What is the difference between a labor contract and a civil law contract? - analysis of practice by Yulia Stusenko

In recent years, in Ukraine, the issue of choosing the right form of interaction with employees or contractors to perform a certain amount of work has become particularly relevant. Which contract should I prefer: labor or civil law?

Last for a business owner more convenient, given lower taxes and the absence of labor guarantees for the employee (minimum wage, vacation, sick leave, etc.). However, the concealment of labor relations attracts the attention of regulatory authorities. And the result of such a "savings" are penalties.

The legislation does not limit business entities in the ability to determine which contracts to conclude for the performance of certain works or the provision of services, as well as in the case of appointment to individual posts. The choice is left to the employer (customer). It should be understood that both labor and civil law contracts are legitimate. Moreover, for limited and additional liability companies, the right of the general meeting of participants to independently determine which contract to conclude with members of the supervisory board and the executive body is provided.

Therefore, the main thing in the process of choosing the form of interaction is compliance with the requirements of the law and focus on the onset of real consequences, and not on concealment of other agreements. Therefore, it is important to understand the key differences between the labor and civil law contracts, as well as to take into account relevant law enforcement and judicial practice on this issue.

Read more about this in the article of the associate partner of Skliarenko, Sydorenko and Partners Yulia Stusenko for the publication Lawyer & Law.