An employment contract is a fundamental concept of labor law. Depending on the duration of the contract, we know contracts for indefinite and fixed periods. Article 12 of the Employment Relationships Act (ZDR-1) prescribes that an employment contract is concluded for an indefinite period of time unless otherwise specified by this act – therefore, a fixed-term employment contract is one of the peculiarities of employment contracts, regulated by ZDR-1 in Articles 54 to 58.

A fixed-term employment contract differs from an employment contract of indefinite duration in that the duration of employment is predetermined or at least determinable. This means that the expiration of the contract is determined by a specific date, although expiration may also be linked to an event – in the case of replacing a temporarily absent worker, it makes sense to specify that the employment contract expires when the absent worker returns to work.

The rights and obligations of the employee and employer in a fixed-term employment contract are the same as those in an indefinite employment contract. However, a fixed-term contract is more favorable for the employer as it offers better flexibility and easier planning of the work process, while the indefinite employment contract is more stable for the employee.

Article 54 of ZDR-1 lists the examples when a fixed-term employment contract can be concluded. Consequently, a legally permissible reason must be provided for entering into a fixed-term employment contract, which must be written in the contract itself (Article 31 of ZDR-1 states that this is a vital component of the contract), otherwise the fixed-term employment contract is deemed illegal.

The consequences of the illegality of a fixed-term employment contract are governed by Article 56 of ZDR-1, which states that an illegal fixed-term contract transforms into an indefinite employment contract – it is considered that the employee has concluded an indefinite contract. The transformation into an indefinite contract occurs if the fixed-term contract is contrary to the law or a collective agreement, meaning that the contract does not contain a legally permissible reason, the contract is not concluded in writing, the duration is not written down, or the employee remains at work after the expiration of the time for which the fixed-term employment contract was concluded.

The limitations on concluding a fixed-term employment contract are regulated by Article 55 of ZDR-1. A fixed-term employment contract is concluded for the time necessary to complete the work. The duration of a fixed-term employment contract is a maximum of 2 years – during this period, multiple fixed-term contracts can also be concluded, but the total duration of these contracts must not exceed 2 years. Thus, the employer must not conclude consecutive fixed-term contracts for the same work, with a combined duration exceeding 2 years. After 2 years, the employer may employ the worker with a contract for an indefinite period. If the employer does not wish to employ the worker, they cannot hire a new worker for the same position with a fixed-term contract, as doing so would effectively chain consecutive fixed-term contracts beyond the already completed 2-year period. The mentioned 2-year period is interrupted if the worker’s fixed-term contract expires and the employer does not conclude a new fixed-term contract for at least 3 months – in that case a new 2-year period begins.

The second paragraph of Article 55 of ZDR-1 lists exceptions for which the mentioned limitation of 2 years does not apply. We can name some examples, such as replacing a temporarily absent worker and employing a managerial person. Such a regulation is based on practical reasons, as it often happens that the worker being replaced is absent longer than the initially projected 2 years. The case of a managerial person also allows an exception – the basis for this is in Article 73 of ZDR-1, which states that other arrangements can be made with a managerial person regarding their rights and obligations from the employment relationship. This exception arises from the dual role of a managerial person, namely the labor law role and the status-based legal role – the first arises from the employment contract, and the second from the appointment act.

The legality of the fixed-term employment contract is judged by labor and social courts. In judicial practice, there are often cases related to illegal reasons for concluding a fixed-term employment contract, futhermore, there are also frequent cases where the reason is legal, but the work itself is not of a temporary nature. A typical example of an illegal reason is trial work – this reason is not listed in Article 54 of ZDR-1 – but trial work can be part of fixed-term employment. The amendment to ZDR-1 now states that trial work mentioned in a fixed-term employment contract lasts proportionately to the duration of the contract and the nature of the work. If a consecutive fixed-term employment contract for the same work is concluded, it must not include trial work.