Do you know your “Freelance” agreement?
Nowadays, according to CONDUSEF data, in Mexico, there are over 11.2 million people who are in the labor or commercial sector under the “Freelance” classification. In general terms, we must understand this term as the person who provides its services independently where it can develop his trade or profession.
The labor-hiring trend finds attractive to do it through people who use the Freelance model. To do this, they enter into contracts with these people, either by a commercial commission or as professional services, often to free themselves from social charges or to reduce expenses that the employer must necessarily cover for the worker in case the labor relationship ends.
When you are a freelancer, in most cases it is assumed that you are exempt from claiming benefits from the employer under the belief that the contractual relationship was evidently civil or commercial. However, in many cases, the Freelancer performs subordination activities attached to a work schedule, which would entail after having terminated a work relationship to have various labor actions under the sphere and protection of the Federal Labor Law and not in civil or mercantile cases in response to your contract for the provision of services or commission.
In such considerations, it is important that those who provide their services through the Freelance classification, know the contractual nature of their services provision, that is, enter into a contract for the provision of professional services with fees payment, is completely a professional act, which by its form requires the service provider to have permission to practice its profession, that is, to have a professional certificate issued by the General Directorate of Professions of the Public Education Ministry. Only if the law does not require a title to carry out such a profession, the service provider is exempted from such condition. But if someone who practices a profession that requires a title to do so, does not have a certificate or authorization, it does not have the right to practice as such and, of course, does not have the right to charge fees.
The above goes like this, taking into account that the contract is regulated by Mexico’s City Civil Code, in articles 2606 to 2615 as well as in the Regulatory Law of the constitutional article 5, also known as the Law of Professions, which defines the profession as “the usual performance for consideration or gratuitous of any act or the provision of any service of each profession, even if it is only a simple consultation or the ostentation of the professional character by cards, advertisements, plaques, badges or in any other mean. Any act performed in serious cases for the purpose of immediate assistance (article 24) will not be considered a professional exercise.”
On the other hand, the employment agreement is about the human intellectual and/or material activity carried out in favor of another person, in a subordinate way and in a personal way; having as main element the subordination, that in words of Néstor de Buen it refers it like the characteristic element of the labor relationship.
The freelancer when entering into a contract for the performance of certain jobs or activities must distinguish the nature of it. Among the distinctions the freelancer must do to know the way in which it is hired, the following stand out:
(i) As far as a contractual labor relationship is concerned, work must always be provided in a personal way; on the other hand, in services provision, it is not required to have an assigned schedule or attend a workplace, all time the services are lent to perform a project.
(ii) In labor matters, work is subordinate and the professional contractual relationship is not. In civil matters, it is not strictly necessary to be subject to the client’s submission, since the achievement of the objective is enough to be understood as concluded. In many cases, the objective must be met successively by certain activities and time periods, which in practice are known as a legal retainer fee, these are usually reviewed annually and can be terminated at the will of either party. Exceptionally, a cause of termination is required.
(iii) In the relationships followed by labor law, the worker does not require technical training, while as mentioned in services provision; the provider requires authorization to perform the tasks.
(iv) The payment of a salary in an employment relationship, and the payment of fees to the professional.
(v) The length of the employment agreement is for an indefinite period, while the provision of service is temporary.
(vi) The duties in an employment agreement are made in the employer’s workplace, however, in the provision of service is not required to go to that address to perform the task, unless otherwise agreed in specifying the purpose of doing so.
(vii) Is the employer’s responsibility, in a work agreement, assigns the tasks to the worker, unlike a provision of services relationship, since it is personal.
From the above, it can be distinguished that the works assigned to a freelancer are often of a civil nature, however, sometimes the requirements for these are not met, so a full interpretation must be made about the intention of the contracting parties. Many companies hire freelancers since they have the false belief that will exempt them from any labor responsibility at the time of terminating the agreement, but the risk is high since, if the freelancer in exercise of their rights manifests a violation to their labor rights, the employer must prove the nature of the contract, where in case of not doing so will have to face the freelancer’s claims.