Types of contracts

Video transcript:

Types of contracts

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While looking for a job Olivier has come across words like an employment contract, freelancer, and contract for work. He is confused because he doesn’t know what they mean, what is the difference between them, and what is the best solution for him?

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No need to worry. Let’s go through them one after the other.
Regular employment relationship
A regular employment relationship is characterized by the personal dependency of Olivier as an employee on the employer. Personal dependency means:
Olivier has to work predetermined working hours
Olivier has to work from the place of work the employer allocates to them.
Olivier’s routine is predetermined by the employer.
Olivier is bound to the employers’ working instructions.
Olivier’s work is regularly controlled by the employer.

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In a regular employment relationship, Olivier has the following rights:
5 weeks paid holidays
Continued payment in case of sickness
The right to time off for care responsibilities.
The right to holiday pay and Christmas bonus.
The employer has a dismissal notice period of 6 weeks
The minimum wage is determined in the collective agreement.
During a regular employment relationship, Olivier is covered by social security, and depending on the amount of the salary they have to pay income tax. Both are withdrawn automatically from the salary by the employer.
In a regular employment relationship can work full-time, part-time, marginal or temporarily.

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Freelance contract
With a freelance contract, Olivier obliges himself to work for money for a client for a defined or undefined period of time. On a freelance contract, there is no personal dependency on the client. That means:
As a freelancer Olivier chooses working hours and place of work himself.
Olivier is not subject to instructions. That means they can decide on their own work routine. They are not subject to the control of the client.
Olivier can be represented by someone else. That means they can delegate the work to someone else.
Olivier doesn’t give a guarantee for success. That means he is paid for the amount of time he works, regardless of if he achieves the results.

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As a freelancer, Olivier doesn’t have the right to:
Paid holidays
Continued payment in case of sickness
Time off for care responsibilities.
There is no minimum wage or collective agreement.
There is no dismissal notice period for the client. That means a freelancer can be dismissed at any time.
As a freelancer, Olivier pays nearly the same social insurance as a regular employee. It is withdrawn automatically by the client. As freelancers are self-employed, they need to tax their income themselves.

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Contract for works
A contract for work is in place when a person – who is called a client – obliges Olivier as a contractor – to produce a certain work assignment in exchange for a fee. A contract for works is based on successes. That means Olivier only gets paid if he finishes the work assignment and delivers it successfully. If he makes a mistake, he is responsible for it.
There is no personal dependency. That means with a contract for work the place of work, working hours, and work can be determined by Olivier himself.
There is no personal obligation to work. That means Olivier can delegate the work to someone else.
Olivier has to use his own equipment e.g. laptop.
Olivier is not integrated into the organization.
As a contract for work is not an employment relationship Olivier doesn’t have any rights based on labour law or a collective agreement (paid holiday, continued salary in case of sickness, time-off for care responsibilities, etc.)

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Now Olivier has a clear overview of the different types of contracts and he can choose what fits best to his preferences.