Law No. 1.583 of 2 December 2025 establishing the contractual termination of employment contracts and amending certain provisions of Law No. 729 of 16 March 1963 concerning employment contracts and Ordinance-Law No. 677 of 2 December 1959 on working hours, (hereinafter the “Law”) was published in the Journal de Monaco on 12 December 2025.
The Law enshrines the mutual termination of employment contracts and modernizes the rules governing the termination of the employment contract during the trial period, those relating to the length of notice period and the obligations incumbent upon the employer with regard to employees whose working hours are shorter than the statutory working time.
Here are the key points to remember:
In its first chapter, the Law establishes a mechanism for the mutual termination of employment contracts, applicable solely to employment contracts for an indeterminate period, which is based on the consent of the parties.
The Law regulates the termination procedure. At a minimum, it must include a preliminary meeting, the signing of an agreement specifying the terms of the termination and the payment of compensation.
Each party has a right of withdrawal. And the exercise of this right by the employee may not result in any adverse treatment by the employer in the context of the employee’s career.
The termination agreement must also be approved by the Labour Inspectorate (“Inspection du travail”).
In the event of a dispute, legal proceedings challenging the mutual termination may be brought within a period of six months from the date of approval or refusal thereof.
In its second chapter, the Law amends Law No. 729 of 16 March 1963 on employment contracts, as well as Ordinance-Law No. 677 of 2 December 1959 on working hours to allow emancipated minors to enter into an employment contract independently.
It provides important clarifications, particularly with regard to trial periods and notice periods establishing a clear legal framework for executive employees (“cadres”) by expressly providing for a specific notice period regime.
Entry into force and compliance:
Provisions relating to mutual termination will enter into force within three months of 12 December 2025 and will apply to ongoing employment contracts, as well as those concluded thereafter.
Amendments to Ordinance-Law No. 677 apply solely to employment contracts concluded after the Law comes into force.
Lastly, the provisions of the Law amending Law No. 729 shall apply immediately from 13 December 2025.
Our team remains at your disposal to assist you and answer any questions you may have on this subject.
A.L.F.A. MONACO