Judicial principles and studies
Labor Law — Dismissal of Initial Contract, New Contract, and Worker Rights
This study summarizes the effects of terminating a fixed‑term employment contract and concluding a new indefinite contract, and the impact of Labor Law provisions and Defense Order No.6/2020 on termination and leave rights.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The points address the effect of dismissing an initial fixed‑term employment contract and entering into a new indefinite contract with the worker's full consent; the suspension of Article 23 under Defense Order No.6/2020; the limited scope of Article 32 regarding end‑of‑service gratuity; and the treatment of annual leave entitlements in a staff handbook versus Articles 61 and 63.
Summary
- Concluding a new indefinite contract after the first fixed‑term contract ends, with the worker's consent, creates a distinct employment relationship; the new contract is valid and its terms govern the new relation without carrying over rights from the expired contract or treating the new contract as a mere continuation because the employee returned to work. - Article 32 applies solely to end‑of‑service gratuity; gaps up to 60 days are treated as continuous only for calculating that gratuity, not for other labor rights. - Defense Order No.6/2020 suspended application of Article 23 effective 22/4/2020; relying on Article 23 to terminate employment therefore conflicts with the order, and absent proof of a case listed in Article 28, the termination is unjustified and unlawful. - The suspension of specific paragraphs of Article 28 under the Defense Order means dismissals based on those suspended provisions are deemed arbitrary and give rise to unfair dismissal compensation and notice pay, in addition to penalties set by the Order. - If the number of annual leave days in the employer's staff handbook exceeds the statutory amount under Article 61, that superior right applies and the court must award pay for those days under Article 63.
Practical significance
- The new indefinite contract stands on its own; its terms determine subsequent rights and obligations. - Dismissals grounded on provisions suspended by Defense Order No.6/2020 are legally vulnerable and may trigger compensation, notice pay, and the Order's sanctions. - Short gaps are relevant only for calculating end‑of‑service gratuity (60‑day rule), not for other entitlements. - More favourable leave provisions in a staff handbook prevail and must be compensated in accordance with Article 63. This content is a general educational summary and not a judicial text or legal advice.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.