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Tutorial

Types of employment contracts - which one to choose?

August 29, 2022
6
reading minutes

Before you introduce a new employee to your team, you need to fulfill a number of formalities. One of them is signing an employment contract. However, there is no universal contract that would work in every situation. Documents vary depending on the needs and responsibilities of the people hired.

Before you introduce a new employee to your team, you need to fulfill a number of formalities. One of them is signing an employment contract. However, there is no universal contract that would work in every situation. Documents vary depending on the needs and responsibilities of the people hired.

What are the characteristics of an employment contract?

An employment contract obliges the parties involved to fulfill certain obligations to each other. According to Article 22 § 1 of the Labor Code, a salaried employee performs work of a specific type for the employer and under his direction and at a place and time designated by the employer. The employer's duties include, first and foremost, the payment of wages. At the same time, the legislator has included a provision in the Labor Code that makes it impermissible to replace an employment contract with one of the civil law, when the conditions for performing work overlap with those that constitute an employment relationship. 

Types of contracts

You_have_already_conducted_a_recruitment_interview, verified_the_candidate_data_and_decided_to_hire_the_candidate. The last step is to sign the employment contract. In this situation, you have several options to choose from: after all, the employment contract can be a term contract, which is concluded for a specific period of time, or indefinite. If the parties involved do not indicate the type of contract, and the circumstances of the establishment of cooperation do not indicate a specific type, it is assumed that it was concluded for an indefinite period.

Trial period contract

During the trial period contract, you can verify the employee's skills and qualifications in practice. During this time the employee can assess the conditions of work, the scope of activities or the atmosphere at work. Most often, the first contract concluded with the employer is a trial period contract in accordance with Article 25 § 2 of the Labor Code, and its duration can be up to 3 months. Such a contract can be concluded only once. This restriction does not apply if another probationary contract is concluded with the same employee, but for a different position, and if there is at least a 3-year break in employment. At the end of the probationary period, you do not have to conclude any further contract with the employee, as a result of which the employment relationship is automatically terminated. You cannot conclude a probationary period contract with juveniles, whose employment and dismissal are regulated by separate regulations. During the trial period contract, the employee is entitled to vacation leave, sick leave, unpaid health care, wages, notice period, and in certain cases - pregnancy protection. 

Fixed-term contract

According to Article 25 § 1 of the Labor Code, a fixed-term contract may be concluded as a second contract, after the expiration of the probationary contract, or as the first contract that was not preceded by any other contract. It is important that the termination date be indicated in the contract. The period of employment (under a fixed-term contract or contracts between the same employer and employee) may not exceed 33 months. You can conclude a fixed-term contract with a given employee three times. The conclusion of another fixed-term employment contract or if the total period of employment under fixed-term contracts will be longer than 33 months automatically implies the conclusion of an employment contract for an indefinite period.

Other forms of fixed-term contracts are term contracts, which are entered into for the duration of a specific job, or replacement contracts entered into to replace an absent employee for excusable reasons, i.e. illness or parental leave, for example. Importantly, the replacement contract should be for the same type of work and position as the absent employee's employment contract. Such a contract can be concluded more than 3 times and for a period longer than 33 months. 

Contract for an indefinite period

An employment contract for an indefinite period of time, according to Article 25 § 1 of the Civil Code, is an indefinite contract, concluded without an end date for the duration of the employment relationship. It assumes the existence of a permanent legal bond between you and the employee and guarantees the stability of his employment and the rights that go with it, primarily in terms of the permanence of the employment relationship. A contract for an indefinite period involves longer notice periods and can be terminated in three ways: by mutual agreement, by notice (by the employee or by the employer) and without notice (in special cases). 

Summary

Employment contracts can take different forms, which allows you to make the process of hiring an employee for certain activities more flexible. It is worth considering all forms and choosing the one that is most beneficial to both parties involved. 

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