In the end, an independent contractor is a person who has his own boss and sets his own rules to justify his operation and production. When a person is paid per project or task, he or she is generally considered an independent contractor. If the person is paid, must comply with a certain schedule and dictates what to do in each facet of his or her work day, he or she is most likely considered an employee. An accurate description of the services gives the client a clear idea of what awaits them and lets the service provider know what they expect from them. On that date, the contract is final and legally binding for both parties. In order to sign service contracts with individuals, it is therefore necessary for these persons to register their transactions in accordance with the legal provisions (first of all in compliance with the Law on Companies). When a company enters into a service contract with a person who does not have a registered business, it is very likely that this is a violation of the legislation discussed above. For example, if the provider is responsible for installing an Internet modem in a customer`s home, it may include the fact that it is responsible for making the modem and its installation available, executing Ethernet cables by the property and providing quality assurance, to ensure that the device is working properly. When individual workers enter into service contracts instead of employment contracts with a company, they are not considered “workers” under the labour code. As a result, they are not entitled to fundamental rights and workers` interests such as minimum wage, working time – rest, overtime pay and the right to join a union. In addition, if the signing of service contracts with individuals is fully authorized, companies may consider that the duration of a service contract is left to their discretion and they have the right to unilaterally terminate the contract at any time without assuming legal liability under labour law. As a result, the legitimate rights and interests of workers are not protected, resulting in unemployment without a safety net (for example. B severance pay, compensation for lack of thought or compensation for unlawful unilateral dismissal).
This can lead to widespread social ills (such as poverty) caused by unemployment. Currently, there are many companies that work the wrong way (signing service contracts with people who do not comply with the law), but their actions have not been verified or reviewed by the authorities. As a result, companies mistakenly believe that the signing of service contracts is accepted by public authorities and, therefore, other companies follow this example.