(Last Updated On: 29/05/2017)

You ask yourself why everyone is celebrating an indefinite employment contract? The advantages are clear; you have a high degree of planning security and do not have to constantly re-apply, since you are employed without a time limit. Nevertheless, the term of notice is relatively short even in an indefinite employment relationship. We will show you the legal regulations and what the content must be up to the notice period in the fixed-term employment contract.

1. Definition of indefinite employment contract
2. Unlimited contract
3. Probationary period
4. Salary
5. Term of notice
6. Special features

Definition of indefinite employment contract – What is it?
The permanent contract is a legal and mutual agreement which forms the basis of the employment relationship and governs it. In this, the employee commits himself to the performance of a dependent work and the employer to the payment of a remuneration. The special feature of an indefinite employment contract is that, unlike the fixed-term employment contract, it does not have a time schedule. This does not indicate an exact date or goal with which the employment relationship ends automatically. This means that there are statutory periods of notice for the permanent employment contract, which must be complied with.

Contents of a permanent contract
The employment contract obliges the employee to provide the contractual work and the employer has to pay compensation in return. In the case of an indefinite contract of employment, certain legal minimum requirements must be specified. The indefinite contract of employment follows the legal regulations and includes information about:
a. Both contracting parties
b. Workplace
c. Start of employment contract
d. Probation
e. Notice period
f. Job description
g. Working hours
h. Holidays and exemption
I. Remuneration such as salary, reimbursement of expenses, allowances or assets.

Specific information in the employment contract
Overtime – The popular clause in employment contracts, according to which “all overtime is paid with the salary,” is ineffective!
Place of employment – Sometimes the employment contract states that the employer is entitled to assign the employee another place of work for operational reasons. This is only true if the place of work is still within the driving distance, which is a maximum of one and a half hours from the previous one. However, if the company has several branches, there is the so-called “displacement clause,” which states that “work is to be provided at any place of the company.”

Clothing: The employer has the so-called right of instruction and may determine the content, place, and time of the work. This allows the company to pound a well-groomed and serious appearance, or to prevent rings or piercings if there is a risk of injury. As long as your clothes do not affect your work performance, your employer can not say anything.

Probationary period in an indefinite employment relationship
In the contractual probationary period, which may be a maximum of six months, both parties may terminate the contractual relationship in a shorter period. This is possible within two weeks, either to the 15th of a month or to the end of the month.

Salary of an indefinite employment contract
The amount of your remuneration depends on the agreement in the employment contract or according to an applicable collective agreement. The statutory minimum wage is usually applied in USA. This means that you get at least $7.75 per hour from your employer. In some sectors, however, other wages can be paid as minimum wages for these specific sectors have been agreed. Therefore, in your permanent contract of employment it must be clear how much your salary will be. In addition, you must state whether you receive additional remuneration such as reimbursement of expenses, allowances, or other benefits.

Statutory periods of notice
For your employer, there are special termination periods in the case of an indefinite employment contract after the end of the probationary period. In the event of a regular termination, the period shall be based on the duration of the employee’s remuneration. The longer someone works in a company, the longer the notice period for an indefinite contract.

Time of employment in the company notice period
1 to 4 years: inclusive one month notice period at the end of a calendar month
5 to 7 years: two-month notice period
8 and 9 years: three month notice period
10 and 11 years: four month notice period
12 to 14 years: inclusive five month notice period
15 to 19 years: six month notice period
More than 20 years of employment: seven month notice period

Thus, with regard to the notice period, there is no difference as to whether a person is employed exactly two years or four years and eleven months at a company.

The employer must comply with these statutory periods of notice in the case of an indefinite contract of employment. An exception is only possible if there is reason for an extraordinary termination. This can be the case, for example, if employee’s theft of company property can be proved by the employer.

In addition, collective bargaining agreements and individual contract regulations can abolish the statutory period of notice in indefinite employment contracts. This means that shorter periods can be specified in a tariff or individual contract.

Special features
As a career starter, you will probably be told again and again that you will only move from a temporary employment contract to the next temporary employment contract. But it is not true, most of the working people in USA are employed in a permanent employment relationship.

According to the Part-Time and Temporary Employment Act, employers are forbidden to give another employee a temporary fixed-term contract, except for a legally permissible reason. If the firm wishes to continue employing a temporary employee, the firm must either offer him a temporary employment contract limited to the duration of a specific project or an indefinite contract of employment. This means for you in concrete terms that if you already have an internship or a trainee program in a company, you already have a fixed-term contract and now you can only enter an indefinite employment relationship.

Extra Tip: It may be advisable to have your employment contract reviewed by an employment lawyer. This is particularly true if some points are incomprehensible, the contract is very complex or contains additional clauses and regulations such as a non-competition clause.


  1. Thank you for the informative post! Could you provide the law/legal provisions where you obtained the “Time of Employment in the company notice period” and for which country?