The outsourcing of services and the hiring of independent contractor is possible, as long as some elements are complied and granted

In regards to the current labor dynamics, which have generated modern hiring schemes that adapt to the operational needs of the beneficiary of the services, and to the way the contractor wants to provide his/her services (being very common that some people want to have a flexible management of their time in order to dedicate to personal or academical projects, entrepreneurship or just be able to provide services to different clients, without being tied to a specific employment contract) it is completely valid to provide services under commercial agreements without any type of subordination.

Hence, it is important to highlight the despite the fact that in many opportunities it has been pretended to invalidate this type of contracts, due to the fact that unfortunately in some cases its appliance has been wrongly done, it must be reminded that at this moment there is no prohibition to outsource certain services or procedures, in order that they are in charge of companies or individual independent contractors.

Consequently, the hiring of services through commercial agreements is possible and valid, as long as certain elements and requirements are complied, allowing to demonstrate that the services are being performed in an autonomous and independent way, without any type of subordination, according to the dispositions stated on article 34 of Colombian Labour Statute.

Therefore, we consider relevant to generate an useful guideline or checklist regarding the conditions that shall be verified in order to determine if the independent services agreements are being used correctly.

Hence, in accordance to the dispositions stated by the Supreme Court of Justice on Case Study SL3695 of August 4, 2021, below we list the elements that the Court stablished in accordance with the Recommendation 198 of the ILO, in order to verify that an independent services agreements is not an employment relationship:

Provision of the services with control or supervision by someone else

Due to the fact that the main element that marks the difference between an employment relationship and a commercial bound is the subordination, it is important to guarantee that there is no supervision or provision of direct instructions from the beneficiary of the services to the independent contractor, considering that the contractor shall perform his services in an autonomous and independent way.

However, the aforementioned does not mean that the beneficiary of the services cannot verify the due compliance of the contract, considering that in regards to commercial dispositions, it is possible that in order to audit, do due diligence and confirm that the services have been duly provided to proceed with the payment of service fees, these validations are possible, without this being an act of subordination.

Exclusivity

Regarding the autonomy and independence of the contractor, and the freedom to freely manage his/her time in order to dedicate to the development of other activities different from those related to the services agreement, it is not possible to stablish exclusivity clauses that limit the possibility of the contractor to provide services in favor of other beneficiaries or employers.

Nevertheless, it is important to point out that in certain cases in which the contractor develops commercial activities that require the usage of elements proper of competition Law, knowledge of trade secrets among other, it is possible that from a merely commercial perspective, some commercial exclusivity clauses are stated in order to avoid damages on this regard.

Granting of vacation

Considering the fact that the vacations are a labor prerogative, it is not possible that these are granted to independent contractors.

However, in case the contractor requires to travel or temporary stop the provision of the services not being able to comply with the contractual obligations, it is possible that the parties agree on a temporary suspension of the commercial agreement.

Imposition of disciplinary sanctions

In accordance with the aforementioned, considering that the imposition of disciplinary sanctions is a faculty that is proper of employers in the frame of employment relationships, it is not possible to impose disciplinary sanctions (written warning or disciplinary suspensions) to the independent contractors.

However, the parties will be vested to stablish on the commercial agreements, certain penalties and indemnities in case of non- compliance of the contractual dispositions.

Compliance of a work schedule

The fact that the compliance of a specific work schedule is an element proper of subordination, it is not possible to demand to an independent contractor that he/she executes his/her activities on a specific schedule or work hours.

Provision of services in offices or places determined by the beneficiary of the services

The provision of a workstation or the request to perform activities permanently on the Company´s headquarters may be considered as a hint of the existence of an employment relationship.

Nevertheless, in recent case studies the Supreme Court of Justice has stablished that it is allowed that in exceptional cases the contractor execute certain activities on the hiring party, as long as there are no elements of subordination (Case Study SL 2171 of 2019).

Provision of tools or materials

In regards to the autonomy and independence proper of contractors, he/she should perform his/her activities with his/her own tools and implements.

However, in reality it is usual that in some cases the parties make commercial agreements stating that the beneficiary of the services will facilitate the access of the contractor to some elements they already have through a commercial loan.

Therefore, we reiterate that the Supreme Court of Justice has mentioned that the mere eventual provision of elements from the beneficiary of the services to the contractor does not automatically generate subordination or the existence of an employment relationship: “Usually the contractor develops his/her activities with her/his own tools, equipment or means; however, under certain circumstances it is possible that this autonomous and independent activity is executed with elements that are property of the beneficiary of the services that are necessary for the due execution of the contractual activities”.

Performance of a role that is proper of the internal company´s organization chart

It is advisable that the people who are hired through independent services agreements, provide an autonomous service as a specialized contractor, hence, it is not possible that they are assigned on a specific role that is part of the organizational chart of the Company.

However, there could be activities that are performed by both direct employees and contractors, as long as the difference between them is the correspondent subordination (for example: there could be an internal legal department with direct employees that perform the roles of legal chief, legal coordinator, and additionally there could be independent contractors that provide specialized legal services in an autonomous and independent way).

Therefore, we reiterate that in regards to the needs of the services and the practical execution, it is possible to outsource certain activities through commercial services agreements, as long as the aforementioned elements and recommendations are considered.