Establishing compliant employment relationships in Jordan requires a clear understanding of the local labor law and the specific requirements for employment agreements. A well-drafted employment contract is fundamental, outlining the terms and conditions of employment, protecting both the employer and the employee, and ensuring adherence to national regulations. Navigating these requirements is crucial for businesses operating or expanding into the Jordanian market.
Employment agreements in Jordan must comply with the provisions of the Labor Law, which sets out minimum standards and mandatory clauses. These agreements serve as the legal basis for the working relationship, defining roles, responsibilities, compensation, and other key aspects of employment. Ensuring your contracts meet these standards is essential for operational compliance and mitigating potential legal issues.
Types of Employment Agreements
Jordanian labor law primarily recognizes two main types of employment contracts: fixed-term and indefinite. The type of contract used impacts aspects like termination procedures and employee rights.
| Contract Type | Description | Key Characteristics |
|---|---|---|
| Fixed-Term | Concluded for a specific period or for the completion of a specific project. | Automatically terminates upon the expiry date or project completion. Cannot exceed five years initially. |
| Indefinite | Concluded without a specified end date. | Continues until terminated by either party in accordance with legal requirements. |
Fixed-term contracts are common for project-based work or positions with a defined duration. Indefinite contracts are the standard for ongoing employment relationships. If a fixed-term contract is renewed multiple times or exceeds the legal limit without being converted, it may be treated as an indefinite contract.
Essential Contract Clauses
Jordanian labor law mandates the inclusion of specific information in every employment contract to ensure transparency and protect employee rights. While additional clauses can be included, these core elements are legally required.
- Names and addresses of the employer and employee: Full legal identification of both parties.
- Nature of work: A clear description of the job title, duties, and responsibilities.
- Place of work: The primary location where the employee will perform their duties.
- Contract duration: Whether the contract is fixed-term (specifying the end date or project) or indefinite.
- Wage/Salary: The agreed-upon basic wage or salary.
- Allowances: Any additional allowances provided (e.g., transportation, housing).
- Payment method and frequency: How and when the salary and allowances will be paid.
- Working hours: The standard daily and weekly working hours.
- Weekly rest day: Specification of the employee's weekly day off.
- Annual leave entitlement: The number of paid annual leave days the employee is entitled to.
- Probationary period: If applicable, the duration of the probationary period.
These clauses form the foundation of the employment relationship and must be clearly stipulated in the written agreement, which should be signed by both parties.
Probationary Period
Jordanian labor law permits employers to include a probationary period in the employment contract. This period allows both the employer and the employee to assess the suitability of the employment relationship.
- The maximum duration for a probationary period is three months.
- During the probationary period, either party may terminate the contract without notice or severance pay, provided the termination is for a valid reason related to the employee's performance or suitability for the job.
- If the employee successfully completes the probationary period, the contract continues according to its terms, and the employee gains full rights under the labor law.
- An employee cannot be placed on probation more than once by the same employer for the same position.
It is crucial to clearly state the duration of the probationary period in the employment contract if one is to be applied.
Confidentiality and Non-Compete Clauses
Employers in Jordan may wish to include clauses related to confidentiality and non-competition to protect their business interests.
- Confidentiality clauses: These are generally enforceable in Jordan, provided they are reasonable in scope and duration, aiming to protect legitimate business secrets and proprietary information.
- Non-compete clauses: These clauses restrict an employee from working for a competitor or starting a competing business after leaving the company. Their enforceability is subject to judicial review and depends heavily on their reasonableness. Courts will consider factors such as:
- The geographical scope of the restriction.
- The duration of the restriction.
- The nature of the restricted activity.
- Whether the restriction is necessary to protect a legitimate business interest (e.g., trade secrets, client relationships).
- Whether the restriction unduly harms the employee's ability to earn a living.
Overly broad or unreasonable non-compete clauses are likely to be deemed unenforceable by Jordanian courts. It is advisable to tailor these clauses narrowly to the specific circumstances and the employee's role.
Contract Modification and Termination
Any modification to an existing employment contract must be agreed upon by both the employer and the employee and should be documented in writing. Unilateral changes to essential terms by the employer are generally not permissible unless explicitly allowed by law or the original contract under specific conditions.
Termination of an employment contract in Jordan is governed by specific legal requirements, which differ based on the contract type and the reason for termination.
- Termination of Fixed-Term Contracts:
- Automatically terminates upon the expiry date or completion of the specified project.
- Early termination by either party without a valid legal reason typically requires compensation equivalent to the wages for the remaining period of the contract.
- Termination of Indefinite Contracts:
- Requires a valid, legally justified reason (e.g., employee misconduct, redundancy, poor performance after warnings).
- Requires providing the employee with the statutory notice period, which is typically one month, unless a longer period is agreed upon in the contract.
- Employees terminated without a valid reason or proper notice are entitled to severance pay and compensation in lieu of notice.
Jordanian law also specifies circumstances under which an employee can terminate the contract without notice while retaining rights to severance pay, such as in cases of employer breach of contract or mistreatment. Adhering to the correct procedures for notice, justification, and compensation is critical to avoid legal disputes and penalties.
