In Djibouti, the labor law recognizes two primary types of employment contracts. These are the fixed-term contracts and indefinite-term contracts.

Fixed-Term Contracts

Fixed-term contracts are those that establish employment for a predetermined period. These types of contracts are typically used for project-based work or temporary positions.

Indefinite-Term Contracts

On the other hand, indefinite-term contracts, also known as permanent contracts, do not have a set end date. These contracts provide ongoing employment until either the employer or the employee decides to terminate the contract.

Djibouti's labor law framework outlines essential elements for employment contracts. Here's a breakdown of key clauses to include in your agreements, referencing the Djiboutian Labour Code (Law No. 60-003 of September 21, 1960).

Parties to the Agreement

Identify the employer (company name and legal representative) and the employee (full name, nationality, and identification details).

Job Description and Duties

Clearly define the employee's position, duties, and responsibilities.

Term and Place of Work

Specify the employment term and the primary work location, including any travel requirements.

Compensation and Benefits

Outline the employee's gross salary, including base pay and any allowances. Detail benefits offered, such as overtime pay, bonuses, health insurance, and paid leave entitlements (as per Djiboutian regulations).

Working Hours and Overtime

Establish the standard workweek and daily working hours, adhering to legal limitations. Define overtime pay rates and conditions for overtime work.

Termination of Employment

Outline grounds for termination by either party, following legal notice periods. Specify severance pay calculations based on length of service.

Dispute Resolution

Establish a process for resolving any disagreements arising from the employment contract.

In Djibouti, the labor law framework permits the inclusion of probationary periods in employment contracts. This initial phase serves as a trial period for both the employer and the employee to gauge the suitability for the role.

Legality and Duration

Probationary periods are legal in Djibouti and are subject to specific timeframes depending on the type of employment contract and the category of the employee.

For indefinite contracts, the maximum durations are as follows:

• 15 days for hourly employees
• 1 month for monthly wage earners
• 3 months for supervisors, executives, and similar positions

For fixed-term contracts, the probationary period cannot exceed one day per week of the contract's total duration, with a one-month maximum for laborers and three months for managers.

It's important to note that the probationary period can be renewed once, but this agreement must be documented in writing.

Termination During Probation

During the probationary period, either the employer or the employee can terminate the employment contract without needing to provide notice or pay compensation. This provides flexibility during the initial assessment phase.

Importance of Clarity

While the law provides a framework, it's crucial to clearly define the probationary period within the employment contract itself. This should include the specific start and end dates of the probation period, performance expectations and evaluation criteria for the employee during this time, and the process for transitioning to permanent employment upon successful completion of probation.

In Djiboutian employment contracts, confidentiality and non-compete clauses can be included to protect an employer's legitimate business interests. However, their enforceability requires specific considerations.

Confidentiality Clauses

Confidentiality clauses are designed to protect an employer's sensitive information, such as trade secrets, customer lists, or proprietary data. These clauses can be broad or specific, depending on the type of information being protected.

The legal basis for these clauses is not explicitly mentioned in the Djiboutian Labour Code (Law No. 60-003 of September 21, 1960). However, general principles of contractual obligation and good faith can be applied to uphold their validity.

Key considerations for confidentiality clauses include:

• Specificity: The clause should clearly define the confidential information that is being protected.
• Reasonable Scope: The scope of confidentiality should not overly restrict the employee's ability to perform their duties or future employment prospects.
• Time Limits: A reasonable time limit for confidentiality obligations after employment termination can be included.

Non-Compete Clauses

Non-compete clauses restrict an employee's ability to work for a competitor or engage in similar activities after leaving the company. Djibouti's legal stance on non-compete clauses is less defined compared to confidentiality.

The enforceability of non-compete clauses is limited. Djiboutian courts may be more likely to uphold non-compete clauses for high-level employees with access to critical business secrets. However, competition is generally encouraged, and overly broad restrictions on an employee's ability to find future employment may be deemed unfair.