We regularly receive the question what the difference is between the employment contract and the contract for services. The answer is important, for example, because it differs per agreement or the other party is entitled to protection against dismissal, with the result that a notice period must be used if you want to terminate this agreement. In addition, a severance payment may have to be paid.
Contract of assignment and employment contract
In practice, it occurs that the client and contractor enter into an assignment contract, but that this agreement appears to be an employment contract. This exchange trick sometimes tries to use the contractors, for example at the moment that the contract of assignment is terminated. In this blog we explain from an employment law perspective (and not tax) what the difference is between these two agreements, what the exchange trick entails and how you can prevent the exchange trick.
In the following two examples, the contractors have submitted the contract of assignment to the court:
Who can remember the Golden Cage? Talpa (later RTL 5) thought to have entered into a contract with the residents of the Golden Cage. One of the residents (Natasia) was of a different opinion; she felt that there was an employment contract. The judge thought the same thing about that.
Recently the judge ruled that a newspaper deliverer is not working on the basis of an employment contract. This client could breathe a sigh of relief. Why does the contract of Natasia contract become an employment contract and does the newspaper delivery agreement remain the same? This is because the judge does not look at the title of the employment contract, but at the party intention, the actual execution and the social position of the contractor. Does that sound too vague? It becomes clearer! We explain the difference between the two agreements first.
Employment contract (parties: employer and employee)
There is an employment contract if the following elements are met:
Wage: this is the consideration of the employer for the work done. Under this consideration can be understood: money, things that are suitable for personal use, use of a house, securities, receivables etc.
Authorization relationship: the employer can give instructions about the work to the employee and these instructions must be followed by the employee. The employer does not actually have to give the instructions and instructions about the work contents, it is sufficient that these instructions or instructions can be given.
Work: the work must be done personally, the employee may not be replaced by another person. There is no question of an employment contract if the employee can be replaced.
If there is an employment contract, the employee is entitled to protection against dismissal.
Contract agreement (parties: client and contractor)
The elements of an assignment agreement are:
Other than on the basis of an employment contract;
The client is not obliged to provide a consideration.
The client may give instructions in the context of the assignment, he may not give instructions on the completion of the assignment. There is therefore no question of an authority relationship. If there is an assignment agreement, the contractor is not entitled to protection against dismissal. You can terminate this agreement immediately as a client if no contractual notice period is included in the agreement. In certain cases it can be unreasonable to cancel the assignment immediately. In that case the judge can determine that a notice period must be observed.
The change trick
The contract of assignment that becomes an employment contract, how is that possible? The judge does not only test whether wages, labor and authority are involved. When assessing the contract of assignment, the court takes into account: 1) the intent of the parties (which agreement do they want to conclude?), 2) the manner in which the client and the contractor actually performed the agreement (the judge tests the Behavior in the elements of the employment contract: Was the work to be carried out personally? Was wages paid? Was there an authority relationship?), and 3) the social position of the contractor. Why is the social position important? This is important because the judge makes an estimate of the situation: is the contractor in the position to know what he is doing and does he use the exchange trick or is the contractor ignorant? In other words, the judge takes into account all the circumstances of the case.
Better to prevent than to cure!
Ensure that the execution of the contract of assignment does not meet the elements of the employment contract. The "dangerous" elements: "authority relationship" and "labor". Appropriation relationship: in practice it regularly occurs that the instructions given by an employer do not fall under the instructional authority of the contract of assignment (no dismissal protection), but under the authority relationship of the employment contract (or dismissal). rming). As an employer you are the sjaak; even though you have entered into a commission contract. Make sure that the instructions can not be regarded as instructions. Work: if the contractor is obliged to personally perform the work, then one of the elements of the employment contract has been met. Do not include this provision in the agreement! The newspaper deliverer was not obliged to perform the work personally, for this reason there was no question of an employment contract. The participants of the Golden Cage had to follow the instructions of Talpa, this was included in an instruction book and in the agreement. The participants also received wages and the work also had to be performed personally, which meant that there was an employment contract.
If there is an employment contract, all kinds of protective provisions of employment law apply and certain payments (deduction of wage tax and social insurance contributions) also have to be made. This may also mean that the contractor, who has become an employee, is entitled to the following reimbursements:
- transition fee;
- fair compensation, and / or
- the compensation due to irregular dismissals.
It depends on the situation whether these allowances can actually be claimed.