The name of the contract does not always determine its type

According to the Supreme Court's judgment of November 25, 2010 (file reference: I CSK 703/09), the nature of the contract is not confirmed by the name, but by the actual content of the document. In order to determine which contract we are dealing with, it is necessary to take into account the purpose for which it was concluded and the consensual intention of the parties. This is especially important now that civil law contracts are becoming more and more popular. If the activities performed by the employee go beyond the scope of such a contract, it may cause the employer a lot of problems. Check when the name of the contract does not indicate its type!

Scope and features of the employment relationship

The Labor Code does not allow the possibility of replacing an employment contract with a civil law contract, if the performance of duties meets the conditions for concluding an employment relationship. The features and scope of the employment relationship are specified in the Labor Code, including:

• submission of the employee in the work process,

• voluntary conclusion of the contract,

• specific place and time of work,

• personal and paid work,

• compliance with the standards and regulations of the workplace,

• the right to leave,

• obligation to justify absence from work.

In the event that the employee performs work under a civil law contract but qualifies for an employment contract, in the event of court proceedings, the court will decide that the case should be considered as if the employee had an employment contract, despite the fact that the name of the contract indicates a civil law contract. Because the contract is not confirmed by its name, but by the purpose of its conclusion. If the employer abuses the civil law contract in such a situation, he may be fined from PLN 1,000 to 30,000 (Art. 281 of the Labor Code).

Characteristics of a mandate contract

Compared to an employment contract, a mandate contract offers the employee less privileges and protection. It is a due diligence agreement, the intended result of which is only likely, which means that the contractor must demonstrate diligence and accuracy in his work to achieve the intended purpose. While exercising due diligence in the execution of the order, the client bears the risk of non-performance.

The characteristic features of work performed under a mandate contract are:

• no obligation to perform activities in a specific place and time,

• the order may in some cases be performed by a third party,

• sometimes it may be unpaid (e.g. in charity work).

By signing such a contract, the contractor is not subordinated to the client, except for the need to comply with the health and safety rules while staying at the workplace (in accordance with Article 304 § 1, in connection with Article 207 of the Labor Code).

Social and disability insurance contributions are collected from the mandate contract. Additionally, the employee can pay the health insurance premium himself. The employer does not have to pay contributions if the employee is a student under the age of 26.

Characteristics of a specific work contract

A specific task contract, as the contract name suggests, is concluded for the purpose of performing a specific task. In accordance with the provisions of the Civil Code, this type of contract relates to a one-off performance of a work, which is the achievement of a predetermined result. Therefore, it is often referred to as a "result contract". A contract for a specific work does not have to be performed personally, but the person performing the work is liable for possible defects in its performance. It is always payable.

Consequences of proving the existence of an employment relationship

In a situation where the employee proves in court that the nature of the duties performed by him is an employment relationship, the employer will have to meet the employee's claims. The employee will be entitled to any benefits that he or she was deprived of during the term of the civil law contract (e.g. the right to a minimum wage or vacation). A dishonest employer will have to settle liabilities to the Social Insurance Institution. He will also be required to pay any outstanding taxes on the employee's wages.