5 requirements for an employment contract: What are they and what are the types?

The employment contract is the legal basis that formalizes the relationship between employer and employee, establishing rights and obligations for both parties. In Brazil, this relationship is primarily regulated by the Consolidation of Labor Laws (CLT) and complementary legislation. Understanding the essential requirements for the validity of an employment contract, as well as the different types that exist, is crucial for both employers and employees.

In this text, I will explain in detail the three basic requirements for the existence of an employment contract, the five requirements that characterize an employment relationship, and the various types of contracts provided for in Brazilian law.

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What are the three requirements for an employment contract?

Before discussing the employment relationship itself, it is important to highlight the three essential requirements for the validity of any contract, including employment:

• Capable parties: the employment contract must be signed between people who have legal capacity, that is, who can exercise rights and incur obligations. In the case of an employee, full capacity occurs at age 18, but the law allows work from age 16 (or from 14, as an apprentice);
• Lawful, possible, and determined purpose: the contract must have as its objective an activity that is not prohibited by law, that can be performed, and that is clearly defined;
• Form prescribed or not defended by law: this means that the contract must comply with the form required by law. In the case of an employment contract, the CLT allows it to be concluded verbally or in writing, depending on the type.

With these three requirements met, the employment contract is considered valid from a legal perspective. However, to establish an employment relationship (which generates rights provided for in the CLT), it is necessary to comply with five more specific requirements, which we will address below.

What are the 5 requirements of an employment relationship?

An employment relationship is a specific legal bond, which is only characterized by the presence of five fundamental elements, provided for in the Consolidation of Labor Laws (CLT) and recognized by Brazilian labor law. These are:

Non-eventuality

The provision of services must be habitual and continuous. This means that the worker performs their activities frequently, within a defined working day, and not sporadically.

For example, a professional who works every week for the same employer is considered non-eventual, while someone who provides services only once, in isolation, does not meet this requirement.

Subordination

This refers to the worker’s subjection to the employer’s orders, guidelines, and commands. The employer determines how, when, and where the service will be performed, establishing rules and controlling the work activity.

Subordination is manifested by the existence of a hierarchy and disciplinary power. Self-employed professionals, for example, are not subordinates because they perform their duties independently.

Onerousness

Work must be provided for remuneration. That is, the worker provides services and, in return, receives a salary or other previously stipulated form of payment.

If there is no payment, there is no employment relationship, and it may be considered, at most, voluntary work, which must meet the specific requirements of Law No. 9.608/1998.

Personality

The employment contract involves an individual who personally provides the service. This means that the employee cannot arrange for another person to replace him or herself without the employer’s consent.

Personality is a characteristic that distinguishes the employment relationship from other forms of service provision, such as contracts with legal entities.

Alterity

This requirement means that the risks of the economic activity are assumed by the employer. The employee is not liable for any losses arising from the performance of his or her work, except in cases of willful misconduct or gross negligence.

Alterity reflects the principle that the employer bears the risks of the business, including those related to maintaining the employment relationship.

What are the types of employment contracts?

Brazilian law provides for different types of employment contracts, adapted to various situations and market needs. Below, we explain the main ones:

Indefinite-Term Employment Contract

This is the most common type and is recommended by the Consolidation of Labor Laws (CLT). There is no set end date for the contract, and it can be terminated only at the will of the parties or for reasons established by law.

This model guarantees greater stability and access to all labor rights provided for in the Consolidation of Labor Laws (CLT).

Fixed-Term Employment Contract

In this case, the contract has a start and end date. It can only be used in specific situations, such as:

• Services whose nature or transience justifies a predetermined term;
• Temporary business activities;
• Hiring an employee on a probationary period.

The maximum term is two years and can be renewed only once.

Temporary Employment Contract

Governed by Law No. 6,019/1974, it is executed through a temporary employment agency. It serves to replace regular staff or meet exceptional service requirements.

The duration is limited to 180 days, extendable for an additional 90.

Casual Employment Contract

This occurs when a person provides sporadic services, without regularity and without direct subordination. There is no employment relationship or obligation of continuity.

An example is freelancers or workers hired for specific events.

Intermittent Employment Contract

Introduced by the Labor Reform (Law No. 13,467/2017), it allows the worker to be called to work only during specific periods, receiving payment proportionally for the days or hours worked.

The employer must call the worker at least three days in advance.

Part-time employment contract

Regulated by the Labor Code (CLT), this contract is intended for employees whose workweek does not exceed 30 hours without the possibility of overtime, or 26 hours with up to 6 hours of overtime per week.

It is widely used in businesses and service sectors.

Does an employment contract replace a formal employment contract?

No. An employment contract is an instrument that defines the terms of the employment relationship between the parties. Recording this information in the Employment and Social Security Card (CTPS) is a legal obligation of the employer.

According to Article 29 of the Consolidation of Labor Laws (CLT), the company has up to five business days to record this information in the CTPS after hiring. An employment contract may be verbal or written, but failure to record this information in the card constitutes a violation and gives the employee the right to seek judicial recognition of the employment relationship.

What types of employment contracts do not create an employment relationship?

Some service contracts do not constitute an employment relationship, precisely because they do not meet the five requirements of an employment relationship. These include:

• Independent service contract: when the professional works independently and without subordination;
• Legal entity contract: when the employee is a partner in a company and provides services as a legal entity;
• Voluntary work: if the contract is non-profit and formalized in accordance with specific legislation.

What constitutes an employment relationship?

The absence of any of the five essential requirements constitutes an employment relationship. Situations such as:

• Provision of sporadic, non-regular services;
• Work without hierarchical subordination;
• Work performed without pay;
• Possibility of replacement by another person (without personal relationship);
• Assumption of risks by the employee, instead of the employer.

When these elements are absent, there is no employment relationship, but rather another legal relationship, such as the provision of services or a commercial partnership.

Conclusion

The employment contract is a fundamental instrument for establishing legal security in professional relationships, guaranteeing rights and obligations for both parties. Understanding the three requirements for the validity of any contract, the five elements of the employment relationship, and the different modalities provided for in the Consolidation of Labor Laws (CLT) is essential for employers, employees, and legal professionals.

Each type of contract has its own specificities regarding term, compensation, rights, and formalities. Furthermore, it is important to differentiate between situations that constitute an employment relationship and those that do not.

The proper formalization and management of employment contracts contributes to harmonious labor relations and the prevention of legal disputes, in addition to ensuring labor rights under Brazilian law.

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