Building workers' union to organise self-employed

In summer 2003, the Danish Union of Wood, Industrial and Building Workers (TIB) announced plans to set up an affiliated organisation which will offer membership to self-employed people in the construction sector. This initiative is targeted at people working as self-employed under questionable circumstances, usually receiving lower pay than set by collective agreements. The issue of increasing 'bogus' self-employment is also seen as a problem by the main building industry employers' organisation.

The Union of Wood, Industrial and Building Workers (Træ-Industri-Byg, TIB) has announced that it will establish an affiliated organisation to recruit as trade union members self-employed 'sole operators' working in the construction industry. These sole operators work alone without any employees and do not meet the conditions to be considered as companies, as all they provide is their own labour - ie in reality they work as normal wage earners (they are known as 'arme og ben-firmaer', or 'arms and legs firms'). TIB estimates that there are around 11,000 such sole operators, and the number is increasing. According to the union, their presence in the industry results in 'dumping' in terms of prices and safety. Typically, they work at lower wages than employees covered by a collective agreement, and TIB and the trade union bargaining cartel in building and construction, (Bygge-, Anlægs- og Trækartellet, BAT-kartellet) see this as a serious problem. Together the unions are aiming to combat this phenomenon, both through unionising the more 'serious' of the self-employed sole operators and closing down the less serious 'arms and legs firms'.

TIB draws inspiration from the Netherlands, where the FNV Bouw construction workers' trade union has organised 3,000 out of 30,000 self-employed workers in the building sector in an affiliated organisation with its own policy and own employees, FNV Zelfstandigen Bouw. The proposal to organise self-employed people in a trade union was initially met with scepticism (NL9908157F), but the Dutch initiative turned out to be very popular. According to TIB, this is due to the fact that sole operators are not very different from employees and have the same needs for security, regular wage conditions and a safe working environment.

'Bogus self-employed'

In addition to the increase in the number of sole operators, a key reason why the trade unions in the building industry have launched their initiative is the view that most sole operators are in fact 'bogus self-employed' ('falske selvstændige'), whether they have been asked to work as such or it is their own free choice. Their existence is seen as constituting a hazard to collective agreements as long as the employers find it profitable to recruit such false self-employed workers. Examples have been reported of building workers working under a collective agreement who have been encouraged or even intimidated by their employer to obtain a VAT number to provide evidence of their registration as self-employed. However, despite the change in the worker's formal status, it is still the same employer that deals with orders, materials and tools and organises the work. The unions want the tax authorities to intensify their controls of one-person firms and the firms which employ them, and in mid-August 2003 they approached the building industry organisation, Bygherreforeningen i Danmark, and asked it to take measures to prevent member companies from hiring bogus self-employed people.

TIB as member of DA?

In principle, the main employers' organisation in the sector, Danish Building Industry (Dansk Byggeri), agrees with the unions' criticism of bogus self-employment. 'It is actually wage earners in disguise that we are dealing with and that is not acceptable. By having a work team of 10 workers registered with the VAT authorities as 10 self-employed persons all agreements concerning pay conditions and pensions, safety and health conditions and other matters are set aside. And we fully agree with the trade unions that this will actually completely erode the welfare system which we have together built up. We cannot stand by and watch this; it has to be stopped,' the director of Dansk Byggeri recently told the Jyllands-Posten newspaper. However, other employers' organisations have a different attitude, especially with regard to the plans to admit self-employed people to TIB. The joint employers' organisation for heating and plumbing engineering and electrical installation, Tekniq, calls the plan 'desperate' and sees it as an expression of bewilderment. Tekniq has made ironical comments, asking whether the next step will be for TIB to join the Danish Employers’ Confederation (Dansk Arbejdsgiverforeining, DA).

Dansk Byggeri does not fear that it will lose members to TIB. It has 700 sole operators as members, but they are characterised as firms which advertise the services they provide. They must have several years’ experience before joining the organisation and employees who change overnight to being self-employed cannot expect to be admitted as members of Dansk Byggeri.

Commentary

TIB's plan for an affiliated organisation which organises self-employed people will be the first of its type in Denmark. In principle, it should be possible, as there seems to be no major overlap between the sole operators who are members of an employers' organisation and those who are merely one-person 'arms and legs firms'. Given the strong growth of various forms of 'atypical' employment across Europe, the establishment of a trade union for the self-employed may be less self-contradictory than it might appear. There is a very delicate borderline between sole operators, free agents, casual workers, freelancers and bogus self-employed people. The common feature is that they are all forms of atypical employment and that there is major growth in such employment. Out of the 11,000 sole operators in building and construction, only half are considered to be genuinely self-employed by both trade unions and employers.

The problem of bogus self-employment can easily be linked to another problem, that of illegal workers from central and eastern European countries, an issue which is currently the subject of coordinated measures by the authorities, the police and the social partners with a view to combating illegal employment (DK0307102N). It is feasible that these illegal workers could work under the cover of bogus self-employment in order to circumvent the rules on employment terms and collective agreements, and it could also be imagined that some employers would hire them on a bogus self-employed basis. If such a practice is allowed to go on uncontrolled there will be fewer apprenticeship places and newly qualified people will go directly into the market as sole operators – to the detriment of the trade unions and the collective bargaining system. (Carsten Jørgensen, FAOS)

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