On 9 December, the European Commission published draft Guidelines on the application of EU competition law to collective agreements on the working conditions of solo self-employed people providing services. The draft Guidelines are the product of an initial impact assessment published this time last year and a subsequent consultation with stakeholders from March to May. They are wide in scope, defining solo self-employed people as “persons who do not have an employment contract or who are not in an employment relationship and who rely primarily on their own personal labour for the provision of the services concerned”. The practical relevance of the Guidelines is that solo self-employed people now have the certainty that they can discuss and agree on collective actions essentially as if they were employees. Put bluntly: a “union” of solo self-employed persons is not a cartel.
The draft Guidelines address the issue that, although collective agreements are usually an important means of protecting and improving working conditions for employees, individuals who work completely on their own and do not employ others risk infringing Article 101 of the Treaty on the Functioning of the European Union (TFEU) if they collectively negotiate their working conditions. Article 101 is a competition measure superficially unrelated to employment or the workplace, but which could have inadvertent reach into this arena in those circumstances. It prohibits as anti-competitive “all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member states and have as their object or effect [so NB no intention needed] the prevention, restriction or distortion of competition within the [EU] internal market”. The concern was that if material numbers of sole practitioners agreed together not to charge less than certain rates for certain jobs, that could be seen as limiting or distorting the open market for those services.
To address this, the draft Guidelines clarify that, in certain circumstances, solo self-employed individuals are to be treated as workers, rather than undertakings, which takes them outside Article 101 TFEU. By reference to CJEU case law, the Commission identified three situations in particular in which solo self-employed persons would be treated as workers for the purpose of any collective agreement and so not be caught by Article 101:
- Economically dependent solo self-employed persons who provide their services exclusively or predominantly to one counterparty (i.e. where they earn at least 50% of their total annual work-related income from a single customer);
- Solo self-employed people working “side-by-side” with workers, who perform the same or similar tasks as workers for the same counterparty; and
- Solo self-employed persons working through a digital labour platform, i.e. any natural or legal person providing a commercial service at a distance though electronic means, at the request of the recipient of the service and involving the organisation of work performed by individuals, irrespective of whether that work is performed online or in a certain location.
Further, the draft Guidelines explain that the Commission will not intervene under Article 101 TFEU against collective agreements concluded by solo self-employed individuals where they are otherwise in a weak bargaining position as regards significantly influencing their working conditions. This includes collective agreements concluded by solo self-employed persons:
- with counterparties of a certain economic strength, such as when they represent the whole sector or industry, or their annual aggregate turnover exceeds €2m or their staff headcount exceeds 10; and/or
- pursuant to national or EU legislation, such as when a national legislator has explicitly granted solo self-employed people the right to collectively bargain or excluded that right from the scope of national competition law, or collective bargaining by authors and performers under the Copyright Directive.
The draft Guidelines come as part of a set of measures proposed by the European Commission to improve working conditions in platform work and to support the sustainable growth of digital labour platforms in the EU. The other measures proposed by the European Commission are a Communication, explaining the EU’s approach and measures on platform work, and a Directive on improving working conditions in platform work.
The consultation on the Guidelines is open until 24 February 2022. The Commission has stated that it will assess stakeholders’ input with the aim of publishing the finalised Guidelines in the second quarter of 2022, together with an impact assessment report.
Even though the draft Guidelines strictly speaking limit the scope of competition law, they are further evidence that competition regulators across the EU are looking more closely at employment relationships and similar arrangements and how they fit into the general competition law framework. Please also see in this respect our previous blog post on anti-competitive recruitment practices.