One of the riskiest and most problematic aspects in the organization and management of personnel costs in Horizon Europe’s actions is the cost category A.2 Natural persons under direct contract.
The eligibility of this staff category is conditioned by cumulative compliance with a number of eligibility elements.
The risk of the non-eligibility of this project staff as “personnel” is quite concrete, and the immediate consequence – for example during a financial audit – is that the costs generated by this staff are reallocated by the auditor under the Subcontract category. Unfortunately, your project did not originally budget for subcontracting. Therefore, in the absence of subcontracts foreseen in the description of the action, and in the estimated budget, the costs are definitively rejected.
Often, therefore, the A.2 category can be a false friend, i.e. it can generate the belief that anyone who is not an “employee” can be an A.2, provided they have a direct contract.
In truth, category A.2 was conceived to meet the needs of those organizations that need to acquire staff for specific project needs, but are unable – legally or for economic reasons – to start an employment relationship at all effects in accordance with the legislation applicable in the country where the beneficiary is established.
Simplifying the reasoning, an A.2 staff member should look like an “A.1 Employee” in daily practice, only with a different contract than what the national labor law considers an employment contract.
What characterizes – therefore – an A.2 is therefore not only the fact of not being an “employee”, but also and above all of the acting (and being considered) similar to an A.1.
A.2 and A.3 Costs for natural persons working under a direct contract other than an employment contract … are also eligible as personnel costs, if they are assigned to the action, fulfil the general eligibility conditions and:
(a) work under conditions similar to those of an employee (in particular regarding the way the work is organised, the tasks that are performed and the premises where they are performed) and
(b) the result of the work belongs to the beneficiary (unless agreed otherwise).
A further element that qualifies an A.2 worker is the relationship between his/her work and “time“.
In many “direct contracts other than employment contracts” entered into between the beneficiary and the employee, the core of the relationship is represented by a specific work performance compensated by a fee.
In reality, worker A.2. is paid for time spent working for the beneficiary (as an employee), and not for having performed work. This second scenario is typical of subcontracts. In principle, an A.2 who sits at his desk all day without doing anything (perhaps because he has not received instructions from his manager) is still entitled to the payment of his fees. A subcontractor who does not carry out his activity does not accrue the right to be paid.
They (A.2 personnel costs) must be calculated on the basis of a rate which corresponds to the costs actually incurred for the direct contract or secondment and must not be significantly different from those for personnel performing similar tasks under an employment contract with the beneficiary.
Then there is the issue of presence in the workplace, which normally the subcontractor does not guarantee, or cannot implement, while a real A.2 does guarantee. And it is often not sufficient to justify the absence from the A.2 office with the Organization’s organizational provisions. If all A.1s have to go to the office every day, the same should apply – in principle – to A.2s as well.
Many other elements contribute to making an A.2 eligible, and these often reside in the way the contract between the parties is drafted, and in the daily management of human resources.
In short… be careful how you use an A.2, because it could turn out to be a false friend!