Essential Requirements and Special Clauses in Labor Contracts

Posted on Nov 16, 2025 in Law & Jurisprudence

Labor Contract Conditions and Requirements

Essential Requirements for a Labor Contract

  1. Consent: The external manifestation of the parties must match their internal will. This consent may be vitiated, which can cancel the contract. Causes for vitiated consent include:
    • Error: (In the person or their characteristics; this is the most relevant cause.)
    • Violence and Intimidation
    • Fraud
  2. Object: The contract must have an object that is lawful and defined.
  3. Cause: The cause must exist and must be lawful.

    Example: Simulating a service contract or payment when the true intent is to purchase pensions. If the object or cause is illegal or based purely on profit, the contract is void.

Special Conditions in the Labor Contract

2.1. The Trial Period

This is the time during which the employer observes the professional training of the worker and assesses their suitability for the job. Collective agreements may modify its duration.

Trial Period Requirements:

  • The employer may terminate the contract during this period without needing to state a cause.
  • Absences (non-suspended leave) do not interrupt this period unless agreed upon by the parties.
  • Generic maximum durations are typically:
    • 15 days for manual workers.
    • Two months for mid-level graduates.
    • Six months for university graduates.
  • The trial period counts towards seniority from the start, granting the worker the same rights as any other person in their category.
  • If a worker has not exceeded two consecutive trial periods in the same category and same job, termination during this period does not qualify for unemployment benefits (INEM).

2.2. Contractual Clauses

2.2.1. Confidentiality and Trade Secrets Clause

The employee agrees not to disclose, both during and after the employment contract, information related to industrial design, trade secrets, drawings, patents, or projects. This clause is always accompanied by a penalty clause, allowing the employer to claim compensation for damages and penalties. The employer must prove the worker’s breach and the resulting damage.

2.2.2. Post-Contract Non-Competition Clause

This clause mandates continued loyalty after the contract ends, preventing the worker from engaging in the same activity (Art. 21 of the Workers’ Statute).

Requirements:

  • Limited to a maximum of two years.
  • Fixed compensation must be established for that period (fixed amount or related to wages).
  • The company must demonstrate a genuine industrial or commercial interest in the agreement.

This clause is bilateral: the employer must assess its value, and the employee must understand the exposure. If the employer creates uncertainty to gain the upper hand, that part of the clause is illicit. If the dismissal is proven to be unfair, this clause does not have to be met (Principle of Labor Law).

2.2.3. Training Repayment Clause (Permanence Pact)

A worker might receive high-cost training and then immediately terminate their contract. To prevent this, upon termination, the worker may have to repay all or part of the training costs. The legality of this clause is subject to judicial review.

2.2.4. Objective-Based Termination Clause

This clause allows parties to agree to termination without compensation if objectives are breached (often related to market conditions). Once objectives are signed, if the employer wishes to change them, they may only terminate the contract to extinguish the clause. The objectives must be agreed upon by both parties.

This clause is permitted, despite potential legal scrutiny, provided that:

  1. The provision of services is based on objectives.
  2. Objectives are agreed upon by both parties and are explicitly stated in the contract.
  3. Both parties agree to termination without compensation for non-fulfillment.

3. Form and Formalities of the Contract

The principle of freedom of form is highly nuanced. Many contracts must be in writing, especially if requested by either party. Failure to comply with formal requirements often results in temporary contracts being deemed permanent, particularly if the trial period has concluded. This formality requirement is also crucial for fixed-term contracts unless the temporality can be proven otherwise.