Getting the form of employment wrong in Kazakhstan is expensive, and employers usually discover the price only in court. A fixed-term employment contract in Kazakhstan looks convenient: hire someone for a year, let the term run out, part ways without a difficult conversation. But Article 30 of the Labour Code is built so that this convenient tool turns into open-ended obligations at exactly the moment a company least expects it. It is worth understanding when a fixed-term contract is genuinely lawful, and when it becomes a trap for the employer who signed it.
After years of staffing oil and gas projects in Atyrau, we at FSSA see the same mistake month after month: an employer sets a term where the law clearly expects an open-ended relationship, then loses a dispute with the worker a couple of years later and has to reinstate them on an indefinite basis anyway. The problem is almost never bad faith. The problem is that Article 30 gets remembered at the moment of dismissal, not at the moment of hiring.
When a fixed-term employment contract is lawful
The logic of the Code is simple, even if practice keeps turning it inside out. By default, an employment contract in Kazakhstan is concluded for an indefinite term — that is the rule, and everything else is an exception that must be justified. A term contract is allowed only in the cases the law lists, and the first of them is a contract for a definite period of no less than one year. You cannot set a shorter period on this ground: an employer who writes six or nine months "just to try the person out" is already breaking Article 30.
There are four situations where the term may run shorter than a year, because it is tied not to the calendar but to the work itself. One is a contract for the duration of specific work, when the finish date cannot be pinned down in advance. Another is covering a temporarily absent employee, for example while the permanent worker is on childcare leave. A third is seasonal work, which by its nature lasts no longer than a single season and in any case no more than a year. The fourth is work within the validity of a permit to employ foreign labour, where the contract simply cannot outlive the permit.
In oil and gas these grounds come up constantly, which is precisely why there is so much confusion around them. Construction, commissioning, supervised equipment installation — that is classic "specific work" with a floating end date. Rotational shifts on seasonal sites, repair campaigns timed for winter, foreign engineers brought in against a particular permit — all of these are lawful reasons for a term. Yet the same companies routinely keep permanent staff on term contracts too — dispatchers, HR officers, base drivers — whose work does not end when one project does. That is where the ground collapses, even though the wording in the contract may look identical.
Everything that does not fit these frames must be either open-ended or a term of a year or more. And "a year or more" does not mean "as many times in a row as you like." The Code sets a hard limit: a fixed-term contract may be extended no more than twice. After that, if the person keeps working, the contract is deemed concluded for an indefinite term — automatically, without a separate order and without the employer's consent. Three consecutive fixed periods with the same worker legally add up to an open-ended relationship. The same rule applies on re-hiring: sign a new term contract with someone who already worked a year on a term contract, and the law reads it as a switch to indefinite status, no matter how much time passed in between.
Where the law ends and the risk begins
The main danger of a term contract is not that it is hard to draft, but that a court reclassifies it with ease. Article 30 contains an outright ban: a fixed-term employment contract in Kazakhstan may not be used to dodge the guarantees and compensation owed to permanent workers. That rule targets exactly the most common scheme — taking a position that is permanent in substance and re-signing it "for a term" year after year so that the person can be dropped at any moment without severance and without any talk of redundancy.
In practice it looks like this. A company keeps an electrician or an accountant in a permanent, unlimited job, but signs a fresh one-year contract every year. On paper everything is clean: there is a term, there are signatures. But the moment the worker goes to the labour inspectorate or to court, the picture falls apart. The inspector looks not at the paper but at the substance of the relationship: the position is on the staff list, the work is permanent, there are no seasonal or project features. The conclusion is predictable — the contract is recognised as open-ended, and dismissal "on expiry of the term" becomes an unlawful dismissal with all that follows: reinstatement, pay for the forced absence, and compensation for moral harm.
Employers tend to make two mistakes here. First they trust that the term in the contract protects them on its own. Then, having lost the dispute, they are surprised the court looked at the character of the work rather than the end date. The logic of the Code is consistent: a term is allowed where the work is objectively temporary, and penalised where it merely disguises permanent employment.
Consider the arithmetic on a simple example. A company kept a storekeeper on annual contracts for three years and in the fourth simply declined to renew, citing expiry. The worker sued. The position is on the staff list, the work is permanent, there is no seasonality — the contract is ruled open-ended and the parting unlawful. From there the numbers run against the employer: reinstatement, pay for a forced absence that easily stretches over several months of litigation, moral damages and legal costs. Add the administrative fine on top. What was meant as a cheap, fast dismissal becomes a cost several times the ordinary severance — plus a reinstated employee few people want to work with after a courtroom.
The civil consequences come with administrative liability. Letting a person work without a properly executed employment contract is penalised under Article 86 of the Code of Administrative Offences: 30 MCI for an official, 60 MCI for a small business, 100 MCI for a medium one, and 150 MCI for a large enterprise. With the monthly calculation index at 4,325 tenge in 2026, that is between 129,750 and 648,750 tenge per episode — and inspectors rarely find just one episode. If reclassification also exposes underpaid guarantees, Article 87 joins in, with its own fines for pay violations that reach 200 MCI on repetition.
There is also a reputational layer that the staffing world underrates. The Atyrau labour market is narrow, oil and gas specialists know one another, and an employer famous for "eternal annual contracts" and sudden goodbyes earns a matching reputation fast. On scarce positions that costs more than any fine: strong candidates simply stop applying.
What changed in 2026
The labour law reform that took effect in the summer of 2026 did not rewrite Article 30 wholesale, but it did shift several important emphases. The first concerns small business entities. Their right to conclude term contracts without the limit set for other employers is preserved and clarified: the "no more than two extensions" rule does not apply to small business. That is a sensible relief for small companies with variable workload, but even here the ban on dodging guarantees has not gone anywhere — abuse is still open to challenge.
The second clarification is about heads of a legal entity's executive body. If the term of the contract with the top manager expires and the owner or authorised body has not given notice of termination by the last working day, the contract is automatically extended for a year unless the founding documents set a different period. The rule closes an old gap where a company was left formally without a valid contract with its director between expiry and re-election.
The overall direction favours the worker and works against formal schemes. The legislator strengthens the requirement to give written notice of an upcoming parting and consistently pushes the idea that long relationships gravitate toward the indefinite form. For the employer that means one thing: treat the choice of term at the entrance, not in hindsight.
Control over the paperwork itself has tightened in parallel. Companies must enter contract data into the unified state register of employment contracts, and violations there are now penalised directly, without a prior warning. For an HR function this means the grey zones around terms and extensions become visible to the inspectorate faster than before.
The practical takeaway we give clients comes down to a few checks before signing. Ask whether the work is temporary in substance or permanent. If permanent, an open-ended contract spares you future disputes and costs less. If the work really is project-based, seasonal or a substitution, fix that ground plainly in the text rather than hiding it behind an abstract "one-year term." And keep the extension counter in mind: a third consecutive fixed period with the same person is already read by the law as an open-ended relationship, whatever the paper says. A fixed-term contract is not a way to make dismissal easier but a tool for work that is genuinely temporary; in that role it is safe, and in every other it eventually turns against whoever tried to save with it.
Frequently asked questions
Can a fixed-term contract be signed for six months?
On the general ground, no. A definite-period contract is concluded for at least a year. A shorter term is lawful only when tied to specific work: performing a particular task, covering an absent employee, seasonal work, or the validity of a foreign labour permit. If none of these grounds fits, a six-month term is a direct breach of Article 30.
How many times can a fixed-term contract be extended?
No more than twice. A definite-period contract allows two extensions; if the worker keeps working after that, the relationship is deemed indefinite automatically. Small business entities are exempt and may extend term contracts without that limit, as are certain categories such as highly qualified workers of retirement age.
What happens if the term expires and the worker keeps working?
If neither party declares termination on the last working day, the contract is deemed extended for the same period. And once the extension limit is exhausted, or a new contract is signed with the same worker, the relationship becomes indefinite automatically. So "just not filling out anything" is not a neutral stance but an act with legal consequences.
What does a sham term cost the employer?
A court or the labour inspectorate recognises the contract as open-ended and the dismissal on expiry as unlawful. That means reinstatement, pay for the forced absence and possible moral damages. In parallel there may be an administrative fine under Articles 86 and 87 of the Code of Administrative Offences — from 30 to 150 or more MCI depending on the size of the business and the nature of the breach.