Entering into an employment contract with a collaborator (employees, co-workers, colleagues, associates… i.e., any member of a team that works collaboratively) is an employer obligation as referred to in Article 24 of the Federal Labor Law (Ley Federal del Trabajo, abbreviated LFT), which defines that the labor conditions under which a person performs subordinated personal services in return for remuneration shall be documented in writing. There should be at least two copies made, with one copy to be retained by each party. Furthermore, Article 804, Section I of the abovementioned Law makes provisions for the employer to conserve the individual labor contract and presenting same, if necessary, at a hearing for an action brought under labor laws.
Nonetheless, whether by ignorance, apathy or poor professional advice, the majority of organizations underestimate the importance of this document, a situation that in the medium or long term causes them serious difficulties or disadvantages.
Some of the common problems that arise are the following:
- during the existence of the employment relationship: the provision of benefits and work conditions, such as the duration of the work-day shift, wages, days off, and so on, which fosters an adverse work environment and a decrease in the productivity of organizations, or
- at the conclusion of the labor-relation ties: in cases of legal action brought due to differences in wage and benefit amounts, claims for shifts worked as overtime, as well as excessive or non-existent benefits. This poses a serious problem for employers - remember that the burden of proof lies with them. Hence, without the contract that establishes the working conditions in force, as well as the documents that support the terms where said conditions are in fact provided (pay stubs, attendance lists, authorization for vacation, etc.), the employers are undoubtedly placed in a very vulnerable position with disgruntled workers.
Based on the foregoing, it should be noted that entering into an individual labor contract is not only mandatory, but advisable for companies, as such determines the scope of the rights and obligations of such companies and their collaborators, in addition to being an effective means of evidence in order to prove those working conditions under which the services were agreed upon in a possible hearing for an action brought under labor laws.
Need more info? Contact us! We will be happy to assist you.