EU Commission allows collective bargaining for solo self-employed

Two years after its initiative to ease collective bargaining for self-employed workers, the European Commission published new guidelines to allow collective bargaining for solo self-employed people under EU competition rules.

The Commission presented new guidelines on applying EU competition law to collective agreements regarding the working conditions of solo self-employed people, defined as self-employed people who do not employ any workers.

EU competition law, in most cases, forbids agreements between undertakings that restrict competition, such as price-fixing agreements among companies.

As self-employed workers have, until now, been considered undertakings like any other company, this rule also applied to them, which made it hard for them to organise as workers without being considered a cartel under EU law.

Worse working conditions and higher risk of poverty

Under these new guidelines, presented on Thursday (29 September), the Commission will no longer apply competition law to solo self-employed people that are in a situation comparable to workers.

“Solo self-employed people in the digital economy and beyond may not be able to individually negotiate good working terms and therefore may face difficult working conditions,” the EU Commission’s Executive Vice-President Margrethe Vestager said in a statement.

Contracting workers as self-employed people instead of properly employed people is a strategy of some companies to evade paying social contributions and to get around other labour regulations. Figures from the European statistical office Eurostat (see graph below) show that self-employed workers are at a much higher risk of poverty and social exclusion than properly employed people.

Graph by Esther Snippe

Who is “in a situation comparable to workers”?

The Commission’s new guidelines also lay out three criteria that help to define whether a solo self-employed person is in a situation comparable to workers.

First, solo self-employed people are in a situation comparable to workers if they are economically dependent on one counterparty. According to the Commission, this is the case if a solo self-employed person “earns, on average, at least 50% of total work-related income from a single counterparty.”

Second, a self-employed person can also be considered to be in a situation comparable to workers if she works side-by-side with workers, and, like a typical worker, is under the direction of the company they work for.

Third, the definition also applies to people who work through digital labour platforms.

Happy trade unions

Trade unions welcomed the Commission’s new guidelines. “The times when contracting authorities could avoid negotiations by referring to EU competition law are over,” said Frank Werneke, chair of the German union ver.di.

Isabelle Schömann of the European Trade Union Confederation (ETUC) said: “Collective bargaining for self-employed workers is vital to establish minimum rates of pay and working conditions.”

“It tackles precarious forms of work and remedies power imbalances in the labour market,” she added.

EU lawmakers push for better protection of bogus self-employed

EU lawmakers quizzed the European Commission executive vice-president, Margrethe Vestager, about new guidelines that would enable self-employed people to seek the protection of collective bargaining agreements, with both sides agreeing that such a right should be guaranteed.

Business associations, meanwhile, had resisted the Commission’s new guidelines, fearing disadvantage.

In a reaction to the Commission’s draft guidelines earlier this year, the business association SMEUnited insisted on treating independent workers like companies, saying that “the right to collective bargaining […] should not be introduced between companies,” and that “the division between employment relationship and entrepreneurship should not be blurred even indirectly.”

With these guidelines, however, the Commission continues on its path of considering independent workers similarly to workers if the power relations are comparable. The EU executive thus also sees the new guidelines as complementary to the work currently being carried out on the proposal for a directive on platform work.

EU institutions inch closer to an agreement on platform worker status

MEPs seem to be approaching a possible compromise on the legal presumption of employment in the platform worker directive, while a broad agreement is starting to emerge in the EU Council.

[Edited by Nathalie Weatherald]

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