The risk of conversion of a civil-law contract (B2B or service agreement) into an employment contract

Your company has signed a B2B or service agreement with an individual. What is the risk the labour inspectors will find that the agreement is actually an employment contract?

 Answer these 30 questions and estimate the risk.




1. Full-time work for the company

What proportion of their working time does the person devote to the company?

100%.

Less than 100% but more than 50%.

Less than 50%.

2. Use of a company position

Does the person have a position within the company’s structure?

Yes.

No, but they can use a company title for their position.

No.

3. Benefits

Does the person receive healthcare or other benefits?

Yes, under the same terms as the company’s employees.

Yes, but under different terms than employees (e.g. at a higher price).

No.

4. Work at the company’s offices

Where does the person work?

Mainly at the company’s offices.

Partially at the company’s offices.

Away from the company’s offices.

5. Use of company equipment

Does the person use equipment issued by the company (e.g. mobile phone, laptop, keys)?

Yes, regularly.

Yes, occasionally.

No.

6. Performance of routine duties

Does the person perform routine duties for the company?

Yes.

They work on several projects for the company.

They work on one project for the company.



7. Payment regardless of tasks performed

Is the person paid regardless of the tasks they perform?

They receive a fixed monthly salary regardless of the number of hours worked.

Remuneration is paid per hour worked.

They are paid pursuant to an invoice issued after completion of an assigned task.



8. Right to paid leave

Does the person have paid leave?

Yes, in the same number of days to which employees are entitled.

Yes, under different terms than employees (e.g. a different number of days).

No.



9. Reimbursement of expenses

Are expenses incurred by the person in connection with their duties reimbursed by the company?

Yes

Expenses may be reimbursed in accordance with the contract terms.

No.



10. Personal performance of duties

Must the person perform their duties personally?

Yes, always.

No, if they obtain approval from the company.

No.



11. Administrative support

In their work, does the person benefit from the company’s administrative support?

Yes, often.

Yes, occasionally.

No.



12. Setting working hours

Does the company set the person’s working hours?

Yes.

The person must occasionally be at the company’s disposal.

The person sets their own working hours.



13. Disciplinary measures

Is the person subject to suspension or other disciplinary measures applied by the company?

Yes, the same as the company’s employees.

Yes, but under different rules than employees.

No.



14. Taking strategic decisions

Does the person take strategic decisions for the company?

No.

They sometimes participate in strategic decision-making processes
     (e.g. consulting on certain decisions).

Yes.



15. Duration of contract

For what time is the contract signed with the person?

For an indefinite period, or a definite period of up to 33 months.

For a definite period longer than 33 months.

For the duration of the specific project.



16. Exclusive work for the company

Does the person work exclusively for the company?

Yes.

They can work for other clients under the terms set by the company.

No, they work for numerous clients.



17. Paid overtime

Does the person receive overtime pay?

Yes, the same as employees.

Yes, but under different terms than employees.

No.



18. Record of working time

Is the person’s working time recorded?

Yes.

Yes, but in a manner different than for employees’ working time
     (for example, the person records their own working time).

No.



19. Responsibility for losses

Under what rules is the person responsible for losses?

According to the Labour Code.

According to the parties’ contract.

According to the Civil Code.



20. Rules for contract termination

What are the rules for terminating the contract with the person (termination notice period, termination only for cause)?

They are the same as set forth in the Labour Code

They differ slightly from those in the Labour Code.

They are different from, and inconsistent with, those in the Labour Code
     (e.g. the termination notice period is shorter than provided for in the
     Labour Code).



21. Economic risk

Who bears the economic risk of a lack of work for the person?

The company.

The parties addressed this in their contract.

The individual.



22. Subordination

Does the person have a duty to carry out the current instructions from a company representative?

Yes.

The person answers to a certain degree to the company’s employees
     or authorities.

No. The person only needs to provide a certain service.



23. Frequency of payment

How is the remuneration for the work paid?

At regular intervals, at least once a month, in arrears.

Regularly, but not necessarily at least once per month and not necessarily
     in arrears.

At irregular intervals (e.g. when the person issues an invoice).



24. Choice of method of performing work

Can the person decide on the manner in which they perform their assigned tasks?

No. The person much perform the assigned tasks in the manner specified by
     the company.

The person has some discretion in choosing the manner of performance of tasks,
     but must comply with certain guidelines from the company.

Yes. The person decides on their own on the method of performing the tasks
     assigned to them.



25. Contractual penalties

Does the contract with the person provide for any contractual penalties?

No.

The contract provides for contractual penalties, but only non-financial ones.

The contract provides for contractual penalties, including financial ones.



26. Parental entitlements

Is the person eligible for parental entitlements?

Yes, all of the entitlements provided for in the Labour Code (plus any additional
     entitlements provided for within the company).

Yes, some of the parental entitlements for which the company’s employees
     are eligible.

No.



27. Economic activity

Does the person operate a registered business connected with the duties performed for the company?

No.

Yes, and the scope of the business partially covers the work the person does for
     the company.

Yes, and the scope of the business covers almost entirely the work the person
     does for the company.



28. Internal company policies

Do the company’s internal policies (such as pay policy and work policy) apply to the person?

Yes, all of the company’s policies on employment matters apply.

Yes, certain of the company’s internal policies apply (e.g. selected procedures).

No.



29. Previous employment at the company

Did the person hired under a B2B contract previously work at the company under an employment contract?

Yes, and they performed the same work.

Yes, but the scope of the person’s duties or other conditions of work or pay
     differed from those in the B2B contract.

No.



30. Liability to third parties

Does the person bear liability to third parties for performance of the person’s tasks and the results?

No.

Yes, limited liability.

Yes, full liability.