The distinction between employed and self-employed is becoming incoherent and outdated.
A quarter of a century after Alain Supiot advocated a comprehensive extension of labour and social rights ‘beyond employment’, labour-law regimes in Europe remain fundamentally anchored by the ‘binary divide’ between employment and self-employment. By and large, those working under subordinate and bilateral contracts of employment for a particular employer continue to be afforded a range of labour rights (often underpinned by European Union directives) while those who work as contractors under contracts for services enjoy few, if any, protections.
Spain, Germany and the United Kingdom have modified the divide with an intermediate category of employment, where some (self-employed) persons who are economically dependent on a main employer or provide their labour in a quasi-subordinate fashion receive very basic and minimal rights. Yet this blurring of categories is often manipulated by unscrupulous employers to push even greater numbers of workers outside mainstream labour protections.
The binary divide may have been conventionally rationalised by the claim that subordinate employees needed special protections on account of their weak bargaining power vis-à-vis employers, whereas the self-employed were ‘their own bosses’—capable of fending for themselves on account of their skills, professionalism and ‘human capital’ or because to varying degrees they operated genuine (and suitably capitalised) businesses.
It is doubtful that this justification—even the distinction itself—ever made much sense. True, some members of the liberal professions have historically enjoyed comfortable lives and stable incomes. But many self-employed workers in agriculture, trades and crafts, construction and the informal economy (not to mention gendered labour in domestic settings) never experienced that.
The exclusion of self-employed workers from labour protection in the past was neither principled nor coherent but stemmed largely from policy choices questionable at the time and increasingly untenable. Today median earnings among the self-employed are significantly lower than for those in the employed category, while studies increasingly indicate that the self-employed are at greater relative risk of poverty and social exclusion.
Troublesome issue
Changes in the structure of labour markets, outsourcing, privatisation, human-resource management, deindustrialisation and technological developments—in particular those linked to the rise of the ‘gig’ economy—have increased the proportion of the workforce in the self-employed category. This has made the distinction between employees and the self-employed fuzzy at best and prone at worst to deliberate abuses. Yet in spite of the mounting evidence that labour and social rights need to be conferred on a broader share of the workforce, the divide between employment and self-employment remains a troublesome issue.
The recently adopted draft EU directive on platform work failed, more than once, to attract the support of sufficient member states for gig-economy workers to enjoy a harmonised, rebuttable presumption of employment—even though such status is central to recommendation 198 of the International Labour Organization on the employment relationship. France, in particular, objected that this would not protect the wish of the ‘genuine self-employed to remain self-employed’. Eventually enough governments were swayed into supporting a modified proposal, which essentially delegated to national authorities the task of designing their own—possibly ‘less stringent’—rebuttable presumption-of-employment status.
Yet although the directive reflects the still-totemic nature of the binary divide, it breaks the taboo of confining labour rights and protections to employees alone. Beyond the employment presumption, almost all the rights it sets out apply to the much broader concept of the ‘person performing platform work’—meaning ‘any individual performing platform work, irrespective of the nature of the contractual relationship or its designation by the parties involved’ (article 2(1)(3) and see paragraph 53 of the preamble).
These include innovative protections in chapter III on ‘algorithmic management’—such as rights to transparency and human oversight and review of automated and algorithmically facilitated decisions—plus a long list of new rights, including to safe and secure communication channels, for the purposes of organising (article 20). But there are also comprehensive core labour protections—from the right to information and consultation (articles 2(1)(7) and 15) to protection from dismissal (article 23)—traditionally seen as the exclusive entitlement of employees with standard employment contracts.
Predominantly personal
The new approach embraced by the platform-work directive is arguably part of a broader, long-advocated trend towards expansion of labour rights to all those performing work in a predominantly personal capacity. The European Commission has already ensured that other rights, such as that to bargain collectively, are effectively enjoyed beyond employment and, especially since the pandemic, there have been louder calls for all workers to receive adequate social protection. The Court of Justice of the European Union has weighed into this debate, stressing that EU equal-treatment rights apply to all workers irrespective of the legal form in which work is provided. The labour movement is increasingly accepting of the idea.
Principle 5 of the EU Pillar of Social Rights already includes the commitment: ‘Regardless of the type and duration of the employment relationship, workers have the right to fair and equal treatment regarding working conditions, access to social protection and training.’ Now the platform-work directive incontrovertibly demonstrates that article 153 of the Treaty on the Functioning of the EU offers a suitable legal base to bestow dignified working conditions on all workers, irrespective of the nature or designation of that relationship.
These developments are however in stark contrast to the definitions shaping the bulk of EU and domestic labour-rights instruments in Europe, still confined to the indefensibly narrow idea that only those with a subordinate contract of employment should attract protections. A broader concept of worker is long overdue and, in a crucial electoral year for Europe and the world, redesign of the personal scope of application of labour-law protections has to become a political priority for all progressive parties.
Open political goal
The leadership of the Labour Party in the UK, to all intents and purposes a government in waiting, should be commended for remaining committed—against external and internal opposition—to granting day-one labour rights to all workers. This is partly on the basis of ideas and parliamentary proposals developed by labour-law scholars and trade unions in the recent past.
The progressive parties’ manifestos for the European Parliament elections, full of avant-garde and innovative ideas in the labour and social spheres, are increasingly sensitive to the issue of ‘securing quality jobs for all’. But they should commit more explicitly to extension of EU labour-law protections to all workers too, thereby scoring an open political goal.
Right-wing and populist parties will hardly want to engage with such progressive proposals. Universal worker rights run against their traditional promotion of the ‘politics of division’—between what they represent as a unionised, protected and privileged, if not parasitic, class of employees (especially if working in the public sector) and striving, hard-working, freedom-seeking, entrepreneurial, self-employed contractors.
The latter are often, although increasingly wrongly, believed to be a captive audience for populist messaging, precisely due to their inherently precarious labour-market situations. But, if anything, this is yet another good reason for the progressive front to promise to grant labour rights to all those who labour, if so politically empowered.
This is part of our series on a progressive ‘manifesto’ for the European Parliament elections
Nicola Countouris is professor of labour and European law at University College London.
Valerio De Stefano is a law professor at Osgoode Hall School, York University, Toronto.
John Hendy is a barrister practising in London, an honorary professor in the law faculty at University College London and a Labour member of the House of Lords.