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Collective bargaining for the self-employed – a tough gig? | Hogan Lovells

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On 6 January 2021, the European Commission published an “Inception Impact Assessment” seeking feedback on an initiative aimed at defining EU competition law’s scope of application to “self-employed” workers (in advance of an open public consultation anticipated for spring 2021). This is part of a review kicked off last summer focused on improving working conditions for the growing ranks of self-employed – workers integral and increasingly active in the consumer-facing (and exceptionally popular) services offered via platform players. In particular, the Commission is keen to facilitate possibilities for “collective bargaining” amongst the self-employed by providing them clarity and certainty regarding compliance with the competition rules.

Collective bargaining and the “self-employed”

Despite the clear benefits of digitalisation, including in respect of enhanced employment opportunities, the European Commission (Commission) has concerns that the increasing number of individuals deriving work through digital platforms might be unable to secure favourable pay or work conditions due to an alleged lack of bargaining power. Such concerns are seen to be particularly acute in relation to individuals working as the customer (delivery) interface via digital platform services (many of whom are “solo self-employed” – i.e., self-employed without employees). However, the Commission believes there are also issues for certain self-employed activities beyond the platform economy – for example, where individuals have entered into commercial service contracts (under which terms and conditions of work may not, the Commission believes, be as secure as they would be for an “employed” individual).

As such, the Commission wants reassurance that the self-employed (including “gig economy” workers who are often self-employed) can protect their interests by taking part in collective engagement with employers in a manner formally recognised as compatible with competition law requirements.

The legal backdrop

Under existing EU competition rules (and indeed the laws of many jurisdictions globally), self-employed workers who come together in order to negotiate better pay or working conditions could find themselves in breach of competition law. This is because self-employed workers are classed as “undertakings” under competition law and, therefore, any collective efforts on issues such as pay could be viewed as cartel-like behaviour.

Therefore, the possibilities for self-employed workers to organise and collectively engage (through unions or other associations) is limited, unlike the situation for their “employee” counterparts who can organise largely without fear of breaching applicable rules. Indeed, it has long been recognised that competition rules should not impede collective activity aimed at protecting workers. To this end, one of the limited exceptions in terms of agreements being caught (by the prohibition on restrictive agreements) is where they are entered into within the framework of collective bargaining between employers and employees (and are intended to improve employment and working conditions). Where this is demonstrated to be the case, they will be excluded from the scope of Article 101(1) TFEU – a principle otherwise known as the “Albany exception“.

However, EU case law (and application of the resulting rules) remains less clear for the “self-employed” – again owing to the fact that such individuals are, legally speaking, “undertakings” meaning that any collective arrangements they pursue may fall foul of the prohibition on restrictive agreements.

The position of the self-employed was arguably not resolved by a 2014 Court of Justice ruling on national reference from the Netherlands (Case C-413/13 FNV Kunsten). The ruling noted that a provision of a collective employment agreement – concluded by an employees’ organisation in the name, and on behalf, of true (rather than “false”) self-employed services providers who are its members – does not constitute the result of a collective negotiation between employers and employees and therefore cannot be excluded (by reason of its nature) from the scope of Article 101(1) TFEU. This was considered to be the case as, although they perform the same activities as employees, these service providers (in the case in question, substitute musicians) are, in principle, “undertakings” (to the extent they offer their services for remuneration on a given market and perform their activities as independent economic operators in relation to their principal).

Thus the question remains for the Commission – how can this rapidly expanding class of worker (who are not, at least formally, “employees”) benefit from collective engagement with employers whilst having certainty regarding compliance with the competition rules? A number of countries have already taken steps to address this issue. For example, the Dutch competition authority amended its guidance in 2019 to clarify that gig economy workers can collectively negotiate under certain circumstances without breaching competition law. The Australian competition authority has also proposed an exemption for self-employed workers and small businesses.

Commission initiative

The Commission’s preliminary view (informed by input received as part of its public consultation on the “Digital Services Act Package” – section V of the consultation on “Self-employed individuals and platforms“) appears to be that the legal certainty enjoyed by “employed” workers (who benefit from collective bargaining without risk of violating the competition rules) should be formally extended to the self-employed.

To this end, the Impact Assessment describes the Commission’s initiative as “ensuring EU competition law does not stand in the way of initiatives to improve working conditions through collective agreements for solo self-employed where they choose to conclude such agreements, while guaranteeing that consumers and SMEs continue to benefit from competitive prices and innovative business models, including in the digital economy“. In particular, the initiative seeks to achieve this objective by providing legal certainty about the applicability of the competition rules to collective bargaining activities engaged in by self-employed workers in order that these workers can determine “without complex legal or economic analyses” whether such collective arrangements are problematic.

The Impact Assessment details four different policy options being considered in term of the scope of the initiative (and which may ultimately be implemented via a Council Regulation or a Commission Communication). These are as follows:

  • Option 1: all solo self-employed providing their own labour through digital labour platforms (i.e., only individuals providing their own labour through platforms would have access to collective bargaining).
  • Option 2: all solo self-employed providing their own labour through digital labour platforms or to professional customers of a certain “minimum size” (i.e., broader than Option 1 so as to cover traditional professions in the “off-line economy” subject to such individuals not being covered by other specific competition law provisions included in sectoral instruments) – for the purpose of determining the minimum size of the counterparty, the use of the definition/thresholds of small- and medium-sized enterprises could be considered.
  • Option 3: all solo self-employed providing their own labour through digital platforms or to professional customers of any size with the exception of regulated (and liberal) professions (additional consideration would need to be given in the absence of a generally applicable EU definition of regulated/liberal professions).
  • Option 4: all solo self-employed providing their own labour through digital labour platforms or to professional customers of any size (i.e., the widest option in scope and involving no restriction as regards the size of the counterparties in the collective bargaining/agreement and permitting counterparties also to bargain collectively (ensuring that small businesses could maintain enough countervailing bargaining power against solo self-employed negotiating jointly).

The Commission has made it clear that, amongst other things, the initiative would only apply to collective bargaining for the purposes of improving working conditions, including wages. Any negotiations or agreements (collective or otherwise) between self-employed actors in relation to, for example, prices charged to end-customers would not be covered by this initiative and, as such, could in principle still be considered a serious breach of competition law.

Furthermore, the envisaged measures would not introduce any obligation for parties to enter into collective negotiations or to conclude any collective agreements – again, the initiative would simply clarify that “EU competition law would not stand in the way of such agreements where the parties concerned chose to enter into them“.

What’s next?

The Commission’s deadline for initial feedback is 3 February, after which it will conduct an open public consultation (anticipated for spring 2021). Thereafter it is anticipated that the measures will be implemented through a Council Regulation or Commission Communication in the second quarter of 2022.

Interested parties are therefore well advised to consider the impact of proposed changes on their business and to interact actively with this ongoing review – in particular, as part of the more detailed public consultation when launched later this year.

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Workers

Gig Workers United launches new campaign to unionize app-based delivery jobs

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One year after the historic ruling in Ontario that Foodora couriers are dependent contractors, organizers in the Greater Toronto Area are setting their sights on legislative change to improve gig workers’ working conditions.

Announced today, the Foodsters United campaign has been relaunched as Gig Workers United. The name change also comes with a broadened scope, as organizers seek to support all app-based delivery workers in the GTA.

First launched in summer 2019, the Foodsters United campaign fought to unionize Foodora couriers in the GTA with the Canadian Union of Postal Workers. Along the way, it brought about the Ontario Labour Relations Board’s landmark decision in February 2020 that Foodora couriers were dependent — not independent — contractors, which affirmed their right to unionization.

“Legislation has not kept up with the pace of technological change.”

But that win was bittersweet, as Foodora pulled out of Canada three months later. The company cited profitability issues, despite posting surging first-quarter revenues in 2020.

Its parent company, Delivery Hero, subsequently agreed to a $3.46-million settlement with former Foodora couriers in Canada.

“The Foodsters have broken many barriers to become the first app-based workers in Canada to form a union, but the fight doesn’t stop here,” said Jan Simpson, national president of CUPW, in today’s press conference.

Supported by CUPW, Gig Workers United is calling for livable wages, enforcement of workers’ rights and health and safety support. The key, organizers said, is changing labour laws to stop worker misclassification.

“Legislation has not kept up with the pace of technological change,” said Brice Sopher, an organizer and courier with Uber Eats, at the press conference.

“It’s time that … our politicians wake up and make those changes and address them now because an increasing segment of the population is going to be subject to this situation. So if we don’t stop it now, then we’re going to have a much more impoverished population.”

Organizers added that the COVID-19 pandemic has increased the importance of this call for change.
Narada Kiondo, a bicycle courier with a number of food delivery apps, said at the press conference that besides facing a higher risk of infection as a frontline worker, couriers often don’t have access to washrooms. The job is also physically taxing, making all paid sick days important for gig workers, organizers said.

With workplaces contributing to the spread of COVID-19, there have been calls for Ontario to provide paid sick days. But the Doug Ford government has repeatedly put the onus on the federal government, despite federal employment minister Carla Qualtrough saying that a provincial program would not duplicate what Ottawa currently offers.

“We should all be demanding that we be paid better.”

At the same time, some couriers such as those with Uber Eats said they have faced a gradual but significant base-pay cut over the past year, which could go as low as $3.99 per trip. Uber previously told The Canadian Press that the change was made to “better reflect each trip’s total time, effort and distance and include travel to the restaurant.” The company said couriers could turn down trips with prices that are too low for them.

“It’s a major slap in the face for myself and all the gig workers out there who are putting their lives at risk and their health at risk delivering food and groceries while everyone else is being told to stay at home,” said Kiondo.

When asked about the idea of basic income, organizers said it would help on a day-to-day level when coupled with paid sick days. But they view it as a stopgap measure.

“[The industry] is exploitive and extractive,” said Arash Manouchehrian, a delivery courier, at the press conference. “We should all be demanding that we be paid better.”

With its relaunch today, the Gig Workers United campaign coincides with a quickly growing organizing effort around the world by gig workers. For instance, the U.K.’s Supreme Court recently ruled that Uber drivers are workers instead of self-employed contractors. And while the campaign’s current focus is on the GTA, organizers said their ambition is bigger.

“This is an industry problem and it’s a national problem,” said Sopher. “So the scope is ultimately to change the industry and to improve lives for all gig workers going forward. That is our aspiration.”



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Biden directive expands jobless aid to self-employed, gig workers and more

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Unemployed Americans who have turned down job offers because they feared their prospective employers weren’t providing sufficient protection from the coronavirus would qualify for jobless aid under a directive the Labor Department issued Thursday.

The measure would also expand a federal unemployment benefits program, established in last spring’s economic relief package, to cover workers who have lost hours or who were laid off because of the pandemic. It would also cover school employees who lose jobs or work hours because of school closings.

The federal program, known as Pandemic Unemployment Assistance, made the self-employed and gig workers eligible for jobless aid for the first time.

“Until now, unemployment insurance benefits during the pandemic have been too scattered and too uncertain,” said Patricia Smith, senior adviser to the labor secretary. “That begins to change today, with many more workers now eligible for unemployment insurance benefits.”

Speaking to reporters, department officials declined to estimate how many Americans would now become newly eligible for jobless benefits.

The benefits will be made retroactive, officials said. People who applied for unemployment benefits after Dec. 27 can receive retroactive payments back to Dec. 6. Those who applied before then and were turned down can receive retroactive payments dating back to when they first applied.

With unemployed Americans now receiving a $300 weekly federal payment on top of state benefits that average about $320 a week, the retroactive aid could result in significant lump sum payments. The department estimates that states won’t be able to update their jobless benefit systems to include the new criteria until late March, which could mean that the first payments would amount to about four months of benefits.

Workers whose employers have closed because of the pandemic are already eligible to receive jobless aid from the federal program. But workers who were laid off even as their company remained open, such as waiters at a restaurant that stayed open for delivery, weren’t eligible. This directive will now cover those workers, the Labor Department said.

For the unemployed who have turned down jobs out of concern over the coronavirus, applicants will have to state under penalty of perjury that their prospective employer wasn’t meeting state or local guidelines on mask-wearing or personal protective equipment, said Suzi Levine, a deputy assistant labor secretary.

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App-based Delivery Workers of Toronto Unite to Fix the Gig Economy

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TORONTO, Feb. 25, 2021 /CNW/ – The Gig Workers United campaign launched today with a bold scope and agenda for change. Delivery workers say the status quo is simply unsafe and unliveable for those whose jobs are controlled by apps. The workers have come together to call on employers and legislators to make fundamental changes.

“We have to stand up for ourselves – the streets don’t look out for us, the apps don’t look out for us, so we’re looking out for each other and collectively calling out a bad business model,” says Narada Kiondo, one of the courier spokespersons. “The way it is just can’t continue – if the gig economy is going to work for our society than it can’t be based on squeezing delivery workers and restaurants for profit, and dodging our labour standards. And we’re going to persist, and we’ll win, because our bodies and our livelihoods are on the line.”

The roots of this struggle are in experiences including the successes of Justice for Foodora Couriers, which showed over the last two years that collective action in the gig economy is possible, that victories are there to be won, and that the organizing campaign itself makes a real difference in workers’ lives. One year ago, the couriers won the legal right to join a union, and the vast majority voted yes.

Foodora, the employer that was the target of that struggle, is no longer operating in Canada, so the workers have broadened their scope in a new drive to organize delivery workers for all the apps. Working conditions, health issues and risks are common, and many couriers work for multiple apps. Now there is a common home for them to work collectively on their demands.

Jan Simpson, National President, spoke about how CUPW has welcomed the delivery workers into the organization: “The couriers have shown that traditional union organizing is possible in this space. But they’ve gone farther than that, with community-organizing tactics and collective mutual aid. They’ve formed a worker-led organization that we’re proud to support because their fresh energy and ideas are what it takes to improve working conditions and reject silicon valley’s model of exploitation.”

“Our demands are reasonable but our vision is big,” says Arash Manouchehrian, another courier. “We need liveable wages, and transparency on wages and scheduling. We need health and safety protections, we need bathroom access, warm-ups, breaks, all the things that most of our society expects as basics for all workers. We have rights, and it’s up to us to assert those rights until we get the system fixed.”

SOURCE Canadian Union of Postal Workers

For further information: please contact CUPW communications at [email protected] or 613-882-2742

Related Links

www.cupw-sttp.org

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