Mandate contract for an indefinite period - is it compliant with the regulations?
A mandate contract is one of the most popular forms of employment. Pursuant to the provisions of the Civil Code, it is a fixed-term contract, and its subject is usually a specific service. However, is it possible to sign a mandate contract for an indefinite period?
Contract of mandate - what is it characterized by?
A mandate contract is defined as a due diligence contract. It consists in entrusting the contractor with the performance of a specific work within the prescribed period, and then paying him the agreed remuneration for this work. Here, the result is not important, as in the case of a contract for a specific task, it is important what actions have been taken to achieve it.
Basic information about the mandate contract
The basic elements that clearly indicate the performance of work under the contract of mandate include:
- great freedom and independence of employees in organizing work,
- no specification of the hourly working time,
- lack of management on the part of commissioning the work,
- the possibility of executing the order by a third party,
- no obligation to execute the order in a strictly defined place.
The mandate contract is beneficial for the entrepreneur because it is not regulated by labor law. The contractor may not take holidays. From January 1, 2020, the minimum hourly rate for concluding a mandate contract is PLN 17.00 per hour of work. The minimum hourly rate for contracts of mandate planned for 2021 is PLN 18.30 gross.
In 2016, the provisions on the obligatory payment of social security contributions for mandate contracts entered into force, which are concluded for amounts lower than the minimum wage applicable in a given year. Of course, there are exceptions to this rule, e.g. if the contractor works under an employment contract and receives at least the minimum wage for this, then no social security contributions should be paid under the contract of mandate. Start a free 30-day trial period with no strings attached!
Contract of mandate - for what period can it be concluded?
The contract of mandate is usually ad hoc. This means a situation where the principal entrusts the contractor with the performance of the activity once. This also applies when the company increases employment seasonally due to, for example, harvested crops.
However, there are cases where the order is not ad hoc. If the client entrusts the permanent performance of certain activities, then in this case he will be able to sign a contract with the contractor for an indefinite period of time. This situation is legally permissible. However, it should be borne in mind that a mandate contract for an indefinite period does not become an employment contract. It is mainly about the situation where the order is characterized by the strict execution of the supervisor's orders at the time and place specified by him.
Contract of mandate for an indefinite period - termination
A mandate contract for an indefinite period may be terminated and, unlike an employment contract, it may occur at any time.Both the contractor and the client may terminate the termination. Termination of cooperation does not have to be justified, as it is not required by law. There are also no notice periods - the contract is terminated with immediate effect. The Civil Code states that the right to terminate an order cannot be waived in advance for important reasons.
The termination of the contract should be made in such a form that the other party can read it easily. It is best to prepare them in the form in which the contract was concluded. It is also worth emphasizing that when a mandate contract for an indefinite period is terminated, there is no obligation to issue a document confirming the performance of the order, as in the case of employment contracts, it is necessary to issue a certificate of employment after its completion. Only at the request of the ordering party, the client may issue such a certificate, but there is no obligation to do so.