Rights and duties of a worker engaged under a contract of employment are set out in the Labour Code. Employment under a mandate contract or a task contract is governed by the Civil Code provisions.
Differences between employment contracts and civil law contracts
The legal basis for work performance may be divided into two groups, i.e. employment under the Labour Code, based on the labour law provisions, and the so-called engagement under a non-employment contract, based on civil law provisions. Employment under the Labour Code comprises the following cases:
- contracts of employment,
- cooperative contract of employment.
Differences between employment contracts and civil-law contracts relate, among others, to:
- the nature of the work performed,
- the necessity to perform work personally,
- remuneration for work,
- right to annual leave,
- the risk arising from work performance,
- the possibility to terminate a contract,
- guarantee of remuneration,
- contributions to the Social Insurance Institution (ZUS).
An employment contract
Employment under the Labour Code involves work performance based on an employment relationship. Legislation applicable to this form of employment is the Labour Code and other labour law provisions.
By establishing an employment relationship a worker undertakes to perform a specific type of work for the benefit of the employer and under their management, in the place and at the time indicated by the employer, for remuneration.
An employment relationship exists between two parties – an employer and an employee.
An employer is an organisational unit, even if it is not a legal person, as well as a natural person, if they employ workers.
An employee is a natural person engaged based on a contract of employment, appointment, nomination, election or a cooperative employment contract.
Thus, the following persons are not employees if they:
- perform work based on civil-law contracts,
- conduct economic activity,
- perform home-based work.
Features of an employment relationship:
- employee’s subordination to the management of the employer,
- payment for the work performed,
- the work is performed personally by the employee,
- repetitive activities in specific time periods,
- the employer incurs the risk related to the conducted activity,
- the work is performed in the place and at the time specified by the employer.
The employer’s management means execution by the employee of the employer’s orders on condition that they are not in breach of the contract and the law.
The employer incurs:
- technical risk – consequences of non-performance of work by the employee due to technical reasons, e.g. downtime,
- personal risk – consequences of mistakes made by an employee,
- economic risk – related to poor economic situation of the enterprise,
- social risk – which consists in incurring some social burdens by the employer (company fund for social benefits, payment of leave allowance).
Guarantee of the minimum remuneration
An employee is entitled to remuneration for the work performed. An employee must not renounce the right to remuneration nor transfer this right to another person. The obligation of personal performance of work means that an employee must not entrust accomplishment of the tasks under an employment contract to third persons.
An employee engaged under an employment contract is guaranteed minimum remuneration for work; in the first semester of 2023 its amount was PLN 3490 gross, and in the second semester 2023 it is PLN 3600 gross. The minimum remuneration may comprise various components due to an employee, for example a basic salary or a regular bonus.
The following components must not be included in the minimum remuneration:
- jubilee reward,
- severance pay due to an employee in connection with retirement followed by an old-age pension or a disability pension,
- remuneration for overtime work,
- extra pay for night-time work,
- extra pay depending on the seniority.
An employer should pay remuneration on a fixed, previously specified date, yet no later than within 10 first days of the following calendar month (Art. 85 § 1 and 2 of the Labour Code).
Termination of an employment contract
An employment contract is terminated:
- by mutual consent of the parties,
- by statement of one of the parties with observing a notice period (termination of the employment contract with notice period),
- by statement of one of the parties without observing a notice period (termination of the employment contract without notice period),
- after the time period for which it was concluded,
- through expiry of the contract (death of the employee or the employer, temporary arrest of the employee).
Employee rights related to the employment under an employment contract:
- annual paid leaves (20 or 26 days),
- special leaves of absence,
- protective provisions concerning working time (right to a break at work, right to daily and weekly rest periods),
- limit of hours of overtime work and obligatory compensation for this work in the form of free time or extra payment,
- protection from termination of the employment relationship, for example:
- of pregnant employees and employees on maternity, parental, childcare, paternal leave,
- of employees in the period of 4 years preceding their retirement age,
- of employees staying on annual leave or being on sick leave; guarantee of the minimum pay,
- protective legislation related to parenthood, among others:
- right to leaves: maternity, parental, childcare, paternal, caretaking,
- extension of the contract duration until childbirth,
- the employer pays social insurance contributions (for an old-age pension, a disability pension, ill-health and accident insurance) and health insurance contributions, based on which the employee is entitled, among others, to health care free of charge,
- inspection and supervision of compliance with legislation on employment under the Labour Code is exercised by the State Labour Inspection, while disputes arising from employment relationships are settled by labour courts.
Duties of employees
An employee has the duty to perform work diligently and conscientiously and follow the superior’s instructions concerning the work, if they are not contrary to legal provisions or the employment contract, in particular:
- observe the working time set out in the company;
- observe the workplace regulations and the rules set out in the company;
- observe the rules and regulations of occupational safety and health, as well as fire protection legislation;
- care for the interests of the company, protect its property and keep secret the information disclosure of which might result in some kind of loss for the employer;
- keep secrets as set out in the employment contract and in legislation,
- observe the principles of interpersonal relations in the workplace.
Work under a mandate contract
A mandate contract is a civil-law contract. This is governed by the Civil Code, not by the Labour Code. A mandate contract is concluded between an ordering party and a contractor.
Through a mandate contract a contractor undertakes to perform a specific activity for the ordering party. A mandate contract is called a “diligent work contract”, just like an employment contract. A mandate contract does not focus on the result. A contractor is obliged to work conscientiously and with adequate diligence while performing actions being the objective of the mandate contract. Examples of mandate contracts: cleaning of rooms, distribution of advertising leaflets.
The possibility of replacement
A contractor may assign the performance of work under the mandate contract to a third person only if this results from the mandate contract itself, from a habit or if is forced to do so by the circumstances. In such a case the contractor should immediately inform the ordering party about the person replacing them and about that person’s residential address; in such a case the contractor may only be liable for the lack of sufficient diligence in choosing the person for replacement. If the contractor has assigned the work performance to another person, while not being authorised to do so, and some property of the ordering party has been lost or destroyed during the work, the contractor is also liable for unintentional loss or destruction, unless any of these would have happened also if the contractor had performed the work by himself/herself.
Remuneration under a mandate contract
Work under a mandate contract is performed in principle for remuneration. If neither a mandate contract nor the circumstances in which it was concluded suggest that the contractor undertook to perform it without pay, pecuniary compensation is due for performing the work.
Payments of remuneration
Payments of remuneration in amounts resulting from the minimum hourly rate are made in monetary form. For contracts concluded for longer than 1 month payments of remuneration in amounts resulting from the minimum hourly rate are made at least once a month. The legislation in force does not exclude deducting fees or penalties from the contractor’s remuneration, unless such action of the ordering party would be intended to circumvent the statutory provisions or be contrary to the principles of interpersonal relations.
Termination of a mandate contract
The ordering party may terminate it at any time. In such cases, however, the ordering party should refund expenses incurred by the contractor in order to properly perform the work under the mandate contract. If the work is for remuneration, the ordering party should pay the contractor the part of remuneration corresponding to the work performed so far. If the contract was terminated without an important reason, the ordering party should also pay damages.
The contractor may terminate a mandate contract at any time. However, if the mandate contract is with remuneration, and the termination was made without an important reason, the contractor is liable for any damage caused. It is forbidden to renounce in advance the right to terminate a mandate contract for important reasons.
Rights arising from a mandate contract:
- A mandate contract is subject to obligatory social insurance, but social insurance contributions to ZUS are deducted in different ways depending on whether a contractor has got any other grounds for social insurance. All possible situations are explained on the website of ZUS in a guide titled “Rules of coverage by social insurance and health insurance; rules of determining the amount of social insurance contributions for persons working based on civil-law contracts”.
- The time of coverage by social insurance is included in the periods in which contributions have been paid, among others it is included in the employment period on which the right to an old-age pension depends, but it is not included in the employee’s job tenure.
- The ordering party pays health insurance contributions, so the contractor is entitled to health care free of charge.
- Ill-health insurance is voluntary. If a contractor decides to be covered by such insurance, then they may benefit from paid sick leave.
- Lack of subordination to the ordering party.
- The right to assign performance of the work under a mandate contract to a third person (if so stipulated in the contract).
The contractor does not have the right, among others, to:
- annual leave; maternity, parental, childcare, paternal, caretaking leave,
- compensation for overtime work,
- severance pay before an old-age pension or a disability pension.
Work under a task contract
Through a task contract the contracted party undertakes to perform a specific task and the ordering party undertakes to pay remuneration. The parties to a task contract are the ordering party and the contractor.
A task contract entails the achievement of a concrete result which may be verified. Under a task contract the contractor undertakes to carry out a task or create work which meets the requirements of the ordering party. Such type of a contract stipulates freedom and independence in carrying out the task; moreover, the legal relationship is not permanent because creation of the work is one-off by nature and it is limited by the deadline.
Remuneration under a task contract
A task contract is executed for remuneration. However, the law-maker has not guaranteed any minimum remuneration and left the method of determining the remuneration to the discretion of the parties. The remuneration amount for the task completion may be specified by indicating the basis for that remuneration. If the parties have not set out the remuneration amount and have not indicated the basis for determining it, in the case of doubts it is assumed that the parties opted for a usual remuneration for a task of that type. If it is still impossible to determine the remuneration amount even in that way, the remuneration due should correspond to the justified input of work and other inputs made by the contractor. Examples of a task contract: making a built-in wardrobe, painting a picture.
Termination of a task contract
The provisions included in the Civil Code concerning task contracts do not stipulate anything about the notice period. The only possibility is for the ordering party to withdraw from the concluded contract if:
- it is necessary to “(…) significantly increase the remuneration set out in the cost estimate”, then the ordering party should pay the contractor “(…) an adequate part of the agreed remuneration” (Art. 631 of the Civil Code);
- the contractor delays the commencement of the task or its completion and is likely to fail to complete it by the agreed deadline (Art. 635 of the Civil Code);
- the contractor performs the task “(…) in the wrong way or contrary to the contract” (Art. 636 § 1 of the Civil Code).
Task contracts and social insurance
A person performing work under a task contract is not covered by social insurance. No contributions are paid from this contract for an old-age pension or a disability pension, accident or ill-health insurance.
- Act of 26 June 1974 Labour Code (Journal of Laws of 2022, item 1510, as amended).
- Act of 23 April 1964 Civil Code (Journal of Laws of 2022, item 1360, as amended).
- Act of 10 October 2002 on the minimum remuneration for work (Journal of Laws of 2020, item 2207).
- Act of 13 October 1998 on the social insurance system (Journal of Laws of 2022, item 1009, as amended).
- Act of 25 June 1999 on cash benefits from social insurance in the event of sickness and maternity (Journal of Laws of 2022, item 1732, as amended).