Employee outsourcing - when can it be questioned?

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Outsourcing is a modern management strategy consisting in entrusting an external company with tasks not directly related to the company's core activity, thanks to which it can focus its resources and financial resources on those areas that constitute the basis of its operation and in which it achieves a competitive advantage. Employee outsourcing is therefore entrusting comprehensive services for one entity in a given area (e.g. accounting or HR and payroll services) to specialized companies that provide services in a specified scope. However, the concept of employee outsourcing itself has not been defined in any of the applicable legal acts. It happens that the terms "employee leasing" or "employee rental" are also used interchangeably. However, in accordance with the current practice, employee leasing is identified rather with the situation referred to in Art. 174 § 1 of the Labor Code, consisting in granting an employee unpaid leave for the duration of the employee's work for another employer. In turn, hiring of employees refers to the employment of employees through a temporary employment agency, which is regulated by the Act of July 9, 2003 on the employment of temporary workers and limits the duration of employment of a specific employee or contractor with a given user employer.

Employee outsourcing - definition

According to generally accepted terminology, the concept of employee outsourcing is synonymous with the transfer of a workplace or part of it to a new employer, made in accordance with Art. 231 of the Labor Code. This solution is aimed at the continued use of the work of a given employee by the current employer, with the simultaneous transfer of the burden related to formal employment to another entity.

In this sense, employee outsourcing involves many formalities, including the obligation to consult the trade unions and inform employees about the causes and effects (legal, economic and social), as well as the terms of employment of the transferred employees, in particular working conditions, pay and retraining - such information should be provided to the employee in writing at least 30 days before the expected date of transfer of the workplace or its part to another employer. Employment contracts concluded with the previous employer are not terminated, because on the date of transition, the new employer becomes, by operation of law, a party to the existing employment relationship. However, it should be remembered that the employee has the right to terminate the employment relationship with the new employer without notice within two months of the transfer of part of the workplace with seven days' notice. The existing and new employers are jointly and severally liable for obligations arising towards the employee during his employment before the establishment or part of it is transferred to a new employer.

Provisions in the contract for employee outsourcing

For an entrepreneur who decides to outsource part of the workplace, it is important to properly formulate the provisions of the employee outsourcing agreement concluded between the current and new employer, which is safer to conclude in writing, although it is not a formal requirement. Such an agreement will be an important evidence during a possible inspection of the Tax Office, Social Insurance Institution or PIP for the employment of employees with an employer other than for whom they provide work. Despite the possibility of free shaping the content of such a contract, it should be borne in mind that its content should imply that the transition of a part of the workplace actually took place and was not an apparent action. You should be aware that the greater the influence of the current employer on the shaping of the employment relationship of employees with the new employer (e.g. recording working time, granting leaves, deciding on the amount of remuneration), the greater doubts may arise on the part of the supervisory authorities in determining who is the actual employer. Start a free 30-day trial period with no strings attached!

When concluding a contract for employee outsourcing, one should remember about the amendment of June 13, 2017 to the Act on the social insurance system, which by adding Art. 38a, in the event of a dispute regarding the determination of the payer of contributions (the actual employer), introduced the possibility of issuing a decisive administrative decision by the Social Insurance Institution - so far only courts had the power to resolve this type of dispute. Thus, in a situation where a new employer who formally employs employees will have problems with settling public law obligations, the authorities claiming these debts will have the option of obtaining overdue contributions from the employer using the work of outsourced employees.

Grounds for contesting such an agreement

An example of challenging employee outsourcing is the judgment of the Provincial Administrative Court in Kraków of September 21, 2017, file number I SA / Kr 137/17, in which the court made an entrepreneur using the services of an unreliable outsourcing company tax liability of the payer for unpaid and unpaid income tax on remuneration of outsourced employees. . In the case under examination, agreements were concluded from which it was to follow that the current employer transfers and the new employer takes over all employees pursuant to Art. 231 of the Labor Code Agreements for the provision of services, including in particular accounting services and tax consultancy, were also concluded between the tax advisory company ("the current employer") and two other entities providing outsourcing services ("the new employer"). The service provider was to delegate persons called contractors (persons employed by the service provider under an employment contract, mandate contract or specific specific task contract) who were actually employees of the original company before. The dispute before the court was limited to determining whether the workplace was transferred to a new employer referred to in Art. 231 of the Labor Code In the present case, the employees transferred on the basis of agreements-understanding were posted to the same workplace from which they were transferred. The court pointed out that the basic condition for the application of Art. 231 of the Labor Code is the actual takeover of control of the workplace by a new entity, which becomes the employer. In the jurisprudence of the Supreme Court it is assumed that entrusting the performance of auxiliary tasks by an employer to an external entity providing services in this respect may not constitute a transfer of a part of the workplace to another employer, unless a comprehensive assessment of the circumstances warrants it. The significant circumstances supporting the recognition that a part of the workplace has been taken over are: the type of enterprise or establishment, whether tangible assets such as buildings and movables have been sold, the value of intangible assets at the time of transfer, taking over most of the employees by the new employer, taking over customer service of the enterprise, the degree of similarity between the activities carried out before and after the sale of the enterprise. The mere fact of taking over the employees does not prejudge the transfer of the plant to a new employer. When assessing who the employer is, the actual takeover of the workplace is decisive. It should be understood that employees perform work for someone other than before. In this case, the transfer of employees to a new employer effectively deprived the company of the possibility of running a business.Thus, in order to continue it, it was necessary to demand the employees taken over, and the concluded contracts-agreements were in no way aimed at actual takeover.

In the opinion of the court, there were basically no changes in the work of the employed employees: "taken over" employees were obliged to follow the substantive guidelines of persons designated by the previous employer, and decision-making in the scope of, inter alia, the amount of employee remuneration or the granting of holidays, as well as employee control and assigning tasks remained with the previous employer, which proves that the new employer has resigned from the tasks and obligations of the employer. Ultimately, the court ruled that the party's leading motive was the goal of reducing costs. Such outsourcing remains in opposition to the provisions of the labor law. The main motive was economic reasons, and not the willingness to transfer the workplace to a new employer. In the present case, the tax authorities clearly demonstrated that the role of companies providing employee outsourcing services was limited to taking over only servicing employees in terms of paying them remuneration, the amount of which was de facto decided by the complainant by sending the necessary data on their employment.

In 2015, it was loud about the so-called the outsourcing scandal, which concerned situations analogous to that described in the above judgment. The complaining party relied on it, believing that it had been misled by its contractors, and the state authorities did not react to such activities of contractors, which were carried out on a large scale, therefore it should not be charged with the necessity to pay advances, but the tax authorities should pursue such actions. receivables from its contractors. However, the basis for imposing the obligation to pay advances is the facts established by the tax authorities in a specific case and if, despite the formal conclusion of the contract, the employees did not transfer to the new employer, the original employer is responsible.

When using employee outsourcing in the correct way, it is therefore necessary to actually separate from your enterprise a department or departments that perform auxiliary functions, not related to the company's main activity and use an external company in this area, i.e. not to interfere in the relationship between the outsourced employees and their new employer .