Key Clauses and Terms in Employment Contracts

Tacit Clauses in Employment Contracts

When parties contract repeatedly over time, establishing and complying with obligations not explicitly reflected in the written agreement, or when situations arise that were not originally contemplated, we encounter what is known as a tacit clause. The repetition of actions demonstrates the parties' mutual intention and establishes the content of their relationship regarding matters not expressly agreed upon. Thus, through tacit agreement, the employment contract is supplemented in aspects not originally specified.

Essential Employment Contract Clauses

An employment contract should typically include the following clauses:

1. Date and Place of Contract

   The place is important as it usually indicates where services should be performed, unless the contract specifies otherwise. The date indicates when the contract is considered effective, marking the commencement of labor rights, unless stipulated differently.

2. Identification of the Parties

   This includes the worker's nationality, date of birth, and start date (date of entry).

   • Nationality is relevant, for example, in jurisdictions like Chile where at least 85% of workers serving an employer must be Chilean nationals (unless the employer has 25 or fewer workers).
   • The birth date verifies the worker's age and determines if authorization is needed for underage workers.

3. Remuneration Details

   The amount, form, and frequency (period) of payment for the agreed remuneration must be specified.

4. Working Hours

   The duration and distribution of the working hours.

5. Contract Term

   There are several possibilities regarding the contract's duration:

   1. Indefinite Term: This is often the default. There is no predetermined end date, and the contract continues until a valid cause for termination arises.
   2. Fixed-Term Contract: This contract has a specific end date.
      • It may typically be renewed once; a second renewal often converts it into an indefinite contract.
      • The duration of a single fixed-term contract generally cannot exceed one year.
      • If a worker continues working with the employer's knowledge after the fixed term expires, the contract is usually deemed renewed indefinitely.
   3. Contract for a Specific Project or Service: The contract's duration is linked to the completion of a particular task or service.

   Note: In some jurisdictions, if a worker provides distinct services under more than two fixed-term contracts totaling 12 months or more within a 15-month period (from the first hiring date), it may be legally presumed they have been hired indefinitely.

6. Other Agreed-Upon Covenants

   Any other agreements the parties decide to include. For example: additional benefits for the worker.