Some Notes on the Conclusion and Performance of Labor Contracts
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A clause such as “The employee is prohibited from working for a competitor within … years” may be declared by the State labor management authority as an unfavorable provision and therefore unenforceable, as it is deemed unfair to the employee, because:
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Under Clause 1, Article 4 of the Labor Code 2019, the State’s labor policy is to “encourage agreements that ensure employees enjoy more favorable conditions than those prescribed by the labor law.” In general, the Labor Code tends to protect employees’ rights and interests.
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Point a, Clause 1, Article 5 of the Labor Code also stipulates that “The right of employees” includes “the freedom to choose employment.”
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Employees may not be compelled to perform a labor contract in order to repay debts to the employer (Clause 3, Article 17 of the Labor Code 2019).
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When a fixed-term labor contract expires and the employee continues working, the following rules apply:
a) Within 30 days from the expiration date of the labor contract, the parties must conclude a new labor contract; during the period before the new labor contract is concluded, the rights, obligations, and interests of both parties shall continue to be governed by the existing contract;
b) If after 30 days from the expiration date no new labor contract is concluded, the expired fixed-term contract shall automatically convert into an indefinite-term labor contract (Points a and b, Clause 2, Article 20 of the Labor Code 2019). -
If the parties sign a new fixed-term labor contract, it may only be concluded once more. Thereafter, if the employee continues working, the parties must conclude an indefinite-term labor contract (Point c, Clause 2, Article 20 of the Labor Code 2019).
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The term of a fixed-term labor contract, once expired, must be renewed by concluding a new contract. Its term may not be extended by an appendix (Clause 2, Article 22 of the Labor Code 2019).
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Notice period for amending an appendix: During the performance of a labor contract, if either party requests to amend or supplement the contents of the contract, such party must notify the other party at least 03 working days in advance regarding the contents to be amended or supplemented (Clause 1, Article 33 of the Labor Code 2019).
