Employment Contracts: A Comprehensive Guide
Employment Contract: An Overview
An employment contract is an agreement between an employer and an employee. It outlines the terms and conditions of the employment relationship. The employer agrees to provide compensation for the employee’s services. The Workers’ Statute (TRLET) defines it as an agreement where a worker provides services on another’s account.
4.1 Capacity to Contract
Both the employer and the employee must have the legal capacity to enter into a contract. For employees, this generally means being over 18 years old. Exceptions include emancipated minors, individuals over 16 with parental/guardian permission, and those subject to foreign laws. While the official entry into the labor market is at 16, those under 18 are prohibited from night work, hazardous jobs, and overtime. Exceptions exist for public entertainment (e.g., advertising) with proper authorization, provided the work isn’t detrimental to their health or training.
Employers can be individuals or legal entities. Legal entities acquire capacity through registration in the Commercial Register. Individuals gain capacity upon reaching legal age (18), with exceptions for emancipated minors and those with authorized representatives.
4.2 Elements of an Employment Contract
The Civil Code outlines three essential elements for any contract:
- Consent: Both parties must agree freely, without coercion.
- Object: The subject of the contract. For the employer, it’s the employee’s skills and work; for the employee, it’s the compensation.
- Cause: The reason for the contract. For the employer, it’s production; for the employee, it’s earning a living.
4.3 Form and Content
Contracts can be oral or written. Either party can request a written version. Certain contracts are legally required to be in writing, including: internships, permanent contracts, part-time contracts, work-from-home contracts, contracts for work or service, contracts for Spanish multinationals sending workers abroad, and any fixed-term contract exceeding four weeks.
4.3.1 Minimum Content
Contracts should include: location, date, names of parties, job title and description, workplace location, working hours (including breaks, rest days, and night work), contract duration and start date, probationary period, remuneration (including base salary and any additions), vacation time, notice period, applicable collective agreement, and signatures.
4.3.2 Clauses
Companies increasingly use clauses to specify additional conditions, such as confidentiality, performance metrics, and full-time status. Breach of these clauses can have consequences.
4.4 The Trial Period
The trial period allows both parties to assess the suitability of the employment relationship. Its duration is typically defined by the collective agreement or by law.
4.4.1 Duration
The TRLET sets a general trial period of two months for qualified technicians and six months for other employees. For companies with fewer than 25 workers, this can be extended to three months for non-qualified workers. For internships, the maximum is one month for graduates and two months for those with vocational training.
4.4.2 Rights
Workers on trial have the same rights as other employees, including social security coverage. Trial periods are prohibited if the worker has previously held the same position in the company. Either party can terminate the contract during the trial period without penalty.
4.5 Contract Duration
Contracts are broadly classified as temporary or indefinite.
A) Temporary Contracts: These have a defined start and end date. Spanish law recognizes three types:
- Contract for work or service: Covers specific projects or services.
- Contract for circumstantial production: Addresses exceptional increases in demand.
- Interim contract: Replaces an absent worker or fills a temporary vacancy.
B) Indefinite Contracts: These have no fixed end date. They can be:
- Ordinary/Work and service contracts.
- Specific indefinite contracts: These include contracts for young people, unemployed women, long-term unemployed individuals, those over 45, disabled individuals, and conversions from temporary contracts.
If a verbal contract is proven in court, it’s assumed to be a permanent contract. The same applies if a written contract isn’t registered with Social Security within 15 days.
4.6 Rights and Obligations
A) Worker’s Rights:
- Free choice of work
- Unionization
- Collective bargaining
- Strike action
- Workplace safety
- Respect for dignity and privacy
- Timely payment of wages
- Protection from discrimination
B) Worker’s Obligations:
- Good faith and diligence
- Compliance with health and safety measures
- Following employer’s instructions
- Contributing to productivity
- Non-competition (within reasonable limits)
- Fulfilling contract obligations
4.7 Excluded Activities
Certain activities fall outside standard labor law, including:
- Public officials
- Compulsory social services
- General managers and advisors of corporations
- Works of friendship or neighborly assistance
- Family support work
- Intermediaries and commission-based roles
4.8 Special Labor Relations
These activities have unique regulations that differ from standard labor law:
- CEOs
- Professional athletes
- Inmates in penal institutions
- Public performers
- Freelancers and commercial agents
- Employees of disability centers
- Dockworkers
- Employed lawyers
- Domestic workers