Summary:

On 21 May 2025, Tunisia’s Assembly of the Representatives of the People (ARP; Parliament) approved a significant reform of the country’s labor laws that will change the way many companies hire their personnel.

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Presented by the Minister of Social Affairs, Essam al-Ahmar, Bill Number 16 of 2025 comes as part of a broader legislative reform effort aimed at regulating employment contracts. The updated legislation introduces a ban on subcontracting for permanent and essential tasks that is intended to protect laborers against contracting practices that prevent them receiving full benefits.

The parliamentary session saw such intense debate that the Speaker, Ibrahim Bouderbala, suspended discussion twice. Only one amendment, relating to Article 8 that aims to integrate affected workers into public institutions with recognized seniority, was adopted. Other proposed amendments were rejected, maintaining a majority of the government’s initial version. The bill was approved by 121 votes in favor, four abstentions and no votes against.

The central provision of the new law is the designation of indefinite-term contracts (CDI) as the default employment arrangement, limiting fixed-term contracts (CDD) to specific and justified cases such as exceptional workload increases, replacing an absent worker, or performing seasonal work. The probationary employment period has also been set at six months, renewable only once.

The new labor decree also introduces penalties, including fines and considering the employment relationship as direct between the worker and the institution receiving the service. Employers that violate the new law may also lose access to state benefits or contracts.

We interview the experts at Hmila Law Firm in this Special Report about the new law.

Outlook: 

While the new approved labor law marks a pivotal shift in Tunisia’s labor history, as it aims to reduce unemployability and create a fair labor environment in the country, the law may not effectively tackle the underlying issues. 

The new Labor decree may reduce flexibility for employers, especially small or medium enterprises, forcing them to adjust their operations or, in more serious circumstances, consider ending operations in Tunisia.  

Experts opined that the decree will not decrease unemployment nor boost growth and economic activity as it may prompt increased conservatism amongst employers given their likely increasing costs. However, employers will maintain the ability to recruit and dismiss workers during the probationary period. 

The law’s success will depend heavily on the balance between guaranteeing workers’ rights and ensuring economic competitiveness, particularly as the practical application of the law plays out in the coming months and years.  

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