Funding Cuts and the Termination of Employees in Organisations: An analytical reading of the case law of the Jordanian Court of Cassation (2025 – 2026) and General Assembly decision 3211/2026

Executive summary

In early 2025 the US administration halted foreign grants and assistance, and the bodies implementing them terminated their agreements with partners in Jordan. Organisations, associations, non-profit companies and branches of foreign organisations found themselves with suspended projects and running employment contracts with no source for salaries. They terminated their employees’ contracts — most of them fixed-term — before expiry, and the employees sued for the wages for the remainder of the contract term under Article 26(a) of the Labour Law.

In most of these cases the Magistrates’ Courts and the Courts of First Instance sitting in their appellate capacity held that a funding cut is an “economic circumstance” that concerns the employer and can be foreseen, that it is not force majeure, and ordered the organisations to pay the wages for the remaining term. The Court of Cassation, however, overturned those judgments in a series of decisions beginning with decision 7438/2025, holding that the interruption of funding to a body that depends on it entirely is “a compelling circumstance and a justified reason for terminating employment contracts” if four conditions are met. When the Amman Court of First Instance sitting as an appellate court insisted on its overturned judgment, the matter went to the General Assembly of the Court of Cassation, which confirmed the principle in decision 3211/2026 of 15/7/2026.

Introduction

First: Importance of the topic

A large number of people work for non-governmental organisations, associations, non-profit companies and branches of foreign organisations in Jordan, and their salaries are usually funded by fixed-term grants from foreign donors. For years this link remained an administrative reality that raised no disputes, until US assistance stopped suddenly in 2025 and the question reached the courts all at once.

The cases that reached the Court of Cassation show the scale of the impact: non-operating branches of foreign humanitarian organisations, associations, and training and education companies working as subcontractors on projects funded by the US Agency for International Development terminated their staff with letters containing phrases such as “suspension of all funded projects” and “force majeure consisting of the suspension and reduction of funding by the main donor”. The amounts awarded against the organisations in individual judgments ranged from about JOD 1,400 to JOD 22,000, depending on the remaining contract term and the employee’s wage.

The topic is all the more important because judicial stability on it is very recent: the first decision on the principle was issued in November 2025, the General Assembly decision in July 2026, and many claims are still pending before the Magistrates’ and appellate courts; an organisation that knows the conditions and prepares its evidence accordingly can expect a very different outcome from one that merely says the funding stopped.

Second: Research question

The study addresses one main question: is a donor’s funding cut a lawful reason for terminating a fixed-term employment contract before its expiry, exempting the organisation from the wages for the remaining term under Article 26(a) of the Labour Law? Subsidiary questions follow: on what legal basis did the Court of Cassation build its position? What conditions did it require, and how are they proven? Why did the trial courts reject this defence? And what must organisations do in their contracts, when funding stops, and in litigation?

Third: Methodology and sources

The study follows an analytical and inductive method: a survey of the decisions of the Court of Cassation (civil chamber) on the question up to 24/10/2026 and of the published trial-court judgments representing the opposing view, analysed in light of the Labour Law, the Civil Code, the Civil Procedure Law and the Law on the Formation of Regular Courts. Sources were the Qarark judgments database and the legislative texts published by the Legislation and Opinion Bureau. Decisions 7438/2025 and 8966/2025 are presented as quoted in later judgments.

Fourth: Scope

By “organisations” the study means any body whose staff salaries depend on external funding tied to a project or grant, whatever its legal form: associations registered with the Associations Registry, not-for-profit companies, non-operating branches of foreign companies and organisations, and companies implementing funded projects as subcontractors; the Court of Cassation has applied the principle to all of these forms and has not confined it to associations.

Fifth: Structure

• Part One: The legislative framework: provisions of the Labour Law and the Civil Code, and the distinction between force majeure, excuse, unforeseen circumstances and economic circumstances.
• Part Two: The position of the trial courts and their reasons for rejecting the funding-cut defence.
• Part Three: The case law of the Court of Cassation: origin, basis, conditions, the General Assembly decision and applications, with a table of judgments.
• Part Four: Assessment of the approach and the author’s opinion.
• Part Five: Practical implications for organisations: when contracting, when funding stops, and in litigation.
• Conclusion: Findings and recommendations.

Part One: The legislative framework

The Labour Law contains no specific provision on contracts tied to external funding, so the question is spread between the termination provisions of the Labour Law and the general rules of the Civil Code on force majeure and excuse — which explains why the courts have differed.

Section 1: Provisions of the Labour Law

Article 21: (The employment contract shall terminate in any of the following cases: (a) if the parties agree to terminate it; (b) if the term of the employment contract expires or the work itself ends…).

Article 26(a): (If the employer terminates a fixed-term employment contract before the end of its term, or the employee terminates it for one of the reasons set out in Article 29 of this Law, the employee shall be entitled to all the rights and benefits provided for in the contract and to the wages due until the end of the remaining term of the contract, unless the termination is a dismissal under Article 28 of this Law).

This provision is the basis of employees’ claims: on its face, the employee is entitled to the wages for the remaining term on any termination by the employer unless it is a dismissal for one of the reasons in Article 28, which are disciplinary reasons that do not include economic circumstances.

Article 31(a): (If the employer’s economic or technical circumstances require reducing the volume of work, replacing one production system with another or ceasing work permanently, which may result in terminating or suspending all or some indefinite-term employment contracts, the employer shall notify the Minister in writing, supported by the justifying reasons, before taking any measure in this regard).

The following paragraphs of the article provide for a tripartite committee formed by the Minister that submits its recommendation within fifteen days, a decision by the Minister within seven days that may be challenged before the Court of Appeal, and a right for the employee to return to work within one year if work returns to normal. The text is express that it concerns indefinite-term contracts.

Article 50: (If the employer is compelled to stop work temporarily for a reason not attributable to him and which he is unable to avert, the employee shall be entitled to wages for no more than the first ten days of the stoppage in the year and shall be paid half his wage for the period exceeding that, provided that the total paid stoppage does not exceed sixty days in the year).

Article 4(b): (Any condition in a contract or agreement, whether concluded before or after this Law, by which an employee waives any right granted to him by this Law shall be void).

Article 15(c): (If the employment contract is for a fixed term, it shall end automatically on expiry of its term; if the parties continue to perform it after its term has expired, this shall be deemed a renewal for an indefinite term from the beginning of the employment).

Section 2: Provisions of the Civil Code

Article 247: (In bilateral contracts, if force majeure arises that makes performance of the obligation impossible, the corresponding obligation shall lapse and the contract shall be rescinded automatically; if the impossibility is partial, the part corresponding to the impossible part shall lapse, and temporary impossibility in continuing contracts is treated as partial impossibility; in both cases the creditor may rescind the contract provided the debtor is aware).

Article 205: (If exceptional general events occur that could not have been foreseen and as a result performance of the contractual obligation, though not impossible, becomes onerous for the debtor so as to threaten him with grave loss, the court may, depending on the circumstances and after balancing the interests of the parties, reduce the onerous obligation to a reasonable level if justice so requires. Any agreement to the contrary shall be void).

Article 826: (If the term of work is specified in the contract and the employer terminates the contract before the end of its term without an excuse or a defect in the employee’s work, he must pay the wage until the end of the term).

Article 829: (1. The contract may be rescinded if an excuse arises that prevents its performance. 2. Either party may, where there is an unforeseen excuse relating to him, request rescission of the contract. 3. In both cases the party requesting rescission shall be liable for the harm arising from the rescission to the other party).

Article 828(1) provides that the employment contract ends on expiry of its term and on completion of the agreed work, and Article 448 provides that an obligation lapses if the debtor proves that its performance has become impossible for a cause beyond his control.

Section 3: Force majeure, excuse, unforeseen circumstances and economic circumstances

The whole dispute turns on the characterisation of the funding cut, and each characterisation has a different effect:

• Force majeure (Arts. 247 and 448): an external event that cannot be foreseen or averted and that makes performance impossible, not merely onerous. Its effect is automatic rescission of the contract without compensation.
• Unforeseen circumstances (Art. 205): an exceptional, general, unforeseen event that makes performance onerous rather than impossible. Its effect is to reduce the onerous obligation to a reasonable level, not to terminate the contract or fully release the debtor.
• Excuse (Arts. 826 and 829): a reason that justifies the employer terminating a fixed-term contract, so that, by contrary implication of Article 826, he is not bound to pay the wage for the full term; but Article 829(3) makes the party requesting rescission liable for the harm arising from it to the other party.
• Economic circumstances (Art. 31 Labour Law): reducing or stopping work because of the employer’s economic or technical circumstances, with a special procedure through the Ministry of Labour; its text is confined to indefinite-term contracts.
• End of the work itself (Art. 21(b) Labour Law and Art. 828(1) Civil Code): the contract ends on completion of the work for which it was concluded; this is a natural expiry, not a termination, and gives rise to no termination rights.

We shall see that the trial courts characterised the funding cut as an economic circumstance, while the Court of Cassation characterised it as force majeure and a justified reason, relying in some decisions on excuse and on the end of the work itself.

Part Two: The position of the trial courts

Before the Court of Cassation settled the question, and even after its first decisions were issued, most Magistrates’ Courts and Courts of First Instance sitting as appellate courts rejected the organisations’ funding-cut defence; the judgments that reached the Court of Cassation show that the first- and second-instance courts awarded employees the wages for the remaining term in most cases, and that this approach continued in Magistrates’ judgments issued in April and May 2026.

Section 1: Arguments of the rejecting approach

The arguments of this approach, as stated in Amman Magistrates’ Court judgments 5628/2026 (10/5/2026), 2877/2026 (21/5/2026), and 30996/2025 and 30966/2025 (28/4/2026), may be summarised as follows:

1. A funding cut is an economic circumstance, not force majeure: (a funding cut falls within the economic circumstances that arise during the employment contract and concern the employer; it is not an external event that cannot be foreseen or averted, nor does it make performance absolutely impossible, but merely onerous).
2. A funding cut is foreseeable for those who depend on funding: the Magistrates’ Court said that a funding cut is (among the matters that can be foreseen, especially by companies that rely on funding, and the first thing such companies foresee is a funding cut), so the requirement of unforeseeability on which force majeure rests is lacking.
3. The organisation still exists: the courts treated the organisation’s continued activity and implementation of other projects as evidence that there was no impossibility, and said that if carrying on business had become impossible the partners should have put the company into liquidation. This was the argument of the employee accepted by the Amman Court of First Instance sitting as an appellate court in decision 937/2026 (18/1/2026), when it reversed a Magistrates’ judgment and awarded her the remaining contract wages.
4. The contract did not tie the appointment to funding: the courts observed that the contracts (contained no express provision indicating that the claimant was appointed against the project or that the appointment was tied to particular funding), so that the relationship was concluded unconditionally and could end only in the cases exhaustively listed in Article 21 of the Labour Law.
5. The legislature regulated economic circumstances by a special procedure: the court held that the legislature dealt with the employer’s emergencies through Article 31 for indefinite-term contracts and Article 50 for temporary stoppage of work, so these procedures cannot be bypassed by relying on the general rules.
6. A funding cut is not the end of the work: the court distinguished between a project ending on expiry of its term or purpose — the “end of the work itself” under Article 21(b) — and the cutting of its funding, which (is not an end within the meaning of Article 21 of the Labour Law but a termination of the project).
7. Nullity of a clause tying the contract to funding: the Magistrates’ Court went further, holding that tying the employment contract to decisions to stop or reduce funding by a contractual clause (places on the claimant the risk of a foreign cause, namely the act of a third party, the donor), an aggravation of liability that is void under Article 4(b) of the Labour Law because it adds a ground of termination not found in Article 21.

This last argument is the most dangerous for organisations, because it does not merely reject the defence where there is no contractual provision but strips the contractual provision itself of effect. We shall see that the Court of Cassation implicitly rejected it by making the employee’s knowledge derived from the contract one of the conditions, and by upholding in decision 4412/2026 a judgment based on clause three of the employment contract.

Section 2: Insistence on the overturned judgment

The trial courts’ adherence to their position went as far as insistence: in Magistrates’ claim 7453/2025, the Amman Magistrates’ Court on 26/5/2025 ordered a non-operating branch of a foreign humanitarian organisation to pay an employee JOD 22,176 and to give him an experience certificate, and the Amman Court of First Instance sitting as an appellate court upheld it; the Court of Cassation then overturned the judgment by decision 7438/2025 of 10/11/2025, but on 27/1/2026, in case 12016/2025, the Amman Court of First Instance sitting as an appellate court decided not to follow the reversal, dismissed the appeal and upheld the Magistrates’ judgment.

Article 202 of the Civil Procedure Law allows the appellate court to decide (to accept the reversal or to insist on its previous judgment); if it insists and the insistence decision is challenged, the Court of Cassation may overturn it for the reasons that required the first reversal, and the case returns to the court that issued the judgment (which must then comply with that decision). Article 9(a)(1) of the Law on the Formation of Regular Courts requires the Court of Cassation in that case to sit as a General Assembly of a president and eight judges, and that is what happened in decision 3211/2026, discussed in the next Part.

Part Three: The case law of the Court of Cassation

Almost all the Court of Cassation’s decisions on the question were issued by three-judge panels presided over by Judge Saleem Al-Habashneh, because the claims originated in the Magistrates’ Courts, and Article 9(a)(2) of the Law on the Formation of Regular Courts provides that the Court of Cassation sits with three judges when hearing challenges to Magistrates’ judgments. These claims reached the Court of Cassation after leave to appeal was obtained under Article 191(2) of the Civil Procedure Law, or without leave where the claim included a non-quantifiable request such as an experience certificate (1559/2026, referring to Cassation 6274/2024).

Section 1: Origin of the approach

The principle goes back to decision 7438/2025 of 10/11/2025, to which all later judgments refer as the source of the four conditions, sometimes together with decision 8966/2025. Decisions 381/2026 and 476/2026 were then issued on 23/2/2026; they are the earliest judgments of this line whose full text we reviewed:

• Cassation 381/2026 (23/2/2026): an education and training company terminated a trainer’s contract after the projects funded by the US Agency for International Development were “finally suspended” on 3/3/2025; the Magistrates’ Court had ordered it to pay JOD 11,557.500. The Court of Cassation overturned the judgment because the appellate court had not addressed the defence in light of the four conditions (“in light of the employment contract”).
• Cassation 476/2026 (23/2/2026): a company whose objects include (improving the quality of life of people living in the poorest places on earth, funding maternal and child projects and providing clean water sources) argued that the continuation of the contract was conditional on the continuation of the project and of its funding, and on the issuance of an executive order stopping the US agency’s foreign project activities. The Court of Cassation overturned the Magistrates’ judgment upheld on appeal (JOD 6,472) for the same reason.

Further judgments to the same effect followed, six of them in claims against a single company working as a subcontractor of a US prime contractor on a USAID-funded project, and others against branches of foreign humanitarian organisations and an association.

Section 2: The legal basis

The Court of Cassation builds its position in an almost fixed formula repeated in its judgments, which can be reduced to four steps:

1. The rule for fixed-term contracts: (under Article 26(a) of the Jordanian Labour Law, a fixed-term contract may not be terminated before its expiry except for a lawful and legally justified reason, failing which the employee is entitled to his wage for the remaining term). The Court thus read the provision as excluding termination for a lawful reason and did not confine the exception to the cases in Article 28.
2. Force majeure in the employment contract: (the principle is that if performance of the contract becomes impossible due to force majeure, the impossibility leads to rescission of the contract by operation of law, and this principle of the general rules is a principle in the employment contract).
3. Distinction according to the source of the impossibility: if the impossibility is due to force majeure or a foreign cause, (the contract is rescinded by operation of law and the employment contract ends immediately without any liability on the employer); if it is attributable to the employer, there is no rescission (but it is regarded as a termination by the employer, who is then liable to compensate for this termination as it is regarded as arbitrary dismissal).
4. Characterisation of the funding cut: (the justified reason for termination must be something serious and real, beyond the employer’s control, that makes continuing the work impossible or unusually onerous. Accordingly, the interruption of funding to a company that depends on it entirely is a compelling circumstance and a justified reason for terminating employment contracts, as long as it is proven that the company has no other resources to cover wages, that the interruption did not result from its default, and that the employee knew that the continuation of his work depended on the continuation of funding).

Note that the Court did not require absolute impossibility but was satisfied that the reason makes continuation (impossible or unusually onerous) — a broader standard than that of force majeure in Article 247 and closer to the standard of excuse.

In decision 1559/2026 (28/6/2026) the Court provided a complementary basis from the employment-contract provisions of the Civil Code: Article 826 requires the wage until the end of the term if the employer terminates the contract (without an excuse or a defect in the employee’s work), and (by contrary implication, terminating a fixed-term contract for a lawful excuse does not require payment of the wage until the end of the contract term). It added that Article 31 of the Labour Law concerns (indefinite-term contracts and the employer who carries on commercial business for profit), so a judgment on a fixed-term contract with a non-operating body (which does not carry on commercial activity, provides humanitarian aid and development in the countries concerned and depends on donor funding) cannot be based on it.

In decision 1115/2026 (13/5/2026) the Court relied on Article 21(b) of the Labour Law (end of the work itself), on a clause in the employment contract allowing the employer to terminate it before expiry if (factual and/or legal reasons arise that prevent its performance), on Article 247 of the Civil Code, and on the General Assembly’s holding in decision 34/2015 (14/4/2015) that a decision by an external body suspending the contractor and barring it from the work site constitutes force majeure (because it could not be foreseen or averted).

Section 3: The four conditions

For the Court of Cassation it is not enough that funding stops; the following conditions, taken from decision 7438/2025, must be met:

1. Funding must be the sole source of staff salaries. In decision 1350/2026 (23/4/2026) the Court broadened this condition by adding an alternative: (or that the employee was appointed from the outset against a funded project). This addition matters for organisations with multiple projects and funding sources, as it allows them to rely on the cut of a particular project’s funding against an employee appointed against it, even if they have other funding for other projects.
2. The organisation must prove that the funding cut is beyond its control. The burden here is expressly on the organisation and is usually discharged by a letter from the donor or the prime contractor, such as the letter dated 3/3/2025 terminating the subcontract (“immediately”) following the termination of the prime contractor’s agreement with the US agency (1115/2026).
3. The employee must know, or be presumed to know, that the continuation of the contract is tied to the continuation of funding, or this must be known from the employment contract or staff instructions. This condition is derived first from the text of the contract, then from the staff instructions, then from the circumstances of the appointment and the nature of the work.
4. There must be no mismanagement or default by the organisation that led to the funding cut. An organisation that lost its funding through breach of the grant terms or poor management cannot benefit from the principle.

The Court says that the interruption of funding is a justified reason (as long as) the above is proven; the conditions are therefore matters of proof whose burden lies on the employer relying on them, not presumptions that the Court assumes.

Section 4: General Assembly decision 3211/2026

The decision was issued on 15/7/2026 by a General Assembly presided over by Judge Adnan Al-Shayyab with Judges Mohammad Omar Maqansa, Saleem Al-Habashneh, Mohammad Al-Khatib, Husni Amarin, Nahar Al-Ghazo, Ali Al-Masri, Dr Khaled Al-Samamaa and Mohammad Al-Tarawneh, on the challenge by a non-operating branch of a foreign humanitarian organisation to the insistence decision of the Amman Court of First Instance sitting as an appellate court in case 12016/2025.

The General Assembly repeated the same formula: Article 26(a), force majeure in the employment contract, the distinction according to the source of the impossibility, the characterisation of the funding cut, and then the four conditions. It decided (to accept the cassation appeal, overturn the challenged judgment and return the file to its source to comply with the reversal and take the legally required action).

The decision is important in three respects:

• It settled the question in the face of the trial court’s insistence: the Court of First Instance sitting as an appellate court must comply in the same case under Article 202 of the Civil Procedure Law.
• It was issued by a General Assembly bench: Article 9(a)(1) of the Law on the Formation of Regular Courts does not allow a panel of the Court of Cassation to depart from a principle established in a previous judgment except by sitting as a General Assembly, so the three-judge panels are not expected to depart from it.
• It is consistent with what the ordinary panels did before and after it: it was preceded by decisions 4412/2026 (24/6/2026) and 3368/2026 (9/7/2026), and followed by decisions 5883/2026 (29/9/2026) and 5835/2026 (8/10/2026).

However, the General Assembly decision did not settle the facts: it returned the file for the conditions to be applied and did not decide that the conditions were met in that case. The principle is settled; the outcome remains a matter of proof in each case.

Section 5: Applications of the conditions

First: Reversals for failure to address the defence or for preventing the organisation from proving it

Most judgments were overturned because the trial court did not examine the defence in light of the conditions or deprived the organisation of a means of proving it:

• Cassation 9000/2025 (25/3/2026): the company argued that the trainer’s work was confined to a USAID-funded project, submitted two letters in English and requested witness evidence. The Court held that the trial court should have (required the defendant to submit a legal translation of the documentary evidence submitted in English and allowed it to call witness evidence), and that its judgment without doing so was (premature and deficient in its reasoning).
• Cassation 1115/2026 and 1350/2026: the Court overturned for refusing the witness evidence the organisation requested to prove its defence, saying in 1350/2026 that examining the conditions (required hearing the appellant’s witness evidence).
• Cassation 1559/2026: overturned because the appellate court based its judgment on Article 31 of the Labour Law when it should have (examined and discussed in its decision whether an excuse, a legal justification and an unforeseen circumstance existed for terminating the employment contract), while upholding the calculation of the wage on the basis of the last contract renewal annex (JOD 1,252) rather than the first contract.
• Cassation 3368/2026 (9/7/2026): contracts renewed since 2018 for an employee who ended up as a senior financial controller under a contract expiring on 31/12/2025. The organisation placed him on paid leave, then suspended his contract, placed him on unpaid leave and asked him to hand over his equipment; the trial courts awarded him the remaining term (JOD 19,635). The Court of Cassation overturned the judgment for failing to apply the four conditions.

Second: An application finally in favour of the organisation

In decision 4412/2026 (24/6/2026) the employee was the appellant: the Amman Court of First Instance sitting as an appellate court had reversed a Magistrates’ judgment in his favour and dismissed his claim against an association. The employee argued that the notice was sent to him before the funding-cut decision was issued, and relied on Article 4(a) of the Labour Law and on clause 3(c)(1) of his contract. The Court of Cassation dismissed the appeal and upheld the judgment because the appellate court had (correctly applied the law in concluding that the termination of the employment contract was due to the US administration’s funding cut and that this termination was justified and consistent with the will of the parties, the law and clause three of the employment contract).

This judgment reveals the decisive role of the contractual provision: the words (consistent with the will of the parties) and (clause three of the employment contract) mean that the contract itself contained a provision tying its continuation to funding, which satisfies the third condition beyond dispute.

Third: An application against the organisation

In decision 5883/2026 (29/9/2026) the Court of Cassation dismissed the organisation’s appeal and upheld the judgment for the employee, for three reasons:

1. The organisation (did not argue in its statement of defence that the cessation of the project funding was the legal reason for the end of the employment relationship), but raised it only later on appeal, which amounted to (a new defence that was not within the scope of the dispute before the court of first instance).
2. (The mere assertion that funding stopped is not in itself sufficient to establish force majeure unless it is proven that the event was beyond the party’s control, could not be averted or remedied, and made performance genuinely impossible rather than merely onerous or costly).
3. The appellate court found that the organisation (did not follow the procedures required by the legislature where it claims that economic or technical circumstances required terminating employment contracts), and the Court of Cassation held this finding reasonable.

This judgment deserves organisations’ attention for two reasons: it makes the procedural timing of the defence a condition for benefiting from the principle, and its second reason uses a standard of genuine impossibility (not merely onerous), stricter than the (impossible or unusually onerous) standard in the fixed formula — although it was stated in the context of a defence not raised in time.

Table of judgments

Note: the table states the bench as given in the text of each decision; decision 8966/2025 is cited in 1350/2026 together with 7438/2025 and its text was not reviewed.

Part Four: Assessment of the approach and the author’s opinion

Section 1: Merits of the approach

• Realism: an organisation with no source other than the grant cannot pay eleven months’ salary to an employee whose project has stopped, and obliging it to do so may push it into liquidation, so that all employees lose.
• Balance: the Court did not give organisations an absolute exemption but set conditions that protect the employee against pretextual reliance on a funding cut: a body with other resources, or which was at fault, or which did not inform the employee that his contract was tied to funding, cannot benefit from the principle.
• Regard for the nature of the body: decision 1559/2026 distinguished between an employer carrying on commercial activity for profit and a non-operating body providing humanitarian aid and depending on donors — a distinction consistent with the nature of these bodies.
• Clarity: the Court formulated specific conditions on which organisations can build their contracts and procedures, which brings a degree of predictability to the outcome of disputes.

Section 2: Observations on the approach

1. Characterisation as force majeure is not free of difficulty, for force majeure under Article 247 presupposes impossibility of performance, payment of wages is a monetary obligation that is not ordinarily impossible, and the organisation usually still exists. This is why the Court had to broaden the standard to whatever makes continuation (impossible or unusually onerous), even though in the Civil Code the effect of onerousness is to reduce the obligation to a reasonable level under Article 205, not to extinguish it. Decision 5883/2026 then required impossibility that is (genuine, not merely onerous or costly). In our view the more accurate basis is the one indicated by decision 1559/2026: excuse under Articles 826 and 829 of the Civil Code.
2. The third condition is logically at odds with the requirement of unforeseeability, for force majeure is an event that cannot be foreseen, whereas the third condition requires the employee to know that his contract depends on funding — that is, the possibility of a funding cut was within the parties’ contemplation at the time of contracting. The Magistrates’ Courts picked this up when they said that (the first thing such companies foresee is a funding cut). Reconciliation is possible if the principle is understood as a contractual allocation of risk accepted by the employee when contracting, or as an excuse, rather than as force majeure in the strict sense.
3. The effect of Article 829(3) has not been examined, for if the basis of termination is excuse, Article 829(3) makes the party requesting rescission liable for (the harm arising from the rescission to the other party). The judgments have not addressed this provision, nor whether the employee is entitled to compensation for the harm of early termination short of the full-term wages — a middle solution the courts may adopt later.
4. The relationship with Article 31 is not entirely settled, for decision 1559/2026 held that Article 31 is specific to indefinite-term contracts, yet decision 5883/2026 upheld a judgment faulting the organisation for not following (the procedures required by the legislature) for economic circumstances. A fixed-term contract becomes indefinite if the parties continue to perform it after expiry under Article 15(c), a common situation in organisations that renew contracts by late annexes or without written renewal, in which case Article 31 and its procedures apply.
5. Suspension and unpaid leave: some organisations resorted to suspending contracts or unpaid leave instead of termination (3368/2026). Article 50 of the Labour Law regulates temporary stoppage of work with full pay for ten days and then half pay up to sixty days a year, and Article 31 regulates suspension of indefinite-term contracts. The judgments have not yet addressed the lawfulness of suspension outside these two provisions.
6. Partial cuts and reductions, as the phrase (suspension and reduction of funding) appeared in some cases, and the first condition in its original form (sole source of salaries) is hard to meet for multi-donor organisations; the broadening in decision 1350/2026 (employee appointed from the outset against a funded project) mitigates this, but the treatment of a partial reduction that does not stop the project remains open.

Section 3: The author’s opinion

We consider that the Court of Cassation reached an outcome that is fair in substance and that the conditions it set are appropriate, but that the sounder legal basis for this outcome is excuse under Article 826 of the Civil Code, reinforced by Article 21(b) of the Labour Law whenever the employee is appointed for a specific project — not force majeure under Article 247. Excuse requires neither impossibility nor unforeseeability, accommodates the situation of a non-profit body that has lost its only source of wages, and explains the four conditions coherently: the first and fourth establish that the excuse is genuine, the second that it is beyond the party’s control, and the third that the employee accepted this risk when contracting.

We also consider that the argument that a contractual clause tying the contract to funding is void under Article 4(b) of the Labour Law does not hold: Article 4(b) invalidates the waiver of a right granted by law, while the law itself allows the contract to be (for specific work) under the definition of the employment contract in Article 2, and provides for its termination (if the work itself ends) under Article 21(b). Defining the work as a funded project and tying its continuation to the continuation of its funding defines the subject and term of the contract; it is not a waiver of a right. The Court of Cassation moved in this direction when it upheld in decision 4412/2026 a judgment based on clause three of the employment contract.

The principle is therefore settled by the General Assembly decision, but an organisation’s real protection comes not from the principle alone but from an employment contract that expressly refers to the project and the funding, and from an evidence file prepared before the dispute reaches court.

Part Five: Practical implications for organisations

Section 1: When contracting

Most of the conditions are met or lost at the moment of contracting, not at the moment of dispute. We therefore recommend the following:

1. The employment contract must state expressly that the appointment is against a specific project: the project name and number, the donor and the grant period. This satisfies the first condition in its broadened form in decision 1350/2026 (employee appointed from the outset against a funded project).
2. It must also state expressly that the continuation of the contract is tied to the continuation of project funding: and that a funding cut or the donor’s termination of the agreement for reasons beyond the organisation’s control is a ground for ending the contract before its expiry, with a specified notice period. This satisfies the third condition directly, as upheld by the Court of Cassation in decision 4412/2026.
3. Include the same terms in the staff instructions or internal regulations, and obtain the employee’s signature acknowledging them, because the third condition accepts knowledge derived from (the employment contract or staff instructions).
4. Make the contract term no longer than the grant period, and renew the contract by a written annex before it expires, not after. Continuing work after expiry without written renewal turns the contract into an indefinite-term contract from the start of employment under Article 15(c), bringing the organisation within the procedures of Article 31.
5. The contract must also be drawn up in Arabic under Article 15(a); do not rely on a contract or annexes in English only.
6. Payroll records must be separated by project and funding source, and kept with the grant agreements, as they are the evidence for the first condition in a dispute.

Section 2: When funding stops

1. Document the donor’s decision: keep the suspension or termination letter issued by the donor or prime contractor and have it legally translated immediately; the Court of Cassation overturned a judgment because English evidence was not translated (9000/2025).
2. Prepare an evidence file for the four conditions before termination: the organisation’s registration certificate and objects, the grant agreement, records proving that the employee’s salary came from the grant alone, a financial statement proving the absence of alternative resources, and proof that the cut was not caused by the organisation’s breach of the grant terms.
3. The termination decision should be taken by the competent body within the organisation (the board or authorised director), stating the funding cut as its reason, and should not precede the donor’s decision: in decision 4412/2026 the employee argued that notice was sent to him before the funding-cut decision was issued.
4. A written termination letter must be sent to the employee stating the project, the donor, the date of the funding cut and the contractual clause relied on, and his undisputed entitlements must be paid (wages up to the termination date, accrued leave and an experience certificate).
5. For indefinite-term contracts, or contracts that may have become indefinite, notify the Minister of Labour in writing before any measure under Article 31; do not rely only on the rule the Court of Cassation established for fixed-term contracts.
6. If the funding cut is temporary or likely to be reversed, consider a temporary stoppage under Article 50 instead of termination, within its limits.
7. Attempt an amicable settlement: in decision 1559/2026 the organisation offered the employee three months’ wages in return for a release, which she refused. A settlement documented by a valid release closes the dispute, but do not make payment of undisputed rights conditional on it.

Section 3: In litigation

1. The funding cut must be raised in the statement of defence before the court of first instance: and the four conditions set out expressly in it. Raising the defence for the first time on appeal makes it a new defence that will be disregarded (5883/2026).
2. The documentary evidence must be submitted in translation, witness evidence requested on the nature of the work, the project, the source of salaries and the employee’s knowledge, and any refusal by the court recorded, as this is the recurrent ground of reversal in this line of judgments.
3. Rely on General Assembly decision 3211/2026 and the judgments following it, on decision 1559/2026 for the proposition that Article 31 does not govern a fixed-term contract with a non-profit body, and on decision 4412/2026 for the effect of the contractual clause.
4. Watch the time limits for leave to appeal to the Court of Cassation: Magistrates’ judgments upheld on appeal may be challenged before the Court of Cassation only with leave under Article 191(2) of the Civil Procedure Law, and the application must identify the novel or complex point of law. If the claim includes a non-quantifiable request such as an experience certificate, the appeal is admissible without leave (1559/2026).
5. As for the employee: the employee may still dispute whether the conditions are met: that the organisation has other resources covering wages, that his contract was not tied to a specific project, that the termination preceded the donor’s decision, that the cut resulted from the organisation’s default, or that the contract became indefinite so that Article 31 applies. The burden of proving the conditions lies on the organisation, not on him.

Conclusion

First: Findings

1. Jordanian labour law contains no specific provision on employment contracts tied to external funding, so the question is spread between Articles 26(a) and 31 of the Labour Law and the general rules of the Civil Code.
2. The trial courts mostly rejected the funding-cut defence, characterising it as a foreseeable economic circumstance rather than force majeure, and some held a contractual clause tying the contract to funding void.
3. Since decision 7438/2025, and by General Assembly decision 3211/2026, the Court of Cassation has settled that the interruption of funding to a body that depends on it entirely is a justified reason for terminating a fixed-term contract, subject to four conditions whose burden of proof lies on the employer.
4. Decision 1350/2026 broadened the first condition to cover an employee appointed from the outset against a funded project, and decision 1559/2026 held that excuse under Article 826 of the Civil Code is a basis for exemption from the full-term wage and that Article 31 of the Labour Law does not govern a fixed-term contract with a non-profit body.
5. Most Court of Cassation decisions were reversals on evidentiary grounds; decision 4412/2026 upheld a termination based on a contractual clause, and decision 5883/2026 rejected a defence not raised before the court of first instance.
6. In the author’s view the sounder basis for the principle is excuse under Articles 826 and 829 of the Civil Code and Article 21(b) of the Labour Law, not force majeure under Article 247; compensation under Article 829(3), partial funding reductions and the suspension of contracts remain unresolved.

Second: Recommendations

1. For organisations: review employment contracts and staff instructions immediately to include express provisions tying the appointment to the project and the continuation of the contract to funding, prepare an evidence file for the four conditions for each funded project, and raise the defence from the statement of defence onwards in pending claims.
2. For the legislature: add a provision to the Labour Law regulating employment contracts tied to funded projects, specifying the conditions for their termination on a funding cut and the employee’s rights in that case (such as compensation fixed by a number of months), instead of leaving the question to the general rules.
3. For the Ministry of Labour: issue instructions or a guidance manual on terminating and suspending contracts when funding stops in associations and non-profit organisations, clarifying whether Article 31 applies to them.
4. For the Court of Cassation: settle, in the first suitable appeal, the effect of Article 829(3) of the Civil Code on the employee’s right to compensation on termination for excuse, and the treatment of partial funding reductions and the suspension of contracts.

References

First: Legislation

• Labour Law No. (8) of 1996 as amended, Articles (2, 4, 15, 21, 26, 28, 31, 50).
• Jordanian Civil Code No. (43) of 1976, Articles (205, 247, 248, 448, 826, 828, 829).
• Civil Procedure Law No. (24) of 1988 as amended, Articles (191, 202).
• Law on the Formation of Regular Courts No. (17) of 2001 as amended, Article (9).

Second: Judgments of the Jordanian Court of Cassation (civil chamber)

• General Assembly: 3211/2026 (15/7/2026), 34/2015 (14/4/2015).
• Ordinary panels on funding cuts: 7438/2025 (cited), 8966/2025 (cited), 9000/2025, 381/2026, 476/2026, 1115/2026, 1350/2026, 1557/2026, 1559/2026, 3368/2026, 4412/2026, 5835/2026, 5883/2026.
• Other judgments: 6274/2024 (admissibility of cassation appeal without leave where a non-quantifiable request is included).

Third: Trial-court judgments

• Amman Magistrates’ Court: 30966/2025 and 30996/2025 (28/4/2026), 5628/2026 (10/5/2026), 2877/2026 (21/5/2026).
• Amman Court of First Instance sitting as an appellate court: 937/2026 (18/1/2026), 12016/2025 (27/1/2026, insistence decision).
• Source of judgments: the Qarark database; legislative texts from the Legislation and Opinion Bureau.

© 2026 All rights reserved — Hjouj Law Firm. No part of this content may be copied or republished by any means without the firm's prior written permission, except for limited academic quotation with attribution.

This study is a general legal study prepared for knowledge and awareness purposes and does not constitute legal advice on any particular case. The outcome of each dispute depends on its facts, documents, employment contract and applicable instructions. The judgments cited are current as of 24/10/2026.

This content is general information and does not replace advice on the facts of your case and the legislation that applies to it.

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