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Collective bargaining for self-employed workers in the UK and the new EC Guidelines

November 3, 2022 -

Art. 101 TFEU remains embedded in UK law even after BREXIT. Like many other States the domestic legislation mirrors precisely the text of Art. 101. However, unlike some other EU countries, by and large competition law has not been used to suppress collective bargaining by the self-employed in the UK, though it has occasionally been threatened in some industries.  

In the field of collective bargaining, the much more significant problem for the UK self-employed is one shared with UK employees: the dramatic contraction of collective bargaining coverage. At the beginning of the Second World War about 50% of the UK workforce was covered by collective bargaining. By 1950 total coverage had risen to around 70% and this figure remained relatively stable until it began to rise in the second half of the 1960s. By 1970 coverage was at about 78%. By 1975 it had risen to a peak of about 85%. The UK was then amongst the European countries with the highest levels of collective bargaining coverage.1

However, after the election in 1979 of a government under Mrs Thatcher committed to neo-liberal doctrine in which the presence of effective trade unionism and collective bargaining was considered to ‘distort the labour market’, measures were taken to cause the percentage of workers covered to slide inexorably downwards. The destruction of collective bargaining coverage was achieved by a combination of means, both legal and practical. 2 The downwards spiral of collective bargaining coverage barely paused in 2000 when a Labour government introduced a statutory recognition machinery 3 which subsequently neither halted nor slowed the decline in collective bargaining coverage.4 

In consequence of 45 years of government policy against collective bargaining, the latest figure for coverage is the Labour Force Survey for 2019 at 26.9% of UK workers covered. Four years later, a more realistic estimate is probably around 23%.  

In relation to pay, this figure must be significantly reduced since most workers in the public sector, though they nominally retain collective bargaining, are not permitted to bargain collectively in relation to wages which are instead set by Pay Review Bodies or overridden by public sector pay freezes. Many self-employed workers do not have collective bargaining coverage and amongst those workers (both employees and self-employed) who have achieved collective bargaining, there are many who do not have the industrial strength to negotiate wage rates but are merely the subject of consultation (if any) over pay. 

One class of self-employed workers which has had very little success in achieving collective bargaining whether over pay or more widely are the gig workers. They are generally lacking in the industrial power to compel collective bargaining. They have therefore sought to utilise the statutory mechanism referred to above to compel collective bargaining. This has proved problematic because that statutory right is confined to ‘workers’, the statutory definition of which (for these purposes) permits employers to devise contracts which purport to exclude them from the definition.  

One such case concerns Deliveroo riders.5 The statutory definition requires the contract to contain an obligation on the putative worker ‘to do or perform personally any work.’ This enabled Deliveroo to seek to prevent the riders’ union from admittance to the statutory recognition machinery by inserting a clause in each rider’s contract permitting the rider to engage a substitute. Needless to say, with payment by way of a small fee for each delivery, the right was infrequently used: ‘substitution is rare’, only ‘a few, if that, riders use substitutes’, ‘most riders do not use a substitute’, and ‘the vast majority of riders see no point in engaging a substitute’.6

The judicially approved approach of Courts to the construction of the statute and to such contracts has broadened over recent years7 but this has not so far proved enough to secure collective bargaining for the riders. However, having failed in the Court of Appeal, the Supreme Court has granted permission to appeal and the case is to be heard in 2023.  

In fact, the union’s argument is based not on the interpretation of the domestic statute but on the proposition that, since Art.11 European Convention on Human Rights guarantees workers the right to bargain collectively,8 for that right to be meaningful in the UK, a union must have access, under conditions not at variance with Art.11, to the statutory recognition machinery.9 Accordingly, for this purpose ‘workers’ must be defined in accordance with ECHR law,10 regardless of the UK statutory definition. 

It is in that regard that the European Commission’s Guidelines on the application of Union competition law to collective agreements regarding the working conditions of solo self-employed persons11 are highly significant. It is true that competition law is not relevant to the Deliveroo case. Neither, strictly speaking, is EU law. However, it was remarkable that the Court of Appeal in Deliveroo found a CJEU case on the Working Time Directive, Yodel12 to be particularly persuasive in leading to its conclusion that the substitution clause was not compatible with the concept of ‘worker’ in ECHR law! The Guidelines, however, by showing a wider notion of the concept of ‘worker’ in a dimension of EU law focussed on trade union rights may help to moderate this curious conclusion.  

For the purposes of protecting collective bargaining from EU competition law, the Guidelines in effect displace the CJEU’s current strained confinement of the notion of ‘worker’ to employees and the ‘false self-employed’.13 Instead, the right to bargain collectively (free from the intrusion of competition law) is extended by the Guidelines, to ‘solo self-employed persons’ and apply thus:14

‘solo self-employed person’ means a person who does not have an employment contract or who is not in an employment relationship, and who relies primarily on his or her own personal labour for the provision of the services concerned. 

The inclusion of the word ‘primarily’ in relation to personal labour must surely permit the rare use of substitute labour by a small minority of the workforce without the consequence of denying the whole workforce the right to bargain collectively.  

Whether this will resolve, or at least assist, the Deliveroo riders’ claim to the right to bargain collectively with their employer which the latter has consistently denied them, remains to be seen. I will report in due course. 

  1. Bargaining coverage in the 1960s and 1970s was almost exclusively by sectoral collective agreements: ‘Joint Industrial Councils’ (or their equivalent) and Wages Councils. Enterprise bargaining was not very significant before 1950 (except in some particular industries) but grew in relevance in the 1960s. Furthermore, most enterprise bargaining was in workplaces covered by sectoral bargaining and sought to improve upon it. By 1970 only 9% of workers were covered only by enterprise bargaining.
  2. The Wages Councils legislation which legally compelled collective bargaining was repealed (Wages Councils covered, by 1948, 18% of the workforce – 3.5 m workers); the Fair Wages Resolutions of the House of Commons which required that contractors and sub-contractors on public contracts (which represented a significant proportion of GDP) observed relevant collective agreements (public procurement) were revoked; legislation imposing extensive restrictions on industrial action severely constrained trade union power to maintain (still less to extend) collective bargaining on a sectoral or even enterprise level basis, the most significant being the absolute prohibition on all forms of secondary action (s.224, Trade Union and Labour Relations (Consolidation) Act 1992) since unions lost the power to compel the extension or acceptance of collective bargaining by applying pressure to employers where they were strong to those where they were not; the legal right to apply to seek extension of the application of an existing collective agreement to employers who were not party to it was repealed; the duty to promote collective bargaining was removed from the government Advisory, Conciliation and Arbitration Service; both the government and media encouraged derecognition and the ending of sectoral and enterprise agreements by employers starting with the media corporations (see for example, the facts leading to Wilson and Palmer v UK [2002] ECHR 552); privatisation of services in the public sector, particularly by outsourcing led to the eroding of collective bargaining coverage in the outsourced operations (notwithstanding the Transfer of Undertakings (Transfer of Engagements) Regulations; fragmentation of employers into separate businesses and the extensive use of outsourcing had the same effect in the private sector; many manufacturing enterprises and, to a lesser extent, service activities where collective bargaining had been long established disappeared to less developed countries with cheaper labour, less powerful unions, and legal regimes which permitted greater exploitation.
  3. Now Schedule A1, Trade Union and Labour (Consolidation) Act 1992.

  4. The machinery has many flaws amongst which are: recognition is only granted in respect of issues confined to pay, hours and holidays; a representative union can be blocked from applying for recognition by the simple device of an employer granting collective bargaining confined to peripheral matters which do not include pay, hours and holidays to a union with no or next to no members (R(NUJ) v CAC, Sec. of State, MGN Ltd, BAJ [2006] ICR 1; IRLR 53; R (Boots) v Central Arbitration Committee, PDAU [2017] EWCA Civ 66, [2017], [2017] IRLR 355); collective bargaining conferred under the scheme is restricted to a single direct employer, it therefore cannot achieve sectoral bargaining or even collective bargaining with the de facto  employer but only the de jure employer (R (on the application of the Independent Workers Union of Great Britain) v Secretary of State for Business, Energy and Industrial Strategy [2021] EWCA Civ 260, [2021] IRLR 363); there is no legal mechanism to enforce the collective agreements achieved under it the recognition scheme.

  5. In IRLR 796.which I have the honour to lead the legal team on behalf of the union: R (on the application of the Independent Workers Union of Great Britain) v Central Arbitration Committee, Roo Foods ltd [2021] EWCA Civ 952, [2021]
  6. Court of Appeal judgment at [24], referring to paragraphs 76, 78 and 79 of the first instance judgment,
  7. Autoclenz  v Belcher [2011] UKSC 41; Pimlico Plumbers v Smith [2018] UKSC29; Uber v Aslam [2019] UKSC 29.
  8. Demir and Baykara v Turkey (2009) 48 EHRR 54.
  9. Pharmacists Defence Association Union v Boots Management Services Ltd [2017] EWCA Civ 66, IRLR 355; Vining v LB Wandsworth [2017] EWCA Civ 1092
  10. Sindicatul Pastorul cel Bun v Romania [2014] ECHR 646; Manolo v Romania [2015] ECHR 575. The European Social Charter, like the ILO, already accepts that the self-employed are entitled to bargain collectively: ICTU V Ireland Complaint No.123/2016, 12 September 2018.
  11. C(2022) 6846 final.
  12. B v Yodel Delivery Network, C-692/19. The case took the form of a ‘reasoned order’ without the benefit of submissions from the parties, the Commission or Member States, and without the Opinion of the Advocate-General. It was not considering the concept of ‘worker’ from the perspective of fundamental trade union rights and it was a decision made without any reference whatsoever to ECHR law.
  13. Albany International BV v Stichting Bedriffspensioenfonds Textielindustrie (1999) C-67/96, 21 September 1999; Pavlov v Stichting Pensioenfonds Medische Specialisten C-180/98, 12 September 2000; FNV Kunsten Informatie en Media v Staat der Nederlanden -413/13, 4 December 2014.
  14. Para 1(2)(a). The Guidelines also are, amongst other things, specifically addressed to digital labour platforms such as Deliveroo’s: para 1(2)(d). The justification for the inclusion of the solo self-employed is their likeness to employees; see 3.1(23): ‘Solo self-employed persons who provide their services exclusively or predominantly to one counterparty are likely to be in a situation of economic dependence vis-à-vis that counterparty. In general, such solo self-employed persons do not determine their conduct independently on the market and are largely dependent on their counterparty, forming an integral part of its business and thus an economic unit with that counterparty. In addition, such solo self-employed persons are more likely to receive instructions on how their work should be carried out.’ See also 4.1(33) on the relevance of lack of bargaining power. Furthermore, in relation to those working through digital platforms which, at the request of customers, organise the work of the worker (see 3.3(30), the Guidelines contains the following (at 3.3 (28)): ‘Solo self-employed persons may be dependent on digital platforms, especially for the purpose of reaching customers, and may often face ‘take it or leave it’ work offers, with little or no scope to negotiate their working conditions, including their remuneration. Digital labour platforms are usually able to unilaterally impose the terms and conditions of the relationship, without previously informing or consulting solo self-employed persons.’

About the author

John Hendy

Lord John HENDY KC is a barrister in London, specialising in trade union law, having appeared in most of the UK's leading collective labour law cases in the last 36 years. The Legal 500, 2015 describes him ‘One of the best advocates at the Bar; supreme in the field of collective labour law.’ John has appeared in the ECtHR and in the CJEU. He is Chair of the Institute of Employment Rights and President of the International Centre for Trade Union Rights. He is an honorary professor in the law faculty of University College, London. You can read John’s full bio online here.

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