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Employment Agreement Essentials

Understand the key elements of employment contracts in Armenia

Types of employment agreements

In Armenia, there are several types of employment agreements, each with its own unique characteristics and legal basis.

Fixed-Term Employment Contracts

Fixed-term employment contracts are used when the employment relationship has a predetermined end date or is tied to the completion of a specific project. The legal basis for these contracts is Article 95 of the Armenian Labor Code. However, these contracts have certain limitations. They cannot exceed five years in duration and can only be concluded under specific circumstances outlined in the Labor Code, such as the temporary replacement of an absent employee or seasonal work.

Indefinite-Term Employment Contracts

Indefinite-term employment contracts are the most common form of employment agreement in Armenia. These contracts have no fixed termination date and are also based on Article 95 of the Armenian Labor Code.

Contracts for Home-Based Work

Contracts for home-based work are employment agreements where work is primarily performed at the employee's residence or another location chosen by the employee. The legal basis for these contracts is Articles 97-101 of the Armenian Labor Code.

Contracts for Seasonal Work

Contracts for seasonal work are employment agreements tied to a particular season of the year. These contracts are also based on Articles 97-101 of the Armenian Labor Code.

Contracts for Temporary Work

Contracts for temporary work are employment agreements carried out for a limited period, typically not exceeding two months. The legal basis for these contracts is Articles 97-101 of the Armenian Labor Code.

Collective Agreements

Collective agreements are negotiated between an employer (or an employer's association) and a trade union. These agreements regulate employment conditions and establish terms that may be more advantageous than those outlined in the Labor Code. The legal basis for these agreements is Articles 45-46 of the Armenian Labor Code.

It's important to note that the Armenian Labor Code provides the foundation for employment agreements. Both employers and employees should thoroughly understand the specific provisions outlined within the code to ensure a compliant and fair employment relationship.

Essential clauses

In Argentinian employment agreements, several essential clauses are required by law.

Identification of Parties

This includes the full names and identification information (e.g., National Identity Document number) of both the employer and employee. This is required by the Law of Employment Contract No. 20.744 (Ley de Contrato de Trabajo, or LCT), Article 10.

Place and Date of Commencement

The location where the work will be performed and the starting date of employment are also required (LCT, Article 10).

Job Description and Category

A precise description of the employee's tasks, duties, responsibilities, and their corresponding job classification is needed (LCT, Article 38).

Duration of the Contract

The contract must specify whether it is an indefinite-term contract (no end date), a fixed-term contract (clear start and end dates), or a seasonal contract (specific periods linked to seasonal activity). This is outlined in LCT, Articles 90, 93, 96.

Remuneration

The agreed salary, including the basic salary, any supplementary payments or bonuses, commissions, and payment intervals (weekly, bi-weekly, monthly) must be stated (LCT, Articles 103, 105).

Working Hours

The contract should include daily and weekly work schedules, regular working hours, including overtime provisions, if applicable, and rest periods and breaks (LCT, Articles 196 – 207).

Vacation and Holidays

The employee's entitlement to annual paid vacation in accordance with their length of service and stipulations regarding public holidays should be included (LCT, Articles 150 – 166).

Social Security and Other Benefits

The contract should clarify employer contributions to social security, pension, and healthcare. Additional benefits may be outlined as well.

Termination

Procedures and grounds for termination of employment by both the employer and employee, including notice periods and severance pay entitlements (if applicable), should be outlined (LCT, Articles 231 – 255).

Argentinean labor laws are extensive and provide minimum standards. Collective Bargaining Agreements (CBAs) can provide more favorable terms for employees in specific sectors.

Probationary period

The probationary period in Argentina serves a dual purpose. It allows both the employer and employee to assess their suitability for the role and working relationship. It also provides an opportunity for the employer to evaluate the employee's performance and compatibility with the company, while offering the employee time to determine if the job aligns with their expectations and skillset.

The legal foundation for the probationary period in Argentina is established by the Law of Employment Contract No. 20.744 (Ley de Contrato de Trabajo, or LCT), specifically in Article 92 bis.

Maximum Duration

The maximum duration of the probationary period is three (3) months for both fixed-term and indefinite-term contracts. This period may be shorter if stipulated in a relevant Collective Bargaining Agreement (CBA).

Rights During the Probationary Period

Employees on probation enjoy full protection of labor laws, including remuneration according to position and applicable CBAs, social security contributions, and vacation and holiday rights (accrued proportionally). During the probationary period, either party may terminate the contract without prior notice or obligation to pay severance.

Important Considerations

The probationary period must be expressly agreed upon in writing within the employment contract. CBAs might establish specific regulations affecting probationary periods within specific sectors or industries.

Confidentiality and non compete clauses

Confidentiality clauses serve to protect the employer's sensitive information, which can include trade secrets, client lists, business strategies, or other proprietary data. The Law of Employment Contract No. 20.744 (Ley de Contrato de Trabajo) establishes the employee's duty of loyalty and obligation to safeguard the employer's interests. The Civil and Commercial Code provides general principles of contractual obligations and protection of confidential information. The scope of these clauses should clearly define what constitutes "confidential information" and can extend beyond the employment period for a reasonable duration.

Confidentiality Clauses

  • Purpose: Protect the employer's sensitive information, including trade secrets, client lists, business strategies, or other proprietary data.
  • Legal Framework: Law of Employment Contract No. 20.744 (Ley de Contrato de Trabajo) and Civil and Commercial Code.
  • Scope: Should clearly define what constitutes "confidential information." Can extend beyond the employment period for a reasonable duration.

Non-compete clauses limit an employee's ability to work for a competitor, start a competing business, or solicit the employer's clients after termination of the employment relationship. The Argentine Constitution guarantees the right to work and engage in lawful industry, so non-compete clauses should not unduly restrict this right. Argentine courts have generally upheld non-compete clauses when they are limited in time, geographical scope, and activity, and the employer provides adequate compensation for the restriction.

Non-Compete Clauses

  • Purpose: Limit an employee's ability to work for a competitor, start a competing business, or solicit the employer's clients after termination of the employment relationship.
  • Legal Framework: Argentine Constitution and Case Law.
  • Essential Considerations: Reasonableness, Compensation, and Specificity.

Restrictions within non-compete clauses should be narrowly tailored to protect legitimate business interests. Overly broad restrictions might be deemed unenforceable. Courts usually require some form of compensation to the employee in exchange for accepting a non-compete restriction. Non-compete clauses should define the restricted activities, geographic area, and duration with clarity. Argentine courts carefully scrutinize non-compete clauses. Employers should ensure these clauses are justified, reasonable, and adequately compensated to increase the likelihood of enforceability.

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