Contract Of Service and Contract For Service – what is the difference?

Contract Of Service and Contract For Service

The law makes a distinction between a contract of service and a contract for service. Basically, a contract of service applies to an employee-employer relationship, while a contract for service applies in the case of an independent sub-contractor. This distinction is most important as protection of employment legislation does not apply to independent subcontractors – with the exception of the Safety Health & Welfare At Work Act 2005 and the Equality Act 2004.

The following is a summary of the essential differences between the two sorts of contract.

Contracts Of Service

  • Employer-Employee relationship.
  • Usually a continuous relationship.
  • A duty of care owed to employees, as the employer.
  • The employer is generally liable for the vicarious acts of employees.
  • Protective legislation applies to contract.
  • Wages/Salary payment method.
  • Subject of contract is to carry on continuous work.

Contracts For Service

  • Employer-Independent Contractor relationship.
  • A relationship organised around the completion of a once-off piece of work.
  • A duty of care, arising from occupiers’ liability.
  • The employer is generally not liable for the vicarious acts of independent contractors.
  • In general, protective legislation does not apply, except for the Safety Health and Welfare at Work Act 1989 and the Equality Act.
  • Various methods of payment, including lump sum per job.
  • Subject of contract is once-off job.

For further details, please contact or call 01 406 14 75. 

Written by Gillian Donohoe MSc FCIPD, Managing Director, Kala Management Solutions Limited.    Send article as PDF   

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