Employment contracts and contracts of mandate are the two most popular forms of employment in Poland, so it's safe to say they undoubtedly lead the Polish market as the most frequently chosen by both employees and employers. Although both are often used for similar purposes, the terms and conditions of work differ significantly. In today's article, I will attempt to explore the issues related to these two most popular forms of employment. I will also answer the question of whether it's possible to convert a contract of mandate to an employment contract and what the potential consequences of such a change are.
Employment contract – a set of characteristics that shape the employment relationship
An employment contract is regulated by the Labor Code, which outlines specific elements that allow us to determine whether a given legal relationship should be considered an employment contract. First and foremost, to speak of an employment contract, it is necessary to specify the type of work , which can be accomplished, for example, by specifying the job title.
Does the employee perform work under clear direction?
A significant element distinguishing an employment contract from a contract of mandate is the employee's subordination to the employer. According to case law, the employer's management refers to the organizational sphere and subordination of the employer, which in practice means that the employer organizes tasks and has the freedom to decide on the actual and legal actions performed by the employee. However, there are cases where other relationships, even civil law ones, involve a certain degree of subordination. The Supreme Court emphasized that the performance of the same actions can occur under both an employment contract and a civil law contract. The characteristic of an employment contract is not being at the employer's disposal, as this can also occur in civil law contracts, but rather performing work under the employer's direction (subordinate work). This characteristic is fundamental to the existence of the employment relationship.
Designation of the workplace
As part of their management authority, the employer also determines the location where work tasks are performed . This location may be a specific location or geographical area related to the type of work performed. In addition to the workplace, non-permanent work locations may also be designated, but they must be clearly marked. Therefore, this aspect of the work is, in a sense, imposed and required by the employer.
How to understand an employee's working time?
An essential element of the employment relationship is the definition of working time , which is understood as remaining at the employer's disposal at the workplace or another designated location. The employer has the ability to shape working time systems and instruct the employee to work overtime if necessary due to unforeseen circumstances. Another crucial element of defining working time is the employer's obligation to provide the employee with a minimum rest period of at least 35 hours per week and 11 hours of daily rest.
Interestingly, if the employer does not provide the employee with minimum rest, the employee may file a claim for compensation for infringement of personal rights.
The essence of remuneration – personal character
The employer employs the employee for a salary that the employee cannot waive or transfer to another person. This undoubtedly indicates the personal nature of the work performed in the case of an employment relationship.
Employment contract – employee protection and safety
The Labor Code protects employees from potential abuse by employers, ensuring the security of both work and remuneration. Employers also gain numerous assurances by having employees available at a specific time and place. These obligations, along with their associated rights, not only help structure the work system but also guarantee mutual benefits. Therefore, both employees and employers often shape their relationships in this way.
Taking into account the set of features of an employment contract, it is worth emphasizing that it is precisely the subordination of the employer and the determination of the time and place of work by him that allows for a clear distinction between an employment relationship and other legal relationships.
Contract of mandate – characteristic features compared to an employment contract
Through a mandate contract, the person accepting the order (the contractor) undertakes to perform a specific legal act for the person giving the order. This contract constitutes a civil law relationship, which distinguishes it from a standard employment contract, which is governed by the Labor Code.
Who shapes the contract of mandate?
As indicated above, an employment contract, according to the regulations, must contain certain elements, such as the place and time of work, and the employment relationship itself is characterized by the employee's subordination. The regulations do not require that a contractual relationship such as a mandate contract contain specific elements , as is the case with an employment contract. The parties shape the relationship at their discretion by defining the subject of the mandate and their mutual obligations. The parties are limited only by the fact that the content or purpose of the contract must not contradict the nature of the relationship, the law, or the principles of social coexistence. In the event of a violation of the above principles, the contract may be deemed invalid in whole or in part, depending on the significance of the contractual provision for the conclusion of the contract itself, without the possibility of its redress.
A contract of mandate, which is a contractual relationship, is also characterized by the equality of entities , meaning that each party has a certain equivalent of performance. This means that the performance of one party is equivalent to the performance of the other party.
A contract of mandate may be concluded in any form , and, like an employment contract, it is an obligation to act diligently, which means that its essence is the conscientious and responsible action of the contractor within the framework of the contract performed.
As emphasized above, an employment contract is distinguished by the personal nature of the work performed, which is not the case with a mandate contract. It is possible to entrust the performance of the contract to a third party due to certain circumstances, established custom, or contractual provisions.
Due to the nature of this contractual relationship, a person employed under a mandate contract has a significant degree of autonomy and freedom in organizing their time and workspace, unless the contract stipulates specific obligations. This means that the person essentially determines the timeframe of their work, deciding when to begin and end their work, as well as where to perform it.
Is a contract of mandate always subject to payment?
Guaranteed remuneration and its personal nature constitute an essential element of an employment contract. While a mandate contract is a paid contract, the parties may agree that remuneration will not be due for the performance of the mandate. However, the absence of remuneration must be directly implied by the contract or the circumstances. This seems a rather peculiar provision, but as it turns out, it is applicable in business. The lack of remuneration is dictated by the nature of the bond between the parties (e.g., family ties, friendship) combined with the insignificant amount of work required to complete the assignment. Whether this applies to employment-like relationships is difficult to say, but the difference between the contracts discussed here is clearly visible in the scope of remuneration.
Can the principal give instructions to the contractor?
Although a contract of mandate establishes equality of entities, case law also distinguishes situations in which the contractor may also contain elements of subordination to the principal, although these are not identical to those in an employment contract. In particular, principals have the right to provide instructions on how to perform the contract and to monitor the results of the activity.
However, it is generally considered far-reaching for the client to indicate the place and time of execution of the order (unless the place and time result from the specific nature of the services provided), as well as to issue binding instructions.
Despite differences in regulations and specific contracts, mandate contracts and employment contracts are very similar. Often, it can be difficult to correctly classify a contract as either a mandate contract or an employment contract. What rights do we have in this regard? Do we have to immediately take the matter to court? It turns out that there are several ways to resolve this issue.
When and how can a mandate contract be changed into an employment contract?
In a situation where the nature of the work of a person employed under a mandate contract shows certain characteristics of an employment contract, depending on the will of the parties, an attempt may be made to recognise it as an employment contract.
Agreement of the parties to the contract of mandate
The first proposed method is to enter into a separate agreement between the parties to the mandate contract. In such a case, unanimous statements or a single document signed by the parties stating that they mutually agree to terminate the mandate contract and enter into an employment contract are sufficient. An "amendment" agreement can also be concluded, specifying that it constitutes a change to the contract between the parties while maintaining the continuity of their duties.
Judicial determination of the existence or non-existence of an employment contract
In special cases, a lawsuit may be filed to establish the existence of a legal relationship between the parties, as a result of which the court will determine that the contract in question is in fact an employment contract.
What features determine the legal nature of an employment contract?
One example is a woman who worked as a cleaner in a hospital under a contract of mandate. The court found that the nature of her work undoubtedly met the characteristics of an employment contract. The plaintiff performed her work based on a previously agreed-upon schedule, collaborated with individuals with identical responsibilities, and worked under employment contracts. Furthermore, she could not count on anyone replacing her, which clearly fulfilled the requirement of personal performance of work. In this situation, the court found that a contract of mandate, regardless of its name or the statements contained therein, was an employment contract due to its nature, the personal performance of work, and subordination to the employer.
The court also found that the work performed by the plaintiff was of a continuous, repetitive nature, at fixed and predetermined intervals, and did not consist in performing a single activity, therefore it undoubtedly met the characteristics of an employment contract.
In order to establish the existence of an employment relationship, there must be conditions such as a legal interest in requesting legal protection through the issuance of a judgment and the existence of a specific legal relationship or right.
According to the established case law of the Supreme Court, an employee has – in principle – a legal interest in establishing the existence of an employment relationship, if only because such a determination determines the right to certain current and future social security benefits and also influences their amount through the construction of the insurance period .
In view of such circumstances, the court, after considering the case, issues a judgment in which it recognises the existence of an employment contract instead of a mandate contract.
This is the relationship between a contract of mandate and an employment contract. Despite their significant differences, these contracts share many similarities. However, when entering into them, it's worth paying close attention to whether the contract is profitable and properly protects your interests. For more information, please contact us!
This article is for informational purposes only and does not constitute legal advice.
Legal status as of September 7, 2023.
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