At the moment of hiring a new employee of the company there raise the question of possibility of concluding with the employee not an employment contract, but civil contract (usually a services contract), or the conclusion of a fixed-term employment contract instead of an employment contract for an indefinite period. The company’s interest is not so much in saving, but rather in the ability to quickly terminate the contract if the employee does not meet expectations, or in the case if the need in such employee disappears.
The conclusion of employment contracts is governed by the mandatory provisions of labor legislation, while the civil contract is governed by the dispositive provisions of civil legislation.
The main difference between employment contracts and civil contracts is the subject of the contract. At the conclusion of the employment contract, the employee undertakes to perform the labor function indicated in the contract, under the civil contract the contractor undertakes to provide certain services and transfer their result to the customer. That is, within the framework of the employment contract, the subject is the process of performing the labor function by the employee, and under the civil contract – the final result of the contractor’s services. Moreover, if under the employment contract the employee is obliged to perform the labor function personally, then under the civil contract the contractor has the right to involve third parties to perform their duties.
Special attention should be paid to the degree of independence of relations between the two types of contracts. The employee, associated with the employer by the employment contract, is directly subordinated: he must obey the job description, daily routine, the requirements of the supervisor, the employer undertakes to create the employee necessary working conditions for the performance of labor functions. The contractor under the civil contract is independent in methods, order, time of performance of the duties, he doesn’t submit to the customer.
Another significant difference is the period of the employment contract and the civil contract. The civil code does not contain a limitation on the duration of contracts. At the same time, the labor code expressly provides that an employment contract is concluded for an indefinite period (Art. 58). The labor code also provides for the possibility of concluding fixed-term employment contracts for a period of not more than five years, when labor relations cannot be established for an indefinite period (art.58) But the employer needs to carefully assess the possibility of concluding a fixed-term employment contract with an employee, according to the labor code, a fixed-term employment contract is rather an exception, the situations in which it is possible to conclude it are specified in article 59 of the labor code, the list is exhaustive.
Thus, at the conclusion of the civil contract companies are encouraged to assess the essence of legal relations and carefully check the content of contracts for features of employment relations. A similar recommendation concerning the conclusion of fixed-term contracts – you need to make sure that there are sufficient grounds for the conclusion of this type of contract.
If, in fact, between an individual and the company is formed an employment relationship, but the company formalizes them as civil contract, it is possible to say that the rights of the employee are violated, he loses the guarantees provided by the labor legislation.
The labor code contains a special procedure for judicial protection of violated rights of an employee – an employee has the right to apply to the state labour inspection, to the court in, or to send a corresponding application to the prosecutor’s office; in the trial there is a mandatory prosecutor, the employee is released from the obligation to pay court costs. According to statistics, in most cases, the court takes the side of the employee.
Autor: Kravchnko Ektarina