In Palestine, the labor law recognizes two primary types of employment agreements: Individual Employment Contracts and Collective Bargaining Agreements. These agreements are crucial as they define the rights and responsibilities of both employers and employees.

Individual Employment Contracts

Individual employment contracts are agreements made between a single employer and a single employee. These contracts usually outline the specific terms and conditions of employment, such as:

• Job duties and responsibilities
• Work hours and schedule
• Compensation (wages, salary, benefits)
• Paid leave (vacation, sick leave)
• Termination provisions

The Palestinian Labour Law No. (7) of 2000 provides the legal framework for individual employment contracts. This law sets the minimum standards for working conditions, including maximum working hours, minimum wage, and regulations regarding termination of employment.

Collective Bargaining Agreements

Collective bargaining agreements are negotiated between a group of employees, often represented by a trade union, and an employer or group of employers. These agreements establish terms and conditions of employment that apply to all employees covered by the agreement. Collective bargaining agreements can enhance the minimum standards set by the Labour Law by providing for:

• Higher wages
• More generous benefits
• Stronger job security provisions

The Palestinian Labour Law supports collective bargaining and offers a legal framework for the negotiation and enforcement of collective bargaining agreements.

While these are the two main types of employment agreements, Palestinian labor law also acknowledges other forms of work arrangements, such as:

• Part-time employment
• Temporary work
• Fixed-term contracts

These arrangements may have specific legal requirements outlined in the Labour Law or other relevant legislation.

The employment agreement should clearly identify the employer and the employee, including their full names and contact information. A detailed description of the employee's job duties and responsibilities should be outlined to manage expectations and clarify performance benchmarks.

The agreement must specify the employee's remuneration, including base salary, any bonuses, allowances, and overtime pay calculations. This should be in accordance with minimum wage regulations. Details regarding benefits, such as health insurance, paid leave (vacation, sick leave), and social security contributions, should also be included.

The agreement should specify the employee's regular working hours, including start and end times, and any potential for overtime work. The agreement should detail the employee's entitlement to various types of leave, such as annual vacation leave, sick leave, and maternity leave.

The agreement should outline the grounds and procedures for termination of employment by both employer and employee. This includes notice periods and severance pay requirements. If the job requires the employee to handle sensitive information, a confidentiality clause can be included to protect the employer's intellectual property or trade secrets.

The agreement may establish a mechanism for resolving any disputes that may arise during the course of employment. This could involve internal grievance procedures or referral to the Ministry of Labour. Additional clauses may be necessary depending on the specific circumstances of the employment relationship.

Palestinian labor law acknowledges the concept of a probationary period in employment agreements. This initial period allows both the employer and the employee to evaluate suitability for the role before the full terms of the employment contract take effect.

Legal Framework

The legal framework for probationary periods is set out in Article 29 of the Palestinian Labour Law No. (7) of 2000. This article states that:

• The work contract may commence with a probationary period, with a maximum duration of three months.
• The probationary period can be extended for one additional period of up to three months, bringing the total maximum probationary period to six months.

There is some debate regarding the wording of Article 29. Some interpretations suggest it might imply a minimum probationary period of three months, while the prevailing view is that three months is the maximum allowable duration.

Purpose of the Probationary Period

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

• Employers: During the probationary period, employers can assess the employee's skills, work ethic, and suitability for the role. This allows them to make an informed decision about confirming the employee's position.
• Employees: The probationary period allows employees to familiarize themselves with the job requirements, company culture, and determine if the position is a good fit for them.

Termination During Probation

Termination of employment during the probationary period is relatively easier for both parties compared to after the probationary period ends. However, there should still be a valid reason for termination.

• Employers: Employers can terminate the employment contract during the probationary period with written notice, without being obligated to provide severance pay.
• Employees: Employees can also terminate the employment contract during the probationary period with written notice, following the notice period stipulated in their contract (if applicable) or based on minimum notice periods outlined in the Labour Law depending on their pay schedule (e.g., one month for monthly wages).

The probationary period serves as a trial period for both employers and employees in Palestine. Understanding the legal framework and its purpose is crucial for ensuring a smooth and compliant employment relationship.

Palestinian labor law does not explicitly address non-compete clauses in employment agreements. However, the concept of confidentiality is recognized and can be incorporated into employment contracts to protect an employer's legitimate business interests.

Confidentiality Clauses

Confidentiality clauses can be included in employment agreements to protect an employer's confidential information, such as trade secrets, customer lists, or proprietary data.

• Legal Basis: These clauses derive their enforceability from the general principles of contractual obligations outlined in the Palestinian Civil Code No. (11) of 1964. The Civil Code upholds the sanctity of contracts and the duty of parties to act in good faith.

• Content of Clauses: Confidentiality clauses should clearly define the confidential information, the scope of the employee's obligations regarding its use and disclosure, and the duration of the confidentiality obligations (which may extend beyond the termination of employment).

Non-Compete Clauses

Limited Enforceability: Palestinian labor law prioritizes an employee's right to work and freedom to pursue a livelihood. Therefore, broadly drafted non-compete clauses that restrict an employee's ability to work for a competitor after leaving the company are generally not enforceable.

• Potential Exceptions: In some limited circumstances, courts may uphold narrowly tailored non-compete clauses to protect an employer's legitimate business interests. These situations might involve:

  • Highly specialized positions: For employees with access to unique knowledge or expertise that could give a competitor an undue advantage, a non-compete clause for a limited timeframe and geographic scope might be considered.

  • Protection of goodwill: To safeguard client relationships or goodwill associated with a specific business line, a narrowly defined non-compete clause might be enforceable.

Importance of Legal Advice: Due to the limited enforceability of non-compete clauses, it's crucial for employers to consult with a legal professional to ensure any such clauses are drafted in a way that complies with Palestinian labor law and have a reasonable chance of being upheld in court.