Due to the increased need for employees, employers are increasingly interested in whether they can conclude a contract of employment or a service contract with a prospective employee.
Many are offering both contracts of employment and service contracts – check what our AI recommends to you!
Contract of employment
Almost every employee (except for individual occupations where it is more profitable to be a freelancer) has concluded at least one employment contract. It can be for a fixed or indefinite period.
According to the new provisions of the labor law from 2023, fixed-term employment can no longer be concluded for any term length, but for a maximum of three years. After three years of fixed-term work have passed or three consecutive fixed-term contracts have passed, the employer must either offer the worker a new permanent contract or wait six months from the end of the employment relationship to offer a new fixed-term contract again.
In addition, the employment contract can be full-time or part-time (for example, 6 hours a day).
The employment contract is signed before the start of work, but if this is not done before the start of the agreed employment relationship, the employer is obliged to hand the employee a written confirmation of the concluded contract. If the employer does not issue this certificate or does not conclude a written employment contract within the time prescribed by the law, it can be considered that the employer has concluded an employment contract with the employee for an indefinite period. We have already written about what to pay attention to when signing an employment contract.
The result of concluding an employment contract is an employment relationship, and it implies several things.
Firstly, it defines an employer as a natural or legal person who employs a worker and for whom work is performed, and secondly, a worker as a natural person who performs certain tasks for the aforementioned employer.
Secondly, the employer is obliged in the employment relationship to provide work to the worker and to pay him a salary for the work performed, while the worker is obliged to personally perform the assigned work according to the employer’s instructions.
Finally, with an employment relationship, the worker makes his workforce available to the employer during the working hours determined by the employer.
The fundamental characteristic of the employment contract is that the worker is not independent and dependent on the employer.
Service contract
The work contract is primarily different from the work contract in terms of which laws regulate it. While the employment contract is regulated by the Croatian Labor Act, the work contract is regulated by the Croatian Obligatory Relations Act.
Unlike an employment contract, a work contract has a client and a contractor. Instead of an employment relationship, it refers to the performance of a specific job, which can be a physical act (such as repairing electrical installations) to mental work (such as writing a book). It is not concluded for a certain period, but is defined by the completion of a work.
The contractor is self-employed and provides the resources he will use to work, determines the time he will spend, and where he will work. In return, the client undertakes to pay him a fee for the delivery or completion of the requested work.
Upon delivery of the completed work, the client is obliged to receive the work, inspect it, and notify the contractor of any defects. If there are hidden defects, then the contractor is responsible for them up to two years after the delivery of the work.
For employees, probably the most important implication is that the employment contract does not constitute an employment relationship. Namely, this means that work contracts are not part of regular or supplementary work and are therefore not subject to restrictions on working hours. Also, pensioners, the unemployed, and other adults who for some reason are not part of the labor market can enter into employment contracts.
Another interesting feature of the work contract is that the contractor performs the work personally, but not exclusively, and can entrust it to other persons. However, he is the final person who is legally responsible for the delivery of the ordered work.
The fundamental characteristic of the work contract is that the contractor is autonomous and independent from the client.
Copyright contract
A copyright contract is similar to a work contract, but it is regulated by the Croatian Copyright and Related Rights Act. The special feature of the copyright contract is that it strictly defines the copyrighted work.
According to the law, an author’s work is an original intellectual creation created by the author, characterized by originality, creativity, and subjectivity.
The Copyright Act expressly lists language works (written works, spoken works, or computer programs), musical works (with or without words), dramatic and dramatic-musical works, choreographic and pantomime works, works of architecture, works of fine art, works of applied arts and industrial design, audiovisual works, cartographic works, photographic works and representations of a scientific or technical nature such as sketches, tables, and technical drawings.
The copyright contract should protect the author’s copyright. They include property rights (income from the work), moral rights (use of the work), and other rights.
As a rule, in the case of intellectual works, a copyright contract (contract on an author’s work) is more profitable for the client than a service contract because the portion of the fee for which tax contributions are not paid is higher, but in return, the author retains the copyright to the delivered work.
Conclusion
An employment contract is a form of legal relationship in which the worker is subordinate to the employer and is not independent, while with a service contract, the contractor is independent and organizes himself.
In the case of an employment relationship, employees receive a regular monthly salary, while in the case of a work contract, contractors receive money only after the delivery of the contracted work.
You can easily reach the contract offer through the recommendation of our AI matching technology!
Get a contract offer easily through recommendations of our AI matching technology!
Author: Goran Mihelčić
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