First Individual Interpretations Issued by the Chief Labour Inspector: When Can a Contract of Mandate or B2B Agreement Be Regarded as an Employment Relationship?

The first interpretations issued by the Chief Labour Inspector (GIP) make it possible to identify several recurring assessment criteria:

• organisational subordination and managerial control,
• determining the time and place of work,
• issuing day-to-day instructions,
• personal performance of work,
• a genuine possibility of appointing a substitute,
• integration of the contractor into the organisation of the business,
• use of the counterparty’s infrastructure and equipment,
• bearing economic risk,
• responsibility for the outcome of the services performed,
• freedom to accept subsequent assignments.

From a business perspective, the key point is that the GIP examines not only the wording of the agreement, but above all the actual manner in which the cooperation is carried out.

One of the first GIP interpretations concerned contracts of mandate concluded with students performing tasks related to the sale of bread and to production. The GIP considered this model to be incorrect, pointing to characteristics of an employment relationship. Although the students could independently indicate their availability, once they started work they performed simple tasks directly related to the production and sales processes. The scope of their duties was specified by the hiring entity. At the same time, the authority indicated that the mere fact that a contractor determines the days on which they are available does not necessarily mean that there is no subordination.

Other GIP interpretations concern work performed under contracts of mandate involving the completion of short-term assignments through a temporary employment agency’s application. Contractors accepted assignments in shops, warehouses and production facilities. The GIP considered this model to be incorrect. The decisive factors were that, once they started work, the contractors:

• followed the client’s instructions,
• were subject to the client’s supervision,
• worked at a specified place and time,
• performed simple physical tasks,
• were directly integrated into the company’s work process.

At the same time, the interpretations indicate that the technology used to organise the acceptance of assignments — i.e. contractors selecting assignments through an application — does not, in itself, eliminate employee subordination. The GIP primarily assesses who actually organises the work and who gives instructions while it is being performed.

Particular importance to businesses is the conclusion arising from an interpretation concerning short-term assignments performed for multiple clients. In the case examined, the work was performed for 21 days for six clients over a six-month period. The GIP held that the short-term nature of the assignments does not preclude the work from constituting temporary agency work. In the GIP’s view, even work performed for a single day may take place under conditions of subordination. If a contractor follows the client’s instructions, is integrated into the client’s work organisation and performs tasks characteristic of employees, the short-term nature of the cooperation does not eliminate the legal risk.

In another interpretation, the GIP challenged a contract of mandate concluded with a driver transporting children with disabilities to schools. The relevant factors included:

• a fixed route,
• personal performance of duties,
• continuity and repeatability of the work,
• a vehicle provided by the entity,
• the vehicle being garaged by the entity,
• a fixed schedule resulting from school hours,
• the absence of significant economic risk on the part of the driver.

In practice, the driver had been incorporated into an organised system for the performance of public tasks. The more extensively a business or public entity organises the contractor’s work by imposing fixed hours, routes, locations and methods of performing duties, the greater the risk that the cooperation will be classified as an employment relationship.

The GIP similarly assessed a contract of mandate with a person supervising children during school transport. It was also relevant that the possibility of appointing a substitute was limited by requirements concerning the verification of the substitute. This interpretation demonstrates that a formal substitution clause is not always sufficient to establish the civil-law nature of an agreement.

The GIP also challenged contracts of mandate with waiters working during the summer season. The waiters worked:

• according to a schedule determined by the hiring entity,
• at the entrepreneur’s premises,
• under the entrepreneur’s supervision,
• using the entrepreneur’s equipment.

According to the GIP, where the manner in which work is performed corresponds to an employment relationship, the fact that the work lasts only a few months does not eliminate the obligation to use the appropriate form of employment.

One of the more interesting interpretations concerned hairdressers and barbers cooperating with a salon chain on the basis of civil-law contracts and B2B agreements. The GIP considered this model to be incorrect. Of particular significance is the argument concerning professional autonomy. The fact that a hairdresser independently chooses a cutting technique does not, in itself, mean that they are an independent entrepreneur. In the GIP’s assessment, this was autonomy resulting from professional qualifications rather than evidence of the absence of subordination. The services were performed:

• at the salon’s premises,
• using its infrastructure,
• according to its price list,
• through its booking system.

Not all contracts of mandate reviewed by the GIP were challenged.

One example is an agreement concerning the acquisition of business contacts and customers. The contractor:

• independently chose the place and time of work,
• did not receive day-to-day work instructions,
• was not subject to real-time supervision,
• was assessed based on sales results,
• could appoint a substitute,
• used their own equipment.

The GIP considered this model to be appropriate. The decisive factor was the contractor’s genuine independence.

In subsequent interpretations, the GIP also positively assessed contracts of mandate with drivers delivering bread. The drivers independently decided:

• when they were available,
• which routes they accepted,
• on which days they performed the assignments.

They were not required to remain permanently available to the business. There was also a genuine possibility of having a substitute perform a delivery. This is a good example showing that a contract of mandate may be appropriate even for a profession that, under different circumstances, could be performed within an employment relationship.

The GIP also positively assessed B2B contracts concluded with IT contractors and Project Managers. The relevant factors included:

• the absence of employer-like managerial control,
• no fixed working hours,
• no obligation to provide services at a specified location,
• contractual liability,
• the possibility of applying contractual penalties,
• the absence of typical employer powers on the part of the Project Manager.

Project management alone therefore did not automatically constitute employer-like managerial control. In the model examined, the Project Manager had no authority to hire or dismiss employees or to grant leave. The GIP thus distinguished between project coordination and the exercise of powers arising from an employer’s authority.

The first 12 individual interpretations issued by the GIP should encourage businesses to review not only their contract templates, but above all the actual practices governing how those contracts are performed.

Key conclusions from the analysis of the PIP’s positions

1. Organisational subordination and managerial control: The fact that a contractor independently determines their working hours or days of availability does not rule out an employment relationship if, once they commence work, the contractor is subject to a work schedule, instructions or day-to-day organisation imposed by the hiring entity.

2. Professional autonomy: Performing tasks requiring professional qualifications (e.g. as a hairdresser, programmer or waiter) independently in terms of the techniques used does not necessarily mean that there is no subordination if the work is performed within the hiring entity’s infrastructure and organisational framework.

3. Genuine nature of a substitution clause: The possibility of appointing a substitute excludes an employment relationship only if it is genuine and allows the agreement to be performed by a third party on behalf of and for the account of the principal contractor, rather than resulting in the termination of the existing agreement and the conclusion of a new one.

4. Temporary and occasional work: The short duration of a contract of mandate — even a single day — or its seasonal nature does not justify the use of civil-law contracts where the work is performed under conditions of subordination.

In light of the new GIP interpretations, it is worth remembering that a business’s legal security does not depend solely on the wording of its contracts. Equally important is how those contracts are actually performed.

A properly conducted audit makes it possible not only to verify whether the documentation complies with applicable regulations, but above all to prepare the business for a potential inspection. Appropriate analysis, adequate preparation and conscious risk management can significantly reduce potential legal consequences.

SKLAW advises on the analysis and auditing of civil-law contracts in light of new regulations and the risks associated with their performance. We have had the opportunity to conduct detailed reviews for businesses of their existing contracts and cooperation practices, identifying areas requiring changes or additional safeguards.

If your company uses contracts of mandate or other civil-law contracts, it is worth checking today whether the way in which they are actually performed corresponds to their formal terms.