TYPES OF EMPLOYMENT CONTRACTS

Every case of hiring an employee is accompanied by the conclusion of an employment contract. At first glance, this may seem like a false statement, because in response you can say: “What about the registration of the employee based on the employer’s order, in such a case, no employment contract is concluded with him.” However, this is not the case, the employment contract is concluded in this case as well.

This article will help you understand what type of employment contract should be concluded with an employee in each individual case and how to choose an employment contract that will allow you to create the most favorable conditions for the employer.

CLASSIFICATION OF EMPLOYMENT CONTRACTS ACCORDING TO THEIR FORM

Oral form.

Essence: The refutation of the statement that in the case of registration of an employee through the “Hiring Order” an employment contract is not concluded is that in such a case an oral employment contract is concluded. Yes, indeed, the employer and the employee do not conclude an employment contract in the literal sense (they do not sign a separate document called an employment contract), but the employee’s submission of the “Application for employment” and the corresponding “Order for employment” is an act of mutual will of the parties , which is interpreted as an oral (since it is not formalized in a separate document) employment contract.

This method of concluding an employment contract is quite common in Ukraine, as it is simple, economical (there is no need to develop an individualized employment contract), and most importantly, this approach is basically laid down and ensured by the legislator. “Legislator” should not be understood as the market state of Ukraine, but as a Soviet experiment, since the main regulation of the conclusion of labor contracts is carried out by the Code of Labor Laws of Ukraine (hereinafter – the “Labor Code”) adopted during the Soviet era.

The above-mentioned approach to drafting labor relations is based on the fact that the conclusion of an employment contract as the main regulator is not a necessity, detailed regulation is provided not by agreements (as happens when concluding a contract), but by solid regulation on the part of both labor legislation and mandatory by the employer of local acts (job instructions, internal labor regulations, etc.).

Standard regulation is definitely an advantage when we are talking about large-scale production, where the conditions of employees performing the same labor function rarely differ from each other, but at the same time it is also an obvious disadvantage, since the individualization of relations with a specific employee is very limited, usually reduced to the regime work and the size of the salary (which, nevertheless, must correspond to the full-time unit).

Cases of application: the oral form of the employment contract cannot be used if the Labor Code provides for the mandatory conclusion of the employment contract in writing. Such cases are defined in Part 1 of Art. 24 KZpP:

1) with organized recruitment of employees.

Details: Currently, organized sets of employees are practically not used;

2) when concluding an employment contract for work in areas with special natural geographical and geological conditions and conditions of increased health risk.

More details: In Ukraine, only the territory that was radioactively contaminated as a result of the Chernobyl disaster is such a territory.

3) when concluding a contract.

Details: It should be noted that contracts are concluded only with employees who occupy higher management positions (director, etc.) and in cases expressly permitted by law. You cannot conclude a contract with an ordinary employee or, for example, a department head.

4) in cases where the employee insists on concluding an employment contract in writing;

5) when concluding an employment contract with a minor;

6) when concluding an employment contract with an individual.

More details: if the employer is an individual – an entrepreneur or simply an individual who uses hired labor related to the provision of household services (cooks, nannies, etc.).

6-1) when concluding an employment contract on remote work or home work;

6-2) when concluding an employment contract with non-fixed working hours;

More details: a new regime aimed at organizing relations with freelancers and other workers who irregularly perform work for a particular employer.

7) in other cases provided for by the legislation of Ukraine.

Read more: For employees of religious organizations; citizens undergoing alternative service; persons participating in public works; persons who are involved in work in farming.

Conclusion: the oral form of the employment contract is convenient for the employer, if the employees occupying specific staff units work under typical conditions, however, it should be remembered that in this case the local acts of the employer acquire significant importance, since the protection will depend on the quality of their writing interests of the employer.

On the other hand, if employees work under individualized conditions, then it is better to fix them in a separate document, which can act as an employment contract (the employer’s order can also provide for part of them, but in the case of a large number of them, this approach is impractical).

Written form

In the case of using a written form of employment contract, the employer and the employee conclude a document that centrally contains all the agreements of the parties and regulates them. Nowadays, the practice of concluding labor contracts in written form has not gained much popularity, because despite the possibility of concluding such a contract, the employer and the employee could not:

  1. a. It is important to individualize (for example, to determine special forms and cases of liability; special cases of termination of the employment contract, etc.), since according to Art. 9 of the Labor Code, any provision of the employment contract that worsens the position of the employee in comparison with what is provided for him by the labor legislation is considered invalid. In fact, individualization could occur only in terms of improving the employee’s conditions (paid courses, longer vacations, etc.), which is less often of interest to the employer.

It was impossible to fill it with conditions that would protect the employer more and at least slightly worsen the position of the employee (even if everything was within reasonable limits) due to the high level of regulation of this relationship by the legislator.

Consider an example with fines for an employee. As often happens in civil relations, the parties like to set a fine for breach of obligations as a completely logical and reasonable way to ensure the fulfillment of such obligations. However, it is impossible to do this within the framework of labor relations. The Labor Code (Article 147) provides for the possibility of applying only one of two types of disciplinary sanctions: reprimand or dismissal (in clearly defined cases).

Therefore, even if the employer wanted to write such a condition in the employment contract, it would be invalid, as it would worsen the position of the employee.

 

  1. b. The conclusion of written employment contracts by the employer with employees does not exempt the employer from the need to adopt a large number of local acts designed to regulate relations with the employee:

– job instructions;

– rules of internal labor regulations;

– staff list;

– vacation schedule and others.

Therefore, the situation arises that the employment contract simply duplicates the terms of these documents and does not generally introduce any novelty to the regulation of relations in this part.

The above brief analysis of the reasons for the lack of popularity of written employment contracts refers to cases of their voluntary conclusion. If your situation corresponds to cases of mandatory conclusion of written employment contracts, which we have already reviewed in point 1.1. of this article (on oral employment contracts), then they are concluded, regardless of the listed shortcomings.

While reading the text, you may have noticed that we have repeatedly used the perfect form of words that refer to the state of affairs shown above. The reason for this is, without exaggeration, a grandiose change to the Labor Code, namely the introduction of a simplified regime for regulating labor relations.

The simplified regime of legal regulation of labor relations can be used by entrepreneurs who have no more than 250 employees. Its main goal is to transfer the role of the main regulator of labor relations from legislative provisions to the labor contract. This allows you to solve the problem of not being able to fully individualize the contract (set fines; give the employer the right to terminate the contract at his own will), as well as not to keep documentation on personnel issues, not to adopt local regulations and organizational and administrative documentation. Unfortunately, this regime will operate until the abolition of martial law, although we can see clear signs that the state is planning to switch to exactly this principle of regulating labor relations.

To summarize, the simplified regime eliminates the main shortcomings and obstacles to the spread of the use of written employment contracts among foreigners.

Conclusion: in the absence of opportunities provided by the simplified regime, the written employment contract is not a regulatory tool that will allow the employer to obtain additional benefits compared to the employee’s execution “by order” (verbal employment contract).

 

CLASSIFICATION OF EMPLOYMENT CONTRACTS BY DURATION:

Fixed-term employment contract:

As a general rule, an employment contract is concluded for an indefinite period, however, in cases clearly defined in the labor legislation (Part 2 of Article 23 of the Labor Code), the employer and the employee may still conclude a fixed-term employment contract.

A fixed-term employment contract is concluded in cases where the employment relationship cannot be established for an indefinite period, taking into account:

1) the nature of the subsequent work or the conditions of its performance.

More details: work has a final result, and after its achievement there is no need for an employee. For example, construction works.

2) interests of the employee.

More details: conclusion of a fixed-term employment contract is a sufficient basis for confirming the employee’s interest.

However, the employee may claim in the future that he did not want to conclude a fixed-term employment contract, but in this case, based on the position of the Supreme Court, he must provide “proper and admissible evidence to confirm that he signed this contract under pressure from the defendant’s officials, or his manifestation of will at the time of conclusion did not correspond to his inner will, or that he did not realize the meaning of the contract or was in a sick state and did not adequately assess his actions, the plaintiff did not provide” (Decision of the Supreme Court of October 25, 2021 in case No. 607/3393/18)

3) in other cases provided for by legislative acts.

If the employer violates the stated conditions for concluding a fixed-term employment contract, then this is the basis for declaring it invalid in terms of determining the term.

After the expiry of the validity period based on the demand of any of the parties (employer or employee), the fixed-term employment contract is considered terminated (clause 2, part 1, article 36 of the Labor Code). If none of the parties makes such a claim, and the employment relationship actually continues, then it is extended for an indefinite period (Article 39-1 of the Labor Code).

In this regard, the Supreme Court also commented: “termination of the employment contract after the expiration of the term does not require a statement or any manifestation of the employee’s will. The owner is also not obliged to warn or otherwise inform the employee about the future dismissal according to clause 2 of part one of article 36 of the Labor Code of Ukraine” (Resolution of the Supreme Court of October 25, 2021 in case No. 607/3393/18).

Permanent employment contract:

Regarding the permanent employment contract, there is nothing special to add here. It should be remembered: if the parties have not agreed otherwise, then the employment contract is considered concluded for an indefinite period.

 

THE DIFFERENCE BETWEEN AN EMPLOYMENT CONTRACT AND A CIVIL LAW CONTRACT

Although this division does not belong to the classic classification of employment contracts, we will also pay attention to it in this article, since these two types of contracts are often mixed in society, despite their different legal nature, which causes negative consequences for the parties to such a contract.

3.1. An employment contract is a contract concluded between an employer and an employee and is regulated by the Labor Code and labor legislation. For him, the main focus is on the work process (fulfillment of the labor function), therefore, only in labor contracts can we find such concepts as working hours, work regime, rest time (vacation), disciplinary sanctions, wages, etc. All these concepts are an integral part of the work process, each of the stages of which is designed to regulate labor legislation in detail.

In the case of concluding an employment contract, the employee is covered by all guarantees of labor legislation.

3.2. A civil law contract is a contract concluded not between an employee and an employer, but between a sole proprietorship and legal entities, between individuals, a sole proprietorship and a natural person (not as an employee) and here the main emphasis shifts precisely to the final result (service provided, work performed ), and not on the process of achieving this result. Therefore, civil law contracts do not use the concepts that are given above and are aimed at settling the process. In this type of contract, only general, framework issues are regulated, and the process of providing a service or work (the sequence of achieving the result) is determined by the party that provides the service or performs the work independently.

Such a person (executor) is an independent and independent subject who performs the work at his own risk, and the customer does not provide him with any guarantees, in particular, in terms of labor protection.

It is strictly forbidden to use concepts from labor law in civil law contracts, as this will cause the risk of reclassification of your relations as labor and, as a result, ascertainment of concealment of labor relations (entails administrative liability) by the State Labor Office.

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