East Timor or Timor-Leste is an island country in Southeast Asia, having won its independence from Indonesia in 2002, after having been originally colonized by Portugal in the 16th century. Along with the Philippines, it is the only other majority-Christian country in Southeast Asia, and also located entirely in the Southern Hemisphere. Most of the country is mountainous and the climate is generally tropical, hot, and humid. Its northern coasts have several coral reef systems that are considered endangered. Its economy used to depend upon exports of commodities such as coffee, marble, petroleum, and sandalwood. Now, it gets a lot of its revenue from oil and natural gas reserves. East Timor’s two main official languages are Portuguese and Tetum.
In Timor-Leste, employment contracts that are made for an indefinite term or without a specified term are considered permanent. Contracts that are not made in writing are always considered to be for indefinite period.
It is mandatory to conclude employment contracts in writing in Timor-Leste. Contracts must be signed by both parties and contain information on identification of both parties, workplace, remuneration, working schedule, probation, notice period, relevant collective agreements, etc.
The lack of written contract shall not affect the validity of the employment contract, nor the rights and duties of the employee and the employer, and it shall be presumed that the lack of the form is attributable to the employer, who shall be automatically responsible for all its legal consequences.
There are no provisions regarding temporary employment contracts in Timor-Leste. Fixed-term contracts can be made for temporary or seasonal work.
Employment contracts can be subject to a probationary period during which any of the parties may terminate the contract without prior notice and without invoking good cause, and there shall be no right to compensation unless otherwise stated in a written agreement. For indefinite term contracts, the maximum duration of probation is 1 month, except where they apply to employees in high technical complexity or responsibility, or to employees exercising confidence-based functions, in which case the probationary period may be established for up to 3 months.
In case of fixed-term contracts, probationary period is as follows:
8 days for fixed term contracts of 6 months or lesser duration
15 days for fixed term contracts that exceed 6 months
The seniority of an employee is counted from the beginning of probationary period.
The standard daily working hours for employees are 8 hours, limited to a maximum of 44 hours per week. All employees have the right to a remunerated weekly rest period of at least 24 consecutive hours. The working time of employees is defined by their employers or collective agreements.
Employees are entitled to at least 12 days' paid annual leave after the first year of work. The period of leave is defined by agreement between the employee and the employer and it shall be incumbent upon the employer to define it in the absence of an agreement.
Where an employer prevents an employee from enjoying their leave within the 12 months from being eligible, the employee will have the right to a compensation corresponding to the double of the remuneration of the unused days of vacation.
In cases of termination of the employment contract, the employee shall have the right to proportional vacations at the rate of 1 day per each month worked.
Employees in Timor-Leste have the right to be justifiably absent from work in case of illness or accidents for up to 12 days a year, 6 days of which are remunerated in full while the remaining 6 days are remunerated at 50% of the daily remuneration value. They must present a medical certificate to avail this benefit.
Timor-Leste also provides a contributory social-security sickness benefit. The daily amount is a percentage of reference remuneration that rises with the duration of incapacity:
60% (up to 15 days)
70% (16–30 days)
75% (31–60 days)
80% (over 60 days)
The benefit is not cumulative with employment income.
Female employees in Timor-Leste have the right to paid maternity leave for a minimum period of 12 weeks, 10 weeks of which must be taken after delivery, without loss of remuneration and seniority rights. In case of miscarriage, employees are granted 4 weeks' leave. In case of any medical complications, additional prenatal leave is granted on doctor's recommendation.
Employees are entitled to 100% of their wages for the duration of maternity leave, paid by the employer. Since 2021, Timor-Leste has implemented a social security scheme where maternity benefits are paid by social security, provided the employee has paid at least 6 contributions in the last 12 months.
Male employees in Timor-Leste have the right to a 5-day paid paternity leave after the birth of their children without losing the right to seniority. The period of paternity leave does not affect the salary or the duration of the vacation period. If during childbirth or within 2 weeks after birth, the employee's spouse or partner dies, they will become entitled to the remaining maternity leave.
Employees are entitled to 100% of their wages for the duration of paternity leave, paid by the employer. Since 2021, the country has implemented a social security scheme where paternity benefits are paid by social security, provided the employee has paid at least 6 contributions in the last 12 months.
According to Timor-Leste's Labour Code, employers are required to give notice as follows to dismiss employees due to market, technological and structural reasons:
15 days for employees who have worked for less than or equal to 2 years
30 days for employees who have worked for more than 2 years.
Non-observance of the period of advance notice requires the payment of remuneration corresponding to the number of days not observed in the advance notice.
If an employee wants to terminate the contract, they have to give a notice of at least 30 days. No notice is required to terminate a contract during probation. Also, dismissing an employee for misconduct requires a disciplinary hearing prior to dismissal and no notice period.
According to the Labour Code of Timor-Leste, irrespective of the reasons, in case of termination of the employment contract, employees shall have the right to compensation for the length of work corresponding to 1 month's salary per every 5 years of work at the service of the employer.
