Defining Employee Status: Key Conditions & Contract Types
The 5 Core Conditions of an Employee
- Dependent Work: The worker is subject to the employer’s directives and instructions. This dependency is specific to the employer’s orders and not merely a general reliance on wage labor.
- Productive Work: The worker is compensated for their labor.
- Free Labor: The employment relationship is established through a mutual agreement (contract).
- Personal Work: The employee must personally perform the job and cannot be substituted by another person.
- Work on Behalf of Others: The output of the worker’s labor benefits the company, and the worker does not typically bear the company’s business risks.
Exclusions and Special Considerations in Employment Status
A. Family Relationships (Family Policy)
An individual has the same degree of relationship with a relative by affinity (e.g., in-laws) as their spouse has with that relative by consanguinity. The law generally considers such family members autonomous if they meet certain conditions (not specified here, but implied to be the inverse of employee conditions), as this is often the case. However, if, in a particular situation, they function as employees and this can be demonstrated to the relevant administrative bodies, they can be registered as such.
B. Public Officials
The law generally does not classify public officials as employees because they often lack the conditions of dependence on a specific employer and working on behalf of others in a commercial sense. This is because each official typically represents the governmental body itself and may not have a direct superior or subordinates in the same hierarchical structure as a private-sector employee.
When Might Officials Be Considered Employees?
There is no single, universally valid criterion. However, factors considered can include the nature of the work (e.g., manual versus intellectual tasks), whether it involves the direct provision of public services, and the temporary or permanent nature of the engagement.
C. Work Performed Out of Friendship, Benevolence, or Good Neighborliness
This category includes unpaid work, such as volunteering, which inherently lacks the element of productive work (i.e., work for remuneration). It also covers sporadic activities undertaken without any formal obligation or expectation of payment.
D. Compulsory Work
In situations involving compulsory work, the condition of free labor (work based on voluntary agreement) is absent. For example, in municipalities with up to 10,000 inhabitants, residents might be compelled to perform certain tasks during a disaster (e.g., emergency repairs to public utilities or infrastructure) without payment.
E. Counselors or Members of Company Governing Bodies
Individuals serving as counselors or members of a company’s governing body (e.g., board of directors) act as legal representatives of the company, binding it with their signatures. If these roles are uncompensated, they are generally not considered employment. However, in practice, individuals often combine such directorial duties with responsibilities corresponding to those of a senior manager, receiving a fee or salary. In such cases, they may be classified as employees for the managerial portion of their work.
F. Trade Representatives (Commission-Based)
This refers to trade representatives whose compensation is directly tied to the operations they carry out. These are often independent traders who buy products and resell them, potentially after adding value, at a higher price. If a trade representative’s agreement with an establishment means they bear the risk of unsold goods or returns (implying financial risk and dependence on the principal’s terms), they might be considered an employee. Conversely, if they operate with full autonomy, absorbing their own profits and losses, they are likely autonomous.
G. Other Cases Not Meeting the Core Conditions
Any other work arrangement that does not satisfy the five fundamental conditions defining an employee would typically fall outside the scope of standard employment.
Working Relationships with Specific Features
Practical Training Employment Contract
This contract aims for a worker, who already possesses theoretical knowledge, to acquire practical working experience in their field.
Training Employment Contract (Apprenticeship)
This contract is designed for the worker to learn specific job skills and gain vocational experience, often combining on-the-job training with theoretical instruction.
Part-Time Work Contract
The worker performs duties for fewer hours per day, week, month, or year than is standard for the activity or full-time employees in comparable roles. A specific variation is partial retirement: a worker aged at least 61 years, meeting all legal requirements to collect a retirement pension, can agree with their employer to reduce their working hours by at least 25% and no more than 75%, transitioning into full retirement.
Relief Contract
A company can utilize this contract type, for instance, in conjunction with an employee taking partial retirement. The company may hire an unemployed worker (the relief worker) to cover the portion of the workday or duties vacated by the partially retired employee. This is often subject to specific legal frameworks.
Group Work Contract
A single contract is established to hire a collective group of workers. A group leader (or chief) is appointed from among them to represent the group, exercising the rights and fulfilling the duties derived from the contract. This includes the collection of the total salary, which the leader is then responsible for distributing among the group members (this arrangement is sometimes known as a ‘Colla’ in certain contexts).
Work-from-Home Contract (Remote Work)
Under this contract, work is performed at the worker’s home or another location chosen by the worker, rather than at the employer’s premises. The arrangement is still subject to company oversight, particularly regarding data security, performance, and other terms of employment.
Special Industrial Relations
Certain categories of workers or employment situations are governed by special industrial relations regulations due to their unique nature. These include, but are not limited to:
- Senior management personnel
- Domestic employees
- Professional athletes
- Public entertainers and artists
- Dock workers (port labor)
- Disabled individuals employed in special employment centers
- Sales representatives who are not consistently held responsible for the financial outcomes of their operations (e.g., those on a fixed salary plus minimal commission not tied to risk)
- And others as defined by specific legislation.