How to hire a person to perform a specific job and protect yourself from fines of the State Labor.
When hiring workers for one-time work, such as during the harvest, the employer faces the problem of their registration. It is inefficient to enroll such employees in the staff of the enterprise. However, if they are not employed, the employer faces a fine of 125 thousand hryvnias from the State Labor Service. The way out of this situation is the conclusion of civil law agreements with such employees (JRS).
Since under such an agreement the company does not employ a person, but hires him to perform a specific job, it is not necessary to make entries in the employment record book and notify the tax office. At the same time, taxes are paid not from the minimum wage, but from the amount of remuneration under the contract.
Civil law contracts should not contain signs of employment. These are working hours, subordination, wages, vacations, etc. The JRS should define a specific list of works with a specific result. Payment for these works should not be made monthly, but for a specific job.
Do not agree with the sanctions? Claim!
The current legislation does not specify what work can be performed under the JRS. However, if the fines of the State Labor Service are appealed, the court will analyze the evidence and the subject of each contract in each specific situation.
One of the agricultural enterprises in Sumy region was fined almost 2.5 million hryvnias for undocumented workers. The State Labor Service did not take into account the civil law contracts of the enterprise and noted that the relationship between the enterprise and employees is labor. The company filed a lawsuit, and the Sumy District Administrative Court sided with the farm and overturned the fine. In its decision of 05.12.2018, the court noted that the subject of JRS is the repair of drinking troughs, sawing firewood, cleaning the area, hay, loading and haymaking, ie is the end result. The JRS specifies the specific result of the work to be transmitted by the contractor to the customer, defines the list of tasks, its types, etc. Therefore, the court came to the conclusion that the JRS concluded at the enterprise do not contain signs of labor relations.
In the Ternopil region, the company has entered into contracts for loading, hilling and unrolling of grain on the current and in the barn. However, the State Labor Inspectorate recognized these contracts as employment contracts and fined the company. The Ternopil District Administrative Court, by its decision of December 20, 2018, canceled the fine of the State Labor Service. In the decision, the court noted that the JRS of the company does not contain signs of employment contracts, in particular, these agreements do not address the obligation of the contractor to be present at the company during certain working hours, the obligation to comply with internal labor regulations, labor process and duration of work. time.
Fines are not always canceled
However, the courts do not always cancel the fines of the State Labor Service, even if there are civil contracts. In particular, the Third Administrative Court of Appeal (Dnipropetrovsk region) in its decision of 04.12.2018 sided with the State Labor. In its decision, the court noted that the subject of the contract is the cleaning of warehouses and field work. However, the payment made by the enterprise did not depend on the type and actual amount of work performed by it, payment was made systematically (monthly) and in a fixed amount. In addition, the contract does not specify what results the company expects from the employee, the labor process does not provide any end result. That is why the court concluded that the relationship between the parties contains signs of an employment relationship.
As you can see, the existence of a civil contract does not save from a fine of the State Labor. And if this agreement is spelled out incorrectly, it will not be possible to appeal the fine in court. Therefore, it is important that the JRS relationship does not resemble labor, and the worker receives a REMUNERATION (not to be confused with wages).
What are the employees talking about?
It is very important that the workers hired by the company for one-time work understand the essence of civil law relations. People need to understand that they have been hired to do a specific job with a certain result and that they will be paid a fixed amount. They do not have a manager, but a customer, there is no approved schedule, but only the amount of work. And it is important that they confirm this information to the labor inspector during the inspection.
For example, the Kirovohrad District Administrative Court sided with the State Labor Inspectorate and in its decision of January 23, 2019, denied the farm a claim for cancellation of the fine. FG concluded contracts with workers to perform various work on the farm, but during the inspection in the explanation (letter-questionnaire of the employee) the employee noted that he works on the farm with a work schedule from 8-00 to 17-00, lunch break from 12-00 to 13-00, day off - Sunday, and receives a salary once a month in cash. Therefore, the court concluded that the relationship between the parties contained signs of labor relations, and the State Labor Service rightly imposed a fine.
At the same time, the Cherkasy District Administrative Court, by its decision of September 6, 2018, canceled the fine of the State Labor Service. In the decision, the court noted that the subject of civil law contracts are works on the transfer of grain remote control unit ZM-60 on the car. In addition, the workers provided explanations stating that they had performed work for which they had received monetary remuneration in accordance with civil law contracts, and that they were not and had never been in an employment relationship with the plaintiff, the company had not organized their employment process. . Therefore, the court concluded that the relationship between workers and the company does not contain signs of labor.
As you can see, civil law contracts are a good alternative to employment.
In order for the State Labor Office not to recognize the JRS relationship as labor, the contract must be properly drawn up. In particular, the result of the work should be clearly defined, and payment should be made for this result, and not monthly or weekly. The contract should not have a work schedule, work should be performed at your own risk and at a time specified by the employee. To avoid misunderstandings with the potential employee, he should explain the essence of the contractual relationship with the employer.
If you follow these simple rules, the risks of receiving a fine from the State Labor will be reduced, and the imposed fines can be successfully canceled in court.
lawyer, partner of the law firm BARGEN
AgroMarket newspaper, May 2019