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Employment in Albania

Employment in Albania

Employment Comparative Guide: 2023
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Contributed by Kalo & Associates.

1. Hiring

1.1. Contracting

Albanian data privacy legislation provides that the employer must obtain explicit, informed, written, and freely given consent from the employee to carry out background checks. This entails that the employer must inform the employee of the scope and purpose for which the personal data is requested, who will process the personal data, whether providing the requested personal information is mandatory or optional and in case providing that information is mandatory, the employer must inform the data subject on the consequences of the refusal to provide such information. It may be questionable if the consent of an employee is considered as ‘freely given’ when refusal to provide consent may result in termination of their employment or in them not being hired.

Regarding medical checks, pursuant to the Council of Ministers‘ Decision No. 639, dated September 7, 2016, “On the determination of rules, procedures and types of medical examination tests that shall be performed according to the occupation of the employee, as well as way of functioning of occupational medical service,“ as amended, medical checks before hiring an employee are mandatory. Employers must hire employees based on a medical check which consists of a medical report issued by the family doctor, and is delivered by the employee at the moment of the beginning of work. Under Article 8 of the same decision, Employees are required to have a medical check-up at the beginning of their employment relationship but in any case, not later than the first trimester of their employment.

Generally speaking, the establishment of a legal entity (i.e., limited liability, joint stock, branch) is required to hire employees located in Albania if the work performed by such employees will be in Albania. Apart from the general obligation to comply with the Albanian Labor Code and other related laws and bylaws in effect when hiring and during the employment relationship in Albania, employment of foreign employees is allowed as long as these employees obtain the respective work and residence permit or exemptions thereof.

Employment contracts in Albania are divided into two main categories: (1) individual contracts and (2) collective contracts.

Collective contracts are entered into by one or more employer(s) and employee unions. Individual employment contracts can be classified as:

a) Part-time Employment Contracts, when the employee agrees to work hourly, half-workday, and for fewer hours per day than full-time employees. Part-time employees have the same rights as other employees.    

b) Work-from-home Employment Contracts, when the employee works from home or other remote places as agreed with the employer according to the terms and conditions of the contract.

c) Teleworking Employment Contracts provide that the employee works from home or other places specified as specified in the employment agreement, using specific technology during the working time according to the terms and conditions of the agreement.       

d) Indefinite-Term Contracts, where there is no set timeframe for the termination of the employment contract. This type of contract is terminated only after observing strict criteria and procedures.

e) Fixed-Term Employment Contracts are contracts entered into for a fixed period that should be specified in the employment contract. The contract will terminate at the expiration date set out therein. If a yearly fixed-term contract is extended for more than three consecutive times then the last contract shall be considered an indefinite-term contract.

f) Commercial agent agreements; 

g) Agreements for acquiring a specific profession (concluded between the teaching master and the person who is studying to acquire a specific profession);

h) Voluntary work (only with respect to non-for-profit activities); 

i) Internship agreements for students;

j) Temporary employment through temporary employment agencies.

Pursuant to Article 21 of the Albanian Labor Code, an employment contract must contain at least the following:

a) identity of the parties;

b) place of work;

c) general job description;

d) date of starting work;

e) term of the contract, when it is a fixed-term contract;

f) term of paid leave;

g) notice term to terminate the contract;

h) the elements related to the salary and the date of its payment;

i) normal weekly working hours;

i) references in the collective contract in power;

k) probation period;

l) types and procedures of disciplinary measures, if there are no collective contracts.

The Albanian Labor Code requires that the employment contract has a written form. Furthermore, any change made to the contract, especially to its mandatory and essential elements, must be done through the written consent of the employee.

Regardless of the type of written forms, the same will be considered valid only if they bear the signatures of the employer and the employee. In the event that the employment contract is agreed upon orally, the employer must produce a written employment contract following the verbal agreement, bearing the signature of the employer and that of the employee and containing the mandatory legal elements provided for in the Labor Code.

The Albanian Labor Code does not explicitly provide that the employment contract or other employment documents must be in Albanian. However, as a matter of customary practice, any employment document is entered into in the language of the employee, or in a language that is understood by the employee.

Under Albanian Labor Code, the first three months of employment are considered a probation period and it cannot be longer than three months. However, the probation period can be reduced or removed by written agreement between the employer and the employee. During the probation period, each party (the employee or the employer) may decide to terminate the contract upon a five days’ notice term and they are not obliged to share the reasons for such termination with the other party.

There is no proper definition of an executive employee in the Albanian Labor Code but it can be presumed that administrators (managing directors) of commercial companies can be considered executive employees. It is not mandatory for a company to sign a service contract or employment contract with the managing director. However, the latter is deemed an employee of the company for social and health security contribution purposes. An administrator is always subject to removal by resolution of the shareholders’ but the administrator will be in any case subject to any entitlements arising from their relationship with the company based on an employment contract or a different type of contract.

Managing directors may be employed, or in the event that they are (a) physical person(s) registered for commercial purposes they may enter into a service agreement. However, in the event that the managing director is a registered person for commercial purposes, the applicable tax regime shall be different and fall outside the scope of the Labor Code. In all other cases, the compensation of the managing director shall be considered as a salary,

In large companies with a complicated structure of the organization or in companies governed by specific laws such as banks, there can be certain positions covered by directors that can also fall within the executive concept but even the employment relationship of such directors is regulated by the Albanian Labor Code. The only difference can be that for certain issues such as compensations and removal consent or approval of shareholders or a public regulatory authority is also required.

1.2. Employees versus independent contractors

The main differentiating factor is the form of contracting. Independent contractors are engaged through service agreements which are frequently used in practice in Albania. However, this type of agreement can only be entered into with individual entrepreneurs also known as the physical person(s) registered for commercial purposes with the commercial register and the tax authorities. The service agreement is a sui generis agreement, and such an agreement is regulated by the Albanian Civil Code and not by the Labor Code.

The main risk of companies when miscategorizing someone as an independent contractor instead of an employee is related to the facing potential penalties from the Labor Inspectorate or the Tax Authorities which can classify such miscategorizing as an attempt to evade employment relations obligations (i.e., payment of social and health insurance and the applicable personal income tax).

1.3. Foreign employees

As a general rule, the work permit is granted for the duration of the contract/assignment letter but not longer than 12 months. Work permits can be renewed by filing the application for renewal at least eight weeks prior to the expiration of the permit. However, foreign nationals from the EEA, the US, Kosovo, Bosnia Hercegovina, Montenegro, North Macedonia, and Serbia, may obtain a Certificate of Exemption from the obligation to obtain a Work Permit, which is valid for an indefinite period.

A short-term stay may not exceed a period of 90 days for 180 days, based on the issued visa or visa-free entry, unless otherwise foreseen in the applicable law or agreements recognized by the Republic of Albania. Temporary stay and permanent stay may be granted only through the equipment of the foreigner with the residence permit.

The Residence Permits may be issued for a period of three months, six months, one year (renewable), or two years (renewable). Foreign nationals who are citizens of the EEA, the US, Kosovo, Montenegro, Bosnia Hercegovina, North Macedonia, or Serbia, may obtain the first Residence Permit valid for five years in accordance with their employment contract.

After five years of residing in Albania through a temporary Residence Permit, employees may apply to obtain a permanent Residence Permit.

1.4. Home office

Work-from-home and telework are recognized by Albanian legislation as employment arrangements. Home office work is regulated in detail through the Council of Ministers‘ Decision No. 255, dated March 25, 1996, while on telework the Albanian Labor Code has introduced only some basic rules and obligations such as the obligations to ensure equal treatment, to provide, install and maintain the working equipment, to avoid isolation of employees by enabling them to meet up with each other during working hours, etc.

The home office concept in the Albanian legislation includes the agreement between employer and employee to establish as a workplace their home or any other place they both agree upon. Furthermore, the legislation limits the object of “home office” to work performed at home that is of artisanal or industrial nature, as well as handmade services or services provided with the help of equipment.

Remote working, or the “telework contract” as described in the Albanian Labor Code, provides that the employee carries out their job at home, or in any other place as agreed with the employer, using information technology within the working time, as specified by the employee, according to the terms agreed between them in the employment contract.

Thus, both “work from home” and “telework” may be provided, based on a mutual agreement, either in the initial employment contract concluded between the employer and the employee or in a subsequent amendment during the course of the employment relationship. 

The working conditions for employees that perform remote work cannot be less favorable, compared to other employees who perform the same work or work comparable to it. The same health and safety rules apply for home office and teleworking, as for other employees.  The Employer must ensure that the workplace of the remote employee meets the minimum occupational health and safety requirements. Minimum safety and health requirements related to the physical aspects of the workplace, such as whether the building structure is solid, fire evacuation procedures, temperature, and ventilation, may not apply in the case of remote working, so the employer may not be responsible for these matters in the place where the employee performs the remote work.

However, an employer must take measures to prevent and avoid risks, informing and training employees about the rules to be followed during remote work, emphasizing, in particular, the obligation of employees to comply with these rules. The Council of Ministers‘ Decision No. 255/1996 also provides regulations regarding allowances, including supplementary expenses of employees including those for the workplace, which they would not have to pay if they would not work from home. Other types of allowances can be regulated through collective contracts, but are not provided explicitly in the Albanian legislation.

2. Contract Modification

Court practice does recognize employment contract modifications to be valid if made through email correspondence, however, the latter must be notarized before being presented to the court. This is nevertheless subject to a case-by-case assessment, meaning that not every judge will recognize email correspondence as consent by an employee to any modification of the employment contract. Implicit acceptance by conduct of employment modifications cannot be recognized as valid, considering that under Albanian Labor Law any modification to the employment contract must be done in writing and with the consent of both parties.

The Albanian Labor Law explicitly provides that all changes to the employment contract must be done with the consent of the employee and this must be given in writing.

If a minor task is envisaged in the employment contract, then it will require a contract modification. Otherwise, a simple informatory correspondence with the employee will suffice.

There is no restriction regarding the modification of employer policies/internal regulations insofar as they do not affect the employment contracts of the employees. However, any modification or change must be discussed with the employees and made available to them beforehand.

3. Termination

3.1. Termination types

Normal Termination

Following the Albanian court practice and current laws, an indefinite-term employment contract is considered duly terminated when the employer decides to do so and the notice term and statutory termination procedure are duly observed.

Labor Code provides that an indefinite-term employment contract can be terminated at any time for one of the following causes which are recognized as valid grounds:

  • the performance/ability of the employee;
  • the behavior of the employee;
  • the operational needs of the employer.

Immediate termination for (good) cause

To terminate the contract with immediate effect (i.e., without observing the notice term and the statutory termination procedure) a (good) cause should exist. Labor Code considers “(good) causes”:

  • All serious circumstances under which the employer cannot continue the employment relations;
  • A serious breach of contractual obligations by the employee;
  • A minor, but repeated breach of contractual obligations by the employee, ignoring written warnings of the employer.

Termination by the employer of fixed-term employment contracts

A fixed-term employment contract can be terminated by the employer in one of the following manners.

Expiry of the term.

As a rule, fixed-term employment contracts expire at the end of the term, so termination notice is not required. However, it is advisable that the employer notifies the employees in writing their decision that the contract will not be renewed; otherwise, if after the expiry of the fixed term the contract continues, it will be considered as tacitly renewed (please refer to Section 1.1. on tacit renewal of fixed-term employment contracts) and all legal effects it will produce in the future will be those of an indefinite-term employment contract.

Immediate termination for (good) cause. Fixed-term employment contracts may also be terminated prior to the expiry of the term, in the form of immediate termination. This type of termination is the same as the termination of indefinite-term employment contracts.

Early termination. This type of termination is similar to the normal termination of indefinite-term employment contracts which means that the statutory termination procedure, termination notice, and grounds for termination must be duly observed by the employer.

According to Article 143 of the Labor Code, there is a schedule of notice terms ranging to:

a) two weeks for employees who have been working for the employer for up to six months,

b) one month for employees that have been working for the employer for more than six months up to two years,

c) two months for employees who have been working for the employer for two to five years, and

d) three months for employees who have been working for the employer for more than five years. Such notice terms cannot be reduced by virtue of a written agreement.

The procedure for termination of employees by the employer includes: a written invitation for a meeting sent to the employee at least 72 hours in advance. In this meeting, the parties may discuss the reasons for the intended termination and acknowledge objections of the employee, if any.

Following this meeting, the termination notification (if the employer still wants to terminate the contract) is delivered to the employee in a written form no sooner than 48 hours, after the meeting.

Financial compensations are as follows:

a) Salary for the notice term;

b) Seniority bonus for those employees that have worked for more than three years with the employer (half monthly salary for each year of work);

c) a 13th salary if it has been paid for the last three years;

d) compensation for the days of annual leaves not yet enjoyed by the employee

e) Any other payment in compliance with the employment agreement or service rules.

In addition to the above financial compensation when the termination of an employment contract by the employer prior to its expiry date, is deemed to be without reasonable cause or without respecting the notice term and procedure, the employer may be liable to compensate the employee with up to 12 months’ salary; the specific obligations of the employer will be decided upon by the courts.

Mutual termination procedures must be done through a written agreement between both parties. These settlement agreements usually offer severance payment on top of the statutory compensations in exchange for the employee waiving their rights to any claim at court. There is no statutory procedure, however, it is suggested that the employers follow the same procedure for termination as described above and during the meeting, parties can produce a written agreement.

In addition to the provision which provides that during the employment period, the employees are not permitted to work for third parties, if such other employment would harm the employer or create competition for the employer, there are provisions to prevent the employee from working for a competitor after the termination of the employment agreement. According to the Labor Code non-competition clauses taking effect after termination can be enforced subject to the following conditions:

a) they are provided in writing at the beginning of the employment relationship;

b) the employee is privy to professional secrets in respect of the employer’s business or activity during the course of employment; and

c) the abuse of such privilege shall cause significant damage to the employer.

The non-compete period shall be no longer than one year after the date of termination. Parties are free to determine and set out agreed non-competition clauses in the employment agreement, but such non-competition clauses shall only be enforceable once the aforementioned criteria are met, and in the event that the conditions of prohibition are clearly defined such as conditions related to place, time and type of activity. An agreement on non-competition after termination is subject to remuneration for the employee, wherein such remuneration is equivalent to the amount of 75 % of the salary they would have received if they were still working with the employer. The prohibition for competition will not apply if the employer terminates the employment agreement without reasonable cause or if the employee terminates the employment agreement for a reasonable cause related to the employer.

3.2. Collective dismissal

Collective dismissal is defined under the Labor Code as the intended dismissal by the employer for reasons unrelated to the employee (e.g., need for restructuring) of one or more employees within a period of 90 days.  The threshold of the number of employees to be dismissed during that 90-day period in order for it to be considered as collective dismissal should be at least 10 for enterprises employing up to 100 employees; 15 for enterprises employing between 100 and 200 employees; 20 for enterprises employing more than 200 employees.

Article 148 of the Labor Code defines specific procedures which need to be followed when an employer plans to execute collective dismissals. The employer shall inform in writing the employees’ trade union which is recognized as the representative of the employees. In the absence of a trade union, the employees shall themselves be informed by way of a notice visibly placed in the workplace. The notice shall contain:

a) the reason(s) for dismissal;

b) the number of employees to be dismissed;

c) the number of employees employed; and

d) the period of time during which it is planned to execute the dismissals.

One copy of this notice must also be submitted to the Ministry responsible for Labor and Social Affairs.

In order to attempt to reach an agreement, the employer shall then undertake the consultation procedure with the employees’ trade union within 20 days of the date on which the notice was displayed. In the absence of a trade union, all interested employees are entitled to participate in the consultations. If the parties fail to reach an agreement, the Ministry responsible for Labor and Social Affairs shall assist them in reaching an agreement within 20 days of the date on which the employer informed the Ministry in writing, with the aim of completing the consultation procedure. After the termination of the 20-day deadline, the employer can then inform the employees of their dismissal and begin the termination of employment contracts by providing the following notice periods:

a) for up to one year of employment: one month;

b) for two-five years of employment: two months; and

c) for more than five years of employment: three months.

Non-compliance with this procedure shall result in the employee’s receiving compensation of up to six months’ salary in addition to the salary payable for the notice period or to additional compensation awarded due to non-compliance with the provision of the specified notice periods.

There is no established court practice in Albania with respect to collective dismissal and court scrutiny and the ruling is subject to a case-by-case assessment.

3.3. Unlawful termination

The termination of an employment contract by the employer prior to its expiry date, without reasonable cause, can result in the employer being liable to compensate the employee with up to 12 months’ salary; the specific obligations of the employer will be decided upon by the courts.

According to the Labor Code termination of the employment contract by an employer is considered to be without cause (Article 146 of the Labor Code) when it is:

a) based on the fact that the employee had genuine complaints arising from the employment contract;

b) based on the fact that the employee had satisfied a legal obligation (e.g., giving evidence in court);

c) based only on the employee’s characteristics (such as race, color, sex, age, civil status, family obligations, pregnancy, religious or political beliefs, nationality, and social status);

d) based on the fact that the employee is required to exercise constitutional rights; and

e) based on the fact that the employee participates in lawful Labor organizations and their activities.

If an employee is dismissed without any reasonable cause, they have the right to bring a claim against the employer to court within 180 days, beginning from the day on which the notice of termination expires. In the event that an employer is found to have had an unjustifiable motive discovered after the expiration of this deadline, the employee has the right to start legal actions within 30 days, beginning from the day on which the particular unreasonable cause was discovered.

Calculation of damages is done based on the salary at the end of the employment. If the salary has changed throughout the years, it is then calculated based on the average salary and indexed. The Labor Code does not make any distinction between the type of compensation provided to the employees. Therefore, all compensation available to them is that mentioned above.

Damages granted by the court are exempted from taxes, whilst those agreed by the parties out of court are subject to a normal personal income tax rate of 15%.

Based on Article 146/3 of the Labor Code, when an employee of the public administration is unlawfully dismissed, the employers may be ordered by a final and binding decision of the court to reinstate the dismissed employee to its positions. the employee

The employer shall observe the non-discrimination obligation, the right of the employees to be organized in unions, the protection of the employees that denounce corruption, minimum age of employees, health and safety at work, protection of pregnant women, minimal salary, overtime limits, etc. These categories of employees cannot be terminated due to the fact that they are a part of said categories. For instance, pregnant women and people on sick or other paid leave cannot be subject to termination.

The Labor Code also provides protection for the striking employees during the strike period, inclusive of the prohibition of the employer dismissing or replacing the participants in the strike with new employees.

According to Article 147 of the Labor Code, the employer cannot terminate the employment contract in the event that, according to the legislation in force, the employee is completing his military service, receiving benefits payment(s) (from the employer or Social Insurance Institute) related to a temporary inability to work for a period no longer than one year, or in the event that the employee is on leave if such leave is granted by the employer.

The Labor Code sets out that employment contracts may be terminated following minor, but repeated breaches of contractual obligations by the employee, ignoring written warnings of the employer. However, the definition and classification of such breaches are done in the employment contract or the internal policies of the employer.

4. Wage And Hour

4.1. Wage

There is a minim wage that is revised by the government from time to time. To date, the minimum wage is ALL 34,000 (approximately EUR 300). Social, health, and tax contributions should be calculated using the reference salary as defined by the Council of Ministers‘ Decision No. 285, dated May 4, 2007, “On defining the referred monthly wage, for purposes of calculating the social and health security contributions, and tax on personal incomes, according to the nomenclature of economic activity, regarding the employees of private and public sector, that perform unqualified and qualified work, and also regarding their executive and technical – economical staff.

The Labor Code allows the parties to determine the currency in which the salary will be paid.

Overtime and extra working hours are regulated by the Labor Code (Article 91), which provides that the employer shall compensate the employee for any overtime with 25% of normal payment if time-off in lieu is not given; or, if agreed, to compensate with time-off in lieu plus 25% of the hours of the normal working day, unless otherwise provided for in the collective contract. Extra work performed at weekends or on public holidays will give rise to higher extra payments of 50% of the normal payment unless otherwise defined by the collective contract.

The Labor Code also regulates night work, defined as work carried out between 10 p.m. and 6 a.m., and which is only permitted in the case of adults over the age of 18 years of age. The duration of night work and of the work carried out one day before or after must be no longer than eight hours without interruption; it must also be preceded or followed by an immediate break of one day. Working during the evening entitles the employee to an extra payment, so for every hour worked between 7 p.m. and 10 p.m. the employee shall receive a payment that is not lower than 20% of normal pay; whereas work during the hours of 10 p.m. and 6 a.m. entitles the employee to extra payment of no less than 50% of normal salary.

4.2. Working time

Working hours are regulated by the Labor Code and by Law No. 9634, dated October 30, 2006, “On Labor Inspection State Labor Inspectorate”. According to Article 83 of the Labor Code, reasonable working hours shall not exceed 40 hours per week, and such weekly working hours must be set out either in a collective agreement or in individual employment contracts. The normal daily working hours are eight hours. The standard working days are Monday to Friday. For public administration, the standard working hours are 8 a.m. to 4.30 p.m. from Monday to Thursday and 8 a.m. to 2 p.m. on Friday. In the private sector, the standard working hours differ from one company to another.

In case the employee works more than six hours per day without interruption, they are entitled to an unpaid break of at least 20 minutes, to be granted after three hours, but not later than six hours of continuous work. An additional break of 20 minutes should be granted to the employee working continuously for nine hours per day. For pregnant employees, a break of at least 30 minutes should be granted every three hours.

The maximum yearly overtime in Albania is 200 working hours

Apart from the wage calculation principles explained in the replies to the above questions, there are no defined rules for working time banking in Albania

Annual vacations are governed by the Albanian Labor Code. The Labor Code provides for minimum paid annual leave of no less than four calendar weeks in one year (pro-rata for those who have worked less than one year). For the purpose of calculating annual leave, sick leave shall be considered working time. The period during which an employee can take annual leave shall be determined by the employer taking into consideration the employee’s preferences. The employee is obliged to give the employer at least 30 days’ prior notice of the dates for their annual leave. Moreover, in cases where the employee receives a salary that includes a contribution in kind (e.g., accommodation, food, and travel expenses), a bonus equal to the contribution in kind, e.g., travel expenses for homeward travel, is awarded. A decision of the Council of Ministers sets out the method of calculation for such additional contributions.

Under the provisions of the Labor CodeAnnual leave must be given during the working year or within the first three months of the consecutive year, but in no case may it be less than one calendar week without interruptions. The right to annual leave which has accrued but has not been (awarded) taken within three years of the date when this right might be enjoyed, is subject to statute of limitations”.

Further to the above-stated provisions, such rights of the employee must be exhausted no later than the month of March in the subsequent year. Thus, the employer should designate and award to the employee the right to take his annual leave within the month of March in the subsequent year. The last paragraph acknowledges the right of the employee to be awarded/to take the annual leave even after the month of March in the subsequent year. This paragraph is designated to protect the interests of those employees who, for any reason (their own or that of their employer), are unable to take the annual vacations. Nevertheless, in practice, this last paragraph has not been applicable as most employees choose to exhaust their annual vacations within the respective year. Furthermore, in practice, if the employees have not taken the annual leave by the month of March in the subsequent year, they receive compensation equal to the salary for the vacations which have not been taken.

According to Article 130 of the Labor Code, the employee provides evidence of his disability to work by a medical report duly issued by a doctor. Furthermore, at the request of the employer, the employee is obliged to undergo an examination by another doctor assigned by the employer; this doctor will declare only the disability of the employee to work while maintaining medical confidence. In the event of illness, the employer pays the employee 80% salary for a period of 14 days, a period which is not covered by Social Insurance. Law No. 7703, dated May 11, 1993, “On Social Insurance in the Republic of Albania”, as amended, defines that after 14 days the employee shall benefit from the social insurance scheme.

The unpaid leave is not regulated within Albanian legislation and there are no conditions or procedures to benefit from it. However, in practice, unpaid leave, its duration, etc., can be arranged by mutual consent between the employee and the employer. It is at the discretion of the employer to accept or refuse the request for unpaid leave. 

5. Collective Labor Law

5.1. Trade unions

In Albania, all citizens have the right to join Labor organizations for the protection of their employment interests and social security and all employees have the right to form trade unions and employers have the right to form their own organizations (Article 176 of the Labor Code). A trade union must have a minimum of 20 people and is formed as an organization/body with legal status through registration as such with the Court of Tirana. Employee trade unions are organized on a national level (according to the respective industry sector) and also on a company level.

Furthermore, the employees have the right to strike, which is provided for by the Constitution of the Republic of Albania and by the Labor Code. Participation in any strike is voluntary and no one shall be forced to participate in a strike against his will. Any action that includes threats or any kind of discrimination against workers due to their participation or non-participation in a strike is prohibited. While a strike is taking place, the parties shall make efforts, through negotiations, to reach a common understanding and sign the relevant agreement confirming the outcome of the negotiations. A strike shall be deemed lawful if it fulfills conditions defined in the Labor Code. The right to strike cannot be exercised in services of vital importance, where the interruption of work endangers the life, personal safety or the health of a part of or all of the people. Such vital services include water supply, electricity supply, fire protection, air traffic control, necessary medical and hospital services, and prison services. A strike shall cease when the parties reach an agreement or the trade union decides to end it.

The Trade Union organization freely organizes the administration and activity; it freely drafts its program. Discrimination against the Trade Union representatives is prohibited.

The termination by the employer of the contract of employment of representatives of the organization of the employees without the consent of this organization shall be invalid. The representatives of the trade union organization may not grant their consent for the termination of the contract, as long as the termination of the contract violates the principles of equal treatment or upon seriously aggrieving or making impossible the normal functioning of the trade union. The request of the employer on granting the consent of the trade union organization shall be responded to within 8 days by the respective body of the organization. The employer may terminate the Labor contract as long as the trade union organization grants its consent or where the court determines the withholding of this consent ungrounded. Where the employer does not observe the procedure provided for in this paragraph, the termination of the Labor contract shall be invalid.

The change of the conditions of the contract of employment of the representatives of the organization of employees may be made only with the consent of the employee and of this organization. The employer may not change the workplace of the representatives of the organization of employees, even if this change is provided for by the contract of employment, without the consent of the employee and of this organization, except for the cases where the change is absolutely indispensable for the economic activity of the enterprise.

If the representatives of the organization of employees, acting at a national scale, during their mandate work and get paid by these organizations, their contracts of employment with the employer shall be suspended. At the end of the mandate, suspension ceases to exist and the contract of employment shall re-enter into force. From this moment on, the parties shall enjoy all the rights and obligations, which stem from the contract of employment.

The employer must create all the necessary conditions and facilities for the elected representatives of the organizations of employees to normally exercise their functions, which are defined in the collective contract of employment. To this effect, the employer must:

a) allow them to enter into working premises;

b) allow the distribution of notices, brochures, publications, and other documents, which belong to the organization of employees;

c) give them the required time to participate in the activities of these organizations inside and outside the country;

d) allow them to enter into working premises and create facilities for them to collect the membership fees of the organization, as well as to organize meetings and appointments.

The trade union rights being benefited based on more than two consecutive collective contracts can not be contested by the employer.

The representatives of the trade union enjoy the protection provided for in this article even subsequent to the end of the mandate, for a period not less than one year.

Each legally founded trade union may submit a collective bargaining request to its employer or employer organization, in order to commence negotiations in relation to a collective Labor contract at either enterprise, group of enterprises, or sector level.

5.2. Works councils

The Labor Code does not provide regulations for the establishment of work councils. Law No. 9901, dated April 14, 2008, “On Entrepreneurs and Commercial Companies”, as amended, provides that the council of employees may appoint representatives to the board of a joint-stock company if agreed with the management of the company. No other provisions deal with such issues.

The establishment of a safety council and relevant criteria are provided under Law No. 10237, dated February 18, 2010, “On Security and Health at Work”. This type of council represents the employees solely in relation to health and security issues at the workplace.

6. Transfer Of Undertakings

This issue is regulated by Article 138 of the Labor Code which is in compliance with Council Directive 77/187/EEC “The Acquired Rights Directive” and is applicable only in the event of the transfer of an enterprise, business, or part of a business to another employer as a result of a legal transfer or merger.

In the event of transferring an undertaking or part of it, all rights and obligations arising from a contract of employment valid until the moment of transfer will pass on to the person subject to the transfer of these rights. Any employee refusing to change employer in this event remains bound by the employment contract until the expiration of the termination notice. According to Article 138(2) of the Labor Code, the previous employer remains jointly responsible with the new employer for obligations derived from the employment contract until the expiration of the notice period for termination or until such date specified in the contract. Article 139 of the Labor Code provides for an information and consultation procedure in the event of a transfer of enterprise. The transferor and transferee are obliged to inform the trade union of its role as the employees’ representative or, in its absence, the employees, and further explain the reason for the transfer, its legal, economic, and social effects on the employees, and the measures to be undertaken in respect thereof. Moreover, they are obliged to engage in consultations regarding the necessary measures to be taken at least 30 days prior to the completion of the transfer.

The transfer of an undertaking in itself does not generally amount to a valid reason or grounds for the termination of employees’ contracts. Exceptions to this rule are when the dismissals are due to economic, technical, or organizational reasons that impose changes to the employment structure. In such cases, the termination procedure as defined in the Labor Code is required to be followed. In the event that an employer terminates the contract without following the abovementioned procedures of information and consultation, the employee is entitled to compensation equal to six months’ salary in addition to the salary they would have received during the prior notice period.

The employee can object to the transfer and, in this case, their employment contract can be terminated following the normal rules of termination and the benefits therein.

7. Labor Investigation

Labor inspectors impose fines/sanctions based on Law No. 9634, dated October 30, 2006, “On Labor Inspection” (amended), and Law No. 10433, dated June 16, 2011, “On Inspection in the Republic of Albania”.

In practice, fines should be determined by inspectors in proportion to the violations. Elements that are taken into account by inspectors in imposing fines are a) repetition or non-repetition; b) duration of the violation; c) the extent of the damage and its consequences; d) the number of employees affected by the violation.

The Labor Code states that the labor inspector imposes a fine from 10 times to 50 times the minimum salary, according to the principle of proportionality, in accordance with the law on inspection. Although there is no specific blacklist of the most significant breaches, the most important ones can be deduced from the amount of penalty imposed on a specific breach. For instance, the highly punishable breaches are the ones related to (i) the employee‘s personal protection, harassment, and discrimination as per stipulation of applicable law on protection against discrimination, and misuse and disclosure of personal data, (ii) non-observance of applicable health and safety rules at work, (iii) lack of signed employment contract with the employee; and (iv) use of personal belongings of the employee. 

Guide Contributors For Albania

Olsi Coku

Special Counsel


+355 4 2233 532


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