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Employment contract

Last modified 15.04.2025 | Text by Labour Inspectorate

An employment contract is an agreement between an employee and an employer under which the employee undertakes to do work for the employer in subordination to the management and supervision of the employer, and the employer undertakes to remunerate the employee for such work and to provide the working conditions prescribed in the agreement between the parties, a collective agreement, law or administrative legislation. The minimum hourly wage in 2025 is 5,31 EUR (gross) and the minimum monthly wage is 886 EUR (gross).

An employment contract is entered into in duplicate original copies of which one copy is retained by the employee and the other with the employer. An employment contract is entered into for a fixed term or an unspecified term, as required. An employment contract may be entered into for a fixed term for example for performance of seasonal work or for replacement of an employee.

In a situation where it is difficult to distinguish between an employment contract and other contracts for provision of services, the Employment Contracts Act will be helpful. Under the Employment Contracts Act, if a person does work for another person which, under the circumstances, can be expected to be done only for remuneration, it is presumed to be an employment contract. This means that in the event of a dispute, the employer must prove that it is a contract other than an employment contract under the law of obligations. For example, an employment contract is one where the employee is awarded a contract entitled "Contract of Employment" but the content of the contract corresponds to the characteristics of the employment relationship.

You can check in the e-MTA if your employer has registered your work on the right basis.

Data in an employment contract

The following provisions and information shall be set out in an employment contract:

  • the name, personal identification code or registry code, place of residence or seat of the employer and the employee
  • the date of entry into the employment contract and commencement of work by the employee
  • a description of duties
  • the official title if this brings about a legal consequence
  • the agreed remuneration payable for the work (wages), including remuneration payable based on the economic performance and transactions, and the manner of calculation, the procedure for payment and the time of falling due of wages (pay day), also taxes and payments payable and withheld by the employer, including a reference to the authorities receiving the taxes and payments and protection accompanied by the payment thereof
  • the training entitlement provided by the employer and other benefits if agreed upon
  • the time when the employee performs the agreed duties (working time)
  • the place of performance of work
  • the duration of annual holiday and a reference to other holiday compensated by the employer
  • a reference to the form reproducible in writing, the obligation to give reasons and the notice periods pertaining to the cancellation of the employment contract
  • a reference to the rules of work organisation established by the employer
  • a reference to a collective agreement if a collective agreement is applicable with regard to the employee
  • a reference to the procedure for performing and compensating overtime work
  • the duration of the probationary period.

Upon the commencement of the employment a probationary period is applied, which may last up to 4 months. A probationary period is a period for the employer for the assessment of the employee and enables to assess the suitability of the work and the environment to the employee. During a probationary period an employee has all the rights provided by law. For the termination of the employment contract during a probationary period the other contracting party shall be notified about it 15 calendar days in advance. When canceling the employment contract during the probationary period, the employer must substantiate which probationary purpose the employee did not meet. Cancellation shall be justified in a format which can be reproduced in writing.

Termination of an employment contract

There are several variants for the termination of an employment contract:

  • Ending the employment relationship on mutual agreement;
  • Fixed-term expiration;
  • Employee’s death;
  • The death of the physical person employer, if the contract was concluded considering the employer’s person;
  • Cancellation.

References

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