Working together without paperwork: where problems arise
Many self-employed people (autónomos) subcontract part of their work to other professionals. You quote, you deal with the client and you invoice. The others work with you, and the end client does not need to know, because you are the one answerable to them.
It is very common in construction and renovation: the client contracts with the developer or builder, who relies on other trades to carry out the work. It also happens in design, IT, consultancy, events and maintenance.
While everything goes well, nobody misses a contract. The problem comes when something goes wrong: a delay, a defect, a client who does not pay or a collaborator who takes your client. You may trust your collaborator completely, but even the best families fall out. When that moment comes, each side looks after its own interests, however good the relationship was. If nothing is in writing, you have to piece together what was agreed from messages and memories.
Collaborator, employee or partner: not the same thing
Before drafting anything, you need to know what your relationship really is. The name you give the contract does not decide it. The facts do.
- If the collaborator works under your instructions, to your hours and with your equipment, without taking on any risk of their own, it may be treated as a disguised employment relationship, known in Spain as a falso autónomo (bogus self-employment). The consequences can include backdated registration and Social Security contributions, as well as fines.
- If a self-employed person earns at least 75% of their income from you, they may be an economically dependent self-employed worker (TRADE). Ley 20/2007, del Estatuto del Trabajo Autónomo (the Self-Employed Workers Statute), gives them specific rights and requires the contract to be in writing.
- If you share clients, costs and profits on a stable basis, a company or another form of partnership may suit you. In other cases circumstances suggest staying as independent collaborators, and then it needs to be properly regulated.
If the relationship is stable, I look with you at whether it makes sense to set up a company or keep the collaboration under a good contract.
Subcontracting on building sites: rules of its own
In construction, Ley 32/2006, reguladora de la subcontratación en el sector (the Construction Subcontracting Act), adds its own requirements. These include registering companies on the Registro de Empresas Acreditadas (Register of Accredited Companies), keeping a subcontracting log book and limits on the chain of subcontractors.
In addition, article 42 of the Estatuto de los Trabajadores (Workers’ Statute) makes the main contractor liable, together with the subcontractor, for certain wage and Social Security debts owed to the subcontractor’s workers when the work is part of the main contractor’s own activity. That is why you should ask for and keep the certificates showing they are up to date with payments, and state in the contract who bears that risk. And remember that, as far as your client is concerned, you are responsible for the work of the people you use on the job.
Clauses worth thinking through
- Non-compete: the collaborator must not poach your clients or work for them directly. It must be proportionate in time, area and activity. If it goes too far, it may not be valid.
- Confidentiality: prices, clients, working methods. Ley 1/2019, de Secretos Empresariales (the Trade Secrets Act), protects this information when you have taken reasonable steps to keep it secret, and a contract is one of them.
- Ownership of the result: in creative or technical work, such as designs, plans or software, who can use them and for what.
- Personal data: if your collaborator accesses your clients’ data, the General Data Protection Regulation (GDPR) requires a data processing agreement. I explain this on the data protection page.
The smart thing is to set out, even minimally, the basis of the collaboration. Depending on your business, a framework agreement for all jobs may be enough, or you may need a separate agreement for each job. I can handle this as a one-off or as part of my ongoing advice service.