An employment contract may be for a definite or indefinite term. A definite term contract shall not exceed four years; however, it may be renewed by mutual agreement for an equal or a shorter term(s). Where a contract is renewed, the renewal shall be deemed as an extension of the original term and shall be added thereto when calculating the worker's total period of service.

Where an employment contract is for a definite term and the employer revokes it for reasons other than those specified in Article (120) he shall be required to compensate the worker for any damage the latter sustains, provided that the amount of compensation shall in no case exceed the aggregate wage due for a period of three months or the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract.

Where a contract is revoked by the worker for reasons other than those specified in Article (121), he shall be required to compensate the employer for any damage the latter sustains as a result, provided that the amount of compensation shall not exceed half a month wage for three months or for the remaining period of the contract, whichever is shorter, unless otherwise stipulated in the contract