In recent years, cooperation on the basis of a B2B contract has become increasingly popular in Poland. Below you can find answers to a number of questions about the basics of this cooperation model.
What is a B2B relationship?
The term ‘B2B’ stands for Business to Business – and it is ‘business to business’ that provides a pictorial explanation of what this type of relationship looks like. At the heart of it is the conclusion of a contract between two entrepreneurs (who are either a company or a sole trader registered with CEIDG). In recent years, more and more individuals are setting up a business and instead of an employment contract, it is the B2B contract that they conclude with their ‘employer’.
What is a B2B contract?
A B2B contract is in fact simply a contract for the provision of services, similar to a contract of mandate. It therefore contains typical elements such as the identification of the parties (principal and contractor), a description of the tasks commissioned, remuneration.
How can a B2B contract be shaped?
A B2B contract is characterized by considerable freedom in shaping its terms. Unlike an employment contract, the framework of which is quite rigidly defined by labor law, in a B2B model it is possible to adapt the terms of cooperation to the needs of the parties. For example, remuneration may be settled on an hourly basis, depending on the number of hours worked, or on a flat rate for a fixed number of hours worked per week or month.
What is the notice period for a B2B contract?
As mentioned above, there is no top-down rule on how long the notice period of a B2B contract should be. A notice period of one month is most commonly used, but there is no obstacle to it being longer or shorter. Much depends on the duration of the B2B contract itself. Usually, for contracts with a longer duration, at least one month’s notice period is used.
What is the duration of a B2B contract?
Again, there is no legal obligation to conclude a B2B contract for a fixed (or indefinite) period. This issue is left to the discretion of the contracting parties.
In the case of B2B, does the length of ‘employment’ with one company matter?
Contrary to an employment contract, the length of cooperation under a B2B contract is irrelevant to the acquisition of certain benefits (e.g. the right to a jubilee award, longer notice period) by the contractor – unless the contract itself provides for such additional provisions.
What about annual leave and sick leave in a B2B contract?
In this aspect, a B2B contract is very different from an employment contract. Well, in the B2B model, there is no guaranteed right to a certain amount of holiday, nor is there a classical sick leave guaranteed. However, it is common to find provisions in B2B contracts referring to these issues, e.g. granting the contractor a ‘paid break in performance’ of a certain number of days per year. Some contractors also opt for a gentlemen’s agreement, without describing these issues in the B2B contract itself, but simply agreeing during the ongoing performance of the contract.
Who takes care of paying social security contributions and advance tax payments in a B2B contract?
The parties to a B2B contract are independent entrepreneurs, so each of them pays taxes and advance payments independently. The situation is different in the case of an employment contract, in which the employee is paid after deduction of contributions and taxes made by the employer.
Running a business is often connected with concluding B2B agreements. This phrase can be seen on numerous occasions, but is always tied to the entrepreneur – which can run their business in the form of a sole tradership, a partnership or a company. What is hiding under B2B then?
Paid sick leave and annual leave are entitlements for people working on employment contracts. Can people working on a B2B basis also work on L4? Are they entitled to annual leave?
Employers take varied measures in order to mitigate costs of employment and eliminate a part of their responsibilities. Some of them, instead of classic employment contract, conclude so-called B2B agreements with job applicants. Others decide to change the method of “employment” after it commences – they decide to change from employment contract to B2B contract. However, concluding B2B contracts can result in some particular kind of risk.
