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Employment in Morocco

Morocco has a relatively modern labour system, with the workforce roughly divided into one third agriculture, one third mining, manufacturing and construction, and the remaining in the trade, finance and service sectors. A large informal economy also exists, made up of street vendors, domestic workers and other underemployed and poorly paid individuals.

While unionisation does not make up a significant proportion of workers, several trade unions do exist in the country; the largest being l’Union Marocaine du Travail with 700,000 members.

Key points on employment in Morocco

The employment relationship is mainly governed by the main employment legislation, the Labour Code and industry-wide collective bargaining agreements (CBAs).

The Labour Code governs specific labour and employment issues, including in particular:

– Conditions of employment and work, employment contracts, termination of employment and dismissal;

– Terms of employment and wages, including minimum wage, minimum age for employment, maternity protection, hours of work and overtime, paid annual and holiday leave, policies for special categories of workers, and occupational safety and health protection;

– Trade union affairs, election and functions of labor representatives;

– Collective bargaining and the settlement of collective labor disputes, including conciliation and arbitration;

– Labour inspections, including the roles and responsibilities of labour inspectors.

  1. Contracts

    Moroccan employment law recognises three types of contracts:

    1. Indefinite duration

    2. Fixed term

    a. For the replacement of an employee by another in the case of suspension of the employment contract of the latter, except where the suspension is the result of a state to strike

    b. For the temporary increase in activity of the company

    c. For seasonal jobs.In the agricultural sector, fixed-term contracts are for six months with the option of renewal for a total duration of two years, after which the contract becomes indefinite. In other sectors, fixed-term contracts have a maximum duration of one year and can only be renewed once. Again, after the two years the contract becomes indefinite.

    3. Employment contracts to carry out a specific job.

    While it is not necessary for employment contracts to be in written form, employers must provide the employee with a job card in verbal agreements. The job card must contain the following details:

    • The name of the employer.

    • The name of the employee.

    • The employee’s function.

    • The employee’s social security number.

  2. Probation Periods

    Article 14 of the Labour Code states that the maximum probationary periods are as follows:

    1. Contracts of indefinite duration:

    • 3 months for executives and similar positions
    • 1.5 months for white collars
    • 15 days for blue collars

    Probationary periods may only be extended once.

    2. Fixed-term contracts:

    • Max. 2 weeks for contracts below 6 months
    • Max. 1 month for contracts exceeding 6 months

    However, shorter trial periods are permitted if stated in the respective CBA or employment contract.

    Unless the employment contract or CBA expressly provides otherwise, the employment contract may be terminated without any restrictions (i.e., without justification or indemnities) during the probationary period. However, employers need to comply with a minimum statutory termination notice period during the probationary period if the probationary period is at least equal to one week (for example, the termination notice will be two days if the employee is paid daily, weekly or fortnightly; or eight days if the employee is paid monthly).

  3. Termination Procedures

    Termination by notice

    Indefinite-term contracts

    Indefinite terms contracts may be terminated by either party or by mutual consent. Early termination requires both employers or employees to provide a notice period, unless the termination is due to a serious breach of contract. The length of the notice period for employees is set out in the Labour Code. Otherwise, the notice period may be substituted by compensation in lieu of notice equal to the salary that would otherwise have been paid to the employee for this period.

    Seniority

    Executive employees

    Blue-collar workers

    < 1 year

    1 month

    8 days

    > 1 year, < 5 years

    2 months

    1 month

    > 5 years

    3 months

    2 months

    Fixed-term contracts

    Early termination of a fixed-term employment contract can be justified if there is:

    • A serious breach of the contract.

    • Disciplinary measures.

    • A force majeure event.

    Dismissal

    An employer may also dismiss a worker for the following reasons as provided under the Labour Code:

    • Disciplinary reasons
    • Ineptitude

    Disciplinary reasons

    An employer may only proceed to dismiss an employee for disciplinary reasons if:

    • The employee has already been subject to disciplinary actions for year without success; or
    • if the employee has made a serious misconduct (faute grave).Under these circumstances, the employee may be dismissed immediately without notice, compensation or damages.The events that may be qualified as a serious misconduct are strictly defined and listed under Article 39 of the Labor Code. Some examples include:
    • disclosure of a trade secret having cause a prejudice the Company;
    • theft, breach of trust, public drunkenness, consumption of drugs, aggression, violence, etc. (within the Company);
    • unjustified absence.

    In order to dismiss an employee for disciplinary reasons, the employer must first invite him/her to a pre-dismissal meeting by way of a registered letter, with an acknowledgement receipt signed by the employee that he or she has been summoned to a pre- dismissal meeting. The meeting should take place within eight days from the delivery of such letter, and in the presence of employees or union representative.

    Once this pre-dismissal meeting has taken place, the employer may notify the employee of the dismissal decision. The notification letter must be sent 48 hours after the pre-dismissal meeting and must be sent by registered mail with an acknowledgement receipt or delivered by hand.

    Ineptitude

    While there is legal definition of what constitutes “ineptitude”, previous judicial definitions have ruled that ineptitude may stem from the employee’s poor performance, non-adaptation to the company’s technology, etc.

    The Labour Code does not provide for any specific procedure to be complied with for dismissals due to ineptitude. However, it is generally recommended to comply with the same dismissal procedure as defined for a disciplinary dismissal.

    Redundancy

    In commercial, industrial or agricultural companies with 10 or more employees, redundancies may be implemented due to technological, structural or economic reasons. However, as a general rule dismissals for economic reasons are very difficult to implement as the authorities rarely grant permission to do so. As such, employers generally negotiate an “amicable termination” with the employees involved (which in practice is a dismissal followed by a settlement agreement).

    The dismissal process is as follows:

    • The employer must inform the employee delegates (or the works council for companies with more than 50 employees) and if necessary, the union representatives of the dismissal decision at least one month before the date of the envisaged dismissals.
    • The parties must then engage negotiations with respect to, in particular, all possible measures that can be envisaged to limit the number of dismissals and/or limit their effects.
    • Minutes of the negotiations’ meetings must be drafted by the employer and sent to the relevant labour authorities.
    • The employer must then seek the authorisation of the governor of the prefecture or province to dismiss the employees. The employer’s request must include in particular a report on the company’s activity and economic situation, a report detailing the grounds on which the envisaged dismissals are based, and a specific report prepared by a chartered accountant.
    • The Labour authorities may then conduct any necessary investigation and a specific commission must render an opinion on the employer’s request.
    • The governor’s decision, which must take into consideration the opinion of the commission, must be rendered within a maximum period of two months from the date of submission of the application by the employer.
    • Once and if the authorisation is granted, the employer can initiate the individual dismissal processes.As the Moroccan Labour Code makes no distinction between individual or collective dismissals, the process described above may be applied for both scenarios.

    Severance payment

    Dismissed employees are entitled to: (i) a paid vacation indemnity (“indemnité de congés-payés”), which is equal to the cash value of the number of accrued and unused vacation days at the end of the notice period; (ii) a notice period indemnity (“indemnité de préavis”) in cases where the employer decides to release the employee from work during the notice period; and (iii) a dismissal indemnity (“indemnité de licenciement”), which is a statutory minimum indemnity (severance payment) based on the number of years of an employee’s service.

    The statutory amounts of severance payments are as follows:

    • 96 hours of salary for each year (or portion of a year) of the first five years of employment.

    • 144 hours of salary for each year (or portion of year) between the sixth and tenth year of employment.

    • 192 hours of salary for each year between the 11th and 15th year of employment.

    • 240 hours of salary for each year (or portion of year) after the 15th year of employment.

    However, where the dismissal is justified by the employee’s gross misconduct (“faute grave”), the employee is not entitled to any severance payment or notice period indemnity. In cases of willful misconduct (“faute lourde”), no severance payment is due.

    Unfair dismissal

    If an employee considers that he or she was dismissed unfairly (e.g., gross misconduct not expressly cited in the Labour Code or poor performance that cannot be sufficiently demonstrated), the employee must launch legal action before the relevant courts within 90 days from the date of receipt by the employee of the dismissal letter. The employee may claim for the payment of damages equal to 1.5 months of salary per year of seniority (not exceeding 36 months).

    Collective disputes

    A “collective employment dispute” refers to any employment-related dispute in which one of the parties is:

    • A workers’ trade union organisation or workers’ group whose purpose is to defend workers’ collective professional interests;
    • One or more employers or a professional association of employers whose purpose is to defend the those employers’ or organisation’s interests.

    Collective disputes are referred to the national investigation commission, chaired by the employment minister or his representative. If a settlement cannot be reached, the dispute is referred for arbitration. Appeals against arbitration awards may be lodged only before the social bench of the Supreme Court, constituted as a court of arbitration.

  4. Statutory Leave

    Working Hours

    Moroccan employees in an industry, commerce or liberal profession work a maximum of 44 hours per week (2288 annually) while those in the agricultural sector work a maximum of 2496 hours per year. It is compulsory to arrange a weekly rest period of at least 24 hours, from midnight to midnight, on Friday, Saturday, Sunday or, in rural areas, the local weekly-market day. Weekly rest must be granted simultaneously to all the employees working at a single workplace unless approved otherwise by the employment authorities. 

    Annual Leave

    All employees working for more than six months at the same company or employer is entitled to:

    • one day and a half of effective work per month worked;
    • two days of effective work per month worked for employees aged under 18.

    Workers are entitled to an extra day and a half for every extra 5 years worked, up to a maximum of 30 days.

    Medical Leave

    Employees are required to inform employers within 48 hours of any medical-related absences. A medical certificate is required for leave exceeding 4 days. In case an employee is absent for medical reasons (other than for a work-related illness or injury) for more than 180 consecutive days in a 365 day period, his employer can assume he has resigned.

    Maternity Leave

    Female employees are entitled to 14 paid weeks off for maternity which may be taken after delivery or in increments of 7 weeks before and 7 weeks after delivery. The employee has the right to take an additional period not to exceed 90 days beginning after the 14 weeks of Maternity leave have passed. A woman may take up to and additional 1 year of unpaid maternity leave, subject to permission of her employer.

  5. Pensions and Benefits

    All companies (except those belonging to the inshore fisheries sector) are required to participate in the national social security system [National Social Security Fund] (Caisse National de Sécurité Sociale – CNSS) and to register all their employees and trainees.

    The contribution rates are based on an employee’s gross monthly remuneration:

    1. Family benefits

    Employer: 6.4% (uncapped)

    Employee: Nil

    2. Death and other daily compensation for illness, pregnancy etc

    Employer: 8.6% (capped at MAD 6,000)

    Employee: 4.29% (capped at MAD 6,000)

    3. Professional training tax

    Employer: 1.6% (uncapped)

    Employee: Nil

    4. Mandatory health insurance

    Employer: 3.5% (uncapped)

    Employee: 2.0% (uncapped)

    5. Solidarity social contribution (la contribution pour l’appui à la cohésion sociale)

    The Moroccan Financial Act for 2013 introduced a “social contribution for solidarity on profits and income” for individuals earning more than MAD 360,000 annually. The social solidarity contribution is due on salaries and similar income, earned or acquired from 1 January 2013 to 31 December 2015, at the following rates:

    • 2% on annual net income between MAD360,000 and MAD600,000.

    • 4% on annual net income between MAD600,001 and MAD840,000.

    • 6% on annual net income over MAD840,000.

Outsourcing Employment Through a GEO Employer of Record Service

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Morocco. For companies which intend to employ their staff directly through their incorporated Moroccan entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Morocco.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Morocco.

The Shield GEO solution is an attractive alternative where

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Morocco

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Morocco

– the company needs help with tax, employment, immigration and payroll compliance in Morocco

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