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10 min czytania 27 March 2025

Features of an employment contract – when do they occur?

Did you know that even if you have a contract for services, in some cases it can be considered an employment contract? The features of an employment contract are the features that may indicate that, despite another type of contract, your employment is subject to employee rights. When can a civil law contract be considered an employment contract?

Features of an employment contract

TABLE OF CONTENTS

Employment contract – what are its characteristics?

An employment contract is one of the ways of establishing an employment relationship, which is regulated by the provisions of the Labor Code. Hiring an employee under an employment contract involves many obligations and rights for both the employer and the employee.

The employer undertakes to provide specific working conditions, pay remuneration, comply with labor law regulations, and provide social and health insurance. In turn, the employee, performing their professional duties, is entitled to remuneration, vacation leave and other benefits, such as sick leave or maternity leave.

An employment contract may be concluded for a fixed term, an indefinite period or for a trial period. Each of these forms of employment is associated with different rules regarding, for example, the notice period. An employment contract precisely specifies the terms of the employment relationship, such as working time, place and time of work and scope of duties. The working time may be full or part, and the working time must be adjusted to the provisions of the law, which includes, among others, specifying working hours, breaks and days off. The employer is obliged to specify the place and time of work, as well as provide appropriate conditions for its performance.

Employment stability

Employment stability is one of the basic assumptions of labor law, which provides the employee with employment stability. This means that the employment contract is concluded for an indefinite period, which offers the greatest stability. The employer cannot fire him without a valid reason. If he wants to terminate the contract, he must provide a reason, and in the case of unjustified dismissal, the employee is entitled to compensation.

This form of employment gives the employee certainty about the future in the company. Employment under an employment contract for an indefinite period protects against unfair dismissal and gives the right to leave, sick pay and other benefits.

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Features of an employment contract

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Employment contract and civil law contracts

In Poland, there are two types of employment: based on an employment contract and based on a civil law contract. Civil law contracts include, for example, a contract for services and a contract for specific work. These are the most frequently signed contracts in Poland. Although both of these contracts are aimed at establishing an employment relationship, they differ in several aspects:

Employment and remuneration

An employment contract involves the establishment of an employment relationship that specifies in detail the working hours, remuneration and place of performance of duties. The employee receives a fixed remuneration, including remuneration for overtime, night work and public holidays.

A contract for services is more flexible – remuneration is determined based on the tasks performed or working hours, and the employee is not always entitled to additional payments for overtime or night work.

Employee benefits

An employment contract is characterized by the fact that employees are entitled to basic benefits related to work, such as: sick leave, vacation leave, protection against dismissal from work and other types of benefits.

In the case of a contract for services, the employee does not have the possibility of using such benefits. They can only have health insurance contributions deducted, which will allow them to use sick leave.

Working time and flexibility

In the case of an employment contract, the working hours, place and scope of duties are specified in the contract. The employee has fixed working hours and complies with the regulations of the workplace. A contract for services is more flexible – the contractor independently decides on the time and place of execution of the order, provided that the task is performed in accordance with the arrangements.

Legal protection An employee under an employment contract enjoys full legal protection, including the right to vacation leave, sick pay, maternity leave, and the right to terminate the contract by notice.

A contractor under a contract for services is not entitled to such benefits, and the contract may be terminated by either party without the need to observe a notice period, unless the contract provides otherwise.

Temporary employment

An employment contract may include employment for a fixed or indefinite period, with full benefits and rights. On the other hand, a contract for services is temporary and is concluded for the duration of a specific task or project. This is a less stable form of employment.

Sham employment contract

A sham employment contract occurs when the parties conclude an agreement that looks like an employment contract, but in reality does not involve a real employment relationship. This may apply to a situation in which an employee performs their duties under the terms of a civil law contract, such as a contract for services or a contract for specific work, but formally signs an employment contract.

Examples of a sham employment contract

Lack of actual supervision – the employee performs their work without supervision from the employer, which may indicate that the employment contract is only on paper.

Performing work on other terms – instead of performing work according to the agreed hours and in the place specified in the contract, the employee has complete freedom in organizing their work, which is more like work on assignment.

Lack of employee benefits – in the case of a sham employment contract, the employee does not enjoy full rights, such as vacation leave, the right to sick leave or overtime pay.

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Features of an employment contract

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Features of an employment contract – what to look out for?

When entering into an employment contract, it is important that it complies with the provisions of labor law. There are certain characteristic features, the so-called features of an employment contract, that distinguish it from other types of contracts, such as civil law contracts (e.g. a contract for services or a contract for specific work). It is worth paying attention to these elements to avoid situations in which the contract is incorrectly classified and the employee does not enjoy the full rights resulting from employment.

Sometimes employers try to circumvent the law by offering contracts that look like employment contracts, but in fact are not. This may apply, for example, to a situation in which an employee performs work under the terms of a contract for services, but their work meets the features of an employment contract, e.g. they perform it at a specific time and place, under the supervision of the employer, but are not covered by full employee rights.

Incorrect classification of a contract as an employment contract may lead to a lack of social benefits, such as health insurance or pension, as well as deprivation of the employee’s right to vacation, sick leave or other benefits that are granted only to employees under an employment contract. For the employer, such a situation may mean legal liability and financial penalties.

Factors determining whether a B2B contract is considered an employment contract

In some cases, despite the conclusion of a B2B (business-to-business) contract, the employment relationship may be considered an employment contract. It sometimes happens that, as a result of an inspection or analysis of the factual situation, a civil law contract is treated as an employment contract if the actual nature of the cooperation meets the characteristics of an employment relationship. Below are the key factors that may determine such classification:

Subordination and supervision by the principal
If a person working under a B2B contract performs their duties in accordance with the guidelines and under the supervision of the principal, then this may indicate that we are dealing with an employment contract. Subordination in matters concerning the place, hours and manner of performing work is one of the main characteristic elements of an employment contract.

Fixed salary
A B2B contract that assumes a fixed monthly salary, regardless of the actual scope of work or result, may indicate an employment relationship. In the case of an employment contract, the salary is often set at a fixed level, and the employee receives a salary regardless of the number of hours worked.

No financial risk
An employee employed under an employment contract does not bear the economic risk that is characteristic of an employment relationship. In the case of a B2B contract, the entrepreneur independently bears the risk associated with the business activity, e.g. irregularity of orders or breaks in work. If the principal does not bear any risk and offers the employee a fixed salary, this may indicate the existence of an employment relationship.

Lack of independence and autonomy in organizing work
A person employed under a B2B contract who is obliged to perform work according to strictly defined rules (e.g. working hours, place of work) may be considered an employee. An employee employed under an employment contract has greater freedom in organizing their work.

Exclusive cooperation with one client
A self-employed person who works exclusively for one client, in a way that resembles a full-time job, may be considered an employee. Often in B2B contracts, a person providing services for one company for a long period of time does not have the possibility of freely choosing other orders, which is a characteristic feature of an employment contract.

Working time and full-time
Self-employed people who work full-time (e.g. 40 hours a week), without any freedom in organizing their working time, may be treated as employees under an employment contract. Working time and full-time are characteristics typical of an employment contract.

By entering into an employment contract, the employee undertakes to perform work for the employer, and the employer undertakes to provide specific working conditions, remuneration and other benefits, in accordance with the provisions of the Labor Code. If the contract of mandate is performed under conditions typical of an employment relationship, it may be reclassified as an employment contract. In order to avoid misunderstandings and legal consequences, it is worth conducting an employment relationship test, analyzing, among other things, scope of subordination, method of remuneration settlement and degree of independence in the performance of duties.

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