Are you a contract employee? This is the threshold for pay you need to be aware of
What does it mean to be employed on an individual contract? And when do you go from being employed under a collective agreement to being a contract employee? We give you the answers.
But how do you know?
"It has to be included in the contract, because you are no longer covered by the collective agreement. So you simply have to make sure to read the contract carefully or have Finansforbundet check that everything is as it should be," says Mette Hjøllund Schousboe, while explaining how Finansforbundet's legal department often finds errors in the determination of the threshold amount when they review members' contracts.
Contract employee or not?
So, the difference between being employed under a collective agreement and a contract lies in the rights that apply to your employment; those of the collective agreement negotiated by Finansforbundet or those in your individual contract negotiated by yourself.
"As an employee under the collective agreement, you can lean back more comfortably since most essential benefits are outlined in the agreement, providing a safety net. In contrast, contract employees need to be more cautious. They have to be absolutely certain that everything is included in the contract", says Mette Hjøllund Schousboe.
But then what's the point of being a contract employee?
As a contract employee, you are not subject to the pay adjustments set by the collective agreement, giving you greater freedom to negotiate salary increases directly with your employer. From the employer's point of view, it may be an advantage not to be restricted by a collective agreement, the chief legal adviser explains.
"We have a fairly detailed collective agreement, both in terms of working time arrangements and rules on pay, time off and so on. Entering into an individual contract with an employee therefore gives employers more freedom. They don't have to involve the opposing party to the collective agreement if they want to change the terms of this particular employee group," she says.
You can't say no
Since the last collective agreement, Finansforbundet's legal department has seen a tendency among companies towards putting employees on individual contracts.
"We've received several enquiries about it because our members don't find them favourable. At least not those who have exceeded the threshold due to a minor pay increase," says Mette Hjøllund Schousboe.
As an employee, you might begin to wonder whether avoiding a pay increase could prevent you from being transferred to an individual contract?
No, it cannot, according to Mette Hjøllunds Schousboe.
"You can't say no to a pay rise – and the employer may make you a contract employee if your pay exceeds the threshold," she says.
She explains that you may, however, ask for Finansforbundet's help to assess whether the transfer from being an employee under the collective agreement to a contract employee constitutes a significant change of the terms of employment.
"And if the terms and conditions have been changed to the effect that it constitutes a significant change, you may refuse, which means that you'll be considered terminated at the employer's notice and be entitled to compensation if your length of service is sufficient," she explains.