This article briefly discusses what is meant by a service provision contract, an employment contract, and their differences; likewise, it will establish why, in the practice of the medical profession, this type of contracting tends to disguise a real employment relationship, when as a general rule the Council of State has established that this type of work performed by healthcare personnel does not fit the typology of service provision contracts.
In Colombia, an employment contract is an agreement entered into between an employer and a worker, establishing the conditions under which the worker will provide services to the employer. This type of contract is regulated by the Substantive Labor Code and labor jurisprudence. An employment contract in Colombia must meet certain requirements and formalities, including: personal service provision, subordination, and remuneration.
A service provision contract is an agreement entered into between a natural or legal person who provides a service autonomously and independently of another natural or legal person who hires them, existing a relationship between equals. In Colombia, this type of contract is regulated by the Civil Code and Law 80 of 1993, and its nature is commercial.
The main difference between an employment contract and a service provision contract in Colombia is that the former establishes an employment relationship between the parties, called employer and worker, while the latter establishes a commercial relationship between the parties, called contractor and contracting party. In the employment contract, the worker is subordinate to the employer, who has the power to direct and control the employee's work, as well as to establish the conditions under which the service will be provided. Therefore, the worker is entitled to certain guarantees and legal protections, such as payment of social benefits, paid vacation, Social Security, and other obligations that are the employer's responsibility.
In the service provision contract, the contractor undertakes to provide a specific service to the contracting party, but is not subordinate to the latter in the way an employee would be. At this point, it is pertinent to develop what the Council of State has stated regarding the element of subordination to better understand it and its scope. In Judgment C-614 of 2009, the Constitutional Court mentioned: “(i) subordination or dependency is the situation in which the public servant is required to comply with orders at any time, regarding the manner, time, or quantity of work, and regulations are imposed on them, which must be maintained during the relationship;” Therefore, it is inferred that merely complying with a schedule is not enough to consider the existence of a subordination relationship, but also the imposition of orders and new functions, as well as the imposition of Work Regulations, leading to the possibility of applying penalties and/or disciplinary sanctions for non-compliance.
At this point, it is important to mention the duration of the service provision contract over time, since there are people who have service provision contracts that are extended for more than 5 or 10 years, a fact that also distorts the figure because it is not its purpose, as stated in Judgment T-388 of 2020, which explains that the service provision contract is completely denatured when it does not meet the objective of having a definitive time limit, and on the contrary, it tends to be prolonged for several years, thus contradicting the aforementioned rules, which indicate that the service provision contract must be developed for the strictly necessary term or, failing that, positions must be created to meet the permanent need of the position.
Given the above and given the nature of the functions performed by a doctor or nurse, it is noted that these functions could not normally be performed autonomously, since healthcare professionals practicing such profession could not autonomously define the place or schedule in which they choose to provide their services, also in case of suspending the provision of service by a doctor or healthcare personnel. However, and citing the words of the Council of State, “[...] does not prevent that in certain cases they may act independently since exceptions may arise. However, the general rule is subordination, so it must be presumed.” Therefore, depending on the case, it will be up to the defendant entity to rebut that presumption.
It is very common for healthcare service provider companies to hire doctors under the service provision figure, but in reality these professionals perform tasks typical of a dependent worker, such as complying with schedules, following orders at any time, manner, or quantity of work from superiors, adhering to an Internal Work Regulation, receiving sanctions, and also working at the contracting company's facilities. This situation constitutes a concealed employment relationship and can lead to situations of labor abuse and precariousness of the labor rights of medical professionals.
Furthermore, the misuse of the service provision contract in the medical profession can lead to the violation of patients' rights. In situations where a doctor is hired under this figure but performs activities typical of a dependent worker, the patient may be affected by the lack of supervision and control by the health entity, and by the absence of mechanisms to protect their rights as a user.
In the Judgment of the Labor Cassation Chamber of August 2, 2004, File No. 22259, with rapporteur Judge Luis Javier Osorio López, the following was stated regarding the contractual relationship, where the contractually agreed link is not the one executed by the parties, which is called contract reality:
“[...] This means that the employment relationship does not necessarily depend on what the parties have agreed, but on the real situation in which the worker is placed. That is why jurisprudence and doctrine, in light of Article 53 of the Political Charter, are oriented so that the application of labor law depends less and less on a subjective legal relationship, but on an objective situation, whose existence is independent of the act that conditions its birth, clear and real circumstances appear sufficient to counteract the stipulations agreed by the parties, because they do not correspond to the reality presented during the development of the legal labor act”. (emphasis added) In conclusion, a contract reality occurs when the contracting party of the commercial relationship makes use of the power of subordination over the contractor, through the imposition of disciplinary sanctions, assignment of new tasks or functions at any time, manner, and quantity of work, completely transforming the service provision contract, since one would be facing a concealed employment relationship. In addition to the above, Article 34 of the Substantive Labor Code, which deals with independent contractors, has stated in its first paragraph that the labor activity performed by the contractor should involve tasks foreign to the normal activities of the contracting company or business; otherwise, contractors would represent the economic base for the operation of the entity, as in the case of EPS (Health Promoting Entities), clinics, hospitals, or other health entities, where if we eliminated medical personnel, its economic operation would not be possible, constituting a characteristic feature of a possible concealment of the employment contract under the service provision contract, thus violating the rights of medical professionals, patients, and society in general.
Juan F. Paz – ASSOCIATE ATTORNEY