Albania
International Employment Law Guide
This page outlines country-level details about the onboarding process when hiring employees, and touches upon the applicable rules when terminating employment contracts.
A. Hiring of employees (onboarding)
Mandatory employer requirements
When employing an individual in Albania, the employer should:
- Draft up an employment contract in writing, which should contain obligatory provisions (i.e. identity of parties, place of work, general description of work to be performed, date of start of the employment relationship, duration for employment contracts of definite duration, normal weekly working hours, etc.);
- Declare the hire of the new employee with the online tax system 24 hours prior to starting the work relationship;
- Insure every employee, starting from the first day of employment as per the employment contract.
From the point of labour legislation, it is not required to establish an Albanian legal entity to hire someone to work in Albania. However, depending of the type of work and/or length of employment in each individual case there is the risk for a permanent establishment to be created.
Probation periods
Pursuant to the Albanian Labour Code, the first 3 months of employment are considered as a probation period, except when the same parties sign a new contract for the performance of the same job.
The probation period may be reduced or removed by the parties, but it may not be prolonged.
During the probation period, each of the parties may terminate the employment agreement, for any motive, by giving a written notice to the other party of at least 5 days.
In practice, the probation period clause is part of the main employment contract. In such case, after the probation period of 3 months, the employment relationship continues normally, without the need to draft another employment agreement.
Hiring checks
Medical examination
The employer should hire an employee based on a medical report issued by the family’s doctor, which should be delivered to the employer at the moment of beginning of employment.
The employer should ensure a medical examination at the moment of employment and/or another one during the first 3 months of employment from the company’s doctor to ensure that the health of the employees is not put to danger from the exposure towards professional risks.
The employer should ensure regular and periodic medical examinations for employees, according to the exposure towards specific risk factors of their employment.
Criminal background check
The employer may request to the employee proof that they have not committed any criminal offences. In practice, the employer usually asks for the employee to provide a criminal records certificate of a recent date.
However, there is no formal requirement in Albanian legislation for a criminal background check of the employee.
Criminal convictions may be an obstacle to the employment if such conviction provides for any prohibition to exercise a certain profession.
Reference and education checks
The employer may require references and conduct education and previous employment checks.
Diversity & inclusion
The Albanian Labour Code contains provisions to protect diversity and insure inclusion. As such, the employer must provide equal pay to employees performing work of equal value, without discriminating.
In addition, employers have the obligation to employ:
- One person with disabilities (including deaf persons and handicapped persons assessed as partly capable by relevant commissions);
- One extra person for every additional 50 employees of the company.
Employers who wish to not employ the above-mentioned persons with disabilities, should make a payment to the Social Employment Fond amounting to 100% of the minimum salary (ALL 34.000) for every month, for every person with disabilities that they should have hired.
Types of employment contracts
All types of employment contracts must be concluded in writing pursuant to the Albanian Legislation. Two types of employment contracts are provided for in the Albanian Labour Code:
- Employment contracts of a definite duration;
- Employment contracts of an indefinite duration.
However, when a definite duration contract is tacitly extended past its term, such contract is considered as of indefinite duration.
Additionally, if the parties have signed subsequent definite duration contracts for at least 3 years, the non-renewal of the definite duration contract by the employer is considered as a termination of a contract of indefinite duration.
Specific rules for executives
Unlike employees, the Managing Directors (administratoret) are not subject to the Labor Code.
It is to be noted that a substantial part of Managing Directors are bound to the company with a service agreement, in which case they are considered to be self-employed and, as a result of which, the Labor Code rules do not apply.
Nevertheless, with regard to social and health contributions matters, managing directors are considered as employees.
Language requirements
There are no specific language requirements provided for by the Albanian legislation.
Equal pay
According to the Albanian Labor Code, the employer has to pay its employees equally, for the same work or work having an equal value, without discriminating, inter alia, on the basis of gender, ethnicity, race, etc.
The same code also forbids direct and indirect discrimination in regards to all aspects and terms of remuneration for the same work or for work of equal value. Equal pay, without discrimination, is the salary which:
- For the same regulated work, it is calculated based on the same unit of measurement;
- For work measured in time, it is the same for the same job position.
Albania, currently, has no explicit equal pay policies in place, aside from the general anti-discrimination measures.
Remote work
The Albanian Labor Code provides for two types of remote work contract:
- Work-from-home contract, meaning that the employee carries out the work at home or in another place stipulated in agreement with the employer, under the terms agreed between them in the employment contract.
- Teleworking contract, meaning that the employee carries out the work at home or in another place stipulated in agreement with the employer, using the information technology tools, within the working hours determined by the employee, under the terms agreed between them in the employment contract.
The labor code also applies to the abovementioned employment contracts, with the exception of: (i) provisions governing weekly working time and lunch breaks, overtime, work on official holidays and night work; (ii) provisions regulating the right to compensation for work difficulties.
Working conditions for employees, who work at home or teleworking can not be less favorable than those of other employees who perform the same or comparable work. For this reason, the employer should take measures: (i) to facilitate teleworking by making available, installing and maintaining the necessary computer equipment for its execution, unless the employee performing teleworking uses personal equipment; (ii) to prevent the isolation of the employee, establishing conditions to meet with the other employees.
A written addendum should be drawn up for ongoing employment contracts.
B. Termination of employees (Offboarding)
Kinds of dismissal
The Albanian Labor Code provides that, before terminating an employment contract with unlimited duration, the employer should deliver a prior notification to the employee indicating its intention to terminate the employment contract and follow up the procedure indicated in point 5 below.
Contracts of a definite duration may not be terminated prior to the expiry of the term.
Employment contracts may be immediately terminated due to serious reasons which do not allow the continuance of the employment. A serious cause is a breach that immediately and definitively makes any further cooperation between the employer and the employee impossible, in accordance with the principle of good faith (examples: theft, competition, aggression, etc.).
Dismissal motivation
In case of any dismissal, the employer shall be obliged to indicate the reasons of termination in the termination notice served to the employee. The termination reasons should be related to (i) the employee’s ability (ii) behavior (iii) operational needs of the enterprise.
As mentioned in point one above, an employment contract may be immediately terminated due to serious cause.
The employee is entitled to know the concrete reasons that have led to his/her dismissal. In the event the court decides the dismissal is unfair, the employee will be entitled to additional compensation (up to 12 monthly salaries), plus the salary pertinent to the relevant notice period.
For detailed procedures of termination, please refer to point 5 below.
Notice period
The duration of the notice period is exclusively based on the employee’s seniority, meaning the period during which the employee was employed by the same company. The notice periods are provided by law and are expressed in weeks/months and will take effect on the date the termination notice has been delivered to the employee (see below):
| Seniority | Notice given by employer |
| 0 ≤ 3 months (trial period) | 5 days |
| 3 ≤ 6 months | 2 weeks |
| 6 ≤ 24 months | 1 month |
| 24 ≤ 60 months | 2 months |
| After 60 months | 3 months |
If the employer terminates the employment contract without notice, such termination shall be considered as a termination with immediate effect. If the immediate termination is without justified cause (i.e. serious cause), the employee is entitled to an indemnity amounting up to one year’s salary plus the salary pertinent to the applicable notice period.
If the salary and/or benefits of the employee are wholly or partly variable, the average of the variable salary and/or benefits, which can be rightfully claimed for payment during the 12 months preceding the dismissal, might be taken into account. However, it is to be noted that the Albanian legislation is silent in this regard, and there is also no consolidated practice in relation to such cases.
Severance pay
The employer is obliged to pay to the employee at the end of the notice period, inter alia, the unused accrued leave, the seniority compensation (if applicable–equal to ½ monthly salary for each year of employment, if the employee has worked for the employer for three consecutive years), and the proportional part of the end year bonus until the date of termination (provided that the bonus has been granted by the employer for at least three consecutive years without any expressed disclaimers). In case of immediate termination with justified cause, the employee is not entitled to the seniority compensation.
Dismissal formalities
Notice must be given in writing and comply with the mandatory procedural requirements applicable in Albania.
The employer who wants to terminate the employment relationship should invite the employee to a meeting, at least, 72 hours in advance, in order to discuss the possibility of termination of the employment contract. During the meeting the employer presents the employee with the reasons of the decision to be taken and gives him/her the possibility to express his/her opinion on the decision. The termination notice must be notified to the employee, in written, not earlier than 48 hours and not later than one week after the meeting date. Such notice must state the start date and the duration of the notice period, the grounds for termination, which relate to causes such as the skills, the behavior of the employee or operational needs of the employer. In addition, the termination notice should contain also information on the severance payments applicable in such case.
Special dismissal protection
Some categories of employees enjoy special statutory protection against Dismissal. It concerns:
- Employees that filed a harassment or discrimination complaint;
- Employees reporting corruption practices, in the ambit of the legislation on whistle-blowers;
- Employees being representatives of trade unions;
- Employees being in temporary incapacity to work (benefiting inability payment from the employer or social security system, for a period up to one year), on maternity leave, adoption leave or any other leave granted by the employer (i.e. parental leave, annual leave, etc.).
These categories of protected workers cannot be dismissed (except for reasons unrelated to the grounds on which they are protected), otherwise, such dismissal shall be invalid.
Legal means of employees
In case of termination of the employment contract without reasonable or justified cause, an employee can raise claims with the competent court within 180 days following the termination date.
The employee can also raise claims in excess of such term, within 30 days upon becoming aware of the non-reasonable non-justifiable cause of termination. Other claims of the employee regarding his/her rights as per the Labor Code have a status of limitation of three years following the date on which the relevant right becomes effective. If the employee’s right is based on the provisions of the Criminal Code, the claims become time-barred dependent on the sort of criminal offence/contravention committed.
Specific rules for executives
Unlike employees, the Managing Directors (administratoret) are not subject to the Labor Code.
It is to be noted that a substantial part of Managing Directors are bound to the company with a service agreement, in which case they are considered to be self-employed and, as a result of which, the Labor Code and, thus, the abovementioned dismissal rules do not apply. In this case, the contractual agreed termination modalities will apply.
Collective dismissals
It is considered as a collective dismissal, the termination of employment relations by the employer for reasons not related to the employee, when the number of dismissals, within 90 days is of:
- At least 10 employees for companies employing up to 100 employees;
- At least 15 employees for companies employing 100-200 employees; and
- At least 20 employees for companies employing over 200 employees.
