Establishing compliant employment relationships in Cabo Verde requires a thorough understanding of the local labor law framework. Employment agreements serve as the foundational document outlining the rights and obligations of both the employer and the employee. These contracts must adhere to specific legal requirements regarding their form, content, and duration to ensure validity and avoid potential disputes.
Navigating the nuances of Cabo Verdean employment law is crucial for companies hiring in the country, whether they are establishing a local entity or utilizing an Employer of Record service. Properly drafted and executed employment agreements are key to a smooth and legally sound employment lifecycle, from hiring through to termination.
Types of Employment Agreements
Cabo Verdean labor law primarily recognizes two main types of employment contracts based on their duration: indefinite-term contracts and fixed-term contracts. Other contract types exist for specific situations, such as part-time work or temporary assignments, but the indefinite and fixed-term contracts are the most common for standard employment relationships.
| Contract Type | Description | Key Characteristics |
|---|---|---|
| Indefinite-Term | The standard form of employment contract, without a predetermined end date. | Presumed unless a fixed-term contract is explicitly justified and agreed upon. Provides greater job security. |
| Fixed-Term | Used for specific, temporary needs of the company, with a defined start and end date. | Must be in writing and justified by objective reasons (e.g., project work, temporary replacement). Subject to limits on duration and renewal. |
| Part-Time | Employment where the agreed working hours are less than the standard full-time hours. | Must be in writing. Working hours and their distribution must be clearly defined. |
| Temporary Work | Involves a temporary work agency supplying a worker to a user company for a specific, temporary need. | Governed by specific regulations concerning temporary work agencies and user companies. Limited duration. |
Fixed-term contracts are subject to strict rules regarding their permissible use, duration, and renewal. They can generally only be used for specific, temporary tasks or situations defined by law. There are limits on how long a fixed-term contract can last and how many times it can be renewed before it is automatically converted into an indefinite-term contract.
Essential Contract Clauses
Cabo Verdean labor law mandates that employment contracts, particularly fixed-term ones, must be in writing and include specific information to be considered valid. While indefinite-term contracts can sometimes be presumed even without a written agreement, having a written contract is always recommended for clarity and legal certainty.
Mandatory clauses and information typically required in a written employment contract include:
- Identification of the parties (employer and employee).
- Place of work.
- Job title, category, or description of the work to be performed.
- Date of commencement of the contract.
- Duration of the contract (for fixed-term contracts) and the justification for its fixed term.
- Amount, form, and frequency of payment of remuneration.
- Duration of the normal working period per day and per week.
- Duration of the probationary period, if applicable.
- Reference to the applicable collective bargaining agreement, if any.
- Signatures of both parties.
Failure to include mandatory terms, especially in fixed-term contracts, can render the contract invalid or lead to its conversion into an indefinite-term contract.
Probationary Periods
Employment contracts in Cabo Verde may include a probationary period at the beginning of the employment relationship. This period allows both the employer and the employee to assess the suitability of the relationship. During the probationary period, the contract can generally be terminated by either party without cause or prior notice, unless otherwise agreed or stipulated by law.
The maximum duration of the probationary period is typically defined by law and can vary depending on the employee's role or qualifications. Common maximum periods include:
- 60 days for most employees.
- 90 days for employees holding positions of technical complexity or requiring special trust.
- 180 days for employees in management positions or those with high technical qualifications.
It is crucial that the probationary period is explicitly stated in the written employment contract. If no probationary period is agreed upon in writing, or if the maximum legal duration is exceeded, the employment is considered effective from the start date without a trial period.
Confidentiality and Non-Compete Clauses
Confidentiality and non-compete clauses are permissible in Cabo Verdean employment contracts but are subject to legal limitations to protect the employee's right to work.
- Confidentiality Clauses: These clauses are generally enforceable as long as they are reasonable in scope and duration and relate to legitimate business interests, such as protecting trade secrets or proprietary information. They typically remain in effect even after the termination of employment.
- Non-Compete Clauses: Clauses restricting an employee from working for a competitor or engaging in a competing business after the termination of employment are subject to strict requirements. For a non-compete clause to be valid and enforceable, it must typically:
- Be in writing.
- Be justified by a legitimate business interest of the employer (e.g., protection of trade secrets, confidential information, or specific training provided to the employee).
- Be limited in geographical scope.
- Be limited in duration (usually a maximum period is stipulated by law, often one or two years).
- Provide for financial compensation to the employee during the restricted period, unless the law provides otherwise or the compensation is deemed inherent in the employee's remuneration during employment.
Non-compete clauses that are overly broad, excessively long, or lack adequate compensation are likely to be deemed invalid and unenforceable by the courts.
Contract Modification and Termination
Any significant modification to the terms and conditions of an employment contract, such as changes to duties, working hours, or remuneration, generally requires the mutual agreement of both the employer and the employee. Unilateral changes by the employer may be considered a breach of contract, potentially leading to the employee's right to terminate the contract with cause and claim compensation.
Termination of an employment contract in Cabo Verde must comply with specific legal procedures, which vary depending on the type of contract and the reason for termination.
- Indefinite-Term Contracts: Can be terminated by either party. Termination by the employer typically requires just cause (either disciplinary or based on objective reasons like restructuring) and adherence to strict procedural requirements, including notification and potential severance pay. Termination by the employee usually requires giving notice, unless there is just cause attributable to the employer.
- Fixed-Term Contracts: Automatically terminate upon reaching their agreed end date. Early termination by either party before the end date is generally only permissible for just cause or by mutual agreement. Unilateral early termination without just cause can result in liability for damages.
- Termination during Probation: As mentioned, termination during the probationary period is generally easier, requiring no cause or notice, unless otherwise specified.
Specific rules apply to collective dismissals (redundancies affecting multiple employees) and termination due to the employer's extinction or closure. Compliance with legal notice periods and severance pay obligations is critical in most termination scenarios involving indefinite-term contracts or early termination of fixed-term contracts without just cause.
