Conversion of a Fixed-Term Employment Contract to a Permanent Contract

Consecutive contracts

If fixed term employment contracts have been made on a consecutive basis without a justifiable reason, the employment contract is considered to be valid until further notice, i.e. permanent. Each individual fixed-term employment contract must therefore have a justified reason within the meaning of the Employment Contracts Act.

However, the employer is not allowed to use repeated fixed-term employment contracts, when a number of fixed-term employment contracts or a combined duration of the fixed-term employments contracts or these as a whole indicate that the employer’s need for manpower is permanent.

Implied extension

A fixed term employment contract is converted into a permanent contract if the employer allows the employee to continue working after the expiry of the contract period. Case law has established that it is not necessary for the employer to expressly approve the continuance of the employee’s employment after the expiry of the contract period. It may be implied from the employer’s inactivity.

Fixed term employment contracts of long duration

The Employment Contracts Act has sought to prevent long-term fixed-term employment contracts from being unreasonably binding on the parties. Fixed-term contracts for terms of more than five years may be terminated like contract valid until further notice after five years from conclusion of the contract.