Employment Contracts: Types, Terms, and Regulations
Contract and Capacity to Treat
An employment contract is an agreement between employer and employee. The employee provides services and adheres to the employer’s organization and direction in exchange for remuneration. The contract is signed by both parties or the company’s legal representative.
Capacity to Sign
Individuals must meet these requirements:
- Be of legal age (18 years old).
- Be 16 or 17 with parental permission. Minors with permission can make employment decisions, including contract termination.
- Be emancipated.
- Exceptionally, be permitted to work under 16 in public performances (theater, television, circus, etc.) with conditions:
- Possess a permit from the Education Authority for each performance.
- The work does not pose a risk to their physical health.
Company as a Party
The following can enter into employment contracts:
- Legal persons (companies).
- Adults or emancipated individuals. Legal representatives can sign for individuals with disabilities.
- Community property.
Contract Form and Validity
Form
Contracts can be written or verbal. Written contracts are generally required, except for:
- Regular permanent, temporary, or full-time contracts for circumstances of production lasting less than four weeks.
Contract Content
Contracts should include:
- Parties’ identities (employer and worker).
- Working time: start date, duration, working hours distribution.
- Workplace: company headquarters and usual work location. Provisions for mobile or varied work locations should be included.
- Job category or a detailed description of the work.
- Salary: initial basic salary, supplements, and payment frequency.
- Holidays: duration, allocation, and distribution.
- Notice periods for contract termination.
- Applicable collective agreement details.
Validity
Employees must sign, indicating agreement. Unfair or fraudulent terms are void and do not negatively affect the worker. Employers must:
- Provide a contract copy to the worker.
- Provide a basic copy to worker representatives for signature.
- Submit a copy and the signed basic copy to the Employment Office within ten working days of contract conclusion, regardless of contract form (written or verbal).
Contract Types
Permanent Contract Promotion
Incentives for companies include reduced Social Security fees when hiring:
- Unemployed individuals registered at the employment office, specifically:
- Young people aged 16-30.
- Individuals over 45.
- People with disabilities.
- Unemployed for at least three months.
- Workers already employed temporarily within the same company.
Form: Always written.
Limitations: Not available to companies with unfair dismissals or collective redundancies within the past six months.
Training Contract
Purpose: Acquire theoretical and practical skills.
Requirements: Age 16-21, no required degree/certificate, no prior experience in the position, limited company size.
Duration: 6 months to 2 years (maximum 3 years collectively). Full-time.
Compensation: Set by collective agreement, not less than minimum wage.
Incentives: 100% bonus on Social Security fees.
Work or Service Contract
Purpose: Specific work or service, autonomous, outside the company’s usual activity, with uncertain but limited duration.
Form: Written, clearly identifying the work/service.
Duration: Until completion, not exceeding three years.
Workday: Full-time or part-time.
Circumstances of Production Contract
Purpose: Address market fluctuations or excess orders within normal business activity (e.g., Christmas season).
Form: Written for contracts exceeding four weeks.
Duration: Maximum six months within a 12-month period (extendable to 18 months via collective agreement).
Workday: Full-time or part-time.
Interim Contract
Purpose: Replace a worker entitled to the job (e.g., on leave) or fill a position during recruitment.
Form: Written, stating the worker and reason for replacement.
Duration: Matches the replaced worker’s leave duration or a maximum of three months for recruitment.
Compensation: None.
Workday: Full-time, part-time only if replacing a part-time worker.
Incentive: Bonus on Social Security fees when replacing workers on maternity/paternity leave, victims of domestic violence, or individuals with disabilities.
Relay Contract
Purpose: Partially replace a retiring worker.
Requirement: Registered as unemployed.
Duration: Indefinite or temporary.
Compensation: 8 days’ wages per year upon termination.
Workday: Matches the substituted worker’s or full-time.
Part-Time Contract
Concept: Fewer working hours than a comparable full-time worker.
Form: Written.
Overtime: Cannot exceed 15% of normal hours, paid as agreed.
Notice: For contracts exceeding one year, at least 15 days’ notice is required for termination.
Compensation: Applicable for temporary contracts (excluding interim and training).
Hiring Through ETT (Temporary Work Agency)
Offer: Indefinite or temporary.
Form: Written.
Termination Compensation: 12 days’ wages.
Worker Rights: Same working conditions (remuneration, working hours, overtime, rest periods).
ETT Duties: Manage salary and Social Security, allocate 1% to training, disciplinary power.
Company Duties: Inform workers of risks, organize work, manage salary.
Additional Contractual Aspects
Probationary Period
A written agreement can establish a probationary period. Either party can terminate without compensation during this time. Workers have the same rights and obligations. Maximum duration is defined by collective agreement or the Workers’ Statute (six months for technicians, two months for others, three months in companies with fewer than 25 employees).
Workday
Daily: Maximum nine hours, unless a different distribution is agreed upon, respecting the 12-hour rest period between shifts.
Weekly: Maximum 40 hours on average, calculated annually. Irregular distribution is allowed, respecting daily and weekly rest periods.
Minors: Maximum eight hours, excluding training time.
Overtime: Voluntary, prohibited for minors at night. Allowed for force majeure, urgent repairs, or raw material loss.
Work Organization
Night Work: Prohibited for minors, specific compensation applies.
Shift Work: Workers successively occupy the same positions.
Work Pace: Adapted to the individual.
Breaks and Holidays
Weekly Rest: Minimum one and a half uninterrupted days (two for minors).
Rest Between Shifts: Minimum 12 hours.
Breaks During Workday: Minimum 15 minutes for shifts exceeding six hours.
Holidays: 30 days paid, non-recoverable, maximum 14 per year (two local). Christmas is a national holiday.
Leave and Permits
Holidays: Paid, non-recoverable, duration agreed upon in contract/agreement, schedule agreed upon two months in advance.
Paid Leave:
- Marriage: 15 days
- Prenatal tests: As required
- Birth/death: 2 days (4 with travel)
- Residence change: 1 day
- Public duty: As legally required
- Union/representative duties: As legally defined
- Family reasons, exams, training, etc.
Work-Life Balance Measures
Flexible Workday: Adapt working hours as per collective agreement or individual agreement.
Reduced Workday:
- Nursing a child under nine months
- Premature births or hospitalized newborns
- Victims of gender violence
Reduction from one-eighth to one-half of normal working hours, with proportional wage reduction.
Flexible Vacation: Enjoyed at a different date, even outside the corresponding calendar year, if coinciding with maternity/paternity leave.
Flexibility Measures
- Contract Flexibility: Varying worker numbers using temporary contracts, ETTs, or discontinuous permanent contracts.
- Work Time Flexibility: Part-time, flexible hours, annualized hours, overtime, shift work.
- Working Life Flexibility: Early retirement programs, incentivized leave, worker relocation.
- Wage Flexibility: Adapting pay to productivity.
- Functional Flexibility: Job rotation.
- Geographical Flexibility: Transfer to another workplace.