EMPLOYMENT LAW
THE WORK CONTRACT: LEGAL AND FORMAL REQUIREMENTS
For an agreement to qualify as an employment contract and thus benefit from the specific protective regulations that govern these types of contracts, it must include four crucial elements:
A physical, manual or intellectual work performance (without any obligation to achieve a given result);
A superior – subordinate relationship, based on three elements: a personal one (in terms of hierarchy; this criteria has to be assessed less strictly when it comes to liberal professions), an organizational one (the fact that the employer makes available working tools for the employee), a time related one (the fact that the employee devotes his time to work). An economic dependency often reflects such a relationship;
A remuneration (as long as the principle of a remuneration is mentioned within the contract, the amount itself doesn’t have to be precisely fixed);
A period (fixed or undetermined).
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In principle, an employment contract may be concluded in writing, verbally or even tacitly (ie. inferred from the parties’ conduct). However, some contracts, such as apprenticeship or mobile salesperson for instance, must be in writing in order to be valid.
An employment contract is deemed to be concluded when parties mutually agreed to do so (art. 1 CO). However, such a contract might also be concluded as soon as the employer accepts (even only tacitly), for a given period, a work performance that can only be provided in exchange for remuneration. The objective circumstances of the situation are determinative.
For example, the Federal Court admitted such a contract in a case where a person (who did not hold a valid work permit) provided a work performance for a pharmacist. Even if the latter denied the existence of a contractual relationship, the Court underlined the following principle: the existence of an employment contract is irrefutable when it can be deducted from the circumstances that the work performance was mainly provided in order to receive a salary (TF 4A_398/2014, November 21st 2014).
However, when it comes to a job performed within the spouse/partner’s company, such a “factual contract” tends not to be recognized by the Courts.
Few specific protecting rules
As an employer, it is essential to be aware of the rules that protect both you and potential employees during negotiations. The person conducting the recruitment process cannot inquire about matters unrelated to the professional role or the candidate’s personal life. This allows candidates to withhold information or even lie without facing consequences.
In terms of employment contracts, there is a requirement for personal performance from the employee, meaning they are not obliged to find a replacement if unable to work. However, this requirement can be waived through mutual agreement.
While parties have the freedom to determine contract terms, the law protects against commitments that excessively constrain one party’s economic freedom. Employers should carefully review contract terms to avoid over-committing and potentially harming the business.
Illegal work: conditions and abuses
It’s important for the employer to verify the regularization of his/her employees as soon as he/she hires them.
Indeed, if the employer intentionally hires a foreigner who doesn’t possess any valid permit, he/she could be sanctioned with an important fine or with a prison term up to 3 years combined with a fine (art. 117 LEI).
The employer shall also be transparent with authorities and not, for instance, provide fake information in order to obtain a permit for his/her employees. In case of non compliance with this principle, criminal penalties undoubtedly will be pronounced against the employer (art. 118 LEI).
The law governing illegal work also allows specific authorities to evaluate the employment situation in each and every enterprise.
To do so, authorities can penetrate companies’ offices during business-hours, request the employer and the employees specific informations, consult certain documents, control workers’ identities and permits.
The employer isn’t allowed to prevent them to do so, otherwise a fine can be issued against him/her.
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