Some Considerations on Employment Contracts with Foreign Citizens

In order for a company to employ a foreign citizen in Mozambique, whether under a quota or authorization regime, a formal employment contract must be signed. There are strict rules on employment contracts with foreign citizens that, if not followed, may lead to its invalidity. Below I point out four main situations:

  1. Clause on governing law: There are cases where the parties determine that the employment contract will be governed by, let’s say, English law or South African law. However, it must be noted that all employment performed in Mozambique, is regulated by Mozambican law.1 This applies even in cases of entities with privileges and immunities, such as embassies, high commissions and consulates. Mozambican labour courts are very strict when it comes to applicable law. Thus, if work is to be performed in Mozambique, the Mozambican labour law applies – Mozambican labour courts open no exceptions to this rule.

  2. Clause on dispute settlement – the relevant jurisdiction: There are cases where the parties may agree to refer the dispute settlement to another jurisdiction other than Mozambican. However, the Mozambican legislation is quite strict on this matter too. All dispute settlement on labour matters must be referred to Mozambican jurisdiction.2 Actually, the law nullifies any dispute settlement clauses that remove the jurisdiction of Mozambican courts.3 Besides, there are no provisions on conflict of laws in labour matters, making it difficult to refer labour dispute settlements to foreign jurisdictions. This matter is of utmost importance in case of litigation, because if not followed properly, can result in a company losing a case in court. Therefore, in case of dispute settlement, Mozambican jurisdiction is the one to be referred to. Again, Mozambican courts hardly open exceptions to this rule.

  3. Clause on contract duration: Employment contracts with foreign citizens cannot exceed two years. Renewal is allowed upon submission of a new work permit application.4 However, irrespective of number of new work permit applications, the employment contract does not convert into permanent contract.5 There are cases where the parties may agree on the employment contract duration of, for instance, three years, which is contrary to what is determined by Mozambican law. In case a work permit application is submitted with a contract with these provisions, immediate rejection is likely to occur. I note that companies that enter employment contracts that do not comply with the duration legal limit, generally keep them secret, i.e., do not submit such contracts to the labour authorities (please see point no. 4).

  4. Not submitting the employment contract for certification by labour authorities: In this case the risk is much higher. This is as such because once the parties sign the contract the employee starts working immediately in the company. However, since no work permit was issued, such contract is not formally valid. This means that in case of a labour inspection visit two scenarios are likely to occur: (i) huge fines to the company will be applied, and (ii) immediate suspension of the foreign employee will be enforced.6 Accordingly, in order to ensure validity of employment contracts with foreign citizens, a work permit must be obtained before the employee starts working in the company.

Nonetheless, there are cases where one or all of the above situations may occur, and still, the employment contract is performed. Labour Law, Article 52.2, provides that “An employment contract that has been declared void or cancelled shall have all the effects of a valid contract if it is actually performed and throughout the duration of the performance.”7 This means that if there is a dispute settlement and such contract is presented to the Mozambican courts, the company may be deemed liable for all its legal consequences.8 To prevent this, there is one and only safe way: strictly follow the law of the land when entering into employment contracts with foreign citizens!

  1. Law no. 23/2007, of 01 Augusto (“Labour Law”), Article 2.1, provides that it applies “…to  the  legal  employment  relationships  between  employers  and employees,  both  national  and  foreign,  in  all  fields  of  activity,  who  carry  out  their  activity  in Mozambique.”
  2. Law no. 10/2018, of 30 August (“Labour Courts Law”), Article 12(a) and 12(b).
  3. Labour Procedure Code, Article 25.
  4. Decree no. 37/2016, of 31 August (“Regulations on Employment of Foreign Citizens”), Article 21.1.
  5. Regulations on Employment of Foreign Citizens, Article 21.2.
  6. Regulations on Employment of Foreign Citizens, Article 27.1.
  7. Regulations on Employment of Foreign Citizens, Article 22.3 has a similar provision.
  8. Labour Law, Article 38.6.

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