Evolution and the autonomy of labour law
| Author | Silviana Sciarra |
| Profession | Professor of Labour Law |
| Pages | 21-36 |
Page 21
Historically, labour law has been trying to gain autonomy from commercial law. The boundary between them becomes even less clear in the light of further developments of European law.The emphasis is put on 'efficiency of enterprises' and the task is assigned to labour law to prove its compatibility with market efficiency.
Agency Work
The field of agency work brings a series of new challenges for national labour lawyers and requires the intervention of EU law.
The Draft Directive on agency workers has inspired interesting comparative work.The principle of equal treatment, as clearly stated in the proposed Directive, is in itself a guiding principle, inasmuch as it clarifies the notion of comparable worker within the user company.
Comparative results emerging from this study suggest that a series of ambitious questions are open: labour law could suffer from an identity crisis, in observing how companies constantly reduce the core production and seek services and other related activities from outside.The antidote to such a crisis, as it emerges from the present study, is the constant adjusting of labour law rules and sanctions to a new function of the discipline.
In agency work, as in a multiplicity of non-standard jobs, the possibility is to lose track of a fundamental rights regime. Control exercised through labour inspectors is an efficient solution, but it seems to work only in legal systems with a consolidated tradition. Collective bargaining can also be a way to bring about equitable working conditions and comparable wages.
Split powers between agencies and users and solidarity in obligations represent only a partial solution. Authorisation or licensing systems for agencies are yet another way to introduce a divide between legal and illegal agency work and thus create a suitable environment for workers.
Further evolution of labour law should be such to bring agency workers closer to other non-standard workers, emphasising their similarities and constructing a new system of guarantees
Economically dependent work
The spreading of self-employment represents one of the most challenging patterns of evolution in the time spell considered by this report. What is most difficult to assess is under which circumstances a grey area emerges, in which criteria of subordination are not immediately visible and yet dependence is an indisputable feature.
The notion of economic dependence - as opposed to personal or functional dependence - has a highly symbolic value and explains the dilemmas of legal reforms attempting to deal with it.
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The overall impression is that economically dependent work is spreading and progressively showing its own features, notwithstanding the different solutions adopted in national legal systems. Rather than evolving as a mere continuation of what used to be described as quasi-dependent work, it attracts in the same area new forms of employment, all similarly characterised by the non-continuity of employment, the low level of earnings and the lack of precise prospects in creating career paths.
Examples taken by various legal systems confirm the variety of solutions adopted to tackle a phenomenon which is still largely undefined.The expansion of non-standard contracts, on the one hand, marks the boundary of a territory which may or may not coincide with new forms of economic dependence. On the other hand, attempts to promote genuine self-employment follow a different direction and have been put forward as well.
Because of the many interconnections that this subject matter has with other evolving patterns of labour law, it seems urgent to adopt an incisive approach towards workers whose fundamental rights might be threatened, because of employment relationships characterised by economic dependence.
The legal presumption, a technique still present in several national legal systems, does not seem to capture the subtleties of situations in which, rather than expanding labour law principles, it is necessary to find new ways to adapt them to economically dependent workers. Certainty about the nature of the employment contract can only be provided by way of creating a floor of rights specifically for economically dependent workers.
Employment is the key word around which entitlements should be constructed.A path should be followed in order to bring together all essential means of expansion of human rights.The notion of protection would perhaps not be appropriate in this regard.What the evolution of labour law is aiming at is the creation of a space in which economic dependence is counterbalanced by a series of economic support mechanisms, such as access to pensions, special bank credits, social security benefits, mobility allowances, training facilities, pregnancy and parental leave, and child-care opportunities.
It can be argued that EU law - preferably in the form of a framework directive - could help to clarify criteria, analogous to the ones on mutual obligations in subordinate employment and yet newly tailored to such new social phenomena.This could be supplemented by a softer approach with regard to economic support mechanisms. Co-ordination of national measures of this kind should be favoured, while leaving the choices on financial aids entirely to Member States.
Mechanisms laid down in Directive 1991/533/EEC (on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship) can be a source of inspiration for new measures to expand to this group of workers the principle of transparency with regard to working conditions and all other relevant contents of the work to be performed.
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Historically, labour law has been trying to gain autonomy from commercial law.As Davies and Freedland have argued, the boundary between the two disciplines is not so clear, despite the fact that the 'underlying principles' inspiring them are so different:'labour law has traditionally been concerned with the protection of employees against the operation of market forces, whereas commercial law has been concerned with providing a framework within which market forces could operate effectively'51.
Such a boundary becomes even less clear in the light of further developments of European law.The fight against unemployment brings about a variety of arguments and suggests a number of actions which should all contribute to decreasing the number of the unemployed and create new jobs. The emphasis - as again Davies and Freedland have argued -is put on 'efficiency of enterprises' and the task is assigned to labour law to prove its compatibility with market efficiency.
The field of agency work52 discloses a series of new challenges for national labour lawyers and can be taken as a good example in order to prove the autonomy of labour law. It is also a field in which further intervention of EU law is required, as it will be suggested in the conclusions.53
Agency work is the product of a less stable economy and of varying market demands, which often expose companies to unpredictable planning in their production schedules and also to changing needs in the selection of skills.At the same time, agencies providing temporary workers respond to the increased need for flexibility expressed by employers, including SMEs.54 The uncertain terminology adopted both in scholarly work and in legislation is a sign of the fact that labour law is facing new concepts. In previous comparative research, reference was made to 'traffic in labour' and to criminal sanctions inflicted on fraudulent employers.55
This attitude of national legislatures has been observed in different historical phases.56 It shows a prevailing intent to expand the protective scope of labour law to employees working de facto under the direction of a user-employer, even though formally employed by another entity, be it a legal or illegal sub-contractor, or another commercial firm.
In subsequent historical phases, there has been a progressive tendency not to maintain all core and peripheral activities within the firm. Externalisation and outsourcing of entire areas of the production process, while being the result of deep changes in the structure of the firm,57 also involved different ways of selecting and acquiring the workforce.
In EU law, we find the expression 'posting of workers' and also 'assigned to work' referred, amongst other situations, to temporary employees assigned by the agency to the user. The expression 'putting workers at the disposal' is also used,58 and even 'employee leasing', although the latter expression is not, as some non-English speaking commentators argue, typical of the UK official jargon.59
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Agency work has been a test case for national legislatures. It forced them to verify whether labour law principles were subject to disintegration. The alternative was to let labour law principles move freely through new commercial transactions and adapt them to workers outside the traditional surroundings of a company.
Rather than evaluating the rationale of the economic choices behind agency work and regulating the contract between the agency and the user, labour law attempted to address agency workers with some specific measures. The trilateral relationship - agency/employee/user - may be the object of regulation too when joint liability is provided for the payment of remuneration and of social security, as well as for other typical managerial obligations, such as the provision of health and safety measures, the duty to inform, and so on.
One solution may be to grant authorisation to the temporary work agency.60 This is a way to signal that, without such an authorisation, activities performed by the agency may be considered illegal. Other restrictions may follow, such as for bidding use of agency workers to substitute other workers exercising their right to strike,61 or take the place of dismissed or suspended workers.
Even the Draft Directive on temporary workers,62 a controversial - and yet highly necessary - source, still in the process of being adopted, offers a few insights into basic guarantees for temporary workers. The Draft Directive specifies that agencies may be regarded as employers and also includes in its scope agency workers with an unlimited contract of employment.63 It also introduces a non-discrimination clause, in line with the Part-time work and the fixed-term Work Directives.
The evolution of labour law at national level offers a wide variety of parallel solutions.
The UK presents a situation whereby temporary workers establishing a relationship with an agency may be considered either dependent employees or self-employed, leaving it to the common law test to verify whether there is a mutuality of obligations64.
A recent case decided by the UK Court of Appeal65 is worth mentioning.The ruling goes in the direction of investigating whether there is an employment relationship with the user-company, especially when agency workers are engaged on a long-term basis. In delivering his judgement, Lord Mummery acknowledged inspiration from scholarly contributions, and looked carefully into the 'complex employment relationships' flourishing in the labour market on a trilateral basis66. He also referred to the proposed EC Directive on agency workers to support the idea that, even when general principles in the law of contract allow sufficient flexibility to cope with new forms of employment,'only legislation can supply the solution that the common law is unable to deliver'67.
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In Ireland, because of court decisions suggesting that agency supplied workers were not employees, the government decided to amend the unfair dismissals legislation in 1993.This provided that where an individual agrees with an employment agency to do or perform personally any work or service for a third person, then the individual is deemed to be an employee employed by the third person under a contract of employment. Subsequent legislation then defined a 'contract of employment' as meaning: a) a contract of service or apprenticeship, and b) any other contract whereby an individual agrees with an employment agency to do or perform personally any work or service for a third person.'Employer' is accordingly defined as the person with whom an employee has entered into a contract of employment subject to the qualification that the person who under a contract of employment referred to in paragraph (b) 'is liable to pay the wages of the individual concerned' is deemed to be the individual's employer68. A recent decision by the Labour Court under the 2001 Part-Time Workers Act69 questions the thinking behind these developments by holding that a worker supplied by an agency to a user company was employed by that latter company under a contract of service.
In the Netherlands, the legislature has proved to be particularly inventive. In the 1999 Flexibility and Security Act, preceded by a 1996 agreement reached by unions and employers inside the Labour Foundation, a wide range of measures is provided for agency workers who are for the first time assigned to a standard contract of employment with the agency. Furthermore, a 1998 Act regulates the position of intermediaries, including temporary work agencies among other legal entities, such as secondment companies and labour pools70. It is worth mentioning that this Act poses an obligation on agencies to apply collective agreements and sector wage provisions.
One interesting side of the Dutch legislation is that the abolition of the licensing system for agencies corresponds to a full recognition of improved legal positions for workers. From January 1, 1999 the contract between a worker and the agency falls under the civil law rules of a labour contract.The so-called phasing system consists in granting rights to temporary employees, while increasing entitlements to such rights in the course of the employment relationship.
Whereas no protection against dismissals is provided for in the first 26 weeks (a period extended by collective agreements to 52 weeks), other rights start to be granted, such as the right to training and the right to enter into a pension scheme.An open-ended contract is the final aim of this legal procedure marked in four phases. Even rights to representation are granted under the Works Council Act and, in fact, temporary employees sit on the works councils of temporary agencies71. The percentage of workers reaching phase three and four - which implies taking full advantage of this phasing legislation - is estimated at around 30%.
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Even in a very advanced legal system, such as the Dutch one, measures to rescue certain groups of workers from unskilled and insecure jobs are still considered necessary.
In the background to these evolutionary trends, we see that between 1991 and 1998 there has been an estimated growth of 10% in temporary work in Europe, although the share of employment is only around 1.4% of total employment in Europe (2.1 million people expressed in full-time jobs). We also discover that in 1999 80 % of temporary workers were concentrated in four Member States: France, the United Kingdom, the Netherlands and Germany72. In the UK, agency workers doubled during the 1990s and are now around 1% of the total labour force (close to 250 000 workers)73. Even in Germany figures are growing, despite the fact that legislation releasing some of the restrictions is only very recent74. Agencies are now in the range of over 6000 and the number of temporary workers tripled between 1993 and 2001.
The number of agencies is growing and legislation is spreading everywhere.
In Sweden, ILO Convention No. 96 was repealed in order to pass legislation in 1993 and in 2001. It was decided not to ratify the new 1997 Convention No.181 on Private Employment Agencies. It is reported that the traditional opposition of Swedish trade unions to the hiring out of workers has given way to a strong impulse to unionise such workers. Even on the side of the agencies a very serious attempt has been made to create a trade institution - not an employers' association - organising temporary employment agencies, aiming at the quality and the ethics of their business activities75.
In Finland a previous licensing system was abolished in 1992. According to the Employment Contracts Act, from 2001 the agency was regarded as the employer. However, the Act explicitly states that if the power to assign and direct workers is transferred to a user company, that company will have the legal obligations directly connected with such powers76.
In Denmark, despite the fact that there has never been legislation on this matter, in 1992 there were 73 registered agencies with 3000 employees and in 1999 there were 346, raising the number of employees to 35 000.
In Greece the first law overcoming the previous strict ban on intermediaries in job placement was approved in 1998 and the creation of temporary work agencies came about in 2001, subject to authorisation by the Labour Ministry and with the consent of the social partners.Temporary agency work represents a very low proportion of the work-force (0.1%). Despite the guarantees provided for in Law 2956/2001 regarding social insurance and trade union rights for agency workers, only some of the issues arising from agency work are dealt with in currently enforced law.
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Two recent reforms have occurred in Germany and Italy. German law was part of the proposals put forward by the Hartz Committee in August 2002, whereas the Italian Decree intervening on several aspects of labour market reforms originates from the October 2001 'White Paper on the Italian Labour Market', drafted by a committee of academics, under the auspices of the Ministry of Welfare in the newly elected centre-right administration.
In the Italian reform, agency work is only one segment of a much wider intervention. It is described as ' somminis-trazione di lavoro ' and substitutes previous legislation on temporary agency work. Art. 20 presents a list of activities for which open-ended contracts can be stipulated between the user company and the agency. Fixed-term agency work can take place when organisational, technical and productive reasons are put forward by the user, even within the user's 'ordinary' production process. In both cases collective agreements have wide margins of manoeuvre. Whereas for open-ended contracts, collective agreements can expand the recourse to agency work beyond the letter of the law, for fixed-term contracts they can set quantitative limits to the user.
Several formalities are provided for in the Decree. Agencies must be authorised to perform their activities; the contract with the user must be in writing and include detailed information, even with regard to possible risks for health and safety. Art. 21 very clearly states the agency's obligations, with regard to the payment of wages and the subsequent user's obligation to reimburse. In case of non-compliance of the obligation to pay wages and social security, the user is responsible for this and will then have to require restitution from the agency.
The Decree attempts to balance the principle of equal treatment between agency workers and workers employed by the user against a very clear separation of typical managerial prerogatives from the concrete control exercised by the user. It is, for example, specified that the recourse to disciplinary powers is an agency's prerogative, following the user's communication of the reasons why disciplinary measures should be taken.The managerial prerogative to move the workers from one job to the other appears similarly split and implies the user's obligation to inform the agency in case of changes in the content of the job. Even the exercise of collective rights should be made possible for agency workers in the user's premises.
One of the most significant innovations in both Italy and Germany consists in allowing contracts between users and agencies for an unlimited time. In Germany, equal treatment should be the leading principle applying to temporary workers. Collective agreements in 2003 have, however, lowered the level of wages, in order to open up more possibilities for employment. It is interesting to note that despite the less rigid approach followed in the 2003 reform, the system of sanctions is still rather strict. In case of lacking authorisation, contracts of employment are established de jure. German agencies are liable for payment of wages and social security even when contracts are considered illegal77.
Looking comparatively at legislation in the field of agency work, a main divide seems to run between fixed-term and open-ended contracts entered with the agency. It is difficult to say whether this distinction in contracts of employment coincides with other special characteristics of the agencies and whether this will affect the relationship with users.
The observation of the whole phenomenon suggests that the expansion of agency work and the growing number of agencies should be the object of further investigation, both from the sociological and the legal point of view.
Both contracts for limited and unlimited duration pose a series of challenges to labour law. In some countries the reg-Page 28ulation of fixed-term agency work is not too distant from that of other contracts with a fixed duration. Sanctions as well as incentive measures to enter into such contracts of employment are a combination of old and new solutions.
It is suggested that in years to come agency work will be the area in which evolution will need to continue, bringing new ideas to national legislatures.The most interesting attitude is shown by legislatures adapting traditional labour law guarantees to agency workers.
We already mentioned the sophisticated Dutch model, in which the entitlement of rights represents a premium for the workers and, at the same time, an investment for the agency.
France should also be mentioned. Attempts in that country have been made to construct a ' statut des travailleurs précaires '78 namely a series of rules modified over the years and addressed to employment relationships characterised by instability.There have been a large number of claims in court, despite the fact that this is not an easy route for those workers lacking job security.The most original guarantee is to give the works council a droit d'alerte (introduced by the 2002 Loi de la modernisation sociale), a way to warn the employer on the growing number of insecure contracts.Training obligations and the protection of health and safety are also provided for.
In Spain temporary work agencies became operational in 1994, overcoming several problems of adaptation of the legal system and having to take into account a strong social reaction. A negative attitude towards temporary work had to do with the very fragmented nature of employment in this field, and with the varying - but often very short - duration of the contracts. A reform was introduced in 1999, followed by the transposition of the Posted workers Directive, which also led to some further changes in the law. Spanish legislation is now very similar to that enforced in other countries. One original feature is the requirement for a minimum proportion of employees hired on a permanent basis79.
Spain is also an interesting case for the understanding of a complex social and organisational phenomenon, whereby agencies which started to operate for providing temporary workers developed into agencies providing services. This may not be an isolated case.
For instance, it is difficult to predict whether the 2003 Italian Decree will encourage differentiation in the services provided by agencies.Art. 29 deals with appalto or contracting-out of activities different from the ones performed by agencies.The contractor takes full responsibility for the work to be performed, has its own organisation and exercises managerial prerogatives. Equal treatment does not apply to workers involved in contracting-out, due to the abrogation of the previous relevant norm. This relaxation of a previous legal limit might represent a 'competitive advantage', when compared to agency work.The delicate point will be evaluating the true entrepreneurial nature of contractors and investigating their validity as employers.
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The Draft Directive on agency workers has inspired interesting comparative work80. National labour lawyers have often been confronted with the need to specify concepts which were new to academic debates and also to law-making. The principle of equal treatment, as clearly stated by the proposed Directive, is in itself a guiding principle, inasmuch as it clarifies the notion of comparable worker within the user company.
The tendency to provide temporary agency workers with better guarantees is already present in a large number of countries. Difficulties in enforcing such guarantees are inherent to the nature of agency work.To quote again the authors mentioned at the beginning of this section, it is the 'multi-laterality of some work relationships which makes them nonstandard; for it is their multi-laterality which expresses or embodies an allocation of risks and responsibilities which is different from the standard pattern'81.
A statute for agency workers
Comparative results emerging from this study suggest that a series of challenging questions need to be addressed. There is often an imprecise knowledge of the content of agency work82. An investigation into the quality and quantity of the services more frequently required by users could be relevant for labour law; and it would be similarly important to know whether agency workers are mainly required for jobs with low qualifications. Such workers may find it difficult to plan a career path inside the agency and may be equally unprepared to take advantage of other labour market opportunities.
Labour law could suffer from an identity crisis, in observing how companies constantly reduce the core production and seek services and other related activities from outside.The antidote to such a crisis, as it emerges from the present study, is the constant adjustment of labour law rules and sanctions to a new function of the discipline.
The impression is that, in some cases, the evolution of labour law cannot go further than adapting old instruments to a completely new organisation of the company. Split powers between agencies and users and solidarity in obligations represent only a partial - albeit potentially very powerful - solution. Authorisation or licensing systems for agencies are yet another way to introduce a distinction between legal and illegal agency work and thus create a suitable environment for workers.
In agency work, as in a multiplicity of non-standard jobs, the risk is to lose track of a fundamental rights regime. Control exercised through labour inspectors is an efficient solution, but it seems to work only in legal systems with a consolidated tradition. Collective bargaining can also be a way to bring about equitable working conditions and comparable wages. Collective agreements can also specify how to entitle agency workers with freedom of association and the right to be informed and consulted.
Further evolution of labour law should be such to bring agency workers closer to other non-standard workers, emphasising their similarities and constructing new system of guarantees.
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The title chosen for this section is, once more, a way to acknowledge the seminal contribution to labour law scholarship offered by the Supiot Report83. Even though only a few years have gone by since this study, quite remarkable changes are visible in national legal systems84.
The spreading of self-employment represents one of the most challenging patterns of evolution in the time spell considered by this report.What is most difficult to assess is under which circumstances (be they social or caused by deep changes in the enterprise organisation) a grey area emerges, in which criteria of subordination are not immediately visible and yet dependence is an indisputable feature85.
The notion of economic dependence - as opposed to personal or functional dependence -has a highly symbolic value and explains the dilemmas of legal reforms dealing with it.A powerful metaphor, drawing on economic analysis, suggests that it indicates 'a bridge between internal and external labour markets'86.
National legal systems have not fully incorporated such a new notion and present, in the majority of cases, an unsettled debate. In several countries academic research challenges both case law and legislative solutions.The result is a vivacious re-visitation of traditional labour law thinking, accompanied by the search for empirical data exemplifying the new phenomenon to be regulated.
Germany is a good example of how controversial the work of the legislature can be and how this can create split opinions among commentators. Field-research undertaken in Germany in the mid-1990s87 proved the difficulty in detecting self-employment hiding dependent work and to understand the reasons why this phenomenon was so widespread88.
Ways to combat abuses of the law, through the elaboration of objective criteria, have continued to be at the centre of academic research and of case law.Whereas the former would be prepared to suggest innovative ideas, the latter - in particular the case law of the Federal Labour Court - tried to maintain a more traditional approach and to ensure criteria of personal subordination, adopting the same notion of dependence for labour law and for social security law89.
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The Red/Green coalition favoured in 1997 a reform of social security and introduced under Article 7 (4) of the Sozialgesetzbuch - a new provision whereby the obligation to pay contributions would apply to all economically dependent workers, regardless of the personal dependency criterion.
The technicalities of this solution have been criticised90. Change in government brought about a new law in 1999, the 'Self-employment Promotion Act', mainly functioning on a legal presumption which binds the social security system to apply the legal definition of dependent worker.The legal presumption can only be avoided if it is clearly stated that no dependent employment is foreseen.The novelty is in the elaboration of criteria for entrepreneurial freedom and for the risks associated with it, but does not seem to tackle the issue of economic dependency.Thereby criticism has been voiced, arguing that the definition of those who are employed only represent a partial solution to a much broader and still unsolved problem91.
In December 2002, the Red/Green coalition struck down the rule on legal presumption and left in force only the inquiry procedure in Section 7 of the Social Code, provided for those who choose to co-operate with the social security system.
Furthermore, the German law that entered into force on January 1st, 2003 deals with 'Ich-AG's' or 'me-public limited companies'. The aim is to help unemployed people start an economic activity by using an Existenzgründungszuschuss, a state financial aid which should cover pensions and other social security benefits.
Every unemployed person who begins to work for himself is entitled to this subsidy if his expected income is not higher than EUR 25 000 per year and if he does not employ other workers (except family members).The subsidy is intended to cover social security contributions which the individual has to pay due to self-employed status.Therefore the monthly amount awarded to the individual is EUR 600 during the first year. In the second year the subsidy decreases to EUR 360 per month and in the third (and last) year to EUR 240. At the end of 2003 more than 100 000 subsidies had been granted, mainly in the service sector.
The newly enacted Italian 'certification' should serve the purpose of filling the gaps between subordinate work and self-employment, with a view to punishing abuses and reducing court cases. Certification is an administrative act and has erga omnes effects; rather than qualifying the nature of the contract, it indicates all legal consequences attached to it, be they civil, administrative, related to social security or fiscal. It applies to 'l avoro a progetto e a pro gramma ', the new definition of self-employment proposed in the 2003 labour market reform.
While leaving untouched some forms of genuine self-employment, the reform intends to tackle hidden forms of subordination. It does so suggesting that a project or a programme - rather than a continuous and co-ordinated collaboration, as in the previous legal definition -helps to specify the content of the obligation carried by the self-employed. A first - and still vague - interpretation proposed by commentators is to view a project as a well defined obligation, undertaken by a fairly skilled person within a very clear time limit. It is more difficult to define what a programme should be, since in each job description, even in the simplest one, such a content should be implicit.
The legislature is very cautious in specifying that the principle of remuneration related to quality and quantity of the work performed should be measured against similar types of self-employment, thus excluding assimilation to collective agreements and to wages for dependent workers.
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For people working ' a progetto o a programma ', health and safety measures apply and a very timid attempt is made to endow them with other rights. It is specified that work be suspended - with no remuneration - for reasons of pregnancy, illness and injury. Suspension due to pregnancy implies that a minimum of 180 days will be added to the duration of the project or of the programme, whereas for other reasons work will terminate as originally stipulated.
In France, the 1994 Loi Madelin - dealing with ' initiative ' and ' entreprise individuelle ' - introduced a legal presumption of the non-existence of subordination (présomption de non-contrat de travail) for those who registered as self-employed. The criticism with regard to such a solution was that it confused criteria for the affiliation to the social security with criteria for the definition of a contract of employment and created a lack of 'professional identity' for those who did not engage in permanent dependent work, as the law specifically indicated92. The presumption was abrogated by the 19 January 2000 Law, following very critical rulings by the Cour de Cassation (the French Supreme Court).
More recently, a language only apparently similar to the one adopted by the Italian legislature is used in the report put forward by the Commission de Virville, appointed by the French Minister for Labour and Social Affairs93. In this document, aimed at making law-making more efficient and clarifying the interpretation of obscure principles, it is suggested that 'definite projects' should be assigned to experts or skilled workers, in order to clarify ambiguous employment offers, often leading to insecure work.The main idea is to regulate a new sort of contract in the Labour Code, inspired by the fixed-term contract regulation and yet different because of its scope.
The Report de Virville also states that an 'imprecise boundary' runs between dependent work and self-employment, despite the useful contribution made over the years by the Cour de Cassation.
It favours, therefore, the introduction of ' contrats types ', which should allow the parties to choose the legal regime most appropriate for specific contracts of employment, thus enhancing flexibility even further. Such proposals face opposition in the academic debate.
Choosing a different perspective, in the United Kingdom an empirical study was launched by the Department of Trade and Industry94 with a view to finding out the status of employed people.The results proved that, due to the expansion of non-standard and very flexible contracts of employment, the number of 'workers' - according to British terminology - was growing, which meant a falling number of 'employees' entitled to legal guarantees.
It is illuminating to discover that recent research in this field develops a 'personal employment contract' as a new 'definitional category', in order to try and include within the same elaboration contracts of employment and semi-dependent workers' contracts95. For the latter category, it is acknowledged though, that the law is still 'an uncharted territory'96.
The discussion on Section 23 (1) of the 1999 Employment Relations Act and on the powers conferred to the Secretary of State to extend rights to individuals who are not protected by them, is an example of how difficult it proves to include self-employed in this area of guarantees. It has been argued - and this is an argument to be further elaborated in the conclusions - that 'labour legislation with a human rights dimension' could be extended to the self-employed97.
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The 1998 Greek law, inspired by the now abrogated French Loi Madelin, provided recognition for self-employment, provided that a written declaration is made and information is sent to the labour inspectors within 15 days. Either the self-employed person or the social insurance institution can prove otherwise.
In Belgium an organisation of small and medium-sized employers has designed a test to verify the elements of dependence, putting together 12 criteria and attributing points to each of them. Below a certain number of points, workers are not considered self-employed. For cases falling in between the established number of points, a special commission decides. Reforms of this highly technical mechanism are under discussion.
In Spain trabajo autonomo dependiente (or 'dependent autonomous work') which sounds like a linguistic contradiction was part of a proposal to identify self-employment, in order to provide new legal guarantees. A criterion based on income, rather than recognition of one exclusive employment relationship, was put forward. It emphasised elements such as co-ordination and collaboration, albeit with more than one employer.
To confirm that the evolution of labour law in this field is closely related to social security, Sweden should be mentioned. Tax and social security laws provide the definition of self-employment98. In this country, as well as in Denmark and Finland, no legal definition of worker is provided and space is left to the ongoing evolution of case law.
In the Netherlands, the UWV (Institute for employee benefit schemes) and the tax department have adopted common policies on the collection of criteria according to which compulsory contributions are due. This should facilitate the distinction between dependent work and self-employment.
The British debate, similarly to the German one, illustrates the way in which scholarly work can intertwine the interpretation of the law with insights into future developments. Some Italian legislative proposals, dating back to the previous centre-left administration and currently under discussion inside the same coalition, now in opposition to the present administration,99 go in a similar direction.There are indications that such issues will be addressed by an independent commission of labour lawyers, appointed by the present Minister in charge of labour affairs.
Examples taken by various legal systems confirm the variety of solutions adopted to tackle a phenomenon which is still largely undefined.The expansion of non-standard contracts, on the one hand, marks the boundary of a territory which may or may not coincide with new forms of economic dependence. On the other hand, attempts to promote genuine self-employment follow a different direction and have been put forward as well.
Because of the many interconnections that this subject matter has with other evolving patterns of labour law, it seems urgent to adopt an incisive approach towards workers whose fundamental rights might be threatened by economically-dependent employment relationships.
The legal presumption, a technique still present in several national legal systems, does not seem to capture the subtleties of situations in which, rather than expanding labour law principles, it is necessary to find new ways to adapt them to economically dependent workers. Certainty about the nature of the employment contract can only be encouraged by creating a base of rights specifically aimed at economically-dependent workers.
Concepts such as 'adaptation' or 'modulazione' are useful to understanding that labour law in this particular area has to invent new solutions100. It is not surprising that even at the ILO a broad area of investigation has recently been opened101.
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The search for a tertium genus or the construction of a new classification of employment contracts - as in the lengthy Italian discussion on 'tipo contrattuale' - are overcome by a multiplicity of phenomena in which it is difficult to ascertain an univocal and precise intention on the part of the contracting parties. Fraud or imprecise interpretation of the law cannot be punished with traditional sanctions, but should be prevented, by providing a suitable legal environment in which to establish a clear and flexible framework of obligations for both parties and an incisive apparatus of inspectors within the social security institutions.
Following Mark Freedland's conception of 'personal employment contracts' it should be clarified that employment is the key word around which entitlements should be constructed. A path should be followed in order to bring together all essential means to expand human rights.The notion of protection may perhaps not be appropriate in this regard.What the evolution of labour law is aiming at is the creation of a space in which economic dependence is counterbalanced by a series of economic support mechanisms, such as access to pension schemes, special bank credits, social security benefits, mobility allowances, training facilities, pregnancy and parental leave, and childcare opportunities.
On a parallel track, labour law should construct a series of permanent and generalised obligations for whoever engages in a personal employment contract where one party is economically dependent. Obligations should rotate around the enforceability of fundamental rights such as dignity, health and safety, access to training, and reconciliation of work and family life.Voluntary sources could complement this floor of legal guarantees and indicate the applicable labour standards.
It is suggested that EU law - preferably in the form of a framework directive - could help clarify the construction of criteria similar to those on mutual obligations in subordinate employment and yet specifically tailored to such new social phenomena.
Criteria to tackle economic dependence can be developed (employment mainly performed with one or with numerous purchasers, direct access to the market, levels and continuity of earnings, number of dependent persons within the family) and so can entitlements which are strictly functional to employment, such as the right to define the scope of the 'personal employment contract' and to know which working conditions will apply, the right to receive notice if employment is to be terminated, and the right to information on health and safety measures.
Entitlements for economically-dependent workers are, in most cases, costly.They may range from the creation of special social security funds and pension funds, to a privileged access to social services, even when workers are short of employment, to forms of spreading earnings in between different spells of employment. This could be left to a softer approach; giving preference to co-ordination of national measures, while leaving the choices on fiscal aids entirely to Member States.
The overall impression is that economically dependent work is spreading and progressively becoming more defined, notwithstanding the different solutions adopted in national legal systems. Rather than evolving as a mere continuation of what used to be described as quasi-dependent work, or lavoro parasubordinato, or trabajo autonomo dependiente, it attracts in the same area new forms of employment, all similarly characterised by non-continuity, the low level of earnings, and the lack of precise prospects in creating career paths.
In this broad new area of work, evolution should be interpreted for the future as a way to find suitable answers to primary needs of labour law, almost a challenge to its ability to be born again.
The title chosen for this section is not intended to mimic the language adopted by some national legislatures102. It rather serves the purpose of underlining yet another new feature in the evolution of labour law.
The point to be made is that, in providing measures oriented to support the family, labour law does not have to establish its autonomy, as in the examples discussed so far. Labour law offers unique opportunities to fulfil objectives which only apparently fall outside its scope.
What is described as family-friendly labour law opens up a new dimension for the evolution of the discipline. Measures in this field are such to adapt contractual obligations to the fulfilmentPage 35 of aims which fall outside the contract of employment and have a wider social implication, such as providing care and assistance within the family.The important point to underline is that such measures may also aim, in line with some European employment policies, to help workers - very often women - to return to the labour market or to stay in it with better chances and proceed further in acquiring new entitlements.
The most consolidated tradition is in the field of parental leave regulation. Evolution in this case meant to expand the protection for working mothers into a broader pattern of protection of the children, guaranteeing that both parents are able to deliver care.
In this context, in Ireland the relevant provisions of the 1997 Organisation of Working Time Act should be noted. These provide that, in determining the times at which annual leave is granted, the employer must take into account: the need for the employee to reconcile work and any family responsibilities, and the opportunity for rest and recreation available to the employee. It should also be noted that, although a social welfare benefit is available for working mothers taking maternity or adoptive leave, no such benefit is available for working parents who take parental leave. Research commissioned by the Working Group on the Review of the Parental Leave Act 1998 showed that only 20% of eligible employees were estimated to have taken parental leave, with the majority of those taking such leave being women (84%)103.
The notion of care is also further expanded in more recent legislation, to include other members of the family in need of assistance. Since 2002 'compassionate leave' is provided for in Austria, to care for dying or seriously ill relatives. A conditional entitlement is introduced to the reduction of working hours. In Belgium leave for 'urgent family reasons' are provided for in collective agreements. In France we find legislation on leave for assisting relatives with terminal illness. Leave for assisting close relatives and partners are part of Italian law too. In Ireland, the Carer's Leave Act 2001 confers a right on employees to take temporary leave from their employment for up to 65 weeks to look after persons in need of full-time care and attention. It is designed to complement the carer's benefit scheme introduced by the Minister for Social, Community and Family Affairs in October 2000. In the Netherlands, the 2001 Work and Care Act brings together provisions on leave to help reconcile work and family responsibilities. In addition to the amendment of existing regulations, such as those governing maternity and parental leave, new provisions cover various other forms of leave, for emergency circumstances, or to take care of a sick child or parent living at home, or for parents adopting a child. Deviation from the law in a way unfavourable for employees is possible if it is agreed upon in a collective labour agreement.
A debate is currently taking place in the Netherlands on so-called 'life cycle collective agreements', which are part of a negotiation between the social partners and government. The trade-off could be between a two-year wage freeze, pre-retirement and the introduction of life course arrangements, which cover work, care, education and leisure.The predecessors of such a new policy on life cycle are labour law and social security measures which, especially in the second half of the 1990s, took the form of flexibilisation of working time and the regulation of leave104.
The notion of reconciliation of family and working life, now enshrined in Article 33 of the Charter of Fundamental Rights, goes even further. It confirms protection against dismissals, but also indicates that there should be ways to enhance and promote choices to devote more time to the family. However, in France - as the report indicates - legal reforms aimed at the reduction of working time (1996, 1998, 2000) did not serve the purpose of reconciling work and family commitments. It was necessary to turn to ad hoc legislation, such as parental leave.
Page 36
In Germany, under certain conditions, it is possible to change from a full-time into a part-time job.This is the case in France too, when compatible with the employer's organisational priorities.
The role of collective agreements is pivotal in this field. In large German companies some better schemes for leave are presented and training measures are added. In Italy too, a recent survey showed the distribution of measures in company agreements, ranging from telework and reduction of working hours, to company services and financial support for career interruptions. In the Netherlands childcare services should become part of collective agreements for agency workers.
Measures of this kind should in the future become more directly functional to employment policies and to a correct enforcement of the equality principle. The Barcelona European Council, for example, set very specific targets for childcare provision in view of improving employment rates for women105.
However, legislative initiatives in the EU countries are less dynamic and inventive than one would expect.This is a field in which the evolution of labour law should be pursued in a more visible and significant way106 exploring new possibilities, such as the ones emerging in life cycle arrangements.
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[51] P. Davies and M. Freedland, 'Employees, workers, and the autonomy of labour law', in: H. Collins et al, Legal Regulation of the Employment Relation, 2000, Kluwer Law International,The Hague, Boston, New York, pp. 270-71.
[52] Throughout this report the term 'agency work' is used to indicate all forms of work - be it temporary or open-ended - in which work is performed with a user company through an agency.This conventional choice should, at least within the limits of the present study, diminish the risk of overlapping definitions and of different linguistic solutions adopted in different legal systems.
[53] See chapter X.
[54] European Commission, Jobs, Jobs, Jobs. Creating more employment in Europe, Report of the Employment taskforce chaired by W. Kok, November 2003, Office for Official Publications of the European Communities, Luxembourg, pp. 32-33, indicates that agencies should be the 'new intermediaries in the recruitment and management of both qualified and unqualified staff' and support flexibility and mobility of the workforce, while seeking to guarantee security.
[55] European Commission, Transformation of Labour and Future of Labour Law in Europe (Supiot Report), 1998, available at: http://europa.eu.int/comm/employment_social/labour_law/docs/supiotreport_en.pdf.
[56] For example, in Italy, legislation aimed at combating fraudulent employers' behaviour was first enacted in the Sixties. Italian legislation inspired similar solutions in Spain in the 1970s.
[57] H. Collins,'Independent contractors and the challenge of vertical disintegration', (1990) Oxford Journal of Legal Studies, pp. 353 ff.
[58] The Belgian Report.
[59] See, for instance, the most recent Italian debate, attributing this tradition to a not well specified Anglo-Saxon tradition. Leading textbooks in the UK, however, use the expression agency employment, following the 1973 Employment Agencies Act, subsequently amended by the 1994 Deregulation and Contracting out Act (DCOA).The expression 'employee leasing' is used in translations from other languages. See for instance P. Schüren, 'Employee leasing in Germany: the Hiring Out of an Employee as a temporary Worker' (2001), Comparative Labour Law and Policy Journal Vol. 22, No 1, pp. 67 ff. Contrary to what might be implied in the adoption of this terminology, the German system has traditionally been fairly restrictive in this field, granting protection to employees, as well as setting limits for the agencies. Even the recent 2003 German reform maintains the basic restrictions, notwithstanding the fact that no time limit is set for the hiring out of employees.
[60] In some countries the authorisation becomes permanent after a few years (for example, in Italy and in Belgium, in the latter with the consent of the trade unions and the user company). In the Netherlands, where the authorisation was abolished as a requirement to operate, there are indications that it might be re-introduced, due to degrading working conditions in a number of agencies. In the UK power is recognised to the Secretary of State to seek a prohibition order against a person hiring out workers for profit.The prohibition order replaced in 1994 a previous licensing system, under the 1973 Employment Agencies Act. See S. Deakin and G. S. Morris, Labour Law, 2001, 3rd edition, Butterworths, London, p. 175. An Employment Tribunal may not grant such an order 'unless it is satisfied that [that person] is, on account of his misconduct or for any other sufficient reason, unsuitable to do what the order prohibits'.
[61] E.g. in Italy,Art. 20.5, 2003/276 Decree and in Greece, see: www.eiro.eurofound.ie/print/2001/11/feature/gr0111101f.html. 62
[62] European Commission, Proposal for a Directive of the European Parliament and the Council on working conditions for temporary workers (COM(2002) 149 final - 2002/0072 (COD)), O.J. C 61, 14/03/2003, p. 124-130. See also, on such a proposal, the Opinion of the Economic and Social Committee, COM (2002) 149 final, 2002/0072 (COD), 2003/C 61/21.
[63] See the recital 16 of the Proposed Directive, stating that derogations from other applicable rights in the user firm are allowed. 64
[64] S. Deakin and G. S. Morris, Labour Law, 2001, 3rd edition, Butterworths, London, p. 178. 65
[65] Dacas v. Brook Street Bureau, 5th March 2004. 66
[66] Reference is made in the judgement to a recent book by M. Freedland, The Personal Contract of Employment, 2nd edition, 2003, OUP, Oxford.
[67] Point 8 of the decision.
[68] I am grateful to Prof. Anthony Kerr for this example of evolution in Irish labour law.
[69] Diageo Global Supply and Mary Rooney, 15 January 2004. A few points in this judgement reveal the tension between labour law principles and agency work.The Court, for example, considers the user company as employer taking into account the claimant's 'inclusion' in the staff regularly employed.
[70] See extensively on these detailed legal measures E. Sol,'Targeting on Transitions: Employment services in the Netherlands' (2001), Comparative Labour Law and Policy Journal Vol. 22, No 1, at pp. 97 ff.
[71] E. Sol, ibid., pp. 100 ff.The Kok report also refers that the largest TWAs in the Netherlands are involved in training and active policies of integration in the labour market, as well as seeking to guarantee childcare arrangements, p. 30.
[72] European Foundation for the Improvement of Living and Working Conditions, Temporary agency work in the European Union, 2002, Dublin, see the table on p. 28.
[73] S. Deakin and G. S. Morris, Labour Law, 2001, 3rd edition, Butterworths, London, p. 175, quoting field research. 74
[74] Entered into force on January 1, 2004.
[75] B. Nyström,'The legal regulation of employment agencies and employment Leasing companies in Sweden' (2001), Comparative Labour Law and Policy Journal Vol. 22, No 1, pp. 193-194.
[76] Chapter I section 7 of the Employement Act:'If, with the employee's consent, the employer assigns an employee for use by another employer (user enterprise), the right to direct and supervise the work is transferred to the user enterprise together with the obligations stipulated for the employer directly related to the performance of the work and its arrangement.' See also R. Eklund, 'Temporary Employment Agencies in the Nordic Countries' (2002), Scandinavian Studies in Law Vol. 43, pp. 311-334.
[77] Consequences under tax law make the agency worker rather vulnerable in case of illegal contracts with the agency, since there is a system of joint liability. See P. Schüren,'Employee leasing in Germany: the Hiring Out of an Employee as a temporary Worker' (2001), Comparative Labour Law and Policy Journal Vol. 22, No 1, p. 79.
[78] See French Report, Chapter III, section 1.2. Collective agreements have also been very innovative in this field. 79
[79] M. Rodríguez-Piñero Royo, 'Temporary work and employment agencies in Spain' (2001), Comparative Labour Law and Policy Journal Vol. 22, No 1, pp. 129 ff.
[80] U. Carabelli, 'Flessibilizzazione e destrutturazione del mercato del lavoro? Il lavoro interinale in Italia e in Europa', in: F. Liso, U. Carabelli (eds.), Il lavoro temporaneo. Commento alla L. 196/1997, 1999, Milano; D. Storrie, Temporary agency work in the European Union, 2002, European Foundation for the Improvement of Living and Working Conditions, Dublin; L. Zappalà, 'La 'flessibilità nella sicurezza' alla prova. Il caso del lavoro temporaneo fra soft law e hard law', Giornale di diritto del lavoro e di relazioni industriali, (2003), p. 69 ff., the latter drawing in particular on Dutch law.
[81] P. Davies and M. Freedland, 'Labour Markets, Welfare and the Personal Scope of Employment Law' (1999), 21 Comparative Labour Law and Policy Journal, p. 244.
[82] D. Storrie, Temporary agency work in the European Union, 2002, European Foundation for the Improvement of Living and Working Conditions, Dublin.
[83] A. Supiot, Au-delà de l'emploi, 1999, Flammarion, Paris, is the title of the book, drawing on the Report prepared for the Commission.
[84] Recent trends in self-employment are in OECD, Labour Force Statistics, 2000, Paris.The growing number of self-employed serving one company confirms the current practice of outsourcing some services. See also: EIRO, 'Economically dependent workers' employment law and industrial relations, 2002, available at: http://www.eiro.eurofound.eu.int/2002/05/study/TN0205101S.html
[85] Some country studies present the cases of telework and home work as examples of grey areas in which managerial powers are exercised, despite the fact that work is performed outside the company. Economic dependence can, in such cases, be a further element to consider, when evaluating the precise nature of such contracts of employment. A different example, referring to France, is offered by A. Perulli, 'Lavoro, autonomo e dipendenza economica oggi' (2003), Rivista Giuridica del Lavoro , n. 2, p. 229.
[86] A. Perulli, ' Lavoro, autonomo e dipendenza economica oggi' (2003), Rivista Giuridica del Lavoro, n. 2, p. 227. See also A. Perulli, Report for the European Commission: Economically dependent / quasi-subordinate (parasubordinate) employment: legal, social and economic aspects, 2003, Brussels available at: http://europa.eu.int/comm/employment_social/labour_law/docs/parasubordination_report_en.pdf
[87] Research was carried on under the auspices of the Federal Labour Agency, following a path-breaking academic analysis developed by R. Wank, Arbeitnehmer und Selbstandige, 1988,Verlag, C.H. Beck, Monaco.
[88] Report on Germany, Chapter II, section 2.1.8.
[89] W. Daubler,'Working People in Germany' (1999), Comparative Labour Law and Policy Journal, p. 85 explains this for reasons of a strong tradition dating back to the Weimar Republic and for reasons of strict interpretation of existing law, which does identify categories of 'worker-like person'.
[90] See R.Wank, in U. Mückenberger, R.Wank, H. Buchner, 'Ridefinire la nozione di subordinazione? Il dibattito in Germania' (2000), Giornale di diritto del lavoro e di relazioni industriali, p. 340.
[91] H. Buchner, in U. Mückenberger, R.Wank, H. Buchner,'Ridefinire la nozione di subordinazione? Il dibattito in Germania' (2000), Giornale di diritto del lavoro e di relazioni industriali, p. 349.
[92] G. Lyon Caen, A. Jeammaud,A. Supiot, Droit du Travail, 1996, Dalloz, Paris, p. 104.
[93] Rapport au Ministre des Affaires sociales, du travail et de la solidarité Pour un code du travail plus efficace, 15 January 2004.
[94] B. Burchell, S. Deakin and S. Honey,'The Employment Status of Individuals in Non-standard Employment' (1999), Employment Relations Research Series No 6, UK Department of Trade and Industry, London.
[95] M. Freedland, The Personal Employment Contract, 2003, OUP, Oxford, p. 26.
[96] Ibid,p.32.
[97] S. Deakin and G. S. Morris, Labour Law, 2001, 3rd edition, Butterworths, London, p. 180.
[98] The Report on Sweden describes the F tax and the A tax, the former for persons who run their own business, the latter for dependent workers.
[99] T. Treu, former Labour Minister under the Prodi government, launched the 'Statuto dei lavori'. See an early draft in T. Treu, Politiche del lavoro, 2001, Il Mulino, Bologna. Further contributions have been added to that project and are currently discussed in a legislative proposal (n. 2049, approved by the Italian Senate in 1999).
[100] A. Perulli uses the expression 'tutele inedite', p. 259.
[101] The scope of the employment relationship, Report of the Committee on the Employment Relationship, International Labour Conference, 91st session Geneva 2003.
[102] Measures on maternity and parental leave, proposed by New Labour in the UK, are presented under this label. See L. Dickens and M. Hall,'Labour Law and Industrial Relations: a New settlement?' in:T. Hervey and J. Kenner (eds.), Industrial Relations:Theory and Practice, 2003, 2nd ed, Blackwell, Oxford, p. 131.
[103] I am grateful to Prof. A. Kerr for pointing out these references to me.
[104] T. Jaspers,T.Wilthagen, A.Veldman, Collective bargaining between the life cycle and the business cycle, April 2003,Work in progress, OSA/Institute for Labour Studies and Utrecht University.
[105] Targets are: 33% for children under three years of age; 90% for children three years old to school age.
[106] I owe this comment - which I share - to Marie-Ange Moreau. See also on these issues M. Barbera,'The Unsolved Conflict: Reshaping Family Work and Market Work in the EU Legal Order', in: T. Hervey and J. Kenner (eds.), Economic and Social Rights under the EU Charter of Fundamental Rights, 2003, Hart Publishing, Oxford, pp. 139 ff.
