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Contract work at the moment predominantly refers to work not following employment contracts, but under contracts of a civil-legal nature. There are pros and cons of contract jobs, as well as different approaches to providing state guarantees. At the same time, the exploitation of the system of civil-law contracts and substitution of labor relations for it may be regarded as an administrative offense and entail negative consequences.
Peculiarities and differences between contract work and employment relations
The law does not prohibit hiring contractors to perform any necessary work and services by entering into transactions of a civil law nature. This issue is extremely relevant in situations where it is necessary to perform a one-time performance of a certain range of tasks within a specific time frame or with the achievement of a specific result. Such agreement allows avoiding unnecessary costs and time spent on full-time employment of an employee, especially when there is no need for his constant presence at the workplace.
At the same time, working under contract deprives the person working in this way of some social guarantees provided by the state. Also, the employer in such a case has certain losses and costs, for example, associated with the lack of disciplinary leverage and management of such an employee.
Advantages of contract work versus formal employment
Certain advantages of contract work make it an extremely advantageous method of employment for both employers and workers. In particular, such a list of benefits can include:
- No need to follow the rules established by the company’s internal regulations and labor legislation;
- Ability to perform work within clearly defined deadlines with a focus on specific results, without the need for mandatory visits to the workplace during work;
- Lack of social guarantees can be compensated for by separate contractual provisions, as can the availability of additional compensation and remuneration;
- No employment history will be spoiled if the contractual obligations are not fulfilled, since the employment record book cannot be filled out and used for contracts of a civil-legal nature;
- There is no direct need for subordination and fulfillment of the requirements of the employer in an unconditional manner – when entering into a civil law contract, the parties are equal;
- Impossibility to bring to disciplinary responsibility;
The ability to require the employer to reclassify the contract as an employment contract, if necessary, through the courts. In general, traditional industries in which contracts prevail or can often be used on a par with employment contracts are construction, IT services, accounting, consulting services, etc.
Disadvantages of contract work
The disadvantages of contract work, first of all, are expressed in much less social protection of the hired worker. Especially when you consider that in many situations, contract work is organized for the sole purpose of avoiding the employer’s responsibility to the employee by not providing him with any additional compensation. In general, the disadvantages of contract work are:
- Lack of social guarantees of official employment. These include the provision of sick leave, paid vacations, protection of disabled and pregnant women from dismissal, the right to rest, and other benefits provided by the provisions of the labor code;
- Irregular working hours and the ability of the customer to demand actual results under the contract within the stipulated time frame;
- The possibility of bearing a greater level of responsibility for improper performance of duties – for example, a violation of performance requirements and insufficient qualifications may result in a simple disciplinary action, while the contract may imply the total loss of pay for labor and even the payment of a penalty to the customer;
- The complicated procedure of settlements in case of liquidation of the enterprise and the lack of guarantees in case of premature termination of the contract at the customer’s initiative, if such is not provided for by the terms of the concluded contract;
- Lack of accrual of labor and insurance length of service, which will harm the pension when subsequently receiving it.
In general, if there are certain agreements with the employer, working conditions under a contract may not differ, or even be more favorable in comparison to full-time employment. But it should not be forgotten that signs of a regular employment relationship may serve as grounds for reclassifying a work contract into an employment contract by the court decision, with negative consequences for both the actual employer and the performer.
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