Labor law in Timor-Leste

The Labour Code applies nationally across sectors, with exceptions for civil servants, the Defense Force, the Police and small subsistence-oriented family businesses. Employment contracts and collective agreements may improve workers’ conditions, but contractual terms that reduce mandatory legal protection are invalid. The main institutions include the Inspeção Geral do Trabalho (IGT), its territorial delegations, SEFOPE, the Serviço de Mediação e Conciliação, the Conselho Nacional do Trabalho, the Conselho de Arbitragem do Trabalho, worker unions and Segurança Social, also known as INSS. NISS is used for social-security identification. An employment contract should be written, signed and prepared in an official language. It normally states the parties, job, workplace, working hours and rest periods, pay and payment interval, category, start date, probation period, duration and reason for a fixed term, and any applicable collective agreement. Missing written form does not by itself remove the contract’s validity or the worker’s rights. An indefinite contract is the normal form. A fixed-term contract is limited to a temporary need such as replacement, seasonal work, a project or another temporary activity, and may last up to three years including renewals. Without a valid reason or within the statutory limit, it becomes indefinite. A new fixed-term contract for the same reason and worker before 90 days have passed can also become indefinite. A training contract can last up to six months. Probation lasts up to one month for an indefinite contract, or up to three months for work involving high technical complexity, high responsibility or a trust function. For fixed-term contracts lasting up to six months, probation can last up to eight days; for longer fixed-term contracts, it can last up to 15 days. Either side can end the contract during probation without notice, good cause or compensation. Seniority is counted from the beginning of probation. Normal working time is limited to eight hours per day and 44 hours per week. After five continuous hours, the worker receives at least one hour of rest. The employer sets the schedule within the limits of the law, the contract and any collective agreement. Weekly rest is paid and lasts at least 24 consecutive hours, normally on Sunday. Public holidays are paid. Annual leave is at least 12 working days per year; during the first year, it accrues at one day per month. If an employer culpably prevents leave, the unused days are compensated at twice the normal rate. Overtime is paid at the normal hourly rate plus 50 percent. Work during weekly rest or a compulsory public holiday is paid at an additional 100 percent. Overtime is generally limited to four hours per day and 16 hours per week, except for force majeure or urgent measures to prevent serious damage. Employers record overtime. Night work from 21:00 to 06:00 attracts an additional 25 percent, and shift work cannot exceed the normal daily or weekly limit. Marriage, a death in the family, community events and religious events can provide three days of leave per year. Illness or accident supported by a medical certificate can provide up to 12 days per year, with six days paid in full and six days paid at 50 percent. Unauthorised absence can result in loss of pay, a reduction in seniority and, in some circumstances, dismissal. Pay must be fair and proportionate, with equal pay for equal work or work of equal value. Payment is made in legal tender, by cheque or by bank transfer, at intervals of no more than one month. A pay receipt identifies gross and net pay, deductions and additional benefits. Written employee authorisation is required for voluntary deductions; social-security and judicial deductions are permitted, with deductions generally capped at 30 percent of monthly pay. The annual allowance is at least one month’s salary and is paid by 20 December. The private-sector minimum wage remains USD 115 per month in the reviewed sources. Discussions about an increase to USD 154–160 had not produced an effective rule in those sources. Workers with fixed-term or indefinite contracts in the public or private sector are generally subject to mandatory social-security registration. The employer registers the worker, submits a monthly remuneration statement and pays contributions between the 10th and 20th of the following month. The total contribution is 10 percent of the relevant contribution base: 4 percent from the worker and 6 percent from the employer. The base includes basic pay, the annual allowance, performance increases and night, shift or remote-work supplements. It excludes overtime, transport, food and accommodation allowances, bonuses, profit-sharing and representation expenses. The Labour Code and Lei No. 11/2023 on Safety, Health and Hygiene at Work cover public, private, cooperative and social workplaces, including national and international employers, self-employed workers, trainees, apprentices and economically dependent workers. Employers assess risks, eliminate or reduce them, provide information and personal protective equipment without charging the worker, and investigate fatal or serious accidents. A parity commission is required where there are more than 20 workers or a special risk exists. Occupational-safety complaints go to the IGT, which can inspect and impose sanctions. Pregnancy and breastfeeding restrict night work, overtime and work that threatens health. Paid maternity leave lasts at least 12 weeks, including at least 10 weeks after childbirth. Medical consultations related to pregnancy do not reduce pay. Breastfeeding continues until the child is six years old, with two one-hour breaks per day. Paternity leave is five paid days. Caring for a sick or injured child under ten can provide up to five unpaid days per year. Dismissal because of pregnancy, breastfeeding or feeding a child is prohibited, and the employer bears the burden of proof. Work admission normally begins at age 15. Children aged 13 to 15 may perform only light work that does not endanger health, education or development. Light work is limited to five hours per day and 25 hours per week, excludes night work and overtime, and requires at least two rest days per week. A medical examination is required before work begins and annually afterward. Disability or chronic illness cannot justify discrimination or dismissal; medical testing, including HIV testing, requires necessity, written consent and confidentiality. Foreign workers have the same rights and duties as national workers, but their written contracts and employment authorisation follow special legislation. The IGT and SEFOPE oversee foreign employment. Workers and employers may form organisations without prior authorisation. Union registration uses by-laws, a founding record and founding members, followed by publication within the prescribed period. Collective bargaining is legally protected and requires good faith. Union dues need written authorisation and are capped at 2 percent of salary. Retaliation or dismissal because of union activity is prohibited. Employment can end through expiry, written mutual agreement, worker initiative, employer good cause or market, technological or structural reasons. A worker’s ordinary notice period is at least 30 days. Employer dismissal for good cause requires culpable conduct and a disciplinary hearing with an opportunity to defend. Examples include more than three consecutive unauthorised absences or five non-consecutive days in a month. A worker challenging an unlawful dismissal generally has 60 days to bring an action. Remedies can include reinstatement with back pay and seniority, or statutory compensation of up to six months’ salary plus one month’s salary for every five years of service. For market, technological or structural termination, the employer first considers suspension or reduced working time. Suspension may last up to two months with 50 percent pay. Working time may be reduced by up to 40 percent for up to three months with proportionate pay. The employer gives written information at least 15 days in advance to workers, their union and the mediation service. For a structural termination, the notice states the grounds, affected numbers and categories, selection criteria and period. Negotiations begin within five days. Notice is 15 days for seniority of up to two years and 30 days for longer service. Affected workers receive two paid working days per week to seek another job, along with a work certificate and social-security deduction record. Individual disputes generally go first to mandatory conciliation or mediation before court proceedings, except for unlawful dismissal and certain market, technological or structural rescission claims. Individual arbitration is voluntary. Collective disputes may use mediation, conciliation or collective arbitration through the Conselho de Arbitragem do Trabalho. The constitutional right to strike is regulated by Law No. 5/2012, while lockouts are prohibited. The IGT enforces labor, occupational-safety, foreign-work and social-security rules. Child-rights violations and forced labor may also be referred to the Ministério Público. There is no separately documented equivalent of a German labor court; the functional pathway is generally an IGT complaint, mediation or conciliation, followed where appropriate by court or arbitration. Domestic work had no specific law in the reviewed sources as of April 2026, so practical coverage and enforcement remain fragmented.