Freelance as a specific type of labour agreement.
Freelance as a specific type of labour agreement
In 2022, remote work does not seem exotic. 2 years of the pandemic followed by the current full-scale invasion of the rf have taught Ukrainians to carry out their professional activities, not leaving their homes. On the contrary, freelance with its free working schedule is still causing mixed emotions.
The freelance market is constantly growing and has not reached its peak yet. It is active in Europe, the USA, and certainly in Ukraine. At the same time, domestic legislation remains bureaucratic and unprepared to respond quickly and adequately to global changes, including the freelance.
It’s worth mentioning, that our legislation has never covered non-standard employment forms before. Instead, the focus of the Labor Law Code of Ukraine (LLCU) developed in 1971 is on regulating labour relations between the subjects of the planned economy.
Thus, to provide new options for legal earnings and own business development, public deputies decided to implement legal regulation of the respective form of work. On July 18, 2022, the Verkhovna Rada of Ukraine passed Law of Ukraine No.2421-IX “On Amendments to some Legal Acts of Ukraine to Regulate Labor Relations with Flexible Work Schedule”  (the Law, Law of Ukraine No.2421-IX), which came in force on August 10, 2022.
The Law extends the Labor Law Code of Ukraine with a new article No.211 “Labor contract with a flexible work schedule”. It actually allows involving a person on an irregular basis for doing some works of not permanent but repetitive character.
The first paragraph of article 211 of the LLCU established that a labour agreement with a flexible working schedule is a specific type of labour agreement, and does not establish a period for doing the work. In other words, the work’s duration depends directly on the scope of work provided by the employer. At that, the employer must meet the legal requirements on total work and rest duration.
Such an agreement does not guarantee any stability in the provision of tasks. In other words, if an employer fails to provide the employee with work to do, the last mentioned is not obliged to work during the stated time. The employee’s liabilities arise only if the employer provides his/her with the work.
Noteworthy, according to the Law, employers may solely resolve on the necessity and period of the involvement of a specific employee, and on the scope of work tasks. The work schedule and the period required to fulfil the task should be agreed upon with the employee only afterwards. A labour agreement shall specify the period to adjust the respective details. Article 211 LLCU contains the list of requirements for a freelance labour agreement.
Interesting that the legislator has decided to restrict the number of special labour agreements with a single employer. The number of labour agreements described shall not exceed 10 per cent of the total number of the employer’s labour agreements. If the employer has less than 10 persons in the team, it is entitled to conclude only one freelance labour contract. In a case of infringement, the Law stipulated a penalty for the employer at the rate of 3 minimal wages (the MW) for each employee exceeding the allowed 10% of freelance agreements. I suppose it should prevent cunning employers from misusing the new type of labour relations.
I have already mentioned above that a freelance agreement must contain specific information, namely on intervals when the employee could be required to work (basic hours and days). The Law of Ukraine No.2421-IX establishes that the totality of these basic hours shall not exceed 40 hours per week, and the totality of the basic days – 6 days per week. In turn, an employee can refuse a specific work if demanded to do it outside of the basic days and hours.
Talking about remuneration, a freelancer shall get a salary for the period of actual work. The Law prescribes that the minimum duration of the working time for such an employee shall be 32 hours. It is interesting that if during one separate month, an employee has been doing the job for less than 32 hours collectively, the employer must pay for not less than 32 working hours. Law of Ukraine No.2421-IX established penalties of 3 MW for an employer’s inaccurate accounting of a freelancer’s working hours.
I support the legislator’s decision not to prohibit freelancers’ labour agreements with other employers. Thus, working in flexible schedule conditions does not restrict any labour rights of employees.
By the way, the Law contains supplement options to terminate a freelance agreement. Those grounds relate to the employee’s skills or behaviour, other economical, technical, structural reasons or alike.
Future freelancers should be aware that after 12 months of work under such an agreement they are entitled to require their employee to conclude a fixed-term or permanent work agreement. In such a case, the employer must enrol this freelancer or provide a well-grounded refusal within 15 days.
To summarize the mentioned above, I think that legal regulation of freelance employment shall enhance social security for the employees in the sphere. Moreover, this could be fruitful for the state budget with new taxes from the respective employees coming from the shadow under the light. Actually, a freelance agreement is an alternative to civil legal contracts. While the freelance market in Ukraine is optimistically developing, this type of employment is becoming more attractive for both employers and employees. Among its benefits are new spheres for freelancers to apply their job skills, a flexible schedule agreement has all chances to become a convenient mechanism to legalize freelance employment.
- Labor Law Code of Ukraine (Digital resource) //official website of the Verkhovna Rada of Ukraine. – Access https://zakon.rada.gov.ua/laws/show/322-08#Text
Law of Ukraine “On Amendments to some Legal Acts of Ukraine to Regulate Labor Relations with Flexible Work Schedule (Digital Resource) // official website of the Verkhovna Rada of Ukraine. – Access https://zakon.rada.gov.ua/laws/show/2421-IX#Text