Employment Contracts in Tunisia: The Key Reform of 2025

On May 21, 2025, Tunisia took a decisive step forward in the area of labor relations. Law Law No. 9-2025, published in the Official Gazette (JORT No. 61 of May 23), completely overhauls the framework for permanent and fixed-term contracts.

Until now, the two types of contracts coexisted, giving employers considerable leeway. From now on, the rule is clear: the permanent contract becomes the standard and the fixed-term contract is only possible in rare exceptions, strictly defined by law.

The CDI: The New Standard in the Tunisian Market

Before the reform, employers could enter into a fixed-term contract for a variety of reasons: to cover for an employee, due to a surge in business, or for specific projects, with maximum durations set by law, but sometimes renewable several times.

Currently, the permanent contract is the default employment contract by default. In practice, any contract signed is deemed to be open-ended unless the employer can prove that it falls under one of the cases exhaustively listed by law.

Circumstances under which a fixed-term contract is permitted:

• Temporary replacement for an absent or suspended employee.
• A one-time, exceptional increase in business activity.
• Seasonal work.
• Assignments that, by their nature, do not allow for a permanent commitment.

Apart from these situations, a fixed-term contract is automatically converted into a a permanent contract, without the employee having to take any action.

Stricter rules as soon as the employment contract is signed

The reform puts an end to “convenience” fixed-term employment contracts or those that lack proper oversight, and here are the main changes:

• Written requirement: All fixed-term contracts must be formalized in a signed contract.
• Specific and verifiable reason: the exceptional reason must be clearly stated and justified.
• None probationary period : unlike a permanent contract, which may include a probationary period of up to 6 months, renewable once.
• Automatic reclassification: the absence of a written contract or an invalid reason converts the contract into a permanent contract from the outset.

For permanent contracts, the probationary period is limited to six months, renewable once, with a minimum of 15 days’ notice in the event of termination.

Effective immediately for existing currently in effect

Tunisian law has retroactive effect in certain situations and entails the following transitional measures:

• All fixed-term contracts currently in effect, with the exception of those listed below, as of May 23, 2025 shall be converted to permanent contracts.
• Employees retain the seniority they accrued prior to the reorganization.
• Fixed-term contracts terminated between March 6, 2024 and the effective date of the law, with a duration of at least 4 years, entitle the employee to automatic permanent status or to compensation of two months’ salary per year of service (to be claimed within one year of the reform).

These measures are designed to help many workers in precarious employment transition to stable jobs.

Equal treatment and hiring priority

The law also strengthens the rights of employees on legally valid fixed-term contracts. They must be entitled to the same conditions as their colleagues on permanent contracts in equivalent positions, including:

• equal pay,
• paid leave,
• social security,
• access to group benefits.

In addition, these employees now have priority for permanent employment for an equivalent position available within the same company.

Outsourcing Management

The reform is not limited to direct employment contracts. It also targets certain subcontracting practices considered abusive.

An employee hired by a service provider but assigned to perform essential functions for the client company must be directly transferred to the client company, with full credit for seniority.

Tunisian companies have three months to comply. Failure to do so may result in fines of up to 10,000 Tunisian dinars, and in the case of a repeat offense, prison sentences.

Employment Contract: Implications for Employers

For Tunisian companies, this reform of employment contracts requires a major overhaul of human resources management.

Major impacts:

• Reduced flexibility associated with fixed-term contracts, forcing companies to plan ahead recruitment well in advance.
• It is necessary to carefully document any use of a fixed-term contract to avoid automatic reclassification.
• Requirement to update employment contract templates, personnel records, and social security filings to incorporate automatic conversions to permanent contracts.
• Potential increase in payroll taxes and severance pay due to the rise in the number of permanent contracts.

Managing the probationary period for permanent employees has become a strategic tool for assessing an employee’s skills and compatibility with the company.

Opportunities for employees

For workers, the reform of employment contracts provides greater security. Abuses involving the use of successive fixed-term contracts for the same permanent position are now virtually impossible.

Key benefits:

• Prompt conversion to a permanent contract in the event of a non-compliant fixed-term contract.
• Full retention of accrued seniority.
• Immediate access to the rights and benefits of permanent employees.
• The option to take legal action in the event of a refusal to integrate or a dispute.

Employees on fixed-term contracts are encouraged to verify that their contracts comply with the new legal requirements. If in doubt, they can seek assistance from the labor inspectorate or labor unions.

A transition that requires adaptation

This reform is not merely a technical amendment to the Labor Code. It marks a profound shift in Tunisia’s employment culture.

Employers will need to strike a balance between complying with the new requirements and maintaining an agile organizational structure. Some may turn to authorized temporary staffing or project-based contracts, but permanent employment contracts will remain the preferred option.

Employees, for their part, now benefit from a more protective framework that fosters commitment and retention. A more stable workforce could, over time, improve productivity and the quality of services.

In summary

Law No. 9-2025 is transforming the contractual landscape in Tunisia:

• Permanent contract by default, fixed-term contract reserved for a few strictly defined cases.
• Stricter formal requirements and greater oversight regarding the grounds for fixed-term employment contracts.
• Automatic conversion of non-compliant fixed-term contracts.
• Expanded rights for temporary workers.
• Stricter penalties for abusive subcontracting.

For both businesses and workers, understanding and applying these new rules is now essential for navigating a labor market that is more regulated and protective.