Section 22 of the Employment Act (Chapter 373) deals with the length of a written contract of service. It has five subsections and each of them settles a question that comes up constantly.
Section 22(1) — fixed term or unspecified
A contract of service made under section 19(a) may be for a specified or for an unspecified period.
Both are permitted, and the choice matters at the other end. Under section 33:
- a contract for a specified time or for specified work terminates when the period expires or the work is completed — unless terminated earlier under Division 6; and
- a contract for an unspecified period is deemed to continue until terminated by either party under Division 6.
Section 22(2) — the automatic extension
Where an employee under a section 19(a) contract is permitted by the employer to continue his employment after the expiry of the specified period, the contract shall be deemed to be extended, on the same terms and conditions, for an unspecified period.
This is one of the most consequential provisions in Division 4, and it is triggered by inaction. Three points follow:
- No new document is needed. The extension is deemed. Letting the employee keep working is enough.
- The terms carry over unchanged. Wage, allowances, benefits — all of them, on the same terms and conditions.
- The end point disappears. The contract is now for an unspecified period, so it can only be ended by notice under section 34, by agreement, by payment in lieu, or on a section 36 ground.
An employer that lets a fixed-term employee work on “for a few weeks while we sort out the renewal” has converted a contract that would have ended by itself into one that requires notice. Conversely, an employee kept on after expiry should not be told the job ended on the original expiry date — under section 22(2) it did not.
Where the intention is genuinely to extend for a further fixed term, sign the new contract before the old one expires.
Section 22(3) — when the period starts
| Contract type | Period commences |
|---|---|
| Section 19(a) — ordinary written | On the date the employee signs, or another date specified in the contract |
| Attested — section 19(b) | On the date it is attested by a labour officer under section 23 |
In no case shall the contract be deemed to have commenced on a date later than the date the employee commenced duty.
That closes the gap between starting work and finishing the paperwork. If the employee began on 1 March and the contract was signed on 20 March, the period is deemed to have commenced no later than 1 March. It matters for length-of-service calculations — notice under section 34(4), recreation leave under section 61, and sick leave under section 65 all turn on service.
Section 22(4) and (5) — the caps on an attested contract
(a) employee not accompanied by any dependants — two years;
(b) employee accompanied by all or any of his dependants — three years.
Section 22(5) allows a shorter attested contract to be followed by a further attested contract with the same employer, provided the combined period does not exceed the section 22(4) maximum. So two twelve-month contracts are permissible for an unaccompanied employee; three are not.
The cap is tied to the repatriation scheme. An attested contract typically involves a worker brought from elsewhere, and Division 7 obliges the employer to return the employee — and, under section 42, accompanying dependants — at the end. A worker whose family has travelled with him is allowed a longer engagement before that entitlement is triggered.
Oral and piece-rate contracts
Section 22 applies to written contracts. For completeness:
- An oral contract is deemed under section 16 to be for the period by reference to which wages are paid, and renews automatically under section 17.
- A piece-rate contract is measured by units of work, and is terminable by either party without notice under section 35(3).
- A casual worker engaged for more than six days in a month becomes an oral contract employee under section 10(1).
Checklist
- Is the contract for a specified period? Diary the expiry date — both sides should.
- Decide before expiry whether to renew, end, or let it roll. Letting it roll engages section 22(2).
- Check the commencement date against the day duty actually started.
- For attested contracts, check the two- or three-year cap and the section 22(5) aggregation rule.
- On expiry of a fixed term, deal with final pay and any repatriation entitlement.
Sources
- Employment Act (Chapter 373) — ss 10, 16, 17, 19, 22, 23, 33–36, 40–42, 61, 65
- Porgera Joint Venture v Kami [2010] PGSC 11; SC1060
- Lo v Hevilift Aviation Ltd [2023] PGNC 177; N10413
Before relying on anything here, read the current text of the Employment Act (Chapter 373) and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.