The contract of employment and the contract of mandate are the two basic forms of contract used in Poland as the basis for the performance of work. Before signing any contract, it is important to understand how these two contracts differ, as each has its own set of guidelines and requirements.
Employment contract:
In Poland, the most common type of contract is the employment contract. It creates a legal relationship between the employer and the employee and is governed by the Labour Code. The Labour Law defines the duties and responsibilities of both the employer and the employee, including, in particular, the obligation of the employer to ensure safe and hygienic working conditions for each employee regardless of the position held and the work performed.
The law defines the minimum wage to which an employee is entitled. This means that the employer (even with the employee’s consent) cannot pay the employee less than the wage set by the law.
There are two basic types of employment contract – fixed-term or open-ended. A fixed-term contract is used when the employment relationship is to last for a specific, predetermined period of time, whereas an indefinite-term contract is used when the employment relationship is to last for a period of time not determined in advance by the parties.
Within the framework of the employment relationship between the parties, the employer is obliged to pay the employee remuneration for the work performed and to pay social security and health insurance contributions. The amount of remuneration, the type and place of work, the working hours and the date of commencement of the work are the basic terms that should be included in the employment contract. Prior to the commencement of work, the employer is obliged to refer the employee to a medical examination to determine whether the employee is fit to perform the work and to conduct an initial training course, which will familiarise the employee with the principles of health and safety at work in the position occupied by the employee.
The employee, on the other hand, is obliged to perform the agreed work for the employer, at the place and time indicated by the employer. Importantly, the employee is obliged to perform the work personally, i.e. he or she may not use the substitution of a third party. The employee is also obliged to comply with the rules arising from the labour legislation, internal regulations, take care of the welfare of the workplace and keep the employer’s classified information confidential.
Contract of mandate:
A contract of mandate is a type of contract that creates a civil law relationship. This means that the legal relationship established on this basis is not governed by the Labour Code. The parties to a contract of mandate are the contractor (in a contract of employment respectively the employee) and the principal (in a contract of employment respectively the employer).
A characteristic feature of a contract of mandate is the significantly greater autonomy enjoyed by the contractor in relation to the employee. As a rule, the contractor performs the agreed tasks at a place and time designated by itself, but may also make use of third parties. The contractor’s activities are, of course, subject to review by the principal, but unlike in an employment contract, the principal cannot exercise constant control and supervision over the contractor’s activities. Remuneration may be set at a monthly or hourly rate, depending on the agreement of the parties and the nature of the activities to be performed by the contractor.
However, it should be borne in mind that the law establishes a minimum rate for each hour of work of the contractor. The remuneration agreed upon by the parties may in no case be lower than the rate set by the law.
IMPORTANT: According to Article 6(4) of the October 13, 1998 on the Law on the Social Insurance System, a person performing mandate contracts is not subject to mandatory pension and disability income insurance if they are high school or college students, up to the age of 26. This may entail very favorable pay conditions and encourage students to choose a contract of mandate.
Differences between the two contracts:
The main difference between an employment contract and a contract of mandate is the degree of control and supervision that the employer exercises over the employee or contractor. In an employment contract, the employee remains fully subordinate to the employer in terms of the work to be performed, while the contractor has greater autonomy and the ability to make his or her own decisions on many practical aspects of the activities performed.
Another key difference is the level of protection afforded to the employee or contractor. Under an employment contract, the employee is entitled to a range of benefits, such as paid annual leave and termination restrictions, whereas under a contract of mandate, the contractor only receives the benefits that he or she has agreed in the course of negotiations with the principal. A contract of mandate is not subject to the strict regulations provided for under the Labour Code and is essentially an employment relationship which is temporary in nature.
In summary, the choice between an employment contract and a contract of mandate should be preceded by an analysis of what type of work and under what factual conditions it is to be performed. If you want to work as a mobile application tester for several hours a week, a contract of mandate is the right type of contract. If, on the other hand, you want to work as a translator in the company’s accounting department, working 8 hours a day, 5 days a week, then an employment contract would be the appropriate basis. Both parties to the contract should carefully consider their needs and the factual conditions of the work to be performed before choosing the type of contract to ensure that they are entering into a contract that is in their best interests.
Author: Anna Korzun
