The summary contains all five weeks of the course Labour Law (Obligations and Contract Law II). It contains class notes and all reading materials according to the relevant week.
- Scope of LL, in light of the emerging ‘gig economy’
- Individual and collective dimension of LL
- Court & state...
Week 6 - Scope of LL, in light of the emerging ‘gig
economy’
Scope of LL, in light of the emerging ‘gig economy’
❖ platform work and its implications for worker protection
❖ the main protective ‘tools’ of labour law and we will discuss arguments in favour and/or
against an employment relationship between the worker and the platform
❖ reach a general awareness and basic understanding of the regulatory instruments of
labour law and a specific knowledge of how the countervailing function of labour law is
challenged by new forms of employment in the platform economy.
Bernd Waas (2010), "The Legal definition of the employment relationship", European Labour
Law Journal 2010, Vol. 1(1), 45-55.
- Key that labour law will apply: defining what forms an employment relationship
- labour law is considerably more protective than (conventional) civil law
- the application of labour law places the other party to the contract under a severe burden
both from a financial and an administrative perspective
- labour law entails many restrictions of entrepreneurial freedom: An employer must, for
instance, not discriminate between fellow employees when offering certain benefits
- the legal definition of the employment relationship is a highly sensitive issue
National law
- huge differences exist with regard to defining an “employment relationship” in MS
national law
- the courts regularly exert enormous discretionary powers even if statutory definitions
exist
- German law:
- the term “employee” is widely regarded as a Typusbegriff (a term that
does not more than referring to a mere type)
- the requirements of an “employment relationship” must not necessarily all
be met in an individual case
- Court denies the possibility to fix requirements for the existence of an
employment relationship that can be applied to all upcoming case
- Whether an employment relationship exists: court uses “typological
method”
- there is simply no singular criterion among the many criteria which have
to be applied in the process which could be called indispensable
- Courts in Europe:
- innumerable criteria are used by the courts in Europe as being indicative
with regard to the existence of an employment relationship
, - Example: whether work is performed solely or mainly for the benefit of
another
- Some criteria have their focus on economic aspects of the employment
relationship
- “primacy of facts“ is employed = the substance of the relationship trumps the form of a
contract
- in many countries the freedom of contract is restricted when it comes to employment
relationships
- German law:
- the rules and provisions of labour law should not easily being evaded by
the parties to the contract
- → Rechtsformzwang: the parties have simply no other choice than to
conclude a contract of employment if they want to fix certain rights and
obligations.
European Law
- to secure a uniform application of law the concept of “worker” cannot be defined by the
Member States
- ECJ: a worker is a person who for a certain period of time perform services for and
under the direction of another person in return for which he receives remuneration
- Article 2(1) lit. d of the Acquired Rights Directive expressly states that “‘employee’ shall
mean any person who, in the Member States concerned, is protected”
- Must respect the general principle of equality and non- discrimination
Difficulties with employment relationship
- Difficulties to determine in individual cases whether an employment relationship exists or
not have even grown
- Organisational trends have led to boundaries of business units becoming
increasingly blurred → difficult to decide whether a person forms part of a given
entity
- technological changes have resulted in offering new channels for employers to
make use of their power to direct.
- modern “knowledge economy”: If more and more persons are attracted by others
because of their specific know how it goes almost without saying that instructions as to
how to do the job will play an ever shrinking role in the future when the question has to
decided whether a person is in a subordinate position or not.
- German law: Neue Selbständigkeit (modern self-employment)
- services are nowadays performed by (seemingly) independent contractors
though such work in the past was essentially done by employees
- → it is often almost impossible to decide whether a person is an employee or an
independent contractor
Deliberate Fragmentation
, - right answer to the problems which arise in the wake of the organisational and
technological changes for defining the boundaries of labour law may be what could be
called “deliberate fragmentation”
- an ever increasing fragmentation of labour law
- “deliberate fragmentation” as a strategy would mean that national legislators may
consider making specific rules of labour law applicable to specific workers only instead of
what could be called a make-or-break approach
- differentiation between employees and independent contractors may become easier if
not the application of labour law is the issue at hand but the application of specific rules
of labour law only
- Mikkelsen case: may be convincing to hold that the rules on transfer of undertaking do
only aim at guaranteeing an employee who is affected by a transfer the further
application of labour law as far as national labour law is applicable
- issue in the context of “wilful fragmentation” of labour law would be to consider specific
legal sub-regimes for different categories of employees affording to them different rights
and entitlements
- the unequal division of individual bargaining power between employee and employer25
seems not to be among the factors that are (directly) decisive for affirming the existence
of an employment relationship → in some countries the basic paradigm of an
employment relationship
- tailor-made contracts of employment are simply not feasible for employers
- to which extent persons should be protected by labour law who are not personally
dependant but economically dependant only → whether the employment relationship
should be the sole “vehicle for the delivery of rights and entitlements”
- German law:
- quasi-salaried workers (arbeitnehmerähnliche Personen) are considered
forming a sub-category which is in need of greater protection than that
provided to most self-employed person
- Some of the legal protections afforded to employees are accordingly
extended to these quasi-workers
- UK:
- over the past years numerous rights have been broadened to all
“workers”, rather than merely to employees
Antonio Aloisi (2015), "Commoditized workers. The Rising of On-Demand Work, a Case Study
Research on a Set of Online Platforms and Apps", January 2015, SSRN Electronic Journal
/ssrn.2637485
- In the framework of the so-called “sharing economy”, the number of on‑demand
companies matching labour supply and demand is on the rise
- = enlarge opportunities for people willing to find a job or to top up their salaries
, - on-demand economy as “a new model capable of exploiting underutilized or
unutilized power of (dormant) assets to gain an income, increasing competition in
the markets and providing users (i.e. consumers) with more choice”
- → human capital as a resource
- Uncertainty and insecurity are the price for extreme flexibility
- multi-faceted process of globalization has created new job opportunities: New
actors make the social-economic scene: independent contractors, freelancers,
unconventional workers and micro-entrepreneurs
- Freelancers, independent contractors and temporary workers will represent
almost the majority of the American workforce in a few years
- a worrisome issue emerges: where to find new sources for essential worker
protection measures like health coverage, insurance against injuries, paid
vacations, and other rights provided or guaranteed by “ordinary” employers
- workers of the on‑demand economy continue to be independent contractors (not
employees, in a word) even though many indicators reveal a disguised
employment relationship also grounded on the disproportionate presence of
vulnerable players.
- Crowd‑working is a cutting-edge opportunity in these always connected, app-‐‑driven
economies
- the rise of the sharing economy can also be perceived as an occasion for the growth of
“precarious employment”
- this new model cannot replay drifts like exploitation and degraded human dignity of work
- = new feudalism
Amazon Mechanical Turk
- “on-demand work” platform
- “employing humans-as-service”
- Differences in bargaining power between Requesters and Providers are enormous
- Amazon itself that can terminate a Provider’s account
- Amazon’s role: it just consists in building a marketplace and letting Requesters getting in
contact with Turkers
- Providers are not “entitled to any of the benefits that a Requester or Amazon Mechanical
Turk may make available to its employees, such as vacation pay, sick leave, insurance
programs, including group health insurance or retirement benefits”
- mechanism also prevents parties from contracting freely outside the platform eventually
shrinking their contractual freedom
- The FLSA (Fair Labor Standards Act) only concerns “employees” that are covered by
labour laws such as minimum wage and antidiscrimination statutes
- “any individual employed by an employer”
- definition of employee, the only addressee of the regulation, offered by the FLSA
is unfortunately narrow and perilously meaningless
- Whether a worker has to be considered an employee or a contractor depends on a
“multifactorial” test based on the facts emerging from the employment relationship
- from a labour law perspective, the definition “micro‑entrepreneur” means nothing
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