Employment contract or not?

To be qualified as an employment contract and, therefore, benefit from specific protection rules governing these types of contracts, an agreement has to contain four essential 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).

Conclusion and validity

 

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 of a remuneration. The objective circumstances of the situation are determinant.

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.

As soon as the negotiations open, the employee is already protected by some specific rules. Indeed, the person in charge of the recruitment is not, in principle, allowed to ask questions not directly linked to the professional activity at stake or about the candidate’s private life. Therefore, the candidate has, at that moment, the right to lie without fearing any reprisal (such as an eventual dismissal based on the lies retrospectively said during the interview).

Employment contract rules, in opposition to those governing other types of contracts, require a “personal performance” from the employee. This means that, in case the person is prevented from working, he/she has no duty to find a replacement person that would be able to execute the said performance. This protection can be waived through a mutual agreement between the parties.

In principle, parties are free to determine what will be covered by the contract (eg. what will be the employee’s tasks). Nevertheless, the law provides some protection against “over-commitments, when the concluded obligations significantly limit the economic freedom of one contracting party.

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 information, 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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