In Madagascar, the labor law framework outlines two main types of employment agreements: Fixed-Term and Indefinite-Term Contracts.

Fixed-Term Contracts (CDD - Contrat à Durée Déterminée)

Fixed-term contracts, as defined by the Malagasy Labor Law, are employment agreements with a predetermined end date or tied to a specific project completion. These contracts cannot exceed a two-year period.

Key characteristics of fixed-term contracts in Madagascar include:

• Maximum Duration: Two years. The contract terminates automatically upon reaching the end date or project completion.
• Renewal: Fixed-term contracts with a minimum duration of six months automatically convert into indefinite-term contracts after two renewals. Re-hiring an employee within one month of a fixed-term contract's conclusion counts as a renewal.
• Suitability: Fixed-term contracts are suitable for temporary positions, specific projects, or seasonal work.

Indefinite-Term Contracts (CDI - Contrat à Durée Indéterminée)

Indefinite-term contracts, also known as CDI (Contrat à Durée Indéterminée), are employment agreements with no predetermined end date. They establish an ongoing employer-employee relationship and provide greater job security for the employee.

Key characteristics of indefinite-term contracts in Madagascar include:

• Duration: No pre-defined end date; continues until terminated by either party with proper notice.
• Termination: Can be terminated by following Madagascar's labor code provisions for termination procedures.
• Benefits: Often include benefits such as paid leave, social security contributions, and severance pay upon termination.

Regardless of the type of employment agreement, Madagascar's Labor Law mandates that all employment contracts must be issued in either Malagasy or French. The contract should specify details like salary, working hours, benefits, and termination clauses.

In Madagascar, labor law mandates clear and comprehensive employment contracts to ensure a well-defined working relationship between employers and employees. Here are the essential clauses that should be included in such agreements:

Identification of Employer and Employee

The full legal names and addresses of both the employer and the employee should be included.

Job Details

The specific job title and a brief description of the employee's duties and responsibilities should be clearly defined. The primary place of work should be specified, with any possibility of remote work arrangements clearly outlined.

Contractual Terms

The agreement should specify whether it is a Fixed-Term Contract (CDD) or an Indefinite-Term Contract (CDI). The standard working hours per week, including any overtime arrangements and their compensation structure, should be defined. The employee's salary or wage, including any allowances, bonuses, or fringe benefits offered, should be clearly stated. The agreement should also reference the method of payment and the frequency of payouts. The employee's entitlement to paid leave, including annual leave, sick leave, and any other authorized leave provisions, should be outlined.

Termination Clauses

Details regarding the notice period required for termination by either party, adhering to Madagascar's labor code, should be included. The agreement should also reference the possibility of termination for cause and the process involved. If applicable, the terms of severance pay in case of termination, considering factors like tenure and reason for termination, as stipulated by Madagascar's labor laws, should be outlined.

Additional Notes

The agreement should be drafted in either Malagasy or French. Both the employer and employee should receive a signed copy of the contract.

In Madagascar, the labor code allows for a probationary period within employment agreements. This initial phase is designed to evaluate an employee's suitability for the role and the company culture.

Key Characteristics

• Maximum Duration: The probationary period can last up to six months, with the possibility of a single renewal for the same duration. This means the maximum probationary period can extend to one year.
• Contractual Specification: The probationary period and its details must be explicitly mentioned within the employment contract. This ensures both parties are aware of the terms and conditions surrounding this initial phase.
• Applicable to Both Contracts: Probationary periods can be included in both fixed-term and indefinite-term employment agreements.

Purpose and Termination During Probation

• Assessment Phase: This period allows employers to assess the employee's skills, performance, and cultural fit within the organization. Similarly, employees can evaluate if the role and company environment align with their expectations.
• Termination with Less Formality: During the probationary period, either the employer or the employee can terminate the contract without the need for extensive justification or lengthy notice periods. However, following proper notification procedures outlined in the contract is still recommended.

Important Note: Even during probation, termination should not be discriminatory or based on unlawful reasons.

Conclusion of Probation

Following a successful probationary period, the employee transitions into the role as per the terms of the employment contract.

Employment agreements in Madagascar may include confidentiality and non-compete clauses to protect the employer's sensitive information and competitive advantage. However, Malagasy law doesn't explicitly address their enforceability, so adhering to best practices is essential.

Confidentiality Clauses

Confidentiality clauses aim to safeguard the employer's confidential information, such as trade secrets, client lists, or proprietary data, from unauthorized disclosure by the employee.

Here's what to consider regarding confidentiality clauses in Madagascar:

• Limited Scope: Confidentiality clauses should be narrowly defined to encompass only legitimate business secrets and not general knowledge or skills acquired during employment.

• Reasonable Duration: The duration of confidentiality obligations should be reasonable and not extend indefinitely after employment ends.

• Legal Enforcement: Though not explicitly regulated, courts may uphold confidentiality clauses if deemed reasonable and necessary to protect legitimate business interests.

Non-Compete Clauses

Non-compete clauses restrict an employee's ability to work for a competitor or engage in similar activities after leaving the company.

Due to the absence of clear legal guidelines, non-compete clauses in Madagascar are generally considered weakly enforceable. Here's why:

• Freedom of Movement: Malagasy law emphasizes an employee's right to work and freedom of movement within the labor market.

• Strict Requirements: For a non-compete clause to be upheld, it would likely need to demonstrate a strong justification, such as protecting highly sensitive information or in cases of key managerial positions.

Even with these limitations, employers can still utilize non-compete clauses with a strategic approach:

• Focus on Confidentiality: Instead of a broad non-compete clause, emphasize confidentiality clauses to protect sensitive information.

• Target Key Positions: Consider non-compete clauses only for senior-level employees with access to critical knowledge or client relationships.

• Negotiate Reasonable Terms: Define a reasonable timeframe and geographical scope for any restrictions imposed by the non-compete clause.

By incorporating these considerations, employers can potentially strengthen the enforceability of non-compete clauses in Madagascar.