An open-ended contract is an employment contract which end is not foreseen in advance. The employer and the employee want to make a long-term commitment for an indefinite period. In principle, either party can terminate the contract by observing the legal or contractual leave period.
Contract concluded until the return of a sick employee? Until the end of the ski season or a construction site? The distinction between fixed-term and open-ended contracts is not always easy to make. However, it has many consequences in terms of Labor Law.
By concluding a contract of indefinite duration, the parties generally wish to commit themselves for a long period. However, they often need a period of time beforehand to determine whether they are mutually suitable. The probation period is presumed. The parties may, within certain limits, modify the duration of the probation period. The notice period during this period is particularly short.
The employer or the employee may, as a rule, terminate the employment contract at any time. The legal or contractual notice period depends on the duration of the employment relationship. Whether the employee is a manager or an employee without responsibilities, the needs of the parties may vary. The notice period can therefore be extended or shortened if necessary.
Termination at an inopportune juncture
While, in principle, the employer may dismiss the employee at any time, certain periods are subject to special protection.
When the employee is in a situation where the search for a job may be difficult or even impossible due to his or her personal situation, he or she is, in certain specific situations, protected against termination. This may be the case if the employee is ill or if a female employee is pregnant. The duration of the protection will depend on the seniority of the employee.
The employee may be tempted, following dismissal, to go on sick leave in order to suspend the notice period. Because of the protection against termination at an inopportune juncture, this suspension may last for a rather long time. In such a situation, the diligent employer will ensure that the employee is truly unable to work. In case of doubt, the employer may call in a medical consultant.
If the employer wishes to terminate an employment contract of indefinite duration, he must dismiss the employee in accordance with the principle of freedom of contract. In principle, the employer may invoke any reason to terminate the contract.
However, some reasons for termination are considered as abuse of right. This is the case when the employer uses a reason inherent to the employee's personality, his family situation or his union activity. Depending on the reason, the dismissal can be qualified as wrongful and lead to heavy financial consequences for the employer. The procedure for wrongful termination is subject to formal rules.
During an open-ended contract, the continuation of the employment relationship is sometimes no longer possible, particularly in the event of disagreement between the employer and one of his or her executives or directors or conflicts with colleagues.
The employer may sometimes hesitate to dismiss the employee, especially if the dismissal could be qualified as wrongful. A termination agreement is always possible, even during a period of protection against termination at an inopportune juncture! However, it is subject to strict conditions of validity and requires mutual concessions.
Prohibition of chain contracts
Employees are not protected against dismissal if they have a fixed-term contract and not an open-ended contract. The employer may be tempted to conclude several fixed-term contracts in succession instead of a permanent contract. Such a procedure will be abusive in certain circumstances. These fixed-term contracts will be considered as one permanent contract, with all the rights that go with it.
De facto indefinite term contract
When the employee remains in the service of his employer after a fixed-term contract, it is not uncommon that they do not formally conclude a new contract. Is it a fixed-term contract or an open-ended contract? This question is crucial in determining whether the employee is protected against wrongful termination and termination at an inopportune juncture.
Minimum/maximum duration contracts
Minimum or maximum duration contracts are somewhat special contracts. They can be very useful in certain situations. This may be the case when the employer wishes to hire a replacement but does not know how long the employee will be ill or if the employer wishes to ensure that the contract will end at the end of the season...
These contracts mix the characteristics of open-ended and fixed-term contracts. It is not always easy to know if an ordinary dismissal is possible and if the employee is protected against dismissal in case of pregnancy or illness.