Fixed-term contract: rules and pitfalls for employers

You have just found the ideal candidate for an eight-month project. Perfect profile, available right away. You want to move fast. And then it starts: which contract do you use? How long can it run? And what if you want to renew it?

A fixed-term contract looks simple. A start date, an end date, done. But in practice, employers regularly run into expensive pitfalls. A contract that was not signed in time? Suddenly you have an employee on a permanent contract. Too many renewals? Same story.

This article sets out exactly which rules apply to fixed-term employment contracts in Belgium. From formal requirements to renewal, from notice periods to the most common mistakes. So you know exactly where you stand.

What exactly is a fixed-term contract?

A fixed-term contract is an employment contract in which the employer and employee agree on an end date in advance. On that date the contract ends automatically, with no notice period and no compensation. No letter needed, no procedure. The contract simply expires.

That sounds logical, right? And yet the danger is in the details.

Belgian law sets strict conditions for this type of contract. They are not there to make life hard for employers, but to prevent employees from being stuck in temporary contracts indefinitely, without the security of a permanent position. The Employment Contracts Act of 3 July 1978 forms the legal basis here.

Formal requirements: where it often goes wrong

A fixed-term contract must meet two hard conditions: it must be in writing, and it must be signed before the work begins. This is the key point.

• In writing. A verbal fixed-term contract does not exist in law. Without a written document, it is automatically treated as a permanent contract.
• Signed before the work begins. Not on the first working day itself, not afterwards. Before. The employee must have signed the contract before he or she actually starts working.

That second point is where things often go wrong in practice. The employee starts on Monday, the contract is signed on Tuesday. The result: the law treats this as a permanent contract. With all the notice rules and compensation that come with it.

We see this regularly with the employers we support. The pressure to start quickly is high, the paperwork slips. But that one day of delay can cost you, as an employer, thousands of euros.

What must the contract contain?

A fixed-term employment contract states at least:

• the identity of both parties
• the job description
• the salary and benefits
• the start date and the end date (or the duration)
• the working arrangement (full-time or part-time, and the work schedule if part-time)

Forget to state the end date or the duration? Then there is legally no fixed-term contract. Here too, the same rule applies: permanent contract.

Duration and renewal: how much room do you have?

There is no legal minimum or maximum for the duration of a single fixed-term contract. You can conclude a contract for two weeks, six months or two years. The law imposes no limit, as long as the duration is reasonable and matches a genuine need.

But be careful when renewing. This is where it gets a little legal. Not boring-legal, but important.

The basic rule: max 4 contracts, max 2 years

If you want to conclude successive fixed-term contracts with the same employee, a double limit applies:

• a maximum of four successive contracts
• each contract lasts at least three months
• the total duration of all contracts combined is a maximum of two years

Exceed one of these limits? Then the employment relationship is automatically converted into a permanent contract. Without you, as an employer, being able to do anything about it.

The exception: 3 years with permission

There is a way to work longer with successive fixed-term contracts. But for that you need prior permission from the Directorate-General Supervision of Social Laws (the labour inspectorate of the FPS Employment). In that case, these conditions apply:

• each contract lasts at least six months
• the total duration is a maximum of three years

You do not get that permission just like that. You have to be able to show that the nature of the work, or another valid reason, justifies the succession. Think of seasonal activities or project work with a clear scope.

When does the limit not apply?

In a limited number of cases you can conclude several fixed-term contracts without breaching the rules on succession. The employer must then prove that the succession is due to:

• the nature of the work (for example, seasonal work)
• another valid reason (for example, subsidised scientific research or the theatre sector)

In practice this is a narrow exception. Do not simply assume that your situation falls under it.

Automatic conversion to a permanent contract

Briefly summarised: your fixed-term contract automatically becomes a permanent contract if:

• the contract was not drawn up in writing
• the contract was not signed before the work began
• you exceed the limit of four successive contracts
• the total duration of two years (or three years with permission) is exceeded
• one of the successive contracts is shorter than three months (or six months under the extended scheme)
• the employee simply keeps working after the contract ends, without a new contract

Employers often forget that last point. If an employee shows up the day after the end of their contract and just gets to work, and you allow it, then a permanent employment contract arises tacitly.

At Recruit we have drawn up thousands of contracts over the years. What we see time and again: it is not the complex legal questions that get employers into trouble. It is the small administrative slips. A signature that comes a day too late. A renewal that nobody thought about.

Ending a fixed-term contract early: the rules

Normally a fixed-term contract simply expires on the end date, with no notice needed. But what if you want to end the contract earlier? Since 1 January 2014 there have been clear rules for this.

First half of the contract (max. 6 months)

During the first half of the agreed duration, you can end the contract with a notice period. That notice period is equal to the notice period that would apply to a permanent contract.

There is, however, a cap: the option to give notice with a notice period applies for a maximum of the first six months. Even if the first half of the contract is longer than six months (for example, with a two-year contract), you can only give notice with a notice period during the first six months.

Want more detail on how to calculate the exact notice period? See our guide on calculating notice periods.

Second half of the contract

Once that first period has passed, you can no longer end the contract with an ordinary notice period. Still want to end it early? Then you have to pay a breach indemnity.

That indemnity is equal to the salary for the remaining duration of the contract, but capped at double the compensation in lieu of notice that would apply to a permanent contract.

A concrete example: say you have a twelve-month fixed-term contract. After eight months you want to stop the collaboration. You then pay the salary for the remaining four months, unless double the compensation in lieu of notice for a permanent contract works out lower. In that case, the lower amount applies.

Serious cause

Both employer and employee can end the contract at any time for serious cause. That is a grave fault that makes the professional collaboration immediately and definitively impossible. Think of theft, violence or repeated refusal to work.

The procedure is strict: you must notify the serious cause within three working days of becoming aware of it. Read more about the correct dismissal procedure in our detailed article.

Important with successive contracts

Be careful: with successive fixed-term contracts, you can only end the first contract early by giving notice. For the following contracts in the series, this option no longer applies. They either expire on the end date, or you pay a breach indemnity.

Trial period: abolished since 2014

A short but important note. The trial period was abolished in Belgium on 1 January 2014. So you can no longer include a trial clause in a fixed-term contract. A trial clause in the contract has no legal value.

What does exist: the option to end the contract early during the first half (as described above). In practice, this acts as a kind of replacement for the trial period, although the rules of the game are different.

Fixed-term contract vs replacement contract

A fixed-term contract and a replacement contract are both temporary, which is why employers sometimes confuse them, but there are important differences.

A fixed-term contract is what you use when you can set an end date. For example: "this contract runs from 1 March to 31 August."

A replacement contract is what you use when you temporarily replace someone who is absent (illness, maternity leave, parental leave). The special feature: you do not have to state an exact end date. The contract can end "on the return of the replaced employee."

The rules on successive contracts also work differently for replacement contracts. The total duration of successive replacement contracts may not exceed two years. But the limit of four contracts does not apply here in the same way.

Want to know more about the different types of employment contract? We previously wrote an extensive guide to employment contracts in Belgium that walks you step by step through the options.

Common mistakes (and how to avoid them)

After more than 15 years in Belgian payroll and HR services, we know exactly which mistakes occur most often. These are the five you absolutely want to avoid.

1. Contract not signed before the start

The classic mistake. The employee starts on Monday, the contract is signed on Wednesday. Legally, you then no longer have a fixed-term contract, but a permanent one. Make sure the paperwork is ready before the first working day. No exceptions.

2. Tacit renewal

The contract expires on 30 June. The employee simply shows up on 1 July. Nobody says anything about it. Congratulations: you now have an employee on a permanent contract. Plan the end date and communicate in good time.

3. Too many or too short renewals

Five successive contracts? One of two months in between? Both breach the rules. Keep a close eye on the limit of four contracts and a minimum of three months per contract.

4. Verbal arrangements

"We agreed it would run until December." Without a written document, that arrangement is worthless. Always put it in writing, signed by both parties.

5. No end date in the contract

A contract that talks about "a temporary employment" without a concrete end date or duration is legally not a fixed-term contract. Be specific.

You can keep track of all this and follow it up yourself. Or you can hand contract management over to a partner who works with these rules every day. With Recruit you draw up contracts in under 60 seconds, with automatic checks against the legal requirements. That way you do not run the risk of making one of these mistakes.

How it differs from temp agency work

Another common question: when do you choose a fixed-term contract, and when do you choose temporary agency work? A fixed-term contract suits a candidate you found yourself and want to employ directly; temp agency work suits situations where you need someone fast and want to outsource the risk and admin.

A fixed-term contract suits you if:

• you found a candidate yourself
• you want to employ the worker directly
• the duration of the project is clear
• you want control over the entire HR process

Temp agency work is a better fit if:

• you need someone quickly and do not want to search yourself
• you want to transfer the employer risk
• you want to fully outsource the administration
• you want to scale up and down flexibly

Want to know more about the specific rules on temp agency work? Read our article on temporary agency work in Belgium for a complete overview. Or see exactly how a temp contract works.

In short

The fixed-term contract is a valuable tool for employers who need temporary staff. But the rules of the game are strict. Draw it up in writing before the start, a maximum of four successive contracts of at least three months each, total duration of a maximum of two years. Exceed those limits, and it automatically becomes a permanent contract.

The key? Good administration and acting in time. Know the rules, respect the deadlines and put everything in writing. Then the fixed-term contract offers you the flexibility you are looking for, without unpleasant surprises.

Frequently asked questions

Can I renew a fixed-term contract indefinitely?

No. You may conclude a maximum of four successive contracts, with a minimum duration of three months each and a total duration of a maximum of two years. With permission from the Directorate-General Supervision of Social Laws, you can extend this to three years, but then each contract must last at least six months.

What happens if my employee keeps working after the contract ends?

A permanent employment contract then arises automatically. So make sure you communicate the end of the contract in good time and that the employee actually stops on the agreed end date.

Do I have to give a notice period with a fixed-term contract?

No, not if the contract simply expires on the end date. Yes, if you want to end the contract early: during the first half of the term (a maximum of six months) you can give notice with a notice period. After that, you pay a breach indemnity.

Is there still a trial period with a fixed-term contract?

No. The trial period was abolished in Belgium on 1 January 2014. You can, however, end the contract early during the first half of the term, which in practice fulfils a comparable function.

What is the difference between a fixed-term contract and a replacement contract?

With a fixed-term contract you set an exact end date. With a replacement contract you replace an absent employee, and the contract can end on their return, without an exact date. The rules on succession also differ.

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How Recruit helps you

Drawing up contracts that are 100% compliant with Belgian law? We take care of it.

With Recruit:

• Contracts in under 60 seconds - Create trial and temp contracts without hassle
• Automatic salary calculation - Correct pay in line with current legislation and your joint committee
• Dimona and social documents - We handle all declarations, you focus on your business
• 24/7 personal support - Always a dedicated contact who knows your company
• No fixed monthly costs - Pay only for what you use

Try Recruit or get in touch with our HR experts for tailored advice.

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The information in this article is purely informative and does not replace professional legal or accounting advice. Labour legislation changes regularly. Always consult the current legislation or contact an HR expert for advice tailored to your situation. Please note: the rules can differ per joint committee and sector. This article provides general guidelines. For specific advice adapted to your sector, contact our HR specialists.