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The employment relationship
Country specific laws
What laws and regulations govern the employment relationship?
At present, the General Labour Law is the main statute that governs all aspects of employment relationships. There is also other derivative legislation on various lateral aspects of employment relationships.
The recruitment and hiring of foreign non-resident employees is subject to the following specific legislation:
- Regulations on the Hiring of Foreign Non-Resident Employees (Presidential Decree 43/17, as amended by Presidential Decree 79/17);
- the Visa Law (2/07); and
- the Visa Law Regulations (Presidential Decree 108/11 of 25 May 2011).
Collective labour law is governed by the following statutes:
- the Trade Union Law (21-C/92);
- the Law on the Right to Collective Bargaining (20-A/92); and
- the Strike Law (23/91).
Who do these cover, including categories of worker?
The General Labour Law applies to all categories of employee apart from:
- employees hired on a permanent basis by the diplomatic or consular representatives of other countries or at the service of international organisations who perform their activities within the scope of the Vienna Convention;
- members of cooperatives and non-governmental organisations whose employment is regulated by the organisation’s articles of association or, if there are none, by the Commercial Law;
- family employees;
- occasional employees;
- consultants and members of the administration or directorship bodies of companies or social organisations provided that they carry out only tasks that are inherent to such positions without any subordination pursuant to an employment contract; and
- public servants or employees who perform their professional activity within public, central or local administrations, a public institution or in another government agency.
Foreign non-resident employees are subject to specific statutes; however, the General Labour Law applies to them on a complementary basis.
Are there specific rules regarding employee/contractor classification?
Article 3.3 of the General Labour Law defines an ‘employment contract’ as:
a contract whereby an employee undertakes to make available his professional activity to an employer’s benefit, within its relevant organization and under its guidance and authority, in consideration for remuneration.
Article 3.27 defines ‘employee’ as follows:
Any natural person, national or foreign resident, who freely undertakes to make his professional activity available to an employer, in consideration for remuneration, within the employer’s organization and under its authority and guidance.
Under Article 1154 of the Civil Code, a ‘services agreement’ is the “agreement whereby one of the parties undertakes to make available the result of his/her intellectual or manual work, with or without pay”.
Must an employment contract be in writing?
No. However, certain types of employment contract (eg, fixed-term and training contracts) must be in writing.
Are any terms implied into employment contracts?
Yes. For example, employment contracts for an unlimited term are always subject to an implied probation period of 60 days.
Are mandatory arbitration/dispute resolution agreements enforceable?
Under the General Labour Law, agreements to arbitrate are valid and enforceable. However, all arbitration proceedings are subject to the procedural rules set out by the law. Conciliation and mediation proceedings are also possible before the General Inspectorate of Labour Services and the public attorney’s office.
How can employers make changes to existing employment agreements?
In general, employers can make unilateral amendments to existing employment agreements if this prerogative has not been expressly excluded by the employment contract or a legal provision. The General Labour Law grants employers broader prerogatives to vary certain aspects of the employment relationship unilaterally (eg, workplace and working hours).
Is a distinction drawn between local and foreign workers?
Yes. National and foreign resident employees (ie, foreign citizens holding a residency permit) are subject to the same rules on recruitment, hiring and termination as set out by the General Labour Law. Foreign non-resident employees (ie, foreign citizens holding a work visa) may be hired only on a fixed-term basis and are subject to recruitment and hiring requirements, plus specific immigration restrictions.