Differences between an employment contract and a civil law contract. How to prevent State Labor fines? (jurisprudence + employment contract template)

Among the inspections of the State Labor Service on compliance with labor legislation, the most resonant were the issues of the actual admission of workers to work without concluding an employment contract, since the fines for such a violation of the law are quite significant. At first glance it seems that the question is simple, but in practice it turns out differently. Employers, when concluding work or service contracts, often do not understand that it is precisely such contracts that most often fall into the "risk zone" and can be interpreted by inspectors not as civil law contracts, but as employment contracts, which can lead to liability as the most enterprise, and indeed its officials or lengthy litigation. An analysis of legislative regulation and judicial practice, which can already be called constant, provides a fairly clear distinction between these contracts, and an understanding of such a difference will largely prevent the negative consequences of these checks. Therefore, it is essential to clearly understand the difference between an employment contract and a civil law contract.

Thus, an employment contract is an agreement between an employee and an employer (employer - an individual), according to which the employee undertakes to perform the work defined by this agreement, and the employer (employer - an individual) undertakes to pay the employee wages and provide working conditions necessary for the performance of work. stipulated by the labor legislation, the collective agreement and the agreement of the parties. An employment contract may establish conditions for the performance of work requiring professional and / or partial professional qualifications, as well as conditions for the performance of work that do not require a person to have a professional or partial professional qualification (Part 1, Article 21 of the Labor Code).

According to Art. 24 of the Labor Code, an employment contract is usually concluded in writing. Compliance with the written form is mandatory:

1) with an organized recruitment of employees;

2) when concluding an employment contract for work in areas with special natural geographical and geological conditions and conditions of increased risk to health;

3) when concluding a contract;

4) in cases where the employee insists on concluding an employment contract in writing;

5) when concluding an employment contract with a minor (Article 187 of this Code);

6) when concluding an employment contract with an individual;

6-1) when concluding an employment contract on remote work or home work;

7) in other cases provided for by the legislation of Ukraine.

A civil law contract with an individual (civil law contract) is an agreement between two or more parties aimed at establishing, changing or terminating civil rights and obligations (Article 626 of the Civil Code of Ukraine). As a rule, they are concluded in the form of a work contract (Chapter 61 of the Civil Code of Ukraine) or a service agreement (Chapter 63 of the Civil Code of Ukraine).

Very often, civil law contracts are drawn up in such a way that even if the employer does not want to avoid concluding an employment contract, such contracts have all the signs of a labor contract and, as a result, the company receives a fine. It is proposed to analyze the difference between these concepts taking into account the judicial practice of the Supreme Court, the conclusions of which regarding the application of the rules of law set forth in the decisions of the Supreme Court are taken into account by other courts when applying such rules of law (part 6 of article 13 of the Law of Ukraine "On the judiciary and the status of judges").
 

According to the findings on the application of Art. Art. 21, 24 of the Labor Code of Ukraine, made in the decision of the Supreme Court of 08.05.2018 in case No. 127/21595/16-c, labor legislation regulates the process of organizing labor activity. An employment contract is an agreement on the implementation and provision of a labor function. Under an employment contract, an employee is obliged to perform not some individually defined work, but work in a certain one or more professions, specialties, positions of appropriate qualifications, to perform a certain labor function in the activities of the enterprise. After the completion of a certain task, labor activity does not stop. The subject of an employment contract is the work of an employee in the production process, and the labor process does not provide for any final result.

According to the legal conclusions on the application of Art. 21, 24 of the Labor Code of Ukraine, made by the Supreme Court, in resolutions of 04.07.2018. in case No. 820/1432/17 and dated 12/16/2020. in case No. 808/2638/16, an employment contract is an agreement on the implementation and provision of a labor function. Under an employment contract, an employee is obliged to perform not some individually defined work, but work in a certain one or more professions, specialties, positions of appropriate qualifications, to perform a certain labor function in the activities of the enterprise. After the completion of a certain task, labor activity does not stop. Under an employment contract, an employee is hired (position) included in the staff of the enterprise to perform certain work (certain functions) for a specific qualification, profession, position.

The employee is guaranteed wages, guarantees, benefits, compensations, etc. established by labor legislation.

Similar conclusions are set out in the decisions of the Supreme Court dated December 24, 2019 in case No. 823/1167/16, dated February 5, 2020 in case No. 620/3913/18, dated February 6, 2020 in case No. 0840/03690. 2020 in case No. 1540/3913/18.

Consequently, labor legislation regulates the process of organizing labor activity. As noted in the decision of the Supreme Court dated 03.12.2020. in case No. 520/10795/18, by analyzing the above norms (meaning, in particular, Art. 21 of the Labor Code of Ukraine), the Supreme Court notes that the main features of an employment contract are:

- labor is legally dependent, proceeding within the framework of a certain enterprise, institution, organization (legal entity) or with an individual citizen (individual);

- by carrying out the instructions and orders of the owner or the body authorized by him; labor has guaranteed pay; performance of work of a certain type (labor function);

- an employment contract, as a rule, is concluded for an indefinite period; the implementation of labor activity occurs, as a rule, as part of a work collective;

- performance during the established working hours of certain labor standards;

- establishment of special conditions of liability;

- application of disciplinary measures; provision of social guarantees by the employer. The liability of an employee under an employment contract is regulated only by imperative norms (the Labor Code of Ukraine and other acts of labor legislation), which cannot be changed by the parties to the contract.

A similar legal position is set out in the decisions of the Supreme Court dated March 6, 2019 in case No. 802/2066/16-a, dated June 13, 2019 in case No. 815/954/18.

In another resolution dated 02.02.2021. in case No. 0540/5987/18-a, providing a legal conclusion under Art. Art. 21, 24 of the Labor Code of Ukraine, the Supreme Court noted that the characteristic features of labor relations are:

systematic payment of wages for the labor process (and not its result);

compliance with the rules of internal labor regulations;

performance of work according to the profession (position) determined by the National Classifier of Ukraine DK 003:2010 "Classifier of Occupations", approved by the order of the State Consumer Standard of July 28, 2010 No. 327;

the obligation of the employer to provide a workplace;

observance of labor protection rules at the enterprise, institution, organization, etc.

Responsibility for failure to conclude an employment contract with an employee is provided for by law both for a legal entity or an individual entrepreneur, and for the head of a legal entity.

So, according to Art. 265 of the Labor Code, legal entities and individuals - entrepreneurs using hired labor, are liable in the form of a fine, in particular, in the event that the employee is actually allowed to work without drawing up an employment contract (contract) in ten times the minimum wage established by law at the time the violation was detected , for each employee in respect of whom a violation has been committed, and for legal entities and individuals - entrepreneurs who use hired labor and are payers of the single tax of the first - third groups, a warning is applied.

Officials of public authorities and local governments, enterprises, institutions and organizations guilty of violating labor laws are liable in accordance with the current legislation (Article 265 of the Labor Code).

As for officials, according to part 3 of Art. 41 of the Code of Administrative Offenses, the actual admission of an employee to work without drawing up an employment contract (contract) -¦ entails the imposition of a fine on officials of enterprises, institutions and organizations, regardless of the form of ownership, individual entrepreneurs using hired labor, from five hundred to one thousand tax-free income minimums.

At the same time, in accordance with the decision of the Supreme Court as part of the joint chamber of the Administrative Court of Cassation dated December 22, 2020 in case No. 3 of Article 41 of the Code of Administrative Offenses of Ukraine, it is obvious that the proceedings are not inherently related, based on the criteria voiced, since they are not complementary in terms of goals and applied sanctions, but provide for the double application of two punitive punitive measures against the same person. This is not only a disproportionate and excessive burden on such a person, but also puts in an unequal legal position when a similar offense is committed in the activities of a legal entity and an individual entrepreneur, not in favor of the latter ... ".

At the same time, even if the director’s actions do not contain an administrative offense, this will not prevent the application to the legal entity of liability under Art. 265 Labor Code. Thus, in the decision of the Supreme Court as part of the panel of judges of the Cassation Administrative Court dated 10/22/2020 No. in case No. 804/8102/16, court from Part 1 of Art. 41 CUAO, art. 265 of the Labor Code of Ukraine, the court concluded that the absence in the actions of the director of the complainant of a legal entity of the composition of an administrative offense established by the decision on the administrative offense case, which has entered into force, does not indicate the absence of violations on the part of the legal entity.

Therefore, to understand and know the differences between an employment contract and a civil law contract is a prevention of a significant fine by the State Labor Service for both a legal entity and an individual entrepreneur, as well as a prevention of administrative liability of company officials.

You can create an Employment contract in the Instaco constructor using the link. To create, you must enter the necessary data in the constructor.