Poland & CEE HR Perspectives: How to create proper employment structure

It is obvious that creating the employment structure is an important challenge. If properly planned and managed it is one of the most crucial basis for meeting business needs and expectations of any entity.

One of the key features of any employment structure should be its flexibility. The internal organization customized for a particular employer should reflect its individual needs and characteristics and thus make it easier to become competitive – also by the ability to quickly adjust to changing market conditions.

Apart from the employment relationship which is relatively formalistic and imposes numerous obligations on employers Polish law offers several non-employment relationships that could serve as basis for cooperation with individuals. Such solutions allow enterprises to be more flexible. Unfortunately, proper implementation and day-to-day exercise of civil-law contracts is relatively challenging. Practice shows that business entities tend to treat employees and civil-law  contractors equally, regardless of the type of contract in force (e.g. B2B, mandate contract or contracts for specific work). Here the risk of reclassification occurs (i.e., the risk of civil-law  contractors being qualified as employees, despite the type of contract signed).

That is why it is so important not only to properly draft the civil law contact but also to ensure that in practice, during the daily performance of obligations, contractors are not treated as employees. It is highly recommended to verify the contents of such civil-law contracts and the way they are performed in reality. Entities (in particular those that have never used civil-law contracts before) should perform such reviews / verifications also after signing such contracts to make sure that the provisions don’t trigger the risk of requalification (i.e., changing civil-law contract to employment contract by court, regardless of the type of contract signed).

Therefore it is absolutely essential to remember about some basic rules:

1. The contractor does not have a boss (superior).
2. The contractor doesn’t perform work – he/she performs obligations/services.
3. The contractor should be free to choose when and where he/she performs services.
4. The contractor should not be granted additional benefits (similar to those received by employees, e.g., Christmas bonuses).
5. The contractor doesn’t have a holiday leave.

At PCS | Littler Global we support our Clients in comprehensive employment structure management. Our vast experience and global reach allows us to provide customized support at planning and reviewing employment structures. We advise how to become cost efficient and how to mitigate risks, we help at verification of currently implemented employment structures in order to meet both local and international business needs of our Clients.