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2. Re-Characterisation of Independent Contractors as Employees

a. Laws and Guiding Principles

Replacement of the contract of employment by any civil law contract while maintaining the terms and conditions of labour employment is not admissible under the regulations of the Polish Labour Code. Conclusion of a contract by which one of the parties undertakes to perform work of a specified type for the other party, under its direction and in the indicated place and time, and the other party commits itself to pay remuneration for work causes ex lege the emergence of the employment relationship between the contracting parties, irrespective of the name of the contract concluded by the parties. The main intention of this regulation is to prevent the pathology consisting in labour law evasion in relations between employers and employees.

b. The Legal Consequences of a Re-Characterisation

The consequence of the conclusion of a civil law contract while keeping the terms and conditions of labour-code employment, is that the employee may submit claims for ascertainment of the existence of an employment relationship. An employee with whom a civil law contract has been concluded on the terms of the contract of employment may submit the case to the labour court and demand the ascertainment of the relationship. Such a claim may also be filed by a non-governmental organization within its statutory activities, if the employee agrees. Also, a labour inspector may institute an action against the employer if a civil law contract is found to have been concluded on the terms of a contract of employment. In the judicial proceedings, both the NGO and the labour inspector are a party in the formal (for the purpose of court proceedings) sense, as there is no legal relationship between them and the sued employer.

c. Judicial Remedies Available to Persons Seeking ‘Employee’ Status

Despite the code prohibition on conclusion of civil law contracts on the terms of the contract of employment, this regulation is very often bent nowadays. That is because civil law contracts are more favourable to employers, as they are free from most obligations, which would be a burden to them under the regulations of the Labour Code. The action for the ascertainment of the existence of the employment relationship is meant as a remedy for this practice and protection of employees' interests.

A demand for the ascertainment of the existence of the employment relationship can be made if there is suspicion that a given person was not employed on the basis of a civil law contract, but a contract of employment. The action may be brought to the labour court by any person who has a legal interest in the case.

The petitioner can be either an employee who claims to have been a party to an employment relationship, or a Labour Inspector. In the latter case, there are two options. The Inspector can demand the ascertainment of the existence of the employment relationship on his own initiative, which does not require approval of the person for whom the Inspector acts, but he may also join any pending proceedings, to which however, the person who has brought the case to court has to consent. Other persons may also demand the ascertainment of the existence of the employment relationship, even though this relation does not concern them directly, if they can prove their legal interest. For example, such persons can be relatives of a deceased employee who, in their opinion, was employed on the basis of a contract of employment.

When deciding whether a given relationship had the character of an employment relationship, the labour court takes into consideration the will of the parties to the concluded contract and the features of the relationship between the parties. In most cases, the features typical for civil law contracts and contracts of employment overlap, so the court has to establish which of those features prevail. It is not possible to unambiguously outline the practice in a case of ascertainment of the existence of the employment relationship, as everything depends on the specific facts of the case. The court indicates the prevalence of specific features of the contract and can either allow the claim and pronounce the existence of the employment relationship, or dismiss the claim.

d. Legal or Administrative Penalties or Damages for the Employers in the Event of Re-Characterisation

The possibility that the court may ascertain the existence of the employment relationship is not the only consequence of concluding a civil law contract on the terms of the contract of employment. The Labour Code contains penal regulations according to which an employer employing an employee on the basis of a civil law contract in conditions where, in compliance with the Labour Code, this employer should conclude the contract of employment with this employee, commits an offence and is subject to a fine of PLN 1,000 (ca EUR 250) to PLN 30,000 (ca EUR 7,500).

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