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Spotlight on Tunisia

flag of Tunisia in front of Town Hall Square

Tunisia is a country located in North Africa, bordered by Algeria to the west, Libya to the southeast and the Mediterranean Sea to the north and east. This location has allowed the country to become an influential Euro-Mediterranean logistics hub. With a population of over 11 million people, Tunisia offers a unique opportunity for multinational companies (MNCs) looking to expand their business operations in the region. Despite facing some economic and political challenges in recent years, Tunisia continues to attract foreign direct investment (FDI) and is known for its skilled workforce, favorable business climate and access to key markets.

Why Tunisia?

  • Strategic location: Easy access to key markets in Europe, Africa and the Middle East, makes Tunisia an ideal hub for companies looking to expand their operations in these regions.
  • Innovation: The Global Innovation Index places Tunisia in the top 10 among the world’s lower middle-income economies, with the country earning stellar marks for its workforce and research capabilities. 
  • Skilled talent: Tunisia has a well-educated and skilled workforce, with a strong, growing focus on science, technology, engineering and mathematics (STEM). This is paving the way for a vibrant and dynamic tech industry. 
  • Favorable business climate: Tunisia offers a relatively favorable business environment, with low labor costs, a competitive tax regime and a range of incentives for foreign investors. The government has also implemented a number of reforms to improve the ease of doing business in the country.
  • Growing economy: Despite some economic challenges in recent years, Tunisia’s economy has continued to grow, with a strong focus on sectors such as tourism, manufacturing and ICT. This has led to a range of investment opportunities for multinational companies.

What is the main source of labor laws in Tunisia?

The Tunisian Constitution guarantees the right to work, fair compensation and the right to form and join trade unions. It also prohibits forced labor, child labor and discrimination in the workplace.

Tunisia is a member of the International Labour Organization (ILO), which sets global labor standards and promotes decent work for all. As a member, Tunisia is required to comply with international labor standards and adopt measures to protect workers’ rights.

At the national level, labor laws in Tunisia are governed by the Labor Code, which was first enacted in 1966 and has since been amended several times. The Labor Code regulates the terms and conditions of employment such as working hours, leave, rest periods, wages, overtime, benefits and employment relationships. The Labor Code also recognizes the right of workers to form and join trade unions and engage in collective bargaining with employers. In addition, the Code establishes the National Social Security Fund, which extends social security benefits to workers and their families.

What do MNCs need to know about entering employment relationships?

In Tunisia, employers have two options when entering into an employment relationship with their employees: they can either orally spell out the terms of the employment or provide a written contract of employment. It is recommended that employers formalize employment with a written contract. 

Typically, indefinite employment agreements are the default and preferred type of employment relationship. However, the law allows employers to employ individuals for a fixed term under certain conditions. The total duration of fixed-term contracts, including any extensions, cannot exceed four years.

It is also important to note that if a fixed-term contract expires and the employee continues to work for the employer, the contract will automatically be converted into an indefinite employment contract. This means that the terms and conditions of the original fixed-term contract will continue to apply. However, the employment relationship will now be considered indefinite.

What are the recommendations for a written contract?

Employment contracts in Tunisia should include the following information at a minimum:

  • The name and address of the employer and the employee
  • The job title and description
  • The start date of employment
  • The duration of the contract (if it is a fixed-term contract)
  • The place of work
  • The working hours and rest periods
  • The wage or salary and the method of payment
  • Any benefits or allowances provided
  • The notice period required for termination of the contract
  • Any other terms and conditions of employment

Employers in Tunisia are required to provide a copy of the employment contract to the employee and to keep a copy for their records. The contract should be written in Arabic, which is the official language of Tunisia. However, if the employee is not fluent in Arabic, the contract should also be translated into a language that the employee understands.

Are probation periods common in Tunisia?

Probation periods are allowed and common in Tunisia. The maximum duration of a probationary period for employees is typically determined by the collective agreement or individual employment agreement. According to the Collective Framework Agreement, the maximum probation period is six months for execution-oriented employees, nine months for technicians and one year for executives.

It’s important to note both the employer and employee have the right to agree to extend or reduce the initially agreed upon period of probation. This means the length of the probationary period can be adjusted based on the needs of the employer and the performance of the employee.

Are supplemental benefits common in Tunisia?

As Tunisia’s economy advances and the labor market becomes tighter, supplemental benefits are becoming a tool to engage and retain talent. These supplemental benefits can vary widely depending on the employer but may include offerings like health insurance, retirement benefits or additional paid time off. 

What are some guidelines for termination?

If either party wishes to unilaterally terminate an employment contract, they must do so in accordance with the reasons and procedures provided by law. Employers or employees who decide to end an employment contract unilaterally must give one month’s notice to the other party. Severance payments are required in certain situations after terminating an employee.

If an employee is dismissed for just reasons other than misconduct, they are entitled to receive a severance pay calculated as one day’s pay for each year of service in the company up to a maximum of three months’ pay. This payment must be made at the time of termination.

On the other hand, if an employee is dismissed with unjust cause, they are entitled to severance pay that is equivalent to one or two months’ pay for each year of service in the company, up to a maximum of three years’ pay.

What makes the Employer of Record (EOR) hiring model an attractive option in Tunisia?

When it comes to hiring in Tunisia, MNCs may face challenges and liabilities associated with complying with local labor laws and regulations. Tunisia’s labor laws can be complex and failure to comply with the requirements can result in reputational damage, fines and other sanctions.

To avoid the lengthy and costly process of setting up a legal entity and learning the regulations for administering payroll in-country, some companies may choose to engage an Employer of Record (EOR) like GoGlobal. This agile, cost-effective solution can help MNCs navigate the complexities of the Tunisian labor market – while mitigating many HR risks and employment pitfalls.

The EOR hiring model can be a temporary solution, serving as a bridge until the company officially sets up a legal entity in Tunisia. Alternatively, it can be a long-term operational solution for building and managing a team in the country. 

With an EOR in place, MNCs can focus on their core business operations – while leaving the administrative burdens and compliance issues to their EOR partner.

How does the hiring process with GoGlobal work?

At GoGlobal, we understand that localizing your employee experience and company culture is crucial to building a successful business in Tunisia. That’s why we provide a personalized onboarding experience for every worker, ensuring they fully understand the details of the EOR arrangement and what it means for them.

Our team on the ground in Tunisia is always available to serve as the point of contact for any issues that arise related to payroll, benefits or taxation. We take care of the administrative burden so you can focus on business development activities and build a successful team in Tunisia.

How is the GoGlobal experience different from other service providers?

At GoGlobal, we take a unique approach to HR. We believe people come first. That’s why we prioritize human interaction throughout the hiring process. We use cutting-edge technology to complement this approach, ensuring that our clients receive the best of both worlds.

Our team members are located all over the world, but we maintain a dedicated team of experts on the ground in every market we serve. This, of course, includes Tunisia. Our local experts are intimately familiar with the country’s unique regulatory environment and cultural customs. They can provide workers with services in their time zone and in English, Arabic or whatever preferred language – empowering a positive experience for all parties involved.

At GoGlobal, we are invested in taking the burden of HR and compliance off our clients’ shoulders so that they can concentrate on their core business activities – and expand their horizons with ease and confidence.

GoGlobal has a significant on-the-ground footprint in Africa, maintaining local offices across 18 countries spanning from North Africa to Sub-Saharan Africa. This extensive on-the-ground footprint empowers GoGlobal to offer exceptional assistance to clients in expanding their operations and building successful teams across Africa.

Find additional details on benefits and hiring in Tunisia, or contact us to talk with an international HR expert.