At Native Teams, we’re all about ensuring that you work in full compliance with local labour laws. That’s why it’s very important to follow the right procedure when an employee’s contract is about to expire.
Before the contract expires, it’s first important to review the agreement terms and understand the notice period requirements, severance obligations, and any terms related to contract renewal or termination. At this stage, you must decide whether to:
- Renew the contract, either by extending the employee’s fixed-term employment or transitioning the employee into a permanent position.
- Allow the contract to expire, ensuring that all the necessary offboarding procedures are completed.
To avoid any administrative or legal complications, it’s essential to make this decision at least 30 days before the contract expires.
Notifying Native Teams about your decision
Once you decide how to proceed with an employee’s contract, you must notify Native Teams at least 30 days before the contract’s end date. This will allow us sufficient time to complete the necessary arrangements and ensure that the process complies with local regulations.
- If the contract is renewed, we will prepare the required extension documentation.
- If the contract is not renewed, we will initiate the offboarding process to handle final payments, benefits termination, and other legal formalities.
Providing final notice is essential for law compliance purposes. In some countries, failing to take the required actions may result in automatic contract renewal, which could create additional legal and financial obligations for you as an employer.
Renewing a fixed-term contract
If you decide to extend or renew a fixed-term contract, you must confirm the following:
- The new duration of employment and whether it remains a fixed-term arrangement or the employee transitions into a permanent role.
- Any updates to salaries, benefits, and other working conditions.
Once this information is provided, we will prepare the contract extension in compliance with the employee’s local laws. In addition to this, we will also verify that the renewal complies with the applicable local regulations, as some jurisdictions limit the number of times an employer can renew a fixed-term contract before converting it into a permanent one.
Ending a fixed-term contract
If you decide not to renew the contract, Native Teams will handle the termination process in compliance with the applicable labour laws. To help us facilitate this, you must:
- Confirm the employee’s final working day.
- Ensure that all outstanding payments, such as salaries, bonuses, and unused leave, are accounted for.
- Arrange for the return of company property and the revocation of system access.
Native Teams will then:
- Prepare and issue the end-of-contract notice in compliance with all the local legal requirements.
- Process the final payroll, severance (if applicable), and statutory deductions.
- Terminate health insurance, pension contributions, and other benefits.
- Complete any mandatory reporting to local labour authorities.
Some jurisdictions require a formal notice period, even for fixed-term contracts. If additional legal steps are required, we will provide you with all the necessary information and guidance.
Legal considerations and compliance
Local employment laws and regulations vary, and in some cases, if an employee has been on multiple fixed-term contracts, local laws may require conversion to a permanent position. In this case, Native Teams will assess the legal requirements in the relevant jurisdiction and provide recommendations.
If an employee challenges the non-renewal of their contract, our legal team will assist in resolving the matter to ensure that the process remains compliant with laws and minimises the risks for all parties involved.
Transitioning the employee after contract expiry
If you want to continue working with the employee under a different arrangement, Native Teams can assist in exploring alternative engagement options, such as:
- Transitioning the employee to a permanent (indefinite-term contract).
- Providing a contractor agreement so the employee can continue working in a self-employed capacity.
These options should be considered well before the contract expiry date to ensure a smooth and issue-free transition and avoid any interruptions in the workflow.
Not the answer you were looking for? Please feel free to contact our support team for more assistance.