Analysis

Definitions according to labor laws

Labor legislation in Brazil

Employee

Individual who works or performs services for an employer on a continuous basis in a "subordinate" position to the employer, for compensation; Subordination is being subject to an employer's rules and management.

Self-employed professional: Individual who is not an employee

The person who may work for many companies and do not have a "subordinate" position to the employer.

Employment Relationship

An Employment Relationship is created when work is developed on "a continuous basis in a subordinate position". It means that the individual needs to frequently work for the same employer, being subject to time control, following the rules set by the Company, and receiving compensations for this work.

Employment Contract

The Employment Contract can either be verbal or written, in other words, it is possible to have an employment relationship without having a written contract due to the Principle of Reality (the daily routine prevails over the written clauses agreed upon by the parties – it is a substance over form agreement).

In general, an employment relationship is deemed as permanent. To this respect, an unlimited period labor contract is in force at the moment the employee is hired. In cases of temporary activities (for example, the construction of a building or a bridge), a special labor contract may be used. Temporary Labor Contracts and Limited Period Labor Contract are generally written arrangements, for a limited period. A labor contract for a limited period (fixed term) may be renewed once and its total term must not exceed two years.

There is also another type of contract, the "probation labor contract", which is a special kind of Temporary Labor Contract. A probation labor contract is an employment contract to hire a worker for a fixed term; upon termination of the fixed term, the employer is under no obligation to hire the employee definitively. This type of contract can be renewed once and the total term must not exceed 90 days. After that time, if an employee continues working, the contract is deemed to be converted into an unlimited period.

Employees hired under temporary contracts and fixed term contracts may be dismissed at the expiration of the contract. Permanent contracts have to be terminated with a minimum prior notice of 30 days (up to 90 days).

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