Last week, we wrote about the potential consequences of converting a B2B contract to an employment contract ( Tax Consequences of Converting a B2B Contract | Graś i Wspólnicy (kglegal.pl) ). Today, we'd like to present a case regarding maternity benefits in the event of a transition from a B2B contract to an employment contract.
The case concerns a woman running a sole proprietorship. She entered into an indefinite-term collaboration agreement with a law firm, under which she provided services consisting of drafting opinions, court documents, and contracts, conducting legal and factual investigations of assigned projects, participating in meetings and hearings, and supporting the firm's team in their ongoing projects. For her services, she invoiced the firm for the agreed-upon flat-rate fee, plus VAT. She registered for social security and paid contributions starting from the minimum base. During her business activity, she sporadically applied for voluntary health insurance. After six months of providing services under a business-to-business agreement, the agreement was terminated by mutual consent. Instead, the parties entered into an employment contract.
The scope of her duties remained unchanged. Work was performed at a predetermined time and place. Formally, she also had a direct supervisor. While her salary was reduced, the actual employer cost was equivalent to the salary previously paid under the business-to-business contract. She worked for four months, then gave birth to a child. She returned to work six months later, after using her maternity leave and part of her vacation leave.
The Social Insurance Institution (ZUS) questioned the right to maternity benefit in this situation. The authority found that the insured woman, by entering into an employment contract, violated the principles of social coexistence by consciously intending to benefit from the social security system at the expense of other participants in that system. It argued that it was common practice for the employer who employed her to cooperate with lawyers under a cooperation agreement. Before her pregnancy, the insured woman had also provided services to the law firm under a business-to-business agreement. Therefore, the transition to an employment contract was intended to benefit the employer by paying higher social security contributions.
The case reached the Court of Appeal, which found that the insured woman had not violated the principles of social coexistence in any way. She performed her daily duties at work, during scheduled hours, using the employer's equipment, in accordance with his guidelines, for a remuneration that fully reflected both the level of her work and her exceptionally high legal skills in fields sought after by the labor market. The amount of this remuneration also fully reflected her previous income. The fact that other lawyers in similar positions provide their services under business-to-business contracts cannot be used to argue the contrary.
The Social Insurance Institution (ZUS) filed a cassation appeal in the case. However, the appeal was dismissed because it failed to demonstrate the need to interpret legal provisions that raised serious doubts or led to discrepancies in court decisions. In its justification, the Supreme Court stated that the pregnant woman's desire to obtain insurance coverage—without setting the remuneration at an excessively high level—is reasonable and justified, both from a personal and social perspective. While the purpose of concluding an employment contract to obtain social insurance benefits is not contrary to the law, this cannot constitute acceptance of reprehensible and socially insensitive behavior or the use of social insurance benefits when the employment contract is concluded shortly before the event giving rise to the entitlement to the benefit and a high remuneration is set in order to obtain benefits calculated on that basis. Such an employment contract is invalid in the part setting excessive remuneration, unjustified by the actual working conditions—as contrary to the principles of social coexistence. Therefore, for the principles of social justice to be violated, the remuneration must be set at a level that is disproportionate to the work input, and this setting must take place just before the anticipated occurrence of the insured risk.
Interestingly, in this case, the courts confirmed that whether specific activities are performed as part of a B2B cooperation or an employment relationship is determined not by their nature, but by the conditions under which they are performed. An employment relationship will consist of performing activities under supervision, at a specific time and place. If these conditions are not met, the same activities may be performed under a B2B agreement.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of September 2, 2024
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