The legal employment relationship inherent in an employment contract entails certain rights and duties for the parties, which differ from those inherent in a contract for the provision of services.
Some of these duties include the obligation to pay a proportional amount to social security, to have an occupational accident insurance contract, to pay vacation and Christmas bonuses, to allow paid vacation days, to provide (or arrange for) professional training, to comply with certain deadlines for terminating the employment contract or the need to initiate disciplinary proceedings with a view to dismissal, to pay certain compensation, to allow parental leave, among many others.
On the other hand, when it comes to a service provider, as a rule all the above-mentioned duties of the employer disappear, and the service provider does not benefit from the other rights mentioned, and is even responsible for taking out an occupational accident insurance contract and paying tax and social security obligations.
For this reason, it is relatively common for employers to ask workers to issue invoices or receipt invoices, as if they were a service provider, cheating the system and putting workers in a situation of extreme economic and social fragility, despite the fact that the relationship between the one who pays and the one who receives fulfills the concept of subordinate work, with the former taking advantage of the fact that it is the "stronger party" in the legal relationship.
Article 11 of the Labour Code (Law no. 107/2009, of 14 September) states that an employment contract is one whereby a natural person undertakes, for remuneration, to provide their activity to another person or persons, within the scope of their organization and under their authority.
In turn, article 1154 of the Civil Code (Decree-Law 47344/66 of November 25) defines a contract for the provision of services as one in which one of the parties undertakes to provide the other with a certain result of their intellectual or manual work, with or without remuneration.
In order to clear up any confusion about the type of relationship that exists, the legislator laid down in Article 12 of the Labor Code that "Presence of services" is a contractual obligation. Article 12 of the Labor Code states that "An employment contract is presumed to exist when, in the relationship between the person providing an activity and one or more others who benefit from it, some of the following characteristics are met: a) The activity is carried out in a place belonging to its beneficiary or determined by it; b) The equipment and work instruments used belong to the beneficiary of the activity; c) The activity provider observes start and end times for the service, determined by the beneficiary of the activity; d) A certain amount is paid to the activity provider at certain intervals in return for the activity; e) The activity provider performs management or leadership functions within the organic structure of the company. "
Specifically, the existence of an employment contract is presumed if at least two of the characteristics set out in Article 12(1) of the Labor Code are met.
It should be stressed that this is a rebuttable presumption, which admits proof to the contrary, and which has the consequence of reversing the burden of proof. In other words, once the indications or realities described have been verified, instead of the worker/service provider bearing the burden, the responsibility, of proving that we are dealing with an employment contract, it is up to the paying entity to prove that we are actually dealing with a contract for the provision of services.
In addition to the indications set out in Article 12, there are a number of other indications to take into account in order to identify the existence of a genuine employment contract, including
a) The power of management (cf. article 97 of the CT), according to which "It is the employer's responsibility to establish the terms under which work is to be performed, within the limits arising from the contract and the rules governing it";
b) Disciplinary power (cfr. art. 98. This can also be verified through the disciplinary sanctions applied by the employer to the workers, whereby, "In exercising disciplinary power, the employer may apply the following sanctions: a) Reprimand; b) Registered reprimand; c) Financial penalty; d) Loss of vacation days; e) Suspension from work with loss of pay and seniority; f) Dismissal without indemnity or compensation". (cfr. art. 328 of the CT);
c) elements contained in the company's internal regulations, drawn up by the employer on the organization and discipline of work (cf. art. 99 of the CT);
d) as well as the verification of certain rights that are inherent to the existence of an employment contract, such as the payment of vacation and Christmas bonuses, or permission to take paid vacation days, or the fulfillment of tax and social security obligations.
Other elements to consider in order to assess the underlying contractual nature will be the obligation of remuneration itself; and the obligation of means vs. the obligation of result; as well as the absolute economic dependence of the supposed provider, namely in relation to the working hours and time to which they are bound, making it impossible for them to provide their activity to someone else, which is a particularly relevant element of the legal qualification.
As a result, it is not uncommon for the distinction between a contract for the provision of services and an employment contract to be made using indications and other factual elements that make it possible to ascertain whether or not there is legal subordination.
However, it is true that only an overall assessment of the various indications can decisively determine whether legal subordination exists.
In view of the problems involved in the issue under analysis, the legislator provided for a specific and faster way of settling the conflict in court through a special action that takes place in the Labor Court, with very short procedural deadlines, regulated by Article 186 et seq. of the Labor Procedure Code (Decree-Law no. 480/99, of November 9, 1999). It also determined that the Authority for Working Conditions must be notified, with a view to instituting misdemeanor proceedings, under the terms of Article 15-A of Law No. 107/2009, of September 14, since Article 12(2) of the Labor Code states that it is a very serious misdemeanor attributable to the employer to carry out an activity, in an apparently autonomous manner, under conditions characteristic of an employment contract, which may cause damage to the employee or the State.
However, if the individual is dismissed in the circumstances under analysis, which will usually occur verbally and naturally without the prior existence of a disciplinary procedure that he can challenge, he will have to resort to a common labor action, which is more complex, and he must immediately take steps to ensure his defense, from the outset presenting himself at work with witnesses and, possibly, resorting to the criminal police to have the respective report drawn up.
In these situations, one thing is certain. If the employee doesn't look after their interests and act accordingly, it certainly won't be the employer who does.
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