In Curaçao, employment agreements can be established either verbally or in writing, although written agreements are generally recommended for clarity and enforceability. There are several types of employment agreements in Curaçao, each suited to different employment situations.

Working Agreement

The working agreement is the most common type of employment contract for full-time employees in Curaçao. This agreement outlines the core aspects of the employment relationship, including:

• Term: The agreement can be for a definite or indefinite period, as agreed upon by both parties.
• Compensation: This includes details on salary, overtime pay, and any bonuses.
• Benefits: While health insurance is covered under the social security scheme, other benefits like vacation leave and sick leave can be outlined in the agreement.
• Working Hours: The agreement should specify the regular working hours, including any overtime expectations.
• Notice Periods: The agreement should establish the required notice period for termination by either party.

Other Employment Agreements

In addition to working agreements, Curaçao recognizes other types of employment contracts for specific situations:

• Contracted Work Agreement: This agreement is used for specific projects with a fixed payment upon completion.
• Performance of Fixed Services Agreement: This agreement is suited for engaging professionals like lawyers or accountants, or for short-term work arrangements where no prior agreement exists.

In Curaçao, while verbal employment agreements are permissible, written agreements are highly recommended for clarity and enforceability. Here are the essential clauses to include in your Curaçao employment agreement:

Parties to the Agreement

• Identify the employer and employee by name and legal entity (if applicable).

Term and Termination

• Specify if the agreement is for a definite period (fixed-term) or indefinite period (open-ended).
• Outline the notice period required for termination by either party, adhering to legal minimums.
• Reference the requirement for permit approval from the Director of the Ministry of Social Development, Labor and Welfare for termination, mentioning any exceptions.

Compensation and Benefits

• Detail the employee's salary, including the currency and frequency of payment.
• Specify how overtime will be compensated, adhering to legal requirements.
• Outline any bonuses or allowances offered, though these are not mandatory.
• Clarify any additional benefits provided by the employer, such as vacation leave, sick leave, or pension contributions, even though health insurance is covered under social security.

Work Schedule

• Define the standard working hours per week or per day.
• Specify expectations for overtime work, if applicable.

Duties and Responsibilities

• Clearly outline the employee's job title, duties, and responsibilities.

Confidentiality

• Include a clause protecting the employer's confidential information, considering the scope of the employee's role.
• Outline the process for resolving any disputes arising from the employment relationship. This may involve internal procedures or referral to external bodies.

Probationary periods are a standard part of employment agreements in Curaçao, providing a window for both employers and employees to evaluate their compatibility before entering a long-term commitment.

Legality and Duration

Probationary periods are legal in Curaçao. However, the maximum duration for such a period is capped at four months. Any agreement that stipulates a probationary period exceeding this limit could be contested as unfair by the employee in a court of law.

Termination During Probation

During the probationary period, both the employer and the employee have the right to terminate the employment relationship. The notice period required during this phase is typically shorter than that required during the rest of the contract. The specific requirements for notice during probation should be clearly outlined in the employment agreement, ensuring they meet the legal minimums.

Evaluation During Probation

Employers are encouraged to conduct performance evaluations during the probationary period. This allows them to assess the employee's suitability for the role. Feedback given during this period can guide the employee in improving their performance and aligning with the employer's expectations.

Importance of Clear Documentation

It is crucial to include a well-defined probationary period clause in the employment agreement. This ensures that both parties are aware of their rights and responsibilities during this period.

In Curaçao, employment agreements often incorporate confidentiality and non-compete clauses to safeguard the employer's legitimate business interests. However, these clauses come with legal considerations and limitations.

Confidentiality Clauses

Confidentiality clauses are commonly used to protect an employer's confidential information, such as trade secrets, client lists, or proprietary data. Curaçao law upholds the enforceability of confidentiality clauses, provided they are reasonable and specific in scope.

When including a confidentiality clause in a Curaçao employment agreement, consider the following:

• Specificity: The clause should clearly define the type of information considered confidential.
• Reasonableness: The scope of the confidentiality clause should be reasonable in relation to the employee's role and the potential harm to the employer if the information is disclosed.
• Duration: The duration of the confidentiality clause should be limited to a reasonable period after employment ends. This protects the information for a fair amount of time without indefinitely restricting the employee's future career options.

Non-Compete Clauses

Non-compete clauses, which restrict an employee's ability to work for a competitor or in a similar role after leaving the company, are generally disfavored in Curaçao law.

While not entirely prohibited, Curaçao courts will only enforce non-compete clauses if they meet strict criteria:

• Essential Interest: The employer must demonstrate a legitimate and essential business interest requiring protection, such as safeguarding trade secrets or highly specialized knowledge.
• Geographic Scope: The geographic restriction of the non-compete clause must be reasonable and limited to the area where the employer's business operates.
• Time Limit: The non-compete clause's duration must be strictly limited. Courts are unlikely to uphold clauses exceeding a few months after employment ends.

Given these strict limitations, employers in Curaçao should carefully consider the necessity of a non-compete clause and consult with legal counsel to ensure it complies with local regulations.