- Observatory: EurWORK
- Date of Publication: 13 June 2002
The boundaries between dependent employment and self-employment have increasingly become blurred in some areas in recent years, in a context of changing labour markets and the spread of practices such as outsourcing and contracting-out. This process has led to growing interest in 'economically dependent workers'- workers who are formally self-employed but depend on a single employer for their income - and calls from trade unions and other sources for such work to be regulated and social security coverage and employment law protection to be provided. This EIRO comparative study examines the extent and characteristics of employment relationships which may involve such 'economically dependent work' across the EU and Norway, and provides an overview of the debate on the implications of these developments. The study also looks at the impact of economically dependent workers on industrial relations, and notably on trade union representation and collective bargaining.
The concept of 'economically dependent workers' refers to those workers who do not correspond to the traditional definition of 'employee'- essentially because they do not have an employment contract as a dependent employee - but who are economically dependent on a single employer for their source of income. The debate focuses on emerging employment arrangements which are 'midway' between self-employment and dependent employment. 'Economically dependent workers' have some characteristics of both in that: (1) they are formally self-employed (they usually have a sort of 'service contract' with the employer); and (2) they depend on a single employer for their income (or large part of it). In some cases, economically dependent workers may also be similar to employees from other points of view:
- lack of a clear organisational separation - ie they work on the employer's premises and/or use the employer's equipment;
- no clear distinction of task - ie they perform the same tasks as some of the existing employees, or tasks which were formerly carried out by employees and later contracted out to 'collaborators'; and
- the 'service' they sell individually to employers falls outside the traditional scope of 'professional services'- ie the tasks are simple, do not require specific skills and no professional knowledge or competence is needed.
The existence of such employment arrangements has been highlighted by the International Labour Organisation (ILO) - see for example, the discussion at the March 2001 session of its governing body - and is documented in a number of European countries, such as Italy, the UK, Germany, Spain and Portugal. The issue was also mentioned, alongside teleworking, in 2000 in the European Commission's first-stage consultation of the social partners on 'modernising and improving employment relations' (EU0007259N) (though the second-stage consultation focused essentially on telework - EU0104205N). For the Commission, 'the development of a category of 'economically dependent workers', who do not, or may not, correspond to the traditional notion of 'employee' raises a number of difficult issues, for employers, workers and governments.'
The issue is relevant from the industrial relations point of view since economically dependent workers do not generally benefit from the protection granted to employees both by law and collective bargaining, including provisions on health and safety, information and consultation, working time, vocational training and social protection. They also fall outside the traditional reach of trade union representation.
The aims of this comparative study - based on the contributions of the European Industrial Relations Observatory (EIRO) national centres in the EU Member States and Norway - are to analyse:
- the scope and relevance of the issue of economically dependent workers in each country;
- the emergence of demands for regulation of this kind of employment arrangement, as articulated in public debate;
- where relevant, the ways in which economically dependent employment has been regulated by law, or the contents of existing proposals in this field; and
- the role of industrial relations, notably whether trade union representation and collective bargaining are being extended to economically dependent workers.
This comparative study outlines and analyses the main issues raised by the emergence of forms of employment that may involve economically dependent workers. For a more detailed description of the situations at national level, especially given the complexity of the topic, readers are referred to the individual national reports, also available on the EIROnline website.
Definition of 'employee' and importance of economic dependence
'Bogus self-employment' and new forms of work
Before proceeding, a distinction must be made between two different issues which often overlap in practical terms, but which should be considered separately, in order better to appreciate the implications of the debate on economically dependent workers:
- first, there are employment relationships which can be regarded as 'bogus self-employment', ie subordinate employment relations which are disguised as autonomous work, usually for fiscal reasons, or in order to avoid the payment of social security contributions and thereby reduce labour costs, or to circumvent labour legislation and protection, such as the provisions on dismissals; and
- second, there are new forms of employment that are 'midway' between dependent employment and self-employment and cannot be easily grouped with either of the two, since they have some features of both. These are employment relationships which have gained importance in recent years, following the deregulation of labour markets and the spread of reorganisation policies, which have often included outsourcing of non-core activities and 'downsizing' of the organisational structure.
The two aspects are strongly intertwined, not least because the emergence of the latter 'ambiguous' forms of employment makes the disguise of 'bogus self-employment' easier. However, the clear distinction between the two issues is underscored by the fact that the current debate on economically dependent workers focuses on the 'economic dependence' which seems to characterise these workers. As we will see below, this is a criterion which cannot alone define an employment relationship as 'subordinate', at least in the traditional and current definition of the term. Subordination implies economic dependence, but the reverse is not always true. In this sense, 'economic dependence' appears to be a socially important criterion which raises the question of the protection of these workers, but cannot justify per se their assimilation as dependent employees. On the other hand, the issue of 'bogus self-employment' refers basically to the capacity of enforcing regulations on dependent employment and of detecting and punishing violations.
Subordination and economic dependence
A first important point is that, in all the countries covered by this study, the key element in defining a dependent 'employee' is subordination - table 1 below sets out the definitions of 'dependent employment' current in the employment law of the 16 countries examined. In fact, even if in practical terms there are several criteria which can be used to assess and qualify the employment relationship, they are usually intended to evaluate the character of subordination.
Second, it is almost invariably 'legal subordination' which distinguishes between different employment relationships, not economic dependence. Therefore, the basic criteria of economic dependence which identify the workers covered by this study may not be relevant as such for the definition of a subordinate employee. It is true that various aspects of economic dependence may be used by courts to assess the subordination of a worker, but it is clear that economic dependence may characterise even contractual relations which correspond unquestionably to self-employment (an example might be a lawyer with one main client). As mentioned above, 'economic dependence' has essentially a social relevance and the increasing attention it is receiving from governments and trade unions should be connected to the perceived growing importance of new forms of employment which pose a threat to the traditional distinction between dependent employment and self-employment and call for a different kind of regulation. In summary, it is exactly the fact that economic dependence does not overlap with the traditional concept of subordination that makes demands for the protection of economically dependent workers an issue.
A further important aspect is that no intermediate degree of subordination is possible: an employment relationship is either subordinate or autonomous. This directly follows from the 'dependent-autonomous' dichotomy, which does not leave room for intermediate situations. However, this necessity to find a definite and unambiguous definition of the employment relationship does not, of course, reduce the difficulty of the practical task, rather it increases it and makes it necessary to use different 'heuristic' tools to assess and define employment relationships, especially in judicial cases dealt with by labour courts.
Another element of complication in the assessment of employment relationships is the existence of different definitions for different domains: for instance, in France the definition of 'employee' in labour law is different from that applicable for social security provisions.
|Country||Main legal criterion||Specifications|
|Austria||Subordination.||Work to be performed personally, within the context of the employer's establishment, under the employer's supervision and managerial and disciplinary authority.|
|Belgium||Subordination.||Employer's right to direct work and to control the worker's performance.|
|Denmark||Subordination.||Employer's right to direct and control the work.|
|Finland||Subordination.||Employer's right to control the work.|
|France||Subordination.||Employer's authority to direct work and control worker's performance.|
|Germany||Personal dependency.||Dependence in terms of place of work, time of work, content of work; incorporation in the employer's organisation; use of employer's equipment.|
|Greece||Personal subordination.||Employer's right to direct work, determine place of work and working hours and control worker's performance.|
|Ireland||No legal definition.||A code of practice on the issue has been recently drawn up by an ad hoc tripartite Employment Status Group (see main text).|
|Italy||Subordination.||Work which takes place within the firm run by the employer, under the authority and the direction of the employer.|
|Luxembourg||Subordination.||Employer's right to direct work.|
|Netherlands||Authoritative relationship.||Employer's right to direct work.|
|Norway||No legal definition.||The concept of employee refers to a person who performs work 'in the service of others'. Specific indicators have been developed by case law (personal obligation, ownership of the equipment, employer's power to direct and control work, responsibility for the results, type of income, right to paid holidays etc).|
|Portugal||Subordination.||Work which is performed under the authority and direction of the employer.|
|Spain||Subordination.||Subordinate work is: voluntary, dependent on the employer's authority, performed on the employer's account, salaried and personal.|
|Sweden||No legal definition.||Indicators developed by case law.|
|UK||No statutory definition.||Indicators developed by case law (control, integration in the business, economic reality, mutuality of obligation).|
For nearly all countries, the difficulty is stressed of identifying an unambiguous definition of 'dependent employment', both in theory and in practice. These difficulties have been tackled in different ways:
- case law represents the standard response, arising from disputes that require a clear decision on the definition of the employment relationship. Labour courts have developed in each country a set of criteria to support rulings in this area;
- a code of practice drawn up by an ad hoc tripartite committee has been used in Ireland to settle the issue of employment status;
- legislative intervention aimed, in certain countries, at reducing the ambiguity by introducing a presumption of subordination in an employment relationship or by defining a set of mandatory criteria to be used in judgments; and
- in order to cope with the recent changes in the labour market and the economy, the introduction or formalisation of new types of employment relationship aimed, in certain countries, at extending the protection granted to employees to these new forms of employment. Usually, only some types of protection are applicable to the workers involved, and this notably concerns social security provisions (eg health insurance, pension schemes and unemployment benefits).
Each of these four approaches is considered below.
Case law is important in all the countries covered by the study, but it is most relevant where there is no statutory definition of dependent employment (Ireland, Norway, Sweden and the UK) or where the legal definition is quite general and contains no cogent specifications (Norway). When disputes arise, labour courts have to use various criteria to overcome the abovementioned difficulties in assessing the nature of employment arrangements, which have probably arisen in recent years owning to the diversification of employment relationships and the spread of non-standard employment contracts, as the courts' final ruling must qualify the employment relationship as either dependent employment or self-employment. These disputes typically involve formally self-employed workers who ask for recognition as being dependent employees, in order to benefit from the protections granted to employees but not to the self-employed. One of the protections which is most frequently claimed is protection against dismissal.
It is important to highlight that the definition of the employment relationship stipulated in the worker's original contract may not be relevant for the court's ruling, since labour law provisions are mandatory and apply to dependent employees, regardless of the original contractual form. Therefore, it is crucial to establish the 'way' in which work takes place and the actual subordination of the worker. For instance, in the UK the criteria developed by case law are based on four 'tests':
- control- who holds control over the task, mode, means and timing?
- integration- how integral is the work to the business?
- economic reality- where does the financial risk lie? and
- mutuality of obligation- what evidence is there of formal subordination to contract terms?
These criteria are designed to help assess the degree of dependence that characterises the employment relationship and they can be used at the discretion of the court. The outcome is, reportedly, often controversial and the tests can counter each other, leading to a high level of uncertainty. Similar situations are also reported from other countries.
With regard to those criteria with an economic reference point which have been developed by case law for assessing whether a relationship constitutes dependent or self-employment, these mainly concern economic risk. Bearing the economic risk of an activity is considered as a constitutive feature of entrepreneurial activity and, therefore, of self-employment. Other indicators of economic dependence (the forms of payment, having only one principal etc) are, on the other hand, far less important among the current criteria utilised in the EU and Norway to define employment relationships in court cases. In France, for example, case law originally regarded economic dependence as an integral element of the employment relationship. However, this attitude has been progressively eroded and substituted by a reference to the concept of legal subordination, ie the employee's subordination to the authority of the employer, which has the right to direct, supervise and control the work performed. As already pointed out, legal subordination represents the general criterion in defining dependent employment adopted in the overwhelming majority of the countries covered by this study.
An example of 'soft regulation' by social dialogue
Ireland, as one of the countries which do not have a statutory definition of dependent employment, has followed a very interesting path to try to overcome the difficulties linked to the distinction between dependent and autonomous work, notably because it involved the social partners. A special tripartite Employment Status Group was set up in the framework of the current national agreement, the Programme for Prosperity and Fairness (PPF) (IE0003149F) to draft a code of practice on employment status. The Employment Status Group's members are representatives of the Irish Congress of Trade Unions (ICTU), the Irish Business and Employers Confederation (IBEC), the Departments of Social Welfare, Enterprise, Trade and Employment, Finance, and the Revenue Commissioners (tax authorities). According to the code of practice, an individual would normally be classified as an employee if he or she:
- is under the control of another person who directs as to how, when and where the work is to be carried out;
- supplies labour only;
- receives a fixed hourly/weekly/monthly wage;
- cannot subcontract work. If the work can be subcontracted and paid for by the person subcontracting the work, the employer/employee relationship may simply be transferred on;
- does not supply materials for the job;
- does not provide equipment other than small tools of the trade. The provision of tools or equipment might not have a significant bearing on coming to a conclusion that employment status may be appropriate, having regard to all the circumstances of a particular case;
- is not exposed to personal financial risk in carrying out work;
- does not assume any responsibility for investment and management in the business;
- does not have the opportunity to profit from sound management in the scheduling of engagements or in the performance of tasks arising from the engagements;
- works set hours or a given number of hours per week or month;
- works for one person or for one business;
- receives expense payments to cover subsistence and/or travel expenses; and
- is entitled to extra pay or time off for overtime.
The consequences which follow from the determination of a person's employment status involve the ways in which tax and social contributions are payable, entitlement to a number of social welfare benefits (employees are entitled to unemployment, disability and invalidity benefits, whereas self-employed people do not have these entitlements) and to other protections granted by labour legislation (an employee has rights in respect of working hours, holidays, maternity/parental leave, protection from unfair dismissal etc).
Extension of labour protection by legislative intervention
In other countries, specific legislative provisions have addressed the 'grey' area between dependent employment and self-employment. The most usual and traditional form of intervention is by the presumption of the existence of legal subordination in the case of certain employment relationships, in order to protect some specific kinds of workers. In this way, the law itself recognises the difficulty of assessing subordination in employment relationships and therefore reverses the burden of proof (or even provides for a mandatory presumption of subordination), which would usually lie on the (formally) self-employed worker.
This is the case of Austria, for instance, where a presumption of subordination is applicable in the case of sales representatives, pharmacists who work in dispensaries open to the public and sportspeople (for whom a mandatory presumption of subordination has been established).
In France, a similar provision concerns professional journalists, artists and writers, as well as models and lumberjacks. Moreover, the Labour Code provides that certain categories of self-employed workers can be covered by the provisions applied to employees, if they sell goods provided exclusively (or almost exclusively) by a single company, or if they collect orders or receive items to process, handle or transport on behalf of a single firm and they work in premises provided or approved by that company and according to criteria and at prices imposed by the aforementioned company. Recent case law has applied these provisions to franchisees who work exclusively using or selling the items supplied by a single firm.
In Portugal, the law has introduced the notion of 'equivalent employment' which refers to formally autonomous employment relationships which are considered to be close to subordinate work and therefore are believed to deserve the same protection. The two typical forms of 'equivalent employment' are homeworking and contractual relationships whereby the worker purchases the raw materials and supplies the seller of those raw materials with the end product for a certain price.
In Greece, employment relationships based on 'contracts for services' can be considered as possibly involving economically dependent workers, as they are midway between dependent employment and self-employment and they are not covered by labour legislation. The great majority of contracts for services concern homeworking. In 1998, owning to a notable increase in the number of contracts for services, Article 1 of law 2639 on 'regulation of labour relations, establishment of a Labour Inspectorate and other provisions' (GR9807181F and GR9808187N) provided for a presumption of subordinate employment in certain circumstances. These include the cases where the workers employed on a contract for services have only one (main) principal employer, the cases of piece-work and homeworking, and telework. However, it has reportedly been difficult to apply these new provisions, because of both organisational problems at the Labour Inspectorate and loopholes in the law.
In Germany, a recent legislative intervention, instead of providing for a presumption of subordination in certain circumstances, has introduced a general assessment procedure to distinguish between employees and self-employed workers. In January 1999, the current 'red-Green' coalition government enacted the Act on the Advancement of Self-Employment (Gesetz zur Förderung der Selbständigkeit), which established a set of five criteria to assess the employment relationship, with a person being considered to be an employee when at least three of them are present. The five criteria are as follows:
- the worker does not employ other employees who are subject to social security obligations;
- the worker usually works for only one contractor;
- the same job is also performed by regular employees;
- prior to this job, the worker concerned carried out the same work as an employee; and
- there are no signs of entrepreneurial activities (unternehmerisches Handeln) by the worker.
It should be stressed, however, that these criteria concern the assessment of the employment relationship only for the purpose of social security schemes. A person who, according to these criteria, is considered an 'employee' will be covered by the social security system (health insurance, old-age pension and unemployment benefits), but will not be necessarily entitled to the other protection granted to employees by labour law or collective agreements.
It is interesting to note that in all these cases, the rationale for legislative intervention can be found (among other reasons) in the protection of work situations which can be regarded as 'economically dependent'. The five criteria introduced in Germany, for instance, correspond almost completely to our abovementioned definition of 'economically dependent workers'. This fact confirms that, while economic dependence cannot be considered an essential element of subordination, it can be a valid reference point for the extension of certain protections, and has been used for this purpose in these cases.
New legal employment status
Another way to try to overcome the ambiguities connected to the assessment of certain employment relationships is establishing new legal forms of employment that correspond to the 'grey' area between dependent employment and self-employment. Since the main problems which affect this kind of work arrangement relate to the lack of a proper protection system, it is not surprising that the first interventions in this area have concerned the extension of social security coverage, and notably of pension coverage, to these workers. Another factor that has encouraged these initiatives is the need to increase social contributions to improve the budgetary sustainability of social security programmes, by extending coverage to formerly excluded workers. It is important to stress that these new employment statuses usually belong to the formal category of self-employment and therefore benefit from certain specific protections and not from the extension of dependent employees' protections.
For instance, in Austria, the 1997 Labour Law and General Social Insurance Amendment Act (Arbeits- und Sozialrechts-Änderungsgesetz, ASRÄG 1997) extended social insurance coverage to all self-employed people and included for the first time the definition of a 'free-service contract'. This term had formerly been used only in practice and by labour courts, and was formalised by the 1997 law. The workers on such contracts, who can be regarded as corresponding more or less to the definition of 'economically dependent workers', remain for all purposes (including social security coverage) under the scope of the regulations on self-employment.
Similarly in Italy, a 1995 reform of the pension system included a rule which created a special and separate social security fund for some groups of workers, including those employed through 'continuous and coordinated contractual relationships' (also known as 'freelance work coordinated by an employer'), among whom are believed to be the great majority of Italian economically dependent workers. One of the aims of this legislative intervention was to hinder the use of this form of contractual relationship to circumvent the regulations on the payment of social security contributions for dependent employees and thereby reduce labour costs. Another important objective of the establishment of the fund was to find a new source of social security contributions to improve the financial sustainability of the public pension system. Since March 2000, workers employed through 'continuous and coordinated contractual relationships' have also been covered by the compulsory insurance against accidents at work/industrial accidents and occupational illnesses administered by the National Board for Insurance against Accidents at Work (Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro, Inail). The coverage is mandatory provided that the workers perform some specific tasks, notably those which involve the use of machinery or driving motor-vehicles.
Self-employment and 'economically dependent workers'
After a steady decrease in the importance of self-employment during the 1970s, the share of non-agricultural self-employment has increased in the majority of European countries since the early 1980s (see the 2000 Organisation for Economic Cooperation and Development Employment Outlook for an analysis of this issue, in particular chapter 5 'The partial renaissance of self-employment'). Although the pace of this growth seems to have substantially slowed down at the turn of the 21st century, and in some cases the trend has been reversed, self-employment remains an important element in employment creation and levels, especially in certain countries. For the purposes of this EIRO study, it is important to note that, given the definition used, an increase in the number of economically dependent workers could be reflected by a rise in the number of self-employed workers. In fact, it is reported from some countries that a significant share of the recent increase in self-employment could be linked to the spread of economically dependent work (as, for instance, in Belgium and Spain), in connection with reorganisation, 'downsizing' and outsourcing processes.
Data on economically dependent workers are available only in those limited cases where a formal or legal definition corresponds, more or less, to what we have defined as 'economically dependent workers'. Therefore, we will first briefly analyse data on self-employment in general and then illustrate the few cases for which we have more accurate data relating to economically dependent workers.
As indicated by table 2 and figure 1 below, the situation in the different countries is quite varied:
- the level of self-employment ranges from less than 5% of all employment in Norway to more than 25% in Greece;
- the share of self-employment in total employment has increased over recent years in many countries, and especially in Sweden (where it has almost doubled), Finland, the UK, Germany, Ireland, Belgium and Italy. However, in other countries it has decreased, in some cases to a great extent. These countries include Luxembourg, Norway, France, Denmark, Greece (which formerly had almost one third of its labour force in self-employment) and Austria; and
- as already mentioned, in the 1990s the increase in self-employment significantly slowed down in the countries concerned - in the UK and Ireland, there was even a net decrease. However, there are two exceptions - in the Netherlands and Austria, the increase started or gained momentum later, in the late 1980s or in the early 1990s.
* 1981 data instead of 1980; ** if 2000 data not available, most recent data used for comparison.
Source: EIRO calculations based on OECD labour force data (non-agriculture civil employment).
Figure 1. Self-employment as % of total non-agricultural civil employment in 2000, and changes from 1980 and 1990
Note: instead of 1980 data, 1981 used for Denmark; instead of 2000 data, 1999 used for Austria, Luxembourg and the Netherlands, and 1998 for Belgium.
Source: EIRO calculations based on OECD Labour Force Data
Looking at the data on the presence of women in self-employment - see table 3 and figure 2 below -some peculiarities emerge. First of all, women remain significantly under-represented in self-employment, as they represent, on average, less than a third of all self-employed workers and reach a maximum of 35% in the Netherlands. However, in as many as 10 countries out of 16, the share of women in self-employment has increased in recent years. This is often true even where the importance of self-employment in total employment has diminished, as in the cases of Greece, Ireland, Norway and UK. The opposite has happened in Finland and especially in Germany, where the presence of women has decreased in a situation of growing self-employment.
Source: EIRO calculations on OECD labour force data (non-agricultural civil employment).
Figure 2. Changes in women as % of total self-employment, and of self-employment as % of total employment, 1990-2000
Note: for certain countries, the comparison for both indicators was made for different years, depending on available data: Austria 1996/1999; Belgium 1990/1998; Denmark 1995/2000; Netherlands 1995/1999; Portugal 1992/2000; Luxembourg missing data on self-employed women.
Source: EIRO calculations based on OECD labour force data
Of course, these data do not say much on the specific topic of this study, as we are not in a position to distinguish and separate traditional forms of self-employment, new forms of genuine autonomous work and what we called 'economically dependent work', or work which lays midway between dependent and self-employment. However, the latest aggregate data suggest that self-employment does not seem to be eroding the centrality of dependent employment (with signs in the opposite direction in recent times).
'Economically dependent workers'
As already pointed out, it is very difficult to find data on economically dependent workers, since there is no precise and accepted definition of such an employment condition, not to mention legal recognition. Rather, this label refers to a general situation of dependence which is considered by some parties, on different grounds, as deserving protection similar to that granted to employees. Therefore, it is possible to collect data on 'economically dependent workers' only for those countries where specific legal employment forms correspond, more or less, to this situation of dependence - as in Austria, Greece, Italy, and Portugal, see table 4 below. It should be made clear, however, that these employment relationships cover formally independent workers and may well include genuine self-employment. Therefore, the figures given for each should generally be regarded as upper limits as far as economically dependent workers are concerned.
|Austria||Free-service contract (freier Dienstvertrag) and contract for work (Werkvertrag).||Freelance contractual relationships.|
|Greece||Contracts for services.||Both contracts for work and contracts for independent services fall under the category of 'contracts for services'.|
|Italy||Continuous and coordinated contractual relationships (Collaborazioni coordinate e continuative).||Contractual relationships which involve the performance of activities in favour of a principal, in the framework of a 'unitary and continuous relation', without subordination or the 'utilisation of organised means', and in exchange for a periodical and pre-determined compensation. These activities must not be provided as part of professional services.|
|Portugal||Contracts for services on 'green receipts''||Independent form of contract of employment. This type of independent workers must fill in a green-coloured receipt and submit it to the enterprises to which they provide services.|
Alternatively, in some countries specific research has been carried out on these employment arrangements and it is possible to give some indications on the extent of economically dependent work (Denmark, Germany, and the Netherlands). The data for both groups of countries are set out in table 5 below.
It must be pointed out, however, that economically dependent workers do not represent a homogeneous group. As they occupy the (broadening) blurred boundary between dependent employees and self-employed workers, identified by the majority of the national reports as the various forms of freelance work, we can find people who are closer to one of the two ends of this continuum. Since data do not refer to a unique category, but to different and country-specific definitions, we can use them essentially as indicators of significance and of trends, and not to make cross-country comparisons.
|Country||No. of EDW relationships||Women as % of total EDW||EDW as % of self-employment*||EDW as % of total employment*|
* Civil non-agriculture employment as in OECD labour force data; ** % calculated on 1999 data (latest available); *** 1995 data (excluding EDW working part time), % reported in research by the Institut für Arbeitsmarkt und Berufsforschung (IAB).
The data in table 5 are quite fragmentary and heterogeneous and need to be treated with extreme caution. In general, however, it is possible to say that existing evidence seems to support the view that the kinds of employment arrangements which are usually referred to as 'economically dependent work' involve a share of the workforce which is around 1%.
The comparatively very high level reported for Italy should be considered in terms of the nature of the data source: 1.3 million people contributed in 2000 to the special social security fund established by the 1995 pension reform (see above under 'New legal employment status midway between employees and self-employed workers'). However, the definition of 'continuous and coordinated contractual relationships' includes very different situations, such as: (a) membership of the boards of firms, associations or other bodies, including supervisory board members and auditors; (b) participation in committees and commissions; (c) collaborations with newspapers, magazines, encyclopaedias and the like; and (d) other contractual relationships which involve the performance of activities in favour of a principal, in the framework of a 'unitary and continuous relation', without subordination or the 'utilisation of organised means', and in exchange for a periodical and pre-determined compensation. Owning to the heterogeneity of these contributors, their weight in total employment as indicated by the figures should be regarded as somewhat overestimated (for instance, members of boards account for almost 40% of all contributors). Besides, the fact that a person contributes to the fund does not mean that the relevant contractual relationship represent his or her sole or prevalent source of income. There might be cases where the contributor's main occupation is actually a standard form of self- or dependent employment (or the contributor might be a pensioner).
Some words of warning may be useful also for other country data. In Portugal, for example, contracts for services on 'green receipts' involve economically dependent work, to the extent that they disguise dependent work as 'false' independent work - as is reportedly the case with a substantial part of 'green receipt' work.
Furthermore, the data on Denmark come from a government study on what was referred to as 'atypical' employment, published in January 2002. The group examined in this study may be considered 'economically dependent workers' in a very broad sense, as they depend on their contractual relationships with their principals (but this generally applies to any kind of work). However, the study focuses on workers who have relatively high earnings: they must have a monthly income of at least EUR 4,000 or run a firm with no employees. Using such a definition, the study finds that these workers receive a relatively high salary (an average annual income of EUR 47,000 for men and EUR 35,000 for women), and generally have specific professional skills and have voluntarily decided to take on freelance positions. It must be said, however, that trade unions do not agree completely with this picture. In particular, the Union of Commercial and Clerical Employees in Denmark (Handels- og Kontorfunktionærernes Forbund, HK) believes that the number of such workers who receive a salary below the collectively-agreed rates is not marginal and is increasing. A study issued in 2000 by the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) estimated the number of 'economically dependent workers' at 102,000, or around 4% of the total workforce.
Some indications on the growth of these kinds of employment may also be drawn from the available data. In Austria and Greece, economically dependent work seems to have been growing at quite a high rate. The number of 'free-service contracts' and 'contracts for work' increased by more than 60% in Austria between 1998 and 2000 (an upward trend found also for total self-employment). In Greece, the number of contracts for services grew by almost 40% between 1999 and 2000. A rise of 14% was recorded in Portugal between July 2000 and July 2001, as far as contracts for services on 'green receipts' are concerned. In Italy, after a strong increase in the first two years of operation, the number of contributors to the special social security fund for continuous and coordinated contractual relationships remained more or less stable in 1999 compared with 1998 ( 0.5%). Also in Denmark, the abovementioned government study on 'atypical' workers indicates that this group seems to be stable, with the exception of certain areas, such as information and communications technologies (ICT), interpreting/translating, and book-keeping.
Sectors, activities and conditions of work
In terms of the sectors and the types of activity where forms of employment that may be regarded as economically dependent work may be found, the national reports indicate a wide array of situations - see table 6 below (no information is available for Ireland, Luxembourg and Sweden). These range from employment relationships and activities which are traditionally part of outsourcing (such as homeworking in the clothing industry) to occupations which are connected to the more recent experiences of reorganisation and contracting-out (such as maintenance work); and from activities which typically have a high rate of freelance employment (for instance, work on newspapers and magazines), to new and emerging occupations (such as ICT workers).
This variety of situations implies a corresponding heterogeneity as regards such important factors as: the characterisation of such work as 'bogus self-employment' or new forms of employment; the voluntary nature of the decision to take on a self-employed position; the level of income; the skill and education levels; and the conditions of work. The 'common-sense' image of economically dependent workers would suggest that they are involuntarily self-employed, with a medium to low income and a relatively low skill endowment. However, this is not the picture which always emerges from the study. In some cases, the choice of working on a freelance basis seem to be to a large extent voluntary and the level of income satisfactory.
Of course, we must bear in mind that official data are missing and that therefore it has been necessary to base our study on scattered and sometime anecdotal evidence. In general, in fact, it must be said that we know very little about 'economically dependent workers' and that there is an evident 'information gap' to be filled on the number and characteristics of these workers, which adds to the abovementioned difficulties in finding a clear-cut definition. For instance, in several country reports, the sectoral distribution of 'economically dependent workers' was simply assumed on the basis of the distribution of self-employment.
|Austria||Journalists, scientific researchers, lorry drivers, ICT workers.||Media, road haulage, scientific research, ICT.|
|Belgium||Cooks, drivers, shop assistants, cleaners, attendants and security guards, secretarial staff.||Hotels and catering, cleaning and caretaking, secretarial services.|
|Denmark||R&D, administration and account-keeping, interpreting, journalistic jobs, education, sales, technical jobs (photography, sound editing), project and consultancy work, creative jobs (illustration, manuscript writing, film production etc) and ICT jobs.||Media, publishing, education, ICT.|
|Finland||Translators, psychologists, speech therapists, consultants, construction workers.||Construction, services, and metalworking.|
|France||Construction workers, lorry drivers, private service workers, real estate salespersons.||Construction and public works, road haulage, metalworking (car industry), private services (express couriers, security, cleaning, training and education, hotels and catering), estate agencies, retail and commerce, agriculture.|
|Germany||-||Retail, meat processing, transportation, and private services such as nursing and teaching.|
|Greece||Homeworkers.||Clothing and leatherwear, manufacturing of costume jewellery, rubber and plastic items and toys.|
|Italy||Workers in: door-to-door sales; training and education; administrative and accounting services; marketing, telemarketing and advertising; collaboration on newspapers, magazines etc; fashion, art, sport and show business; healthcare; and technical assistance.||Retail and commerce, private services, media, healthcare.|
|Netherlands||Artists, reporters, construction workers.||Media, construction, business services.|
|Norway||Lorry drivers, courier service workers and construction workers.||Road transport, courier services and building/construction.|
|Portugal||ICT workers, construction workers, lorry drivers, artists, reporters and workers in: door-to-door sales; training and education; marketing, telemarketing and advertising; collaboration on newspapers, magazines etc; fashion, art, sport and entertainment; healthcare and technical assistance.||ICT, construction and public works, road haulage, private services (express couriers, security, cleaning, training and education, hotels and catering). estate agencies, retail and commerce.|
|Spain||-||Construction, hotels and catering, road transport, computer activities, and health and social services.|
|United Kingdom||-||Construction, transport and communications, finance, business services, distribution, hotels and catering. media and entertainment.|
Legal regulation of 'economically dependent work'
Since 'economically dependent work' is not recognised as such by the legal systems of the countries covered by this study, it is not possible to speak of any specific legal regulation. The only instances of regulation by law are the abovementioned interventions in the 'grey' area between dependent and autonomous work. These legislative provisions either introduce a presumption of subordination for certain categories of workers (as in Austria, France, Greece and Portugal) or extend some specific aspects of protection (typically social security coverage, sometimes including health and safety provisions) to certain forms of self-employment (as in Austria, Germany and Italy) formerly devoid of them.
In the absence of specific interventions in this grey area, the provisions for self-employed workers are generally applicable to those workers who are regarded as being economically dependent. Depending on the features of the national welfare state system, these workers may well be covered by the same social security protection available to employees (as occurs in Sweden). Otherwise, they are usually outside the scope of labour law protection (such as the rules on dismissals) and of collective bargaining coverage, and they are subject to different fiscal and tax regulations.
Debate and positions of the social partners
The issue of economically dependent workers has been widely debated in several European countries, despite all the uncertainties, or maybe because of them, covering both the definition and the extent of these employment relationships. The recent transformations in the labour market and the effects of industrial change have fuelled a debate on the perceived crisis of the traditional dichotomy between dependent and autonomous work which questions the existing regulatory framework and highlights possible shortcomings in the current system of labour protection. Moreover, a demand for the protection of 'economically dependent workers' seems to be particularly present where these new forms of employment: involve former employees, who are now doing the same job but as self-employed workers (an example cited is that of lorry drivers); or extend their reach to sectors where the presence of subordinate employment was practically exclusive or largely predominant. These two situations, which are usually and to a large extent coupled, may arise as a consequence of reorganisation, 'downsizing' and outsourcing processes.
There are only a few countries where the issues raised by economically dependent workers are not perceived as problematic in the public debate. In Luxembourg, the issue does not currently arise, while in France there is no debate at present on economically dependent workers and their status.
In Sweden, the extensive coverage of the welfare system considerably reduces the potential impact, in terms of workers' protection, of the spread of new forms of employment, including the great increase in self-employment, which has almost doubled over the past 20 years. Nonetheless, even in Sweden the government launched a study in July 2000 to examine the possibility of changing some aspects of labour regulation to support job security, in the light of changes in the economy and the labour market, and notably the rise of 'atypical work' and self-employment (SE0008158N).
In other countries as well, the issue of a possible revision of the definition of dependent employment has been raised and addressed by the government. In Belgium, the former Minister of Labour, Miet Smet, asked the University of Antwerp to carry out a study particularly focused on 'bogus self-employment', with a view to finding a better definition of the link of subordination in employment relationships. The current Minister of Labour, Laurette Onkelinx, has given the matter further consideration, and hopes to present a draft law that will aim to define the link of authority more accurately. In UK, an important recognition of the current debate on the definition of 'employee' came by the inclusion in the Employment Relations Act 1999 of a provision (Section 23) which empowers the Secretary of State to confer some or all employment rights to categories of individuals who do not or cannot presently benefit from them (UK9902180F).
In some countries, the issue has been addressed through the involvement of the social partners. We have already discussed the example of Ireland, where the tripartite Employment Status Group, set up in the framework of the Programme for Prosperity and Fairness national agreement, drafted a code of practice to help distinguish between self-employment and dependent employment. In Denmark, a similar initiative has been developed with the support of the government, which, in 2000, formed a working group with the social partners to discuss the problems and consequences that the emergence of a 'third group' of workers between employees and self-employed might have for labour legislation. The government report on 'atypical' work which was released in January 2002 (see above under 'Economically dependent workers') is a result of this joint effort. In Norway, a public committee - including representatives of the social partners - has been set up to review possible changes to the Working Environment and Workers' Protection Act (Arbeidsmiljøloven), which will also consider the present regulations regarding 'employee' and 'employer' status, including the question of groups that might be regarded as 'dependent employees'.
In the Netherlands, the debate focuses on social protection for self-employed people without employees and on the establishment of a new definition for dependent employment. The most controversial aspect of this debate is the extension of social security coverage to self-employed workers, as employees seem to oppose such a step on grounds that it would be unfair. At the same time, self-employed workers oppose these proposals because they feel they would restrict their freedom in managing their business.
In Italy the situation is quite peculiar, owning to the wide diffusion of the phenomenon of 'continuous and coordinated contractual relationships', which was made evident by the establishment of the special social security fund in the second half on the 1990s (see above under 'New legal employment status'). The debate is quite lively and there are currently draft bills which aim to introduce further regulation of 'continuous and coordinated contractual relationships'. For instance, the 'proxy law' on labour market reform which was presented by the current centre-right government (IT0201277F) and is at the centre of a major confrontation with the unions in 2002 (IT0205101N) includes some provisions on these employment relationships. Among other measures, the bill's section on 'continuous and coordinated contractual relationships' envisages the introduction, including by collective agreements, of fundamental protections for these workers' dignity and security, and forms of 'certification' of the employment relationship, in order to avoid disputes over its definition (eg as dependent or autonomous work). Another draft bill presented by the centre-left opposition proposes a stricter regulation of this form of employment, including the extension of some worker and trade union rights included in the Workers' Statute.
In certain countries (such as Austria, Finland, Germany, Ireland, Italy, Portugal and Spain), the trade unions are calling for a redefinition of the boundaries between dependent employment and self-employment, in order to provide more protection to workers who they regard as 'economically dependent'. The unions have changed to some extent their positions on 'atypical' work in recent years. While they still consider the 'standard' forms of dependent work as the most appropriate way to create employment and provide protection to workers, they recognise the role of new and atypical forms of employment, provided they are implemented in a clear regulatory framework that includes, at least, a set of basic rights. For instance, in Austria, unions have long opposed atypical employment, such as 'contracts for work' and 'free-service contracts', since they believe that these forms of employment can undermine the system of labour protection and social security. However, in recent times the unions have recognised that it is not possible to oppose the changes in the labour market and are now supporting the introduction of some sort of framework regulation on pay and working conditions also for these kinds of workers.
As far as employers' associations are concerned, they are generally in favour of the spread of more flexible forms of employment (particularly autonomous work), which they do not regard as 'economically dependent', but rather as an expression of genuine entrepreneurial activity. In their view, new forms of self-employment match the needs of both companies and workers for more flexible conditions of work and individual entrepreneurship. Therefore, employers' associations usually oppose interventions that would extend to these forms of employment regulations or protections which are typical of dependent employment, as they believe that this would impose negative constraints on free economic activity. On the other hand, they support the implementation of a proper system of social security protection that is line with the general provisions for self-employment.
Impact on industrial relations
In certain countries, the pressure exerted by the growth of new forms of employment, which may involve economically dependent workers, have had an impact on the industrial relations system and led to changes in either the structure of representation or the content of collective bargaining, or in both. However, there are also examples of countries where, despite the existence of a debate on economically dependent workers or on the blurring distinction between dependent and self-employment, no significant developments have been registered, as far as industrial relations are concerned. This is the case, for instance, in Belgium.
Before going into the details of the impact on industrial relations, a preliminary issue must be raised, since in some cases the development of industrial relations, and notably of collective bargaining, with regard to formally self-employed workers might be in contrast with existing competition law. In fact, collective agreements which bind formally self-employed workers, who are entrepreneurs, may well be considered as anti-competitive practices and thus as unlawful. This problem is reported in particular in the cases of Finland and Ireland. Even if this possible constraint seems so far to be more of a theoretical nature, a major consequence of this situation is reported from Ireland. The National Newspapers Association of Ireland (NNAI), representing newspaper employers outside Dublin, decided to withdraw from a pay rates agreement it had with the National Union of Journalists (NUJ), a union which represents freelance photographers and journalists. NNAI said that the fixing of minimum rates for freelance workers could be regard as an anti-competitive practice and, fearing heavy fines from the Competition Authority, it pulled out of the deal. This may place a strong and real constraint on trade union action in Ireland in the area of economically dependent work, should there be no legal clarification of this point .
Trade union representation
As far as the impact on trade union representation is concerned, we can distinguish between two situations - the inclusion of economically dependent workers in existing trade unions and the creation of ad hoc organisations - see table 7 below. A variant of the first situation are unions that traditionally represent freelance workers and simply continue to do so, maybe in the situation of an increasing number of potential self-employed members. This generally applies to the unions representing journalists and media workers and, sometimes, lorry drivers. In Germany, for instance, the Unified Service Sector Union (Vereinigste Dienstleistungsgewerkschaft, ver.di) has many freelance workers among its members, since one of the unions which merged to create ver.di in 2001 (DE0104220F), the Media Trade Union (IG Medien), had formerly succeeded in organising some 10,000 freelancers (freie Mitarbeiter). Ver.di is now trying to strengthen this representation through an initiative called the connexx project, which is aimed at both employees and self-employed workers (DE0111204N).
Arguably more interesting are the cases where unions decide to extend their field of representation to new groups of workers; a choice which may be controversial for many reasons. In the Netherlands, for example, the Christian Trade Union Federation (Christelijk Nationaal Vakverbond, CNV) has decided not to extend its representation to self-employed workers (with no employees), while the other major union confederation, the Dutch Trade Union Federation (Federatie Nederlandse Vakbeweging), FNV, has opted to do so and founded a new union especially devoted to self-employed workers without employees (NL9908157F). Moreover, independent unions have been set up for self-employed workers without employees. Other examples of the establishment of new union organisations on an occupational basis (ie that organise only economically dependent workers regardless of the industry they work in), as opposed to sectoral organisations, can be found in Italy and Spain.
In Italy, special structures were set up in 1998 within the three main trade union confederations to deal with the difficulties in representing and protecting atypical workers, including workers on 'continuous and coordinated contractual relationships'. The General Confederation of Italian workers (Confederazione Generale Italian del Lavoro, Cgil) and the Italian Confederation of Workers' Unions (Confederazione Italiana Sindacati Lavoratori, Cisl) have established, respectively, New Work Identities (Nuove Identità di Lavoro, Cgil-Nidil) and the Atypical and Temporary Agency Workers' Association (Associazione Lavoratori Atipici e Interinali, Alai-Cisl), while the Union of Italian Workers (Unione Italiana del Lavoro, Uil) has brought atypical forms of work within the remit of its Committees for Employment (Comitati per l'occupazione, Cpo), originally set up to represent unemployed people and those working in 'socially useful jobs' (IT9807327F). In 2000, the total number of members of Nidil-Cgil stood 9,064, and 45% of them were freelance workers coordinated by an employer. Alai-Cisl had 11,195 member in 2000.
In Spain, a specific union for 'economically dependent workers' was set up in 2000 within the Catalan regional organisation of the Trade Union Confederation of Workers' Commissions (Comisiones Obreras, CC.OO). The new union is called the Autonomous and Dependent Workers' Federation (Federación de Trabajadores Autonomos Dependientes, TRADE).
In Denmark, the HK union, which covers the sectors where freelancers are most present (administration, ICT, interpreting, publishing and services), founded in 2001 a special section for freelance workers (HK Freelancer) which at present has 650 members. In Austria, the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA) recently launched an initiative (work@flex) for persons working under a 'free service contract' or 'contract for work'.
It is important to note that the heterogeneity of these kinds of workers, together with the possible difficulties in establishing genuine collective bargaining (see below), can make it more difficult for trade unions to recruit members. Therefore, the provision of incentives such as insurance coverage, assistance in individual disputes and other forms of advice can be particularly crucial to sustain membership. Examples of such incentives can be found:
- in Austria, where through its work@flex initiative, GPA offers members insurance to cover sickness and the resulting loss of earnings;
- in Denmark, where HK Freelancer provides information, advice and legal and administrative support, as well as a web-based 'job bank';
- in Germany, where the former IG Medien provided freelance workers with special training and advice;
- in the Netherlands, where some unions are trying to attract self-employed workers also by offering insurance coverage and legal advice; and
- in Norway, where the Finance Sector Union (Finansforbundet) has launched an initiative targeted at young workers, including self-employed consultants, which offers services such as fiscal and legal advice (NO0204102F).
In the key industrial relations area of collective bargaining, developments are even less pronounced than in the domain of representation. A possible reason may be that union representation of workers in new forms of employment, which may include economically dependent workers, is often quite recent. Of course, this is not true for the more traditional forms of representation of specific categories of self-employed or freelance workers, such as journalists. However, examples of collective bargaining which cover to a significant extent economically dependent workers are reported only from a handful of countries - Austria, Italy, Norway, Spain and the UK. This picture probably understates to some extent the actual coverage of collective bargaining as it contrasts notably with the diffusion of the representation of self-employed workers, which is also reported in Denmark, Finland, France, Germany, Ireland, and the Netherlands.
Where there is bargaining coverage, the most common situation is that the scope of existing collective agreements is extended to cover also self-employed or freelance workers - see table 7 below. This can happen at national sectoral level (as with the latest national agreement for journalists in Austria, or the forestry agreement in Norway) or at company level (as in the UK, especially in the media and entertainment sectors).
The only reported examples of collective agreements which cover exclusively economically dependent workers are found in Italy. Here bargaining has led to a series of important agreements on workers with 'continuous and coordinated contractual relationships' (IT0011273F). The signatories to these agreements, along with the unions, are both public bodies and private firms. Many of the latter operate in the area of new technologies (call centres, web contact centres etc) or commercial services (for which they hire promoters and merchandisers, for example) and they seek high flexibility in their use of their workforce.
An important recent agreement was signed on 10 October 2001 by Nidil, Alai, Cpo and the Arci non-profit association, which has some 5,500 local structures throughout Italy . This framework agreement may be applied to around 3,300 freelance 'coordinated' workers. Other notable agreements include those concluded: at Mibi, a company which operates web contact centres (signed on 23 October 2000 in Catania by Nidil, Alai, Cpo and the Ugl-terziario union); at Answer, a company operating web contact centres and commercial promotion services (signed on 30 March 2000); and at Telco, which runs call centres and delivers outsourced services (signed on 18 November 1999). Although the contents of these agreements differ considerably, they have a number of features in common. In particular, they usually include:
- the granting of a series of trade union rights to workers on freelance 'coordinated' contracts (relating to freedom of association, membership, assembly, election of representatives);
- a commitment to apply the rules on workplace health and safety to 'collaborators';
- the provision of training;
- the suspension of the contract in the case of illness, accident or maternity (sometime with a specific allowance);
- rest periods for collaborators on contracts of more than a certain minimum duration; and
- the payment of an end-of-service allowance.
|Austria||GPA recently launched an initiative (work@flex) in favour of workers on 'free-service contracts' or 'contracts for work'.||The June 1999 collective agreement for journalists covers freelance journalists who work on a regular basis.|
|Denmark||HK has set up a specific union for freelance workers (HK Freelancer); some EDWs are members of the Danish Journalists' Union (Dansk Journalistforbund).||None.|
|Finland||Some EDWs are members of existing confederations - the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA), the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) and the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK).||None.|
|France||Some EDWs are members of existing sectoral or occupational unions (eg lorry drivers, sales representatives, models, journalists and lumberjacks).||None.|
|Germany||The Unified Service Sector Union (ver.di) has launched the 'connexx' project to attract workers in the media sector, including freelance workers.||None.|
|Ireland||Some EDWs are member of existing sectoral or occupational unions, eg the National Union of Journalists or Communication Workers' Union.||None.|
|Italy||The three main confederations, Cgil, Cisl and Uil, have founded specific structures devoted to 'freelance workers coordinated by an employer' (Nidil, Alai and Cpo).||Some specific company-level agreements on 'freelance workers coordinated by an employer'; the 2001 agreement for journalists includes some rules on freelance 'coordinated' workers (IT0104367F).|
|Netherlands||FNV has founded a union for self-employed workers without employees; FNV Bouw- en Houtbond (construction) has a section for self-employed workers without employees; independent unions exist for self-employed workers without employees.||None.|
|Norway||Many EDWs are members of existing sectoral or occupational unions (eg journalists, artists, drivers). The Finance Sector Union has launched a web-based unit to attract young workers, including self-employed consultants.||The agreement for the forestry sector also covers self-employed workers; the agreements for a couple of major TV stations also cover freelance workers; agreements regulate wages and working conditions of freelance actors.|
|Spain||CC.OO in Catalonia has created the Autonomous and Dependent Workers' Federation (TRADE).||No specific agreements. The latest agreement for road transport recognises the presence of this kind of worker, though it introduces no specific protection or regulations.|
|Sweden||Freelance journalists have their own 'club' (Frilansklubben) within the Swedish Union of Journalists (Svenska Journalistförbundet, SJF). Other freelance workers, such as writers, dancers and artists, may also be members of unions.||Pay agreement for journalists include recommendations on wages for freelancers.|
|United Kingdom||Some existing unions also represent freelance workers - eg the Union of Construction, Allied Trades and Technicians (UCATT), the Broadcasting, Entertainment, Cinematograph and Theatre Union (BECTU) Equity (actors) and the National Union of Journalists, NUJ.||Some single-employer collective agreements also cover freelance workers.|
Finally, we can also mention the examples of social dialogue which have been developed in Ireland and Denmark in the framework of the debate over the challenges posed to the traditional distinction between dependent and autonomous work by emerging new forms of employment relationship (see above).
The first point which emerges from this study on 'economically dependent workers' is the great variety of situations, both across countries and within individual countries. The main features of employment relationships that may include economically dependent work, as well as the types of workers involved, are often specific to the national context. However, a significant heterogeneity may also be present at national level. In the blurring boundaries between dependent and self-employment, we can find a full range of job positions, going from 'bogus self-employment' which conceals dependent work and usually concerns a low-skilled, less expensive and less protected labour force, to emerging jobs in the ICT or consultancy sectors which generally involve well-educated and well-paid autonomous workers. According to the existing evidence, which is very scarce and fragmented, the phenomenon seems to concern, on average, around 1% of total employment.
In essence, the debate over economically dependent workers represents an aspect of the crisis of the standard distinction between dependent and autonomous work and clearly signals the difficulties of tackling the changes in the labour market and the economy with the traditional tools of labour law (and industrial relations). In other words, it voices an emerging demand for regulation and protection which comes from the 'grey area' between dependent employment and self-employment. This is an area which has apparently been growing in the past few decades, even if this increase may have slowed down in the most recent years, if we consider aggregate data on total self-employment.
This rising demand for regulation and protection requires, first of all, a statutory response, which should provide a clarification of the broadening meanings and forms of employment. Such a response might be progressed through social dialogue and the involvement of social partners, along a path which has been to some extent been followed in Ireland and Denmark. Whatever the approach, there are apparently three options in this domain:
- an extension of (most of) the provisions and protections typical of dependent employment to new forms of employment, including self-employed workers who may be regarded as 'economically dependent'. This is the option generally favoured by the unions, which believe that this would be the best way to grant workers an appropriate endowment of rights and protection. However, since it may lead to a reduction in the differences between forms of employment, this approach might contrast with the European employment strategy's objectives of adaptability and support for entrepreneurial activity;
- the definition of a third intermediate status which would stand mid-way between dependent and autonomous work and would benefit from an intermediate level of regulation and protection. In this case, the main problem seems to be connected with the identification of the features which would characterise this status. As mentioned above, there is such a variety of employment relations and job positions that it would be very difficult to find a clear-cut and satisfactory definition, even more so if this attempt were undertaken at European level; and
- the establishment of a common set of basic rights and protections that would apply to all workers, irrespective of their formal employment relationships (in addition to the existing regulatory framework for dependent employees). This is an option which is being discussed in Italy in the framework of a proposal to define a so-called 'work statute' (IT9709310F) and which is also implicitly supported in the UK by a suggestion to use the term 'worker' instead of 'employee' in legislation establishing labour rights and protection (it has been estimated that this might protect up to a further 5% of all those in employment). Here, the difficulty lies mainly in the definition of the set of rights which should be extended to all workers. In an extreme interpretation, in fact, this approach would simply overlap with the first option.
In any case, while the question of a total system of protection waits to be addressed, there have already been significant steps in granting some essential coverage to these kinds of worker, notably in the areas of social security and health and safety regulations.
However, there is a second and important area of response which is raised by the abovementioned demand for protection (and representation): that of industrial relations and notably of trade unions. The growth in non-standard forms of employment, among which economically dependent work may be classified, is challenging trade unions' representation and regulatory capacity in the labour market. However, the example of economically dependent workers shows that the unions, in order to cope with these new demands for representation and protection, are effectively trying to extend their reach beyond the limits of standard employment and to recruit members among the self-employed and various kinds of freelance workers. In this, they are proving able to follow innovative strategies, using an original combination of: incentives which arise from the early traditions of the trade union movement (like the provision of social security coverage and of some sorts of job placement support - such as 'job banks'); new services (eg different forms of professional advice); and new tools (especially the internet). If they are successful in this organising effort, further developments will probably follow in the area of collective bargaining, as the cases of Italy and UK seem to suggest.
Eventually, the combined effect of possible changes in the statutory framework and in industrial relations may have an important impact on the work and life prospects of many self-employed workers, including economically dependent workers. (Roberto Pedersini, Fondazione Regionale Pietro Seveso).