Contracts and Dismissals

Written Employment Particulars

The Madagascar Labour Code requires the working relationship between the worker and the employer. Individual employment contracts may be of a definite (fixed-term) or indefinite period. Fixed-term contracts and certain specialised agreements, such as trial engagements, must be concluded in writing. Employment contracts, written in Malagasy and/or French, may be drawn up and signed by both parties at the time of hiring. In the absence of a written contract, its conditions may be proved by any legal means. The employment contract must be drawn up in two originals, one copy for each party, and the second copy must be given immediately to the worker after signature. The employment contract is exempt from all stamp duty and registration fees. The Ministry of Labour shall furnish contract templates containing mandatory clauses, which parties may utilise as references or submit to the appropriate Labour Inspector for compliance verification. The employment contract must specify the function, professional category, minimum classification index, salary, and effective date of the contract. Registration of the contract is not required. The contract must be concluded according to the provisions of the Labour Code. Source: §17-23 of the Labour Code 2024, Law No. 2024-014

Fixed Term Contracts

Madagascan Labour Law prohibits hiring fixed-term contract (CDD) workers for tasks of a permanent nature. An employment contract may be concluded for a definite or indefinite period. A fixed-term contract is a contract whose term is fixed by the parties at the time of its conclusion or is linked to the completion of a specific task or the occurrence of a certain event whose future occurrence is certain. A fixed-term contract must be in writing. A single CDD cannot be longer than 2 years and cannot be shorter than 1 month. It may be renewed twice, but the total duration, including renewals, must not exceed 6 years, and after two successive renewals, it becomes an indefinite-term contract (CDI); re-hiring the worker in the same position within 3 months counts as a renewal. A CDD is treated as CDI if its legal conditions are not met, if, after a CDD (or trial contract), neither party shows the will to end the relationship, for certain daily workers meeting the 6-month/20-day average rule, and for any proven work relationship without a written contract. A CDD ends at its term and can end early by one party only in the cases stated in the contract, in case of faute lourde, or force majeure (economic difficulty/technological change are excluded); otherwise, the party ending it owes an indemnity equal to wages and benefits for the remaining period. Source: § 22–27, and 62 of the Labour Code Law No. 2024-014

Probation Period

A probationary period may be agreed between the employer and the worker, but it must be expressly stipulated in writing in the employment contract. The probationary (trial) period must not exceed six (6) months, and it is renewable once, provided that the total duration, including renewal, does not exceed six months.

A probationary period must be clearly specified in a written employment contract, stating at least the vacancy, duration, salary, and occupational category. The written probationary agreement must also specify the notice period required in the event of termination during the probationary period. If a written employment contract does not provide for a probationary period, the worker is deemed to have been hired on an indefinite‑term contract.

The duration of the probationary period varies according to the professional category of the worker, as may be determined by decree after consultation with the National Labour Council. Under current practice, and insofar as older implementing regulations remain applicable, these periods are generally:

● Three (3) months for skilled and unskilled blue‑collar workers and white‑collar workers without managerial responsibilities (categories 1, 2, and 3). ● Four (4) months for engineers and employees with supervisory or managerial functions (category 4). ● Six (6) months for high‑ranking executives (category 5).

Where the probationary period is suspended due to certified illness, the period is extended by the amount of time remaining at the date of suspension. If the absent worker’s illness exceeds one month during the probationary period, the employer is required to pay compensation equal to the worker’s salary for a maximum of one month. A worker on a trial (probationary) contract is entitled to the same working conditions and social protection as a confirmed worker in the same position.

Source: §52–57 of the Labour Code, Law No. 2024‑014; Decree No. 2007-008 of 9 January 2007 laying down the forms, duration and other terms of the probationary appointment

Termination of Employment

The Madagascar Labour Code 2024 recognises the following types of contract termination: ● Expiry of a fixed-term contract. ● Early termination of a fixed-term contract by mutual agreement, serious misconduct, or force majeure. ● Termination of an open-ended contract with notice. ● Termination of an open-ended contract without notice in cases of gross misconduct. ● Termination due to economic reasons, technological changes, or closure of the enterprise. ● Collective redundancy (mass layoff) for economic reasons. ● Voluntary resignation by the worker. Under the Madagascar Labour Code, any termination of an open-ended contract must be grounded in a legitimate reason related to the worker’s aptitude, behaviour, or the operational needs of the enterprise. Terminations require prior written notice, unless exceptions apply, such as serious misconduct or force majeure. Written notification must include the reasons for termination and be transmitted to the worker by conclusive means. Any new reason provided after the notification date is inadmissible. A fixed-term contract terminates automatically upon the expiry date. However, it may be terminated earlier by mutual agreement, in the event of force majeure, or in cases of serious misconduct. Early unilateral termination outside these exceptions entitles the other party to compensation equivalent to the wages and benefits for the remaining contract period. An open-ended contract may be terminated by either party, provided the notice period is observed. Failure to respect notice obligations entitles the worker or employer to compensation equivalent to the remuneration and benefits corresponding to the unobserved notice period. In cases of gross misconduct, the employer may terminate the contract without notice. Certain circumstances prevent the termination of an employment contract, including: ● Suspension due to the closure of the facility ● Mandatory military service ● Verified illness of the worker ● Verified illness or hospitalisation of a child, affecting the parent According to Labour Code, any dismissal, which must be notified in writing, entitles the worker to: 1. payment of outstanding salary up to the effective date of departure from the undertaking; 2. a compensatory allowance for any accrued but unused leave at the time of termination; 3. notice pay calculated in accordance with the applicable statutory provisions, except in cases of gross misconduct; 4. the issuance of a certificate of employment. Collective Redundancies In the event of collective dismissals for economic reasons, the employer must: ● Consult the works council or staff representatives and provide all information regarding the reasons for dismissal, financial situation of the company, proposed recovery plan, list of staff affected, rehiring priorities, and employment evolution; ● Draw up minutes of the consultation meeting and display them for the staff. ● Receive an opinion from the works council or staff representatives within 20 days; ● Notify the Labour and Social Laws Inspector, attaching the consultation minutes and the list of affected staff. The Inspector issues an opinion within 15 working days. If no works council exists, the employer submits the proposed measure directly to the Inspector, who decides within 15 working days. The order of layoffs must respect professional category, seniority, technical skills, professional conscience, and family responsibilities. Furthermore, the Code provides that, unless more favourable provisions are contained in the individual employment contract or the applicable collective bargaining agreement, any worker dismissed for economic reasons or as a result of the cessation of the employer’s activities shall be entitled to a severance allowance calculated at the rate of ten (10) days’ wages per completed year of service, provided that the total amount shall not exceed six (06) months’ wages.

This allowance, calculated on the basis of the worker’s last rate of remuneration at the time of dismissal, taking into account all benefits and ancillary payments that do not constitute reimbursement of expenses, shall be separate from the notice allowance, the compensatory allowance for paid leave, and any damages awarded for unfair dismissal. Gross Misconduct Serious misconduct by the employer or worker justifies immediate termination without notice. While the Code does not list specific acts, it says “faute lourde” is as provided in the internal rules or, failing that, left to the competent court. Unfair Dismissal and Remedies Dismissals without a legitimate reason are considered abusive or unfair, such as failure to follow the required procedure, termination based on reasons that are not valid professional reasons or are pretextual, and termination motivated by the worker’s union activity or opinions, while leaving the final legal assessment to the competent court. The Code also requires that termination be notified in writing, that the notification state the reasons, and that it be sent by any reliable/traceable means; it further provides that no new reasons may be added after the notification. Constructive termination occurs when the employer’s actions force the worker to resign; in such cases, the worker is entitled to severance and damages. Remedies for unfair dismissal include: ● Compensation instead of notice. ● Severance pays (calculated according to years of service, typically ten days’ salary per full year for economic dismissals); ● Damages for unjustified termination, as determined by the competent court. Damages for unjust dismissal are calculated based on the nature of the contract: for fixed-term contracts, they correspond to the wages and benefits the worker would have received for the remaining term; for open-ended contracts, they include all seniority payments during employment. Sources: §35–51 of the Labour Code, Law No. 2024-014