly and constructively. Here are some key points to consider:

  • Clear Expectations: Employers should clearly outline performance expectations for the probationary period. This could involve setting specific goals or milestones.
  • Regular Feedback: Providing regular feedback throughout the probationary period allows for course correction if necessary.
  • Open Communication: Maintaining open communication channels between employer and employee facilitates a smooth transition beyond the probation period.

Confidentiality and non compete clauses

Dominican employment agreements often incorporate confidentiality and non-compete clauses to safeguard the employer's legitimate business interests. However, the law in the Dominican Republic also recognizes the employee's right to work and ensures the protection of confidential information.

Confidentiality Clauses

Confidentiality clauses are typically included in employment agreements to protect sensitive employer information. This information can include trade secrets, client lists, formulas, inventions, and unpublished information. The clause should clearly define the scope of confidential information and the restrictions placed on employee disclosure during and after employment. Dominican courts generally uphold confidentiality clauses as long as they are reasonable and protect legitimate business interests.

Non-Compete Clauses

Non-compete clauses, which restrict an employee's ability to work for a competitor after leaving the company, are not explicitly addressed in Dominican legislation. However, the Dominican Constitution upholds the freedom to work. This suggests that courts might view strict non-compete clauses unfavorably, particularly those with broad geographic or time restrictions.


In the absence of specific legislation, Dominican courts would likely assess the enforceability of non-compete clauses based on reasonableness. Factors to consider include the scope of restriction, the employee's role, and alternative employment. Clauses are more enforceable for senior employees with access to sensitive information and shouldn't prevent employees from finding reasonable alternative employment. Therefore, employers drafting non-compete clauses in Dominica should ensure they are reasonable and tailored to protect essential confidential information without unduly restricting the employee's ability to work in their field.

Alternative Approach

Instead of a non-compete clause, employers could consider a non-solicitation clause. This clause restricts the employee from soliciting the employer's clients or employees for a specific period after termination. This approach might be more enforceable under Dominican law.

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