EurWORK European Observatory of Working Life

Employment relationship

The concept of an individual employment relationship expands the coverage of EU labour regulation from a narrower scope limited to a ‘contract of employment’, based on the criterion of subordination of the employee to the employer. The concept of an ‘employment relationship’, distinct from a relationship founded on a contract of employment, can be found in EU legislation.

The Acquired Rights Directive of 1977 (Council Directive 77/187, consolidated in Directive 2001/23) referred to rights and obligations ‘arising from a contract of employment or from an employment relationship’ (Article 3(1)); also Article 4(2), which refers to where a ‘contract of employment or the employment relationship is terminated’. The Directive on the protection of employees in the event of insolvency of 1980, Directive 80/987, referred to ‘employees’ claims arising from contracts of employment or employment relationships’ (Article 1(1)) (repeated in Articles 3(1), 3(2), and 4(2)).

However, the initiative most clearly directed to the problem of the limited concept of the contract of employment was Council Directive 91/533/EEC of 14 October 1991 on an employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship. Article 1(1) of the Directive defines its scope as follows: ‘This Directive shall apply to every paid employee having a contract or employment relationship defined by the law in force in a Member State and/or governed by the law in force in a Member State’.

The Directive makes a clear distinction between contractual and other employment relationships, i.e. workers who do not have a contract of employment, but nonetheless are in a relationship of employment. Both forms of relationship are included within the scope of the Directive. By including within its scope workers who do not have a contract of employment, and thus do not fall within the definition of ‘employee’, it raises a question of what criteria constitute an employment relationship, which is not also a contract of employment.

An obvious category is that of independent contractors/self-employed workers, who are normally considered in national law as having not a contract of employment, but a contract for services. These are paid workers and they have a relationship of employment. This relationship, contrary to the title of self-employment, is with the paying client or customer. However, there are obviously other types. This emerges with clarity from Article 1(2)(b), which states that the Directive applies to casual and/or specific workers, unless its non-application is justified. The problem of classifying such workers as employees has been encountered in domestic law.

First, they must be ‘paid’. That is not the same as saying there is a contract, although being paid makes it likely. The Directive clearly envisages paid employment relationships, which are not contractual. Moreover, the Directive does not specify from whom the payment comes. The definition of ‘pay’ in Article 157(2) TFEU (equal pay) specifies pay ‘which the worker receives... from his employer’. In contracts of employment, payment will normally be received from the employer. However, employment relationships may not be as direct as employment contracts, and the modalities of remuneration are more diverse. There is an extremely wide definition given in Article 157(2) TFEU: ‘...‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives, directly or indirectly, in respect of his employment….’

Second, the information required by Directive 91/533 is of the ‘essential aspects of the contract or employment relationship (Article 2(1)).’ There is no formal checklist. What is an essential aspect of the employment relationship will depend on the nature of the relationship. The information provided ‘shall cover at least’ certain items listed in Article 2(2). The degree of specification required is variable. For example, the place of work need not be fixed (Article 2(2)(b)); there need be no work title - a brief description of the work will suffice (Article 2(2)(c); leave and notice entitlements may be indicated through a procedure or method of determining them (Article 2(2)(f,g)); and relevant collective agreements only where appropriate (Article 2(2)(j)). However, there is required information on the date of commencement of the relationship (Article 2(2)(d)); if a temporary relationship, the expected duration Article 2(2)(e)); remuneration entitlement (Article 2(2)(h)), within the broad sense of rewards described above, and normal working time (Article 2(2)(i)).

Third, employment relationships ‘of a casual and/or specific nature’ may be excluded, but only if this is ‘justified by objective considerations’ (Article 1(2)(b)). The casual and/or specific nature of work does not preclude it being an employment relationship (or even a contract). The third element of an employment relationship is, therefore, that it may be casual and/or specific and still fall within the scope of the Directive.

What these elements of an employment relationship comprise is the recognition by EU labour law that work has taken new forms, which may not fall within the classical common law definition of contracts of employment. Such employment relationships are likely to fall within the scope of the EU labour law laid down in this Directive.

See also: atypical work; casual worker; contract of employment; economically dependent worker; employee; fragmentation of the labour force; homeworking; proof of employment; temporary agency work; terms and conditions of employment; undeclared work.

Please note: the European industrial relations dictionary is updated annually. If errors are brought to our attention, we will try to correct them.
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