This document contains a summary of the second part of 'Obligations and Contract Law II', specifically Labour Law. It provides the 5 weeks of the course merged with the relevant case law, class notes and all reading material.
Bernd Waas (2010), "The Legal definition of the employment relationship", European Labour Law Journal 2010, Vol. 1(1), 45-55.
- 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
- 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
- “primacy of facts“ is employed = the substance of the relationship trumps the form of a contract → freedom of contract is
restricted when it comes to employment relationships
- → labour law entails many restrictions of entrepreneurial freedom: An employer must, for instance, not discriminate between
fellow employees when offering certain benefits
- German law:
- the term “employee” is widely regarded as a Typusbegriff (a term that does not more than referring to a mere
type)
- the rules and provisions of labour law should not easily being evaded by the parties to the contract
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
- → it is often almost impossible to decide whether a person is an employee or an independent contractor
Deliberate Fragmentation
, - 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 employer 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
General Labour Law
● Justification for why we have the rights:
Reasons and ○ Labour is not (merely) a commodity = not a product to trade in economic perspective
○ Found in ILO constitution
goals of labour
● Justification: Employees are personally dependent
law ○ = “die Arbeit ist also der Mensch selbst” - Hugo Sinzheimer
○ Sth you do but cannot separate from yourself !!
○ To limit contract law in the field of labour
○ Employees are personally dependent not only economically (cannot separate) which involves yourself
● The employee’s dignity has to be protected while at work
● Unequal bargaining power of employees vis-a-vis the employer must be compensated
, ● Labour law mediates the relationship between
Actors of ○ workers (employees),
○ employers (organisations),
labour law
○ trade unions and
○ the government
● Bring the system of labour law up to date
→ starting point
The criteria for an employment contract
Employment
Definition of employment contract:
contract
1. Two people engaged in a work relationship (contractual agreement) e.g. employment contract between employer and employee
2. one party (employee) commits to the performance of work
3. under subordination of the other party (employer)
a. → Whenever one party of the contractual relationship has the right to provide directives and execute control over the
performance of the work
b. voluntarily an agreement to obey for working days
4. in exchange for pay (salary)
● Problem: Inequality between the contracting parties
Functions of ○ “primacy of facts“ is employed = the substance of the relationship trumps the form of a contract → freedom of contract is
restricted when it comes to employment relationships
Labour Law
○ Reason of primacy of facts and why people do not decide for themselves:
■ 2 parties are not equal and do not have equal bargaining power, weaker party must be compensated
○ In the words of the German Federal Constitutional Court:
■ "If one party to a contract enjoys such predominance that he is in fact able to fix the content of the contract
unilaterally, (...) a near balance of power is lacking, the instruments of contract law will not be sufficient in
guaranteeing a reasonable reconcilement of Interests“ - Federal Constitutional Court 7 February 1990
↓↓↓↓ Unequal distribution of power between the employer and the employee → justifies the establishment of special set of rules
to govern the employment relationship: labour law
, ● “The fundamental principle of labour law is to guarantee the weaker party in the labour market, protection and basic rights in order
to be in a fair position when negotiating salary and working conditions.”
○ This justifies the establishment of a special set of rules to govern the employment relationship: Labour law
○ Protection justifies the interference with the freedom to contract
■ Get workers in a fair position at work and while negotiating salaries
■ Solution in 2 ways: protecting individual party (protection on the weaker party) or collective bargaining (uplifting
bargaining power of the wearer party)
● How to empower the employee?
1. Protecting individual party: By setting mandatory labour standards from which the individual parties may not
deviate, except in a more favourable way for the worker → so by setting a floor of rights
2. Collective bargaining: By facilitating and prioritising collective bargaining/ giving primacy to collective agreements
■ Trade unions can legally negotiate with the employer
■ Use mechanism to pressure the employer
● After WW I & II: ‘constitutionalization’ of LL / Constitutionalised:
○ Many HR treaties codifications
■ CFR has solidarity chapter
■ Main rights for workers collectively and individually → solidarity is behind LL
■ collectively: Art 28 CFR
● Right of collective bargaining and action – both employers and workers have the right to negotiate collective
agreements, and to take collective decisions to protect their interests (for example, to take strike action).
■ individually: Art 31 CFR
● Fair and just working conditions – this includes the right to safe working conditions, a maximum working
week, rest periods and to annual leave.
● Gig work issue and focus on line between self employed and employee and inbetween
● Binary divide: self employed or employees
The dichotomy
○ Self-employed workers
■ Freedom of contract preserved
■ Equality before the law
■ Civil law; commercial law
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