In our quest to understand the intricacies of employment contracts in various jurisdictions, we reached out to professionals across the globe. Our member from Portugal, João Paulo Menezes Falcão and José Lourenço Gonçalves from MF & AC Advogados, offered valuable insights into the typical elements that should be included in an employment contract to safeguard the interests of both employees and employers.

According to Portuguese law, the employment contract is, in principle, a consensual contract and, as a rule, no special form is required, namely being drawn up a private written document.

Although the rule is that the employment contract has no form, there are numerous exceptions to this principle, which means that the absence of form only applies when the employment contract is concluded under the traditional paradigm, i.e. for an indefinite period of time and on a full-time basis. All other models are subject to a written form. It can therefore be concluded that, as a rule, the special (written) form is required to “legitimize” an agreement that strays from the common regime. Examples of this are the employment promise contract, fixed-term employment contract, part-time employment contract, intermittent employment contract, etc.

In any case, regardless of the legal framework mentioned above, the truth is that parties traditionally put their employment contracts in writing, either under the so-called normal paradigm, or due to the legal obligation of some exceptional regime, as mentioned above.

It is therefore important to analyze what kind of clauses are traditionally stipulated in employment contracts.

Therefore, it should be noted that parties are obliged to a reciprocal duty of information, namely: the employee must inform the employer of aspects relevant to the provision of work and the employer must provide the employee with at least the following information:

a) Their respective identification, namely, if they are a company, the existence of a corporate coalition, reciprocal holdings, control or group, as well as their registered office or domicile;

b) The place of work or, if there is no fixed or predominant place, an indication that the work is to be carried out in several locations;

c) The employee’s category or a summary description of the corresponding duties;

d) The dates on which the contract was concluded and on which its effects begin;

e) The stipulated term or foreseeable duration of the contract, in the case of fixed-term or uncertain-term contracts, respectively;

f) The duration of vacations or the criteria for their determination;

g) The notice periods and the formal requirements to be met by the employer and the employee in order to terminate the contract, or the criteria for their determination;

h) The amount, frequency and method of payment of remuneration, including a breakdown of its constituent elements;

i) The normal daily and weekly working period, specifying the cases in which it is defined in average terms, as well as the applicable regime in the case of overtime and shift work;

j) The number of the work accident insurance policy and identification of the insurance company;

k) The applicable collective bargaining agreement, if any, and the names of the respective signatories;

l) The identification of the Labor Compensation Guarantee Fund (FGCT), provided for in specific legislation;

m) In the case of a temporary worker, identification of the user;

n) The duration and conditions of the trial period, if applicable;

o) The individual right to continuous training;

p) Social protection schemes, including benefits that complement or replace those provided by the general social security scheme;

q) The parameters, criteria, rules and instructions on which algorithms or other artificial intelligence systems that affect decision-making on access to and maintenance of employment, as well as working conditions, including profiling and monitoring of professional activity, are based.

Thus, when reduced to writing, the duty to provide the aforementioned information is deemed as having been fulfilled, provided that the information is contained in a written clause. It can therefore be said that one of the clauses traditionally included in employment contracts to safeguard the interests of the parties is the clause that fulfills the duty to provide the aforementioned information.

Finally, the clauses traditionally included in employment contracts to safeguard and regulate the interests of the parties are as follows: 

a) Contracted duties (which describe the tasks that the employee must carry out and which, as a rule, cannot be changed, namely to duties of a lower professional category); 

b) Place of work (since the employee has the right not to have his place of work changed, unless the change does not cause him serious harm);

c) Normal daily and weekly working hours (namely in the sense that all work done outside these parameters will be considered and paid as overtime);

d) Remuneration (this clause is important because it defines which benefits are considered remuneration, and these are covered by the principle of irreducibility of remuneration); 

e) Trial period (period during which either party, without prior notice and without the right to any compensation, may terminate the employment contract).

As a rule, these will be the traditional clauses included in the various employment contracts, although it is true that in the employment contract of a worker who holds a management or administrative position, other types of clauses may also be included, given the high degree of responsibility of the positions held.

The insights shared by our Portuguese member provide a valuable glimpse into how employment contracts in Portugal are structured to protect the interests of both employers and employees.