ECUADOR Law and Practice Contributed by: Sebastian Corral Guevara, Miguel Pizarro Páez, María Fernanda Mencías Pérez, José Cisneros Pazmiño, Roque Bustamante Espinosa and Jorge Pizarro Páez, Flor Bustamante Pizarro & Hurtado
sidiary remedy. Accordingly, it is not available where the law provides another direct legal mechanism to sanction, remedy or correct the alleged abuse or dam - age, including challenges, appeals or actions for nul - lity against the relevant corporate acts or decisions. The mere existence of unpaid debts, insolvency or contractual non-performance is not, in itself, sufficient to justify disregarding the company’s separate legal personality. Accordingly, the separate legal personality of the com - pany and the limited liability of shareholders, directors, officers and legal representatives remain the general rule under Ecuadorian corporate law, while personal liability and piercing the corporate veil are exceptional remedies that apply only in the specific circumstances expressly provided by law. Employment relationships in Ecuador are governed by a predominantly statutory and protective legal framework. Ecuadorian labour law is considered a matter of public policy and is based on the consti - tutional principles of worker protection, equal treat - ment, job stability and the non-waivability of statutory labour rights. Consequently, the parties’ contractual freedom is limited, and employment agreements may not derogate from the minimum rights and benefits established by law. The principal sources governing employment relation - ships are, in hierarchical order, the Constitution of the Republic of Ecuador, international treaties and con - ventions (particularly those ratified by the International Labour Organization – ILO), the Labour Code, other applicable legislation, executive regulations, ministeri - al resolutions and administrative regulations issued by the Ministry of Labour. Judicial precedents issued by the Constitutional Court also play an important role in the interpretation and application of labour legislation. Collective bargaining agreements constitute an addi - tional source of labour regulation and are binding upon the parties. Where a collective bargaining agreement grants more favourable rights or benefits than those 4. Employment Law 4.1 Nature of Applicable Regulations
established by law or by an individual employment agreement, the more favourable provisions generally prevail in accordance with the pro operario principle. Individual employment agreements govern the spe - cific terms and conditions of the employment relation - ship, provided that they comply with the mandatory provisions of labour legislation. Any contractual provi - sion that reduces or waives statutory labour rights is generally deemed null and unenforceable. 4.2 Characteristics of Employment Contracts Ecuadorian employment contracts are governed by the Labour Code, which establishes mandatory mini - mum employment conditions that cannot be waived by agreement between the parties. Although Ecuado - rian law recognises both written and verbal employ - ment contracts, written agreements are required for a number of employment arrangements and are the standard practice in virtually all formal employment relationships. In addition, employers are generally required to regis - ter employment contracts electronically with the Min - istry of Labour within the statutory period following their execution. A written employment contract should generally include the essential terms of employment, includ - ing the identity of the parties, the services to be per - formed, remuneration, working hours, place of work, commencement date and, where applicable, the dura - tion of the employment relationship. The Labour Code requires certain employment con - tracts to be executed in writing, including contracts involving technical or professional services, proba - tionary periods, apprenticeship arrangements, group employment, contracts with adolescent workers and temporary employment arrangements such as even - tual, occasional and seasonal contracts. As a general rule, indefinite-term employment is the standard form of employment in Ecuador. However, the Labour Code also recognises specific temporary employment arrangements in limited circumstances, including eventual contracts, occasional contracts and seasonal contracts.
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