On the employee edit screen, you have the options to add in emergency contacts for employees. You now have the options to define a list of options for emergency contact relationships.
People > Employees > Edit > Emergency Contact
The default behaviour for this screen is that the relationship field is a free text box where you can type in the relationship of the contact.
Under the data management menu, there is an option for relationships where you can add in predefined relationships.
Administration > HR > Data management > Relationships
With active relationships in place, you get a drop-down box with these options when adding in emergency contacts.