Tunisia bans fixed-term contracts for workers' 'dignity'

TUNIS - Tunisia's parliament on Wednesday scrapped fixed-term contracts and subcontractor agreements, following a push by President Kais Saied to protect workers- a move that has raised concerns for the economy.

Seasonal work and temporary replacements will be exempt from the ban in a country heavily reliant on informal labour, particularly in agriculture.

Parliament speaker Brahim Bouderbala said the reform would help guarantee "human dignity and every citizen's right to work in decent conditions".

Fixed-term contracts have long been used across Tunisia's public and private sectors, especially in services.

Existing legislation allowed employers to dismiss workers at will, often leaving them without income, social security or healthcare.

Employers who violate the new rules could face fines and potential prison time in case of repeat offences.

Under the new law, violators face fines and possible jail time for repeat offences.

Once in force, all subcontractors and service providers -- including cleaners and gardeners -- will automatically become permanent staff.

Economists warned the law could backfire.

One expert, Aram Belhadj, said it "will not reduce unemployment or boost growth and economic activity".

"It may reduce job insecurity, but employers will still be able to hire and fire workers during the probation period, creating a new form of instability," he told AFP.

Despite a modest post-Covid rebound, Tunisia's unemployment rate remains stuck at 16%, with nearly 40% of young people out of work.