Publication date: 05.06.2024
lawyer, 23 years of experience in enforcement.
Benefits and reasons for concluding an outsourcing contract.
Today, many Ukrainian companies have lost or no longer have the opportunity to complete all their economic activities, as a result of which they provide work for their employees. To keep employees at the company, the only way out is to conclude an outsourcing contract.
What is the concept of outstaffing and how is this term defined at the legislative level in Ukraine?
The term outstaffing or other words such as "employee rental", "employee leasing" are often used - this is the removal of employees from the staff of the client company and their transfer to the staff of the "outstaffer" or contractor company.
In addition, employees must work in their previous position and adhere to the rules, schedule and other requirements of the client company.
But the employer's duties regarding them will be fulfilled by the contractor: all personnel issues, such as wages, sick leave, benefits, vacations, social guarantees, etc., are entrusted to the contractor company.
In addition, there is currently no official definition of outsourcing at the legislative level in Ukraine, as this term comes from international legal systems.
Yes, the idea of outsourcing is not formally recognized in the legislation of Ukraine, but Art. 39 of the Law of Ukraine "On Employment of the Population" describes the activities of "enterprises that hire employees to work in Ukraine, including the content of outsourcing.
In addition, in accordance with clause 14.1.183 clause 14.1 of Art. 14 of the Tax Code of Ukraine, personnel service is a type of economic or civil law, which provides for the provision of services to another person (natural or legal entity) for a fee.
As a result, despite the absence of a formal definition of the term "outstaffing" in Ukrainian legislation, in practice, a contract on the implementation of economic activities involving outstaffing is actively concluded between the customer and the contractor.
When is an external agreement necessary?
An outstaffing contract is necessary when the company (client) requires external experts to perform specific tasks or projects, but wishes to avoid direct hiring of these individuals to its staff. This contract usually:
- Need for specialized knowledge: If a company wants specific knowledge or skills needed for a particular project, it can look for an outsourcing company that has specialists with the relevant experience.
- temporary need for resources: when a company needs additional resources to complete a project or task, it can use outsourcing services to quickly attract the necessary personnel.
- Efficient use of resources: Companies that want to focus on their core business can take advantage of outsourcing for repetitive or complex tasks, then those tasks can be delegated to other companies.
- cost reduction: compared to hiring internal employees, outsourcing is economically more profitable, since the company only pays for the work actually performed, without taking into account additional costs related to personnel management.
- when the company has problems with the labor department, because of which they have problems with fines.
- When the company has problems with payment of labor, which negatively affect non-core expenses, distract the company's attention and negatively affect the company's reputation.
In addition, the outstaffing agreement is used in the presence of legal restrictions on the number of employees (for example, when individual entrepreneurs who work at the II level of the simplified taxation system (for example, sole proprietorships) have no more than 10 employees, the services of the contracting company will help to solve this issue and attract additional staff as needed without increasing headcount.
Legal service "Consultant" will provide professional legal services for business. Lawyers and lawyers will provide qualified legal support to the business, as well as provide assistance in the preparation of the contract or the preparation of a contract for making additional contributions to the authorized capital by the participants of the LLC, contract preparation, counterparty verification, Preparation of a claim to a debtor etc.у
