Pros and cons of an employment contract for the employee and the employer

What social guarantees do a fixed-term employment contract provide?

A fixed-term employment contract has the peculiarity that in terms of social guarantees a person will not feel the difference. In the same way as when signing a regular contract, the right to vacation, sick leave and other benefits is guaranteed.

It is not allowed to increase the duration of a work shift. All trips to work on weekends are paid in accordance with the Labor Code of the Russian Federation.

The agreement concluded by the parties defines the rights and obligations of both parties, as well as responsibility for their violations.

Disadvantages of working under an employment contract

1. A white salary reduced by the amount of income tax is transferred to the worker’s account. Therefore, an unofficial worker has a chance to receive a larger amount of money.
2. The terms of the contract bind the parties to the labor relationship with reciprocal obligations. This means that the employee is required to comply with internal labor regulations and follow job or work instructions. In contrast, non-contractual relationships make it impossible to enter a reprimand or a record of dismissal in the work book at the initiative of the employer. In this case, there is also no financial liability for damage or loss caused to the enterprise.
3. If an employee wants to change his job, he will have to work for two weeks from the date of signing the resignation letter.
4. Deduction of alimony from wages if it is prescribed by a court decision.
5. It is not profitable to be the recipient of a white salary in a situation where unfulfilled financial obligations arise, for example, an unpaid bank loan. In this case, the credit institution can, through the court, recover money from the debtor by seizing the salary card.
6. Officially confirmed income, the level of which is above the subsistence level, excludes the owner from the category of low-income families. Whereas a citizen who has not been registered anywhere and has no income is considered low-income and can exercise the right to receive social benefits and subsidies. Low-income families are entitled to child benefits, utility and housing subsidies, provision of places in kindergartens without waiting lists and other government assistance. If employed illegally, a citizen remains unemployed, which gives him grounds for applying for unemployment benefits.

When is a fixed-term contract signed?

Article 59 of the Labor Code of the Russian Federation lists cases when urgent work is performed.

8 reasons for signing a contract for a specific period:

• replacing a temporarily absent employee;
• performing seasonal work;
• carrying out work related to the expansion of production;
• provision of additional services (installation, reconstruction);
• registration of a specialist to perform duties for a certain period of time;
• internship;
• performance of public duties;
• acceptance into alternative civil service.

By agreement of the parties, the contract may be limited in duration when joining an enterprise with a small number of employees.

It is also practiced to conclude fixed-term employment contracts with pensioners and persons whose health condition does not allow concluding an open-ended agreement.

For work in the Far North, it is also envisaged to conclude a fixed-term employment contract. Company directors and their deputies work under fixed-term employment contracts. For activities on river and sea vessels, registration in this way is also allowed.

Employer's liability

If an employer does not want to formalize an employment relationship with a citizen working for him, he may be subject to both administrative and criminal liability.

Administrative responsibility

The employer's responsibility is divided:

• on the responsibility of officials responsible for formalizing labor relations;
• on the liability of a legal entity.

In accordance with Article 5.27 “Violation of labor legislation and other regulatory legal acts containing labor law norms” of the Code of Administrative Offenses of the Russian Federation, a fine may be imposed on an individual in the amount of:

• without notification of the hiring of an employee by the head of an organization by a person who did not have the right to do so - from 3,000 to 5,000 rubles;
• without notifying the manager by the person responsible for hiring citizens - from 10,000 to 20,000 rubles;
• for refusal or error in formalizing official labor relations for a person who does not have the authority to do so - from 5,000 to 10,000 rubles;
• for refusal or error in formalizing official labor relations for an official - from 10,000 to 20,000 rubles.

In case of a repeated offense, dismissal may be applied with the inability to hold a similar position for the period established by law.

For a legal entity, other forms of punishment apply, including criminal liability.

Administrative liability under the Code of Administrative Offenses of the Russian Federation is a fine in the amount of 50,000 to 100,000 rubles or suspension of the organization’s activities for up to three months.

Criminal liability

An employer cannot bear criminal liability for failure to conclude an employment relationship, but it may arise in connection with non-payment of taxes for employees who actually perform their duties in the organization.

In this case, under Article 199 “Failure to fulfill the duties of a tax agent,” a legal entity may be liable in the form of a fine in the amount of 100,000 to 500,000 rubles or imprisonment for a period of two to six years.

Benefits of temporary work

By and large, a person loses nothing if he takes a temporary position. He will also be able to use the social package. Sick leave and paid leave are guaranteed. Salaries are transferred twice a month. The duration between payments should not be less than fifteen days.

The company transfers contributions to the Pension Fund and also pays social contributions. The rights of workers are preserved in the event of liquidation of a company and reduction of staff.

So the employee is completely socially protected. But there is also a drawback to this form of cooperation.

Advantages and disadvantages

The employer can see the positive aspects of using this type of interaction when hiring a team, which will not require him to constantly monitor the activities of builders (other specialists).

Payment will be made upon high-quality completion of the work, after which mutual settlements will be carried out. This form of relationship does not provide for vacation pay and sick leave , which makes it possible to save some money.

If certain duties are not fulfilled or performed poorly, the employer has the right not to pay wages , including through the court or on the basis of the law on consumer rights. These categories of persons are dismissed without any special legal consequences for the employer.

The vagueness of the legal basis leads to the fact that the relationship becomes blurred, making it difficult to manage the work.

Often this type of relationship attracts unreliable or unscrupulous partners, since penalties for this type of hiring are more than difficult to regulate and impose.

By entrusting urgent and important work to such a partner, you may find yourself in a difficult situation if it involves obligations to third parties.

The positive aspects for hired workers (specialists) are that the procedure requires a minimum of provided documentation, characteristics and confirmation of qualifications .

Getting a job, as well as dismissal upon completion, is done quickly.

This gives you the opportunity to manage your time and adjust to receiving orders at your discretion. Since the work schedule is flexible, it is convenient to manage the schedule.

Negative can be called the meager guarantees received from the hiring person. Dismissal can follow at the slightest violation, when the claim for severance pay will have to be defended in court, without a guarantee of recognition of the claim.

If an illness occurs, you will have to adjust the delivery time of services or disrupt them, which can lead to a breakdown in relationships . It’s even worse if the work depends on the supply of resources from the customer or third parties.

The employee will have to engage in organizational activities that are not his responsibility, or take risks .

Design nuances

If you are not offered a permanent job, you need to clarify why the employer is doing this.
The law prohibits the conclusion of temporary contracts for the purpose of evading the provision of social guarantees. Therefore, you can save email correspondence or record conversations. This evidence will help the specialist defend his rights. The evidence will be useful for appealing to labor inspectors and the court.

If, after the expiration of the contract, cooperation continues, the contract is considered unlimited. Therefore, if the employer does not remind about the dismissal, then the person is considered accepted for a permanent position.

Decor

Depending on the scale of the work, the parties choose a design option from among:

1. Compiled in simple written form , including at the discretion of provisions, clauses and sub-clauses.
2. Draw up and print on a sheet of A-4 format, sealed with the signatures of the parties . For legal entities, a stamp is required.
3. Additionally, it is certified at a notary office .

How to protect your rights

There is a way not only to quit, but also to receive substantial monetary compensation. The fact is that all terms of cooperation are fixed in the contract. Therefore, it is possible to agree that the person is paid severance pay. It will not be so offensive to quit if the company pays a decent remuneration.

There is one more little trick you can do. If the specialist was not notified three days in advance that the work time was coming to an end, then there is no need to remind about this. The contract is automatically transformed into an open-ended one if the employer does not notify the person about the end of work.

Often things end up leading to dismissal. When all the documents are completed, you can go to court. If the case is successfully resolved, the employee is reinstated in his position.

The court will evaluate the circumstances of the case. It is checked whether there really are grounds for limiting the work to a time frame or not. All grounds are listed in Art. 59 of the Labor Code. If there are no such grounds, then the judge takes the side of the employee who filed the statement of claim. A conclusion is made about whether there was really good will of the parties to sign an agreement limited in time, or whether the person was forced to agree to such conditions.

Advantages of working under an employment contract

A full-fledged employee receives a regular salary of a set amount , no matter what the financial condition of the employer.

The legislation regulates the minimum level, terms and sequence of remuneration. Long-term withholding or violation of the wage payment schedule will entail serious consequences for the employer, including criminal punishment for the manager. The employer does not have the right to unilaterally reduce wages in part of the fixed amount. This requires the consent of the worker.

Officially confirmed earnings are needed to apply for a loan or mortgage from a bank or obtain a visa. Without proof of income, you will have to take out loans at high interest rates. And in order to obtain a visa, citizens without white wages will need to make a deposit with a credit institution.

When officially applying for a job, the personnel service is obliged to maintain and store work books of the enterprise’s personnel. Based on the entries in the book about the time worked, the length of service is determined.

Experience is a necessary condition for the calculation and payment of benefits for temporary disability, for the establishment of old-age and long-service pensions. At the same time, the amount of social benefits is directly affected by the length of work experience. When looking for a new job, experience demonstrates the applicant’s experience in the professional field and increases the chances of a positive interview result.

Other advantages:

1. Mandatory annual paid leave is a tangible benefit to legal employment. Working for more than two years in a row without providing vacation is directly prohibited. In an unofficial job, you will most likely have to settle for leave without pay.
2. The official employer pays contributions for pension, social and health insurance. Therefore, employees of such an organization, if they are unable to perform work functions, are paid sick leave and parental leave. They are insured against work-related injuries and will receive a pension in old age.
3. Work under an employment contract means paid business trips, student leave, severance pay for staff reductions and other guarantees and compensation.
4. When working with the conclusion of a contract, certain categories of employees are provided with an additional set of benefits and compensation. In particular, this applies to women during pregnancy and childcare, minor workers, part-time workers, people working in the Far North and on a rotational basis. Illegal work will put citizens who fit these categories at an extreme disadvantage.
5. An employer who hires personnel under employment contracts is obliged to comply with labor protection requirements. It provides workers with personal protective equipment, special clothing, and organizes therapeutic and preventive nutrition in hazardous working conditions. Existing labor standards oblige employers to create safe working conditions.

Arbitrage practice

Let us present a case from judicial practice to show how controversial situations are resolved. Disagreements between the parties to labor relations were resolved by the Moscow City Court. Determination No. 4g/8-12759 is dated December 2013.

The crux of the matter. The specialist was assigned to a division of the company under a fixed-term contract. The term of cooperation expired and the person was fired. But the employee was not satisfied with this situation, so he sent a statement of claim to the court.

Conclusions made by the court:

1. It is possible to sign a contract limited to a certain period of time with the management personnel of the company.
2. There are no grounds for hiring heads of a structural unit for a temporary position.
3. Since the contract was concluded with violations, the dismissal is illegal.

Comments

This legal dispute shows that violations of the procedure established by law are interpreted in favor of the employee. Infringement of labor rights is not allowed. There is one important nuance. A manager can be hired for a limited period. But only when it comes to managing the company itself. Another issue is filling management positions in a structural unit. It is impossible to temporarily hire a branch manager, since such an organization is not an independent legal entity. However, such mistakes are often made in practice.

The second definition is given from the practice of the Irkutsk Regional Court. Case No. 33-4481/13 is dated June 2013.

The essence of the dispute. The person was hired temporarily. The duration of cooperation is limited to the duration of the government contract. The specialist was unhappy that he was fired. I sought justice through the courts.

Conclusions on the case:

1. There is no basis for signing a temporary contract. The employee's responsibilities do not go beyond the normal activities of the enterprise.
2. There is no evidence that additional services were actually required. The company's references to the expiration of the agreement have no legal significance.

Comments

The result of the consideration of the case turned out to be pleasant for the plaintiff, because the contract was recognized as unlimited. Indeed, Art. 59 of the Labor Code of the Russian Federation clearly defines the cases that constitute the basis for urgent work. In this situation we are talking about work that goes beyond the normal work of the enterprise. For example, a company receives an order and is forced to hire new specialists. When the work does not go beyond the scope of normal activities, it means that the person should be registered under an open-ended contract.

Pitfalls for the employer

The greatest risk lies in the correct drafting of the text of the document, because the slightest mistake can lead to the fact that the contract will be considered indefinite . It is important for the employer to remember that:

• You cannot issue several fixed-term contracts one after another with the same employee if the job function does not change.
• The text of the document always states the reasons for its preparation (Article 57 of the Labor Code of the Russian Federation) and the date when it should be completed.
• A fixed-term contract cannot be valid for more than 5 years.

If the above rules are not observed, cooperation officially becomes permanent. Dismissal of an employee if the contract is incorrectly drawn up is illegal, therefore, by court decision, he is reinstated in his position.

The most egregious cases of violation of temporary contracts may be subject to fines. Private entrepreneurs are charged a fine of up to 5,000 rubles, and companies – from 30 to 50 thousand rubles. according to clause 1 of article 5.27 of the Code of Administrative Offenses of the Russian Federation. If the employee registration procedure is repeatedly violated, the manager is removed from office for up to 3 years.

Example. a programmer was needed to perform a specific task - creating a website and promoting it. There was a vacant position on the staff, but the employer decided to enter into a fixed-term contract. The employee was hired and the contract was signed. After the work was completed efficiently, the manager announced the termination of the contract. However, the new employee, citing incorrect execution of the contract, continued to work.

Summary

So, temporary work has its own characteristics. There are cases when you can accept a person for a set period of time. A fixed-term employment contract has pros and cons for the employee. The document concluded by the parties defines the basic conditions of the activity.

1. A fixed-term employment contract has its own characteristics. Social guarantees remain in any case. However, it is important to take signing documents seriously. An employee may file an application incorrectly and lose entitlement to benefits.
2. No one has abolished the right to judicial protection. If labor rights have been violated, you should go to court.
3. If possible, it is better to collect evidence in advance: recordings of conversations, email correspondence. As they say: words cannot be tied to deeds. You will need serious arguments to prove the correctness of your position.
4. When labor rights are violated, you can use alternative methods of protection: contact labor inspectors or the prosecutor's office.

Disadvantages of an open-ended employment contract compared to a fixed-term one

However, an open-ended employment contract also has a number of disadvantages compared to fixed-term ones. First of all, such shortcomings affect the employer. The disadvantages of an open-ended contract in this situation include:

• Not applicable for short-term and strictly defined assignments

  Read also:  How to sue an employer for non-payment of wages?
  . If an organization needs to carry out one-time or short-term work, especially not related to the main field of activity, and therefore does not provide for the need for a permanent full-time employee, an open-ended employment contract will definitely be ineffective.
• High level of commitment . The employer has a greater number of obligations to employees on an open-ended contract, which may have a certain impact on the efficiency of the entire organization.
• Low level of flexibility . The conclusion of open-ended employment contracts does not imply additional conditions for the dismissal of an employee and does not allow maximizing the effectiveness of personnel policy. At the same time, on a fixed-term contract there is the possibility of temporarily hiring workers to replace absent workers.

An open-ended employment contract, when compared with a fixed-term one, also has certain disadvantages for the employee himself:

• Greater difficulty when leaving . If an employee wishes to quit on a permanent contract, he will have to notify the employer about this two weeks in advance, while for short-term and seasonal work such a warning can be given three days before dismissal. However, some categories of workers may be dismissed without prior warning and mandatory service.
• The need for long-term planning . If an employee works under an open-ended contract, he must plan his time in advance and, in fact, in most situations remain tied to one place of activity. For some people, this is a serious disadvantage of such relationships.

Options for formalizing labor relations

A civil law contract is concluded when civil law relations arise between the parties: the contractor, on the instructions of the customer, undertakes to perform certain work and deliver the result to the customer, and the customer undertakes to accept the result of the work and pay for it (Article 702 of the Civil Code of the Russian Federation). In this case, the subject of the contract is not the performance of a labor function, but exclusively the result of the work, which is documented in a separate document - an act.