In Malawi, the legal framework for employment contracts is outlined by the Malawian Employment Act. There are three main types of employment agreements recognized under this Act.

Fixed-Term Contracts

Fixed-term contracts are established for a predetermined period or until the completion of a specific project. These contracts automatically expire upon reaching the designated end date or project completion, and no termination notice is required from either party. The Malawian Employment Act doesn't specify a maximum duration or limitations on renewals for fixed-term contracts, allowing for flexibility based on the agreement between employer and employee.

Indefinite-Term Contracts

Indefinite-term contracts, also known as permanent contracts, have no predetermined end date and continue until terminated by either party. Unlike fixed-term contracts, termination of indefinite-term contracts requires written notice from the party initiating the termination. The Employment Act outlines the required notice periods based on the employee's length of service.

Job-Completion Contracts

Job-completion contracts are similar to fixed-term contracts, but they are established for the specific purpose of completing a particular task or project. These contracts automatically terminate upon the successful completion of the designated task, and no termination notice is necessary.

An employment agreement in Malawi should clearly identify the parties involved, including the full names of the employer and employee, and business details for the employer.

The agreement should specify the start date of employment. The employee's job title, primary responsibilities, and reporting structure should be clearly outlined to ensure a shared understanding of the role and expectations.

The employee's compensation package should be detailed, including base salary, any applicable allowances, bonus structure, payment schedule and method, and offered benefits. This prevents confusion and ensures the employee understands their total compensation.

The standard working hours, overtime pay policy, and leave entitlements should be established in the agreement. The agreement should detail the legally required minimum standards regarding leave, including annual leave, sick leave, and public holidays, and can include any additional leave offered by the employer.

The process for termination of employment should be outlined, including notice periods required by both employer and employee, grounds for termination with or without notice, and severance pay, if applicable.

Confidentiality clauses restricting the employee's disclosure of confidential company information are often included in agreements. Ownership of intellectual property created during employment should also be addressed, with clear outlining of ownership rights in the agreement.

The agreement can establish a process for resolving any disputes arising between the employer and employee. This may involve internal procedures or opting for external mediation or arbitration.

The Malawian Employment Act acknowledges the use of probationary periods in employment contracts. This initial phase of employment allows employers to assess an employee's suitability for the role and provides employees with a chance to determine if the position aligns with their expectations.

Legality and Duration

The Employment Act permits employers to establish a probationary period, but it doesn't specify a maximum duration. This means there's some flexibility in determining the appropriate length. However, it's important to ensure the probationary period is reasonable considering the complexity of the position and industry standards. Legal counsel can advise on a suitable timeframe that complies with local regulations.

Key Characteristics

• Mutually Agreed Term: The duration of the probationary period should be clearly outlined in the employment agreement and agreed upon by both the employer and employee.
• Assessment and Feedback: The probationary period serves as an evaluation stage. Employers are encouraged to provide constructive feedback to the employee throughout this time to facilitate their adjustment and development in the role.
• Termination During Probation: A significant distinction exists regarding termination during probation. The Employment Act states that either party can terminate the employment relationship at any time without notice during the probationary period. This differs from confirmed employees who are entitled to notice periods for termination.

Confirmation of Employment

Once the probationary period concludes successfully, the employee typically transitions into a confirmed role, subject to the terms and conditions outlined in the employment agreement. This signifies the employer's satisfaction with the employee's performance and establishes a more permanent employment relationship.

While the Malawian Employment Act provides a framework for probationary periods, it's recommended to consult with a Malawian labour law expert to ensure the established terms are fair, reasonable, and comply with local legal standards.

Employment agreements in Malawi often incorporate clauses designed to protect the employer's confidential information and restrict competition from former employees.

Confidentiality Clauses

Confidentiality clauses are designed to safeguard an employer's sensitive or proprietary information from unauthorized disclosure. This information could include trade secrets, client lists, marketing strategies, or unpublished inventions.

The Malawian Employment Act doesn't have specific regulations governing confidentiality clauses. However, employers can include such clauses in their employment agreements, provided they are reasonable and don't unduly restrict the employee's ability to perform their duties or future employment prospects.

Key Considerations for Confidentiality Clauses:

• Specificity: The clause should clearly define the type of information considered confidential.
• Duration: The restriction on disclosing confidential information should be limited to a reasonable timeframe, even after employment ends.

Non-Compete Clauses

Non-compete clauses restrict former employees from taking up positions with competing companies or starting their own competing businesses for a specific period after leaving the employer.

The legal enforceability of non-compete clauses in Malawi is less clear compared to confidentiality clauses. The Employment Act doesn't explicitly address non-compete clauses, and there's limited case law on the subject.

Challenges with Non-Compete Clauses:

• Restraint of Trade: Malawian courts may view overly broad non-compete clauses as an unreasonable restraint of trade, potentially hindering an employee's ability to earn a living.
• Reasonableness: Similar to confidentiality clauses, the courts are likely to consider the reasonableness of non-compete clauses. Factors such as the duration of the restriction, geographical scope, and the employee's level of seniority will be weighed.