Planning to hire in Madagascar? Be aware: the legal framework has changed.
The new Law No. 2024-014 on the Malagasy Labor Code redefines the rules that govern the relationship between employer and employee, particularly regarding the employment contract in Madagascar. Several types of employment contracts exist, but in practice, the most commonly used are the CDI (Permanent Contract) and the CDD (Fixed-Term Contract).
Definition of Employment Contracts
All employment contracts must be written at the time of hiring and must include the job title. There souhld also be the professional category, minimum classification index, salary, and the contract’s effective date. If no written contract exists, the working relationship can be proven by any available means.
CDI (Contrat à Durée Indéterminée – Permanent Contract)
This is a contract concluded between an employer and employee without a time limit.
According to Articles 25 and 27 of the Labor Code, the following are also considered as CDI:
- A CDD with a minimum term of 1 month and a maximum of 2 years, renewed twice, with the total not exceeding 6 years
- A CDD that does not meet legal validity conditions
- A CDD or probationary contract in which neither party expresses intent to terminate
- Daily employment in the same position for six consecutive months, with an average of 20 working days per month
CDD (Contrat à Durée Déterminée – Fixed-Term Contract)
The CDD is defined by a predetermined end date agreed upon by both parties. It may not exceed 2 years, and can be renewed twice, without surpassing 6 years total.
It applies in the following cases:
- Tasks outside the company’s regular and permanent activities
- Completion of a specific project
- Temporary workforce increases due to exceptional demand
- Urgent work required for safety or emergency reasons
Specific Characteristics of CDI and CDD
The CDI reflects contractual freedom and long-term stability for both employer and employee.
CDI: The Standard Contract
For the employer, the CDI enables:
- Permanent hiring of qualified staff
- Long-term employee commitment
- Reduced time spent on repeated recruitment
For the employee, it provides:
- Life and job stability
- Security in the position
CDD: A Contract by Exception
The CDD is an exception to free contracting and is only used when the job is not of a permanent nature. It is designed for short-term needs or substitutions, such as interim contracts.
Other Contract Types in the Labor Code
The Malagasy Labor Code provides for several alternative contract formats to suit different employer and employee needs.
Interim Contract
Defined in Articles 62 and 63, this contract applies for:
- Up to 1 year for external hires
- Up to 6 months for internal employees
If no termination is declared by either party at the end of the term, it automatically converts into a CDI.
Teleworking
Telework must be provided for in the Internal Regulations or, failing that, in a contract or amendment.
It is also authorized in exceptional circumstances preventing access to the workplace (Article 74).
Subcontracting or Consultant Contract
This increasingly popular model offers:
- Flexible schedules and autonomy for the worker
- No social contributions for the employer
- Greater agility for both parties
It is governed by Articles 50 and 51 of the new Labor Code.
With the 2024 reform of the Labor Code, companies must exercise special care when drafting or renewing employment contracts in Madagascar.
MDG Services supports you in:
- Reviewing your existing contracts for legal compliance
- Updating your templates to reflect the new requirements
- Advising you on the best contract types for each situation
Need help managing your employment contracts in Madagascar? Contact MDG Services today for expert HR and legal support.