BlogContracts & TransactionsLegal ResourcesIndividual Employment Contract

July 21, 20210

We have previously elaborated on the right to work and the employment matters. In this blog we focus on the individual employment contract pursuant to the Albanian Labor Law.

What are the essential elements that an individual employment contract should contain?

The minimum rights of employees provided by law are guaranteed even if there is no written employment contract. However, the employer must have some documents proving the existence of the employment relationship and the time of its commencement. These documents are:

  1. The social and health insurance booklet,
  2. The workbook,
  3. The bank account where the salary passes,
  4. The payroll to be submitted by the employer to the tax authorities, and
  5. The statements at the employment offices.

The contract must be written, otherwise the employer is punished by law. Article 21 of the Labor Code provides that the contract must contain:

  1. The identity of the parties,
  2. The workplace,
  3. The general job description
  4. The date of commencement of work
  5. The duration, if the contract is concluded for a certain period
  6. The deadline for notification for contract termination
  7. The constituent elements of the salary and the date of its award
  8. The normal weekly working hours
  9. The reference to the collective agreement in force (if any)
  10. The probationary period
  11. Types and procedures of disciplinary measures (if there is no collective agreement).

The contract must be concluded within 7 days from the day of employment, if it has not been concluded yet as defined by law. The parties may provide in this contract more elements than those provided by law, but it is necessary that the minimum rights and obligations sanctioned by law be part of the contract. For example, the parties may set a salary higher than the set minimum wage or more than 4 calendar weeks of annual leave, etc.

What are the obligations of employees at work?

Benefits: The employee must account for any benefit received during the course of his or her work activity, and must return to the employer all items / amounts of money received, except for gifts given to him personally.

Enforcement of Rules: The employee must be aware of:

  • Obligations defined in the employment contract signed with the employer,
  • Internal rules of procedure, and / or
  • Other rules set by the employer.

The employee is obliged to respect the rules and instructions given by the employer, except to those rules and instructions that change the terms of the contract. The change of the contract should be done only by agreement between the parties. Also, the employee is not obliged to follow those orders or instructions that harm his/her health or life (Article 23 of the Labor Code).

Loyalty: The employee must safeguard the legitimate interests of the employer faithfully. He / she should help the employer in case of accident or danger, according to his / her possibilities. The employee must act faithfully towards the employer both during working hours and outside working hours. The breach of fidelity constitutes a cause for the immediate termination of the contract in a justified manner. However, this obligation is limited to the obligation to the state and the obligation of the employer to respect the personality of the employee. Also, the employee has the right to report to the competent bodies for any criminal offense, breach of contract or legislation, of which he has been informed, by the employer. (Article 26 of the Labor Code)

Conflict of Interest: The employee should not perform another job paid for by third parties, if it is to the detriment of the employer or if it competes with him. The employee who has reached the age of 18, must swear in writing that after the termination of the employment relation, he/she will not compete with the employer. This agreement is valid in cases where the employee has had access to information such as the secrets of the fabrication or activity of the employer and the use of these secrets would cause serious harm to the employer. The employer may request the implementation of this agreement only if he offers the employee, during the period of detention, not less than 75% of the salary he would have received if he had continued to work for the employer. When the salary is not variable, the remuneration is calculated on the basis of the average salary of the previous year and is indexed (Article 28 of the Labor Code).

The employee, if he violates the prohibition of competition, must compensate for the damage caused to the employer. The employee can continue the competitive activity after the fine has been paid and the difference between the fine and the damage caused, if the penalty provides for a fine. The court may reduce the fine if it is excessive, taking into account the circumstances of the violation. The employer may request in addition to the fine, and the prohibition of competitive activity taking into account the compromised interests of the employer and the conduct of the employee. (Article 31 of the Labor Code).

Confidentiality: During the working activity as well as after its completion, the employee must keep secret some facts such as the secrets of the activity or production of which he/she was aware of during the work.

Indemnity: The employee, in cases of breach of contractual obligations intentionally or by negligence, must be liable to the employer for the damage caused to him. The level of carefulness the employee must show care during work is proportionate to his/her technical knowledge and skills / qualities which the employer should know or should have known. If the damage was caused due to the performance of work and if it is inseparably from work, then the damage is borne by the employer. The damage includes the real damage and the lost profit Article 27 of the Labor Code).

What are the obligations of the employer in an employment relationship?

Protection: The employer must respect and protect the personality of the employees, in relation to their work and take measures to ensure the protection of the mental and physical health of the employees. The employer must not harass the employees with actions that are intended to and result in the degradation of the  working conditions that lead to the violation of the rights and dignity of the person and harm his/her physical, mental or professional future.

The employer must inform the employees about the dangers from fire or various explosions as well as about the protective means for the prevention of these dangers. The employer must teach employees how to use fire extinguishers or other means of fire as well as show the ways out in case of fire by organizing at least once a year firefighting exercises and how to evacuate persons (Article 66 of the Code of Labor).

Prohibition of Harassment: The employer must ensure the prohibition of moral / sexual harassment by or against the employee and must prevent any attitude that violates the dignity of the employee. The employer should not commit acts that constitute sexual harassment against the employee and should prohibit the conduct of such harassment by other employees. Sexual harassment includes any form of behavior, words or physical / symbolic acts of a sexual nature that are intended to violate personal dignity by creating a threatening, humiliating and offensive environment for the employee. It can be performed by the employer against the employee or between employees.

If the employee complains that he has been harassed in one of the above ways, he/she must present facts about the person to whom the complaint is addressed. An employee who complains of being harassed should not be fired, unreasonably penalized, or discriminated against and be a victim of sexual harassment. 

Wages and Contributions: The employers are required to maintain payroll and contribution records each month for all employees and to submit this register whenever required by the labor and tax administration inspectors. The register must indicate the date of commencement of work, the duration of the leave due, the dates on which the leave was taken and the salary paid for the paid annual leave, for each employee. The book of work accidents must also be kept.

What are the consequences of not having an individual employment contract?

Protecting the rights of the employees becomes more difficult in the absence of an individual written employment contract. Legislation cannot anticipate every specific case of work processes and problems that may arise during work in different fields and different sectors of employment. For such reason, the individual employment contract describes the working conditions, the respective rights and obligations and the cases of termination of the contract. The absence of this contract harms the employee legally and practically because the employee’s claims in case of disagreement between the parties are more difficult to prove. While the lack of a written contract can harm the employer legally.

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