It definitely is the case in the EU. Where did you get the idea it isn't? In my country, which is in the EU, having someone work for you without a contract is

It definitely is the case in the EU. Where did you get the idea it isn't? In my country, which is in the EU, having someone work for you without a contract is a crime. Because by not having a contract you're denying them rights such as pension contribution, paid vacation, health insurance etc. Plus you have to pay taxes on salary, so if you hire them "on a handshake" as it were, you're probably doing tax evasion too.