What is an employment contract?
Individual employment contracts are those in which a natural person undertakes to provide personal services to another natural or legal person (Companies), submitting to comply with the orders and indications that in this case the employer may indicate.
The labor law allows that the same employee may enter into employment contracts with two (2) or more employers, unless he/she has signed a contract of exclusivity in favor of one of them. Article 22 of the Labor Code in force.
Employment contracts are of utmost importance for both the employee and the employer, since they establish the date on which the employment relationship begins, the activity or activities to be performed, the timetable(s) in which these activities will be carried out and the salary to be earned by the employee.
The requirements that a written employment contract must contain are set forth in Article 37 of the Labor Code in force.
Article 20 of the Labor Code, for an employment contract to exist, these three (3) essential elements must be present:
- The employee's personal activity, i.e., that the work activity is performed by the contracted person in accordance with the agreed conditions, in time, place and manner.
- To remain under the continuous subordination of the employer, as mentioned above, at the time of signing the employment contract, workers are obliged to be under the orders and at the disposal of the employer under the terms established in the employment contract, as well as to respect the policies and guidelines established by the employer.
- A salary as remuneration for the labor activity performed, the employer is obliged to pay a salary either on a biweekly or monthly basis to the employee for the activity performed, which is indicated and accepted by the employee at the time of hiring.
Having proven the existence of these three elements, personal activity of the worker, subordination and a salary payment, we can determine the existence of an employment relationship either by means of a verbal or written employment contract.
¿Can the individual employment contract be?
- Indefinite-term: Indefinite-term contracts are those that have a start date, but no termination date.
- Time-limited: In this type of contract, unlike the previous one, a start date and an end date are established, since it is foreseen that it will be a one-time activity and will not be performed on a permanent basis.
- These contracts, unlike the two previous ones, establish a start date, but do not establish a termination date, as this is uncertain. This type of contract ends once the work or service that gave rise to the contract is completed and will not end until the work or service is fully completed under the previously agreed conditions.
It is of utmost importance to know that employment contracts, which due to the nature of the activity are performed on a permanent or continuous basis in the company, it will be understood that the contract is indefinite, even if it is expressed in them that it is for a limited period of time.
Trial Period
What is the Trial Period?
It is a period of time of 60 days starting from the moment the contract is signed, on the one hand this time will serve the employer to evaluate the performance and skills of the worker that if they do not meet the expectations, this can terminate the employment contract without liability on his part, on the other hand the worker in this trial period can evaluate the conditions and demands of the job and likewise if these do not meet their expectations may terminate the employment contract.
This trial period is remunerated from the day on which the employment relationship begins. If after two months neither party expresses its will to terminate the employment contract, it will continue with the conditions previously agreed upon.
Probationary Period, Articles 49 and 50 of the Labor Code in force.
Termination of Employment Contracts
Can Employment Contracts be terminated?
Indeed, all employment contracts can be terminated, either by the employee or by the employer.
At the same time, the time-limited contract may be terminated in advance of the agreed date.
How can these employment contracts be terminated?
There are two ways to terminate employment contracts:
- Bilaterally: In this case both parties both the worker and the employer agree to terminate the individual employment contract that unites them, agreeing to pay one hundred percent (100%) of the Labor Benefits and Indemnities or a lower percentage thereof.
- Unilaterally: In this case only one of the parties terminates the individual employment contract.
Article 111 of the Labor Code in force, The following are causes for termination of employment contracts
In the case of workers, they may terminate their employment contract in accordance with the provisions of Article 114 of the Labor Code in force, enjoying the payment of the totality of their Labor Benefits and Indemnities.
At the same time, employees may terminate their employment contract by submitting a resignation, in which case they will only receive the payment of the Acquired Rights (Thirteenth and Fourteenth proportional month and proportional Vacation).
As for the employer, they may terminate an employment contract in accordance with the provisions of Article 112 of the Labor Code in force, being these Just Causes to terminate them without any liability, other than the payment of the Acquired Rights (Thirteenth and Fourteenth proportional month and proportional Vacations).
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