The use of that field is just to filter Partners by that field in an action/menu just like there is filters for Customers and Suppliers, You could check their use in the addons/base/res/res_partner_view.xml

<record id="action_partner_employee_form" model="ir.actions.act_window">
    <field name="name">Employees</field>
    <field name="type">ir.actions.act_window</field>
    <field name="res_model">res.partner</field>
    <field name="view_type">form</field>
    <field name="domain">[('employee','=',1)]</field>
    <field name="context">{'default_customer':0, 'default_supplier':0 , 'default_employee':1}</field>
    <field name="filter" eval="True"/>
</record>

But I don't see that the action is used anywere