The European Commission defines a self-employed person as someone ‘pursuing a gainful activity for their own account, under the conditions laid down by national law’. This definition comes from Directive 2010/41/EU (738Kb PDF) on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity. This is in contrast to an employee, who is subordinate to and dependent on an employer.
However, there is often a blurring of the borders between self-employment and employment. For example, self-employed workers are no less dependent economically on their work for subsistence, though paid by their clients or customers. Further, some self-employed workers perform work as entrepreneurs while being in a dependent or subordinate position.
The fifth European Working Conditions Survey (EWCS, 7.5Mb PDF) carried out in 2010 included some questions about the self-employed. The survey used four parameters to distinguish self-employed people – especially self-employed people without employees – from employees. The parameters were:
- the degree of dependency on only one client – a ‘genuine business’ is assumed to seek income from different sources;
- resources that come through payment for products or services provided and not from a regular (monthly) payment like a salary;
- capacity for hiring staff when needed;
- ability to decide significant steps for the business.
According to the fifth EWCS, around 15% of working people in Europe are currently self-employed, and in many countries this status gives rise to specific regulations, social protection and rights. The proportion of self-employed people varies across the EU, from more than 30% in Greece to fewer than 10% in Denmark, Latvia and Sweden. The population of self-employed people fell in the early 2000s before rising again by 2005 and declining slightly by 2010. The EWCS data suggest the main decline is concentrated in the category of self-employed with employees, down from 5% of workers in the third EWCS to 4% in the fifth EWCS.
In terms of occupation, according to the fifth EWCS, 16% of self-employed people are professionals while 14% are craft and related workers. Between 15% and 17% are service and sales workers, 17% are managers and 16% are skilled agricultural workers. In total, 90% of self-employed people work in the private sector.
The fifth EWCS survey also found that self-employed workers were more likely to work 48 hours a week or more. On average, long hours are worked by 43% of self-employed workers without employees, by 54% of self-employed workers with employees, and by just 11% of employees who were not self-employed. The survey also found that 63% of employees work on a regular time schedule, compared with just 33% of self-employed people with employees, and 29% of self-employed people without employees.
In terms of health and safety, the survey found that 28% of self-employed people felt that their health and safety was at risk due to their work, compared with 24% of employees on permanent contracts and 22% of employees on temporary contracts. On the plus side, 91% of self-employed people felt that they were doing useful work and had a feeling of job satisfaction, compared with 82% of employees.
The diversity of work carried out by self-employed people has attracted various forms of regulation. In the EU, self-employed people have been the subject of increased attention, especially in the sphere of employment law, with the focus on the areas of free movement and equal treatment, and in the European Employment Strategy.
The second of the four pillars of the European Employment Strategy is entrepreneurship. One of its aims is to increase the number of self-employed persons in the EU, particularly by encouraging the Member States to reduce tax and social security obstacles for this form of economic activity. In recent times, boosting self-employment and entrepreneurship has been a focus for European institutions as a means of increasing employment and economic activity during the economic crisis which began in 2008.
Free movement and self-employed persons
Article 53 of the Treaty on the Functioning of the European Union (TFEU) provides for the free movement of those taking up and pursuing activities as self-employed people. It stipulates:
In order to make it easier for persons to take up and pursue activities as self-employed persons, the Council shall… issue Directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications.
The European Court of Justice (ECJ) reinforced these Treaty provisions by defining ‘worker’ as any person engaged in economic activity. This definition ensures that all Treaty provisions covering the free movement of workers also apply to the self-employed.
A number of Directives have been adopted to promote the mutual recognition of diverse national systems of qualification and their regulation, and the regulation of particular professional qualifications, such as those applying to lawyers, doctors and architects. Council Directive 89/48/EEC aimed to establish a general system for the recognition of higher education diplomas awarded on completion of professional education and training of at least three years’ duration. Despite these legal moves, free movement of the self-employed, particularly self-employed professionals, has remained relatively low.
Equal treatment and self-employed persons
Directive 2010/41/EU deals with the application of the principle of the equal treatment of women and men engaged in an activity in a self-employed capacity. It states in Article 4 that there shall be no discrimination whatsoever on grounds of sex in the public or private sectors, either directly or indirectly. There should be no discrimination, for instance, in relation to the establishment, equipping or extension of a business or the launch or extension of any other form of self-employed activity.
The Directive also states that where a national social protection system exists for self-employed workers, the spouses or life partners who participate in the activities of the self-employed worker have the right to social protection in their own name, in accordance with national law (Article 7). The Directive also stipulates that Member States should ensure that female self-employed workers and female spouses and life partners of self-employed people are granted a maternity allowance that is sufficient to enable them to cease economic activity for at least 14 weeks.
Overall, the EU is keen to encourage more women to be entrepreneurs and to become self-employed. Women are currently an under-represented group among the self-employed.
The principle of equal treatment with respect to self-employed people also extends beyond gender. Council Directive 2000/43 implements the principle of equal treatment between persons irrespective of racial or ethnic origin. It applies to all people in relation to:
...conditions for access to employment, to self-employment and to occupation, including selection criteria and recruitment conditions, whatever the branch of activity and at all levels of the professional hierarchy, including promotion.
Council Directive 2000/78, which establishes a general framework for equal treatment in employment and occupation, contains an identical provision.
See also: Atypical work; Casual worker; Contract of employment; Discrimination; Economically dependent worker; Equality between women and men; Free movement and social security; Homeworking; Mobility of workers; Occupational mobility; Portability of social security rights; Worker.