The summary contains the 5 relevant weeks of the second part of Obligations and Contract Law II, namely Labour Law. The summary contains all reading material, class notes and case law from 2023.
General criteria to assess if someone is an employee or an independent contractor
Indicators (some can outweigh others), not all of them have to point that you're an employee → holistic weighing in all legal systems
and provides flexibility to include new forms of employment
1. the work needs to be performed personally
● Indication of being employee performing personally
○ Example: one cannot let someone else take care of the pet
○ Employees must perform their task personally
● Contractor has freedom to decide whether the person performs it themselves or subcontracts it → subcontract to
someone else = independent contractor
2. the (im)possibility of having control over one’s own work; → subordination
● If there is less possibility to control work = employee status
● Example: one is allowed to work for other companies = independent contractor
● Example: accept or decline a request = independent contractor
● Example: decide on the amount of services = independent contractor
● Example: cannot let others perform the task = employee
● Example: rating system is indicator for being employee and is a sign of subordination
○ Platforms are in fact employer
○ Dismissal if the ratings are under a certain threshold = employee
○ shifting control (from the rating stars) to riders in order not to be subject to the responsibilities of employment
status
3. the freedom (or not) of managing one’s own time schedule; → subordination
● If less freedom = employee
● Example: accept or decline a request = independent contractor
● Example: decide on the amount of services = independent contractor
4. the way in which tasks are performed; → subordination
● If the employer very much tells you how to perform the work, then under control = employee
● If little instructions = not employee
● How well tasks are performed is checked e.g. within a certain time limit or quality of the work → employee
5. (The power of direction exercised by the employer/contractor)
● Example: mandatory clothing = employee
● Not a strong indicator since many jobs do not require mandatory clothing
, 6. the concrete dependency in relation to the employer / contractor
● → economic dependency such as income or personal dependency; separate it from subordination
● Example: one is allowed to work for other companies → not fully dependent on the work of the platform for making a
living
● Determining hourly rate = string indicator for independent contractor
● No sick leave = independent contractor
● Sick leave = employee
● Clause in the contract excluding to work for other companies makes the income dependent on one employer →
employee
● Risk of losing assignments through bad customer reviews which shows the dependency too
7. the permanency of the relationship;
● May depend on the quality of the service
● If the quality is adequate -> permanent and employee
8. the number of working hours;
● If she can determine herself → freedom and independent contractor
● If there is a fixed number of hours → employee
9. the ownership of equipment;
● Provided with tools by the employer = employee
● If having it yourself e.g. smartphone= independent contractor
● What is more important for the job?
● equipment (if owned then less dependent on the employer)
10. the method of payment (hours vs project).
● Paid by task if payment occurs after each service = independent contractor → not continuous payment
● Paid by hour = employee
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
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