A civil contract is a written agreement between individuals or legal entities that defines the appearance, amendment and termination of legal relations. This includes activities such as buying and selling, donating, exchanging, building contract, storage, insurance, transportation, and many others.
Terms of an agreement
By concluding a legal act, the employer is not obligated to enter notes in the work books. Nevertheless, the agreed period during which work is performed or services are provided should be included in the length of service, which gives the right to a legal pension. The length of the employment period, which is considered an insurance period, depends on the period entered in the GPC agreement. Moreover, the employer should transfer insurance contributions accrued on cash compensation to the Pension Fund. This allows you to replenish the employee’s funds in the state account in the same way as the accumulation of other employees.
Information on payments under the contract of the amount that was transferred in favor of the fund, the employer must provide there as part of the usual personified reporting. For the employee, from the point of view of receiving a pension in the future, it does not play a decisive role according to which contract to hire - labor or civil law. Such agreements are determined by the requirements of the Civil Code, where a separate chapter is devoted to each type of these agreements.
Items in a legal act
Schematically a typical GPC agreement consists of the following defining items:
- Introductory part. The name of the act, place and date of its signing, details of the contracting parties are indicated here. Both legal entities and individuals can play their role. Between them there is a difference in that for the first (as a rule, customers) the organization or its representative is indicated, on behalf of which the contract is fastened. For individuals, first name, middle name and last name, passport data and address of registration are indicated.
- The essence of the contract. Here they mention all the basic conditions under the agreement: the name of the subject of discussion, in other words, of what is being specifically discussed, the technical conditions of the work performed, the duties and corresponding rights of both parties, the period of guaranteed fulfillment by the signatory of their obligations and requirements. Since the main goal is the orientation toward the final result for the possibility of fulfilling the civil law contract, the type and quantity of the work and services rendered by the hired employee are stated clearly and in detail, with explanations.
- The cost and calculation procedure, where the amount of remuneration is established upon the fact of the labor expended and the cash payment system is determined. According to the requirements of a civil law contract, the hired employee independently chooses the methods for fulfilling orders, unless otherwise specified by the contract. If it does not provide for preliminary remuneration for the services provided or payment for certain stages of their completion, the customer is obliged to pay the amount prescribed by the agreement after the completion of the final work, provided that it is done properly and on time.
- Additional and other conditions that are not required to be indicated in each document, but they may in some way affect the current implementation of the obligations of the parties: responsibility for the performance of work, ways to ensure it, sanctions for one or another party in case of possible violation of the agreement, good reason for changes or complete termination of the act unilaterally, an agreement on the confidentiality of information, the procedure for resolving disputes arising between signatories.
- The final part of the contract contains details and signatures of both parties. As a legal entity, the customer enters the details in the following sequence: name of organization, its mailing address, mandatory TIN, bank account details. Attribute design involves graphical highlighting. And for an individual, the details are indicated in a completely different sequence: name, passport data, postal address of the place of residence or registration, also a TIN, home (any contact) phone. If the agreement requires it, they write the payment details.
Labor function
One of the most important distinguishing features of typical GPC agreements is the subject of a negotiated agreement between the parties. The essence of the signing act is the expected end result of the work or the level of services rendered, which the employer accepts at the time specified in the contract. How the process of performing the required work will proceed should not be a matter of excitement for the customer, but this does not prevent him from participating in the verification of the implementation of the clauses of the contract.
By the due date, the hired employee must hand over the finished task and transfer its result to the customer on the basis of a special Act of the work performed (or the services provided). This document serves as the basis for the payment of remuneration to the performer.
Realizing the requirements of the clauses of the signed agreement, the contractor has the right to attract third parties to the labor process, unless otherwise required by the contract. The contractor’s acts do not apply to the contractor according to the internal routine. Therefore, he is not required to obey the rules of the organization that hired him, as well as the requirements of its officials. Of course, the customer can monitor the execution of the task at any time, but cannot control the contractor himself or give him binding instructions.
The working process
If for employees who are provided with time-based pay, the time sheet is the basis for further payroll, then remuneration paid to hired makers is paid for closed orders that can confirm the fact that the conditional amount of work has been completed. The contractor independently determines the degree of tension of the work regime, develops an optimal plan for the successful implementation of the task, sets the daily real size of the work. The customer is not required to take into account the working time that the employee spent on solving the problem, and will not pay him for the probable overtime employment even on weekends and holidays. By concluding a GPC agreement on the provision of services, the employer should focus only on the provisions and requirements of the Civil Code. The document is signed by specific representatives on both sides, the wet signature is sealed. The completion of work by agreement is sealed by the Act of Acceptance of Services.
Working conditions for a citizen
For GPC contracted by the contract, unlike a full-time employee, conditions with a specially equipped workplace should not be created without fail. The customer is exempted from the need to be responsible for safety and labor protection in relation to the contractor. These issues lie entirely with the contractor. On the contrary, with regard to equipment and materials, the contract should determine whether the customer should provide the hired worker with materials and tools. In the absence of such a condition, the contractor uses his own.
Also floating is the issue of an industrial accident. It is difficult for a person employed under a GPC agreement to receive temporary disability benefits from the employer. The fact is that the customer has the right not to include an accident insurance clause in the contract.
Registration under the GPC agreement does not require compliance with strict employment rules . Only signatures under the agreement are enough, in contrast to the acceptance procedure under the employment contract, according to which it is required to issue an order and have a personal card per person.
Financial issue
A typical GPC agreement allows the contractor to receive remuneration for the work (services) provided only upon completion of the full amount. Thus, if the customer hired an employee for several months, then he does not have to make periodic payments. However, if the contractor has not completed all the work by the time indicated in the agreement, wages may not be paid. At the same time, a special condition on the payment of an advance payment (phased delivery of work) may be provided for in the contract agreement. In this case, the customer should pay for individual stages of production, adopted by him under the Act.
The financial calculations for the result of the work done with the contractor who concluded the GPC agreement, the organization must correctly reflect on account number 76 from the Chart of Accounts “Settlements with other debtors and creditors”. Thus, for an employer, signing a GPC agreement brings certain advantages, and for a hired employee it often leads to negative consequences.
Features of civil agreement
An organization may also conclude a contract with those employees for whose positions in the staff list there is no space provided. This means that the customer is allowed to hire any number of non-staff employees. Also, this fact leads to the fact that the employer is free to refuse any applicant without explaining the reasons for such a decision. This follows from the thesis about the freedom of citizens and legal entities in the consent or denial of agreements according to the Civil Code. For example, the organization does not intend to recruit people from Asia or older than 50 years, or nonresidents without registration.
The agreement provides the employer with a wide field for “maneuvers” regarding the number of employees. The standard labor legislation limits the actions of the customer to special norms. If, for example, he wants to refuse the applicant, then there must be appropriate justification without taking into account personal preferences. Since the GPC contract for the provision of services in all cases is concluded for a certain period, there is no need to get rid of the unnecessary employee, you just have to wait until the work is completed.
The issue of infringement of the wage worker
During the validity of the GPC agreement, for a possible violation of the deadlines for the performance of work, a peculiar penalty in the form of a fine (penalty) may be recovered from a negligent contractor. And if the violations take a more serious form and damage is caused to the property of the customer, the employee is obliged to indemnify in full. Moreover, unlike the provisions of the labor contract, under civil service agreements, the contractor assumes the risk of unexpected damage to the result of the finished work before its acceptance under the Act.
The employer is required to accrue contributions to the Pension Fund and the MHIF only for cash payments to the employee. But the employer has the opportunity to save on insurance contributions to the Social Insurance Fund, because they do not need to be paid.
As for the holidays, here the issue is not on the side of the employee. In civil legislation for workers under the terms of the GPC agreements, vacation pay is not provided. Unlike other employees who have a minimum annual paid leave of 28 calendar days.
Social features of the contract
Registration under the GPC agreement for students means that the employee does not have the opportunity to receive paid study leave, as with others, since the Civil Code does not provide for such a social guarantee. At the same time, he cannot expect, unlike the one working on a regular basis, the annual one-time payment of travel to the place of distance learning and the return trip. Along with this drawback, GPCs drawn up under the contract are also deprived of the opportunity to receive additional payments that the employer can make to his employees: material assistance, compensation for the cost of the trip, payment of treatment, replenishment of part of the retirement pension, reimbursement of interest on loans, etc.
The customer is not obliged to give the contractor a property deduction in the event of purchase or construction of housing, does not make a social deduction in the amount of personal pension contributions paid by the contractor to the non-state fund under the terms of the contract of the non-state option of collateral.
An employer under a civil agreement loses the need to pay temporary disability benefits related to the supervision of a sick family member, quarantine, aftercare in a sanatorium, with prosthetics. An employee must fill out such payments through social protection authorities. In this case, all of them will be produced in a minimum amount, despite the size of past income.
Amounts received by an employee under a GPC agreement are not taken into account when calculating average earnings. From this it follows that in the future, when the contractor will have to conclude an employment contract with the organization, these amounts will not participate in the calculation of average incomes.
Transformation of a GPC / SEC agreement in labor
Based on the fact that current legislation is on the side of the interests of the employee, the court may find it possible to call the GPC agreement actually regulated labor relations between the employer and the employee. Thus, it turns out that in this case the requirements of labor law and law will apply to them. Here, the specific content of the contract is of paramount importance.
If the court decision renders a verdict on labor relations, the employer should draw up an employment contract with the employee, the start date of which relates to the past, on the day of signing the GPC agreement. This will force the employer to pay the employee periods of temporary disability, provide previously taken paid leave, pay for it the costs of insurance premiums, etc.
The following circumstances may serve as the basis for the court to recognize the GPC / SEC as a labor contract.
- The need to comply with internal regulations, work schedules, strict compliance with the instructions of the employer.
- Payments must be made on an ongoing basis.
- The performance by an individual of specific actions and duties imposed on him for a very long time.
- The fact of the presence of liability that was assigned to the contractor under the GPC agreement.
- The arrangement of a workplace for an employee at the customer’s expense, as well as the provision of equipment, mobile communications, workwear, and KKT for the effective performance of work or the provision of the services it provides.