The emergence of a European right to collective bargaining for the self-employed: an asset for the effectiveness of the right to collective bargaining?

1. This contribution intends to explore the relationship between civil society and the state by focusing on one specific issue: the right to collective bargaining of self-employed workers.¹ The right to collective bargaining for workers who are not considered to be employees under national law, such as freelancers, has been under debate for several years (section 1). This debate took a step forward in December 2021, when the European Commission published draft guidelines (section 2). The text by the European authority brings, both from the point of view of labour law and competition law, interesting developments regarding the complex relationship between civil society and the authorities (section 3). The thesis adopted in this contribution is that competition law is one element of the multiple state interventions necessary for the effectiveness of the freedom of association of workers, while both, by framing the action of companies, contribute to a proportionate exercise of the freedom to conduct business.

Section 1

Self-employed workers at the centre of the challenge of linking collective bargaining rights and competition law

2. When they are not bogus self-employed, the self-employed are subject to competition law. Consequently, Article 101 of the Treaty on the Functioning of the European Union prohibits them from concluding collective price agreements with their principals.² This issue has been on the agenda of the International Labour Organisation (ILO) for the last decade.³ Two European cases in particular illustrate the challenges posed by the articulation between collective bargaining rights and competition law: Ireland and the Netherlands. From 2005 onwards, the Irish Congress of Trade Unions (ICTU) complained to the ILO’s Committee of Experts on the Application of Conventions and Recommendations (CEACR) about restrictions imposed on collective bargaining rights by the Irish Competition Authority.⁴ In addition, the CEACR’s examination of the collective bargaining rights of contract labourers in the Netherlands, in particular those in the arts and entertainment sector, following communications submitted by the Netherlands Trade Union Confederation (FNV) from 2008, raises the same issues as the Irish case.⁵ In both countries, legal debates have led to regulatory interventions. In Ireland, an act amending the Competition Act in 2017 defined which self-employed workers are exempt from the competition rules.⁶ In the Netherlands, the Competition Authority (Autoriteit Consument & Markt) has issued guidelines which aim to determine the extent to which self-employed persons can enter into price agreements. The Competition Authority has, for example, stated that self-employed workers are permitted to negotiate rates in order to safeguard their livelihoods⁷ In addition, regulatory developments have occurred in other EU countries. For example, in April 2021, the Portuguese Competition Authority published a document entitled “Labour market agreements and competition policy”.⁸ This paper deals more broadly with the interplay of competition law and labour market organisation. A similar initiative to clarify the complex links between labour market organisation and competition law also exists in France, through the opinion on the effects on competition of the extension of branch agreements of the French Competition Authority.⁹

3. In June 2020, the European Commission announced its intention to address the issue. On 9 December 2021, the Commission communicated draft guidelines.¹⁰ The draft guidelines also shed useful light on the role of competition law. Indeed, the concept of imbalance of power contained in the draft guidelines is likely to favour the effectiveness of the right to collective bargaining.

Section 2

Presentation of the draft guidelines of 9 December 2021

4. The draft “Guidelines on the application of EU competition law to collective agreements regarding the working conditions of solo self-employed persons” aim to define which workers, although not recognised as employees under national law, can nevertheless collectively negotiate their prices and working conditions with the principal. The European Commission intends to adopt a final version of this text in the second quarter of 2022.
5. The text is in line with the case law of the European Court of Justice in the field of competition law. In this sense, the draft guidelines explain that a self-employed person is not an undertaking if he or she has no real freedom to determine their own course of action on the market¹¹ This formula can be found in several rulings of the European Court of Justice in the field of competition law, such as Viho Europe BV v Commission of the European Communities and Confederación Española de Empresarios de Estaciones de Servicio.¹² The formula is part of an important theory in this area of law, the doctrine of the economic unit. According to this theory, two distinct legal entities can be considered, from the point of view of competition law, as a single undertaking if the relationship between them justifies treating them as a single economic unit. Instead, their relationship will be considered an internal allocation of tasks within a group, without being subject to Article 101 of the Treaty on the Functioning of the European Union.¹³ In other words, the draft guidelines contribute to the development of a European law on collective bargaining for self-employed workers while respecting the internal coherence of a branch of law designed to regulate and control the action of companies.
6. In their application of the concept of the undertaking specific to competition law, the draft guidelines identify three types of workers who, although they are not considered employees under national law, may collectively negotiate prices with their principal. Firstly, these are self-employed people who derive 50% of their income from their relationship with a principal. In this respect, the proposal is more favourable than a Spanish law in a related area, which provides that a self-employed worker is considered to be such if he or she invoices more than 75% of his or her sales to a single client.¹⁴ However, it raises concerns if a self-employed person earns the vast majority of their income from a limited number of clients. Secondly, the draft guidelines explain that self-employed workers who work side-by-side with employees, such as freelance musicians integrated in an orchestra with employed musicians, may conclude agreements with their principal on prices and working conditions.¹⁵ Finally, the draft guidelines provide that all workers who offer their work through a digital platform fall outside the scope of Article 101 of the Treaty on the Functioning of the European Union when they conclude agreements that by their nature and purpose aim at improving working conditions.¹⁶

Section 3

The imbalance of power: a concept that brings labour law and competition law closer together

7. In addition to the threefold typology set out above, the draft guidelines establish a further category for the benefit of workers who, although not considered employees under national law, may collectively negotiate their prices and working conditions with their employer.¹⁷ These are situations where there is a clear imbalance of bargaining power between the individual self-employed and the principal. In this case, the European Commission authorises workers with self-employed status to collectively negotiate agreements with the principal. This complementary category is interesting because it does not derive principles discussed hereabove from the strict application of competition law. On the other hand, it recognises the role of collective bargaining: collective agreements are a legitimate means to correct the imbalance in bargaining power between the two sides, which is necessary for the conclusion of employment contracts.¹⁸
8. This additional category is, however, not completely alien to competition law. In several EU countries, such as Germany, France or Belgium, competition law now contains provisions to prosecute abuses of a superior bargaining position, e.g. when a dominant company imposes prices on its customers or suppliers. These are article L. 420-2 of the French Code de commerce or Article IV.2/1 of the Belgian Code de droit économique.¹⁹ In Belgium, the courts have already used the concept of the position of economic dependence of a co-contractor.²⁰ These legal and jurisprudential developments are the focus of attention of a doctrine attempting to systematise the concept of abuse of bargaining power.²¹ In a case involving Article IV.2/1 of the Belgian Code of Economic Law, decided in Brussels on 16 March 2021, it is stated that the absence of an alternative on the part of one of the parties to the contract gives the other party the power to impose conditions that are not in line with normal market conditions. In this case, a company active in diamond cutting needed the services of a specific banking company due to the particular structure of the value chain. The banking company refused to offer the requested services. The refusal was made possible, according to the court, by the lack of an alternative on the part of the co-contractor. It constituted, according to the court, an abuse of a position of economic dependence. For this reason, the court ordered the stronger contractor to provide certain services, under penalty of a fine.²² In this case, the subjection of one of the parties vis-à-vis the other can be compared with another form of domination: the one exercised by a principal over a self-employed person.
9. In an emerging way, competition law is sometimes seen as an instrument through which economic actors are given bargaining power in a given market.²³ For example, following Britton-Purdy, Singh, Kapczyncki and Rahman, where employers have pervasive monopsony power, we can expect implications for wages and working conditions that lend credence to new arguments for antitrust intervention.²⁴ McCrystal and Hardy show that, in Australia, competition law already allocates special bargaining rights to small firms.²⁵ Other authors do not hesitate to highlight the common characteristics of both fields, explaining that collective bargaining encompasses competition law because it determines the way in which trade can take place.²⁶ According to this view, the role of competition authorities is to allocate co-ordination rights and, subsequently, because of their strong investigative powers, to verify their effectiveness.
10. In this respect, and by analogy with the way the Brussels court ruled on 16 March 2021, one can imagine a workers’ union demanding, together with a self-employed person who is an actor of the collective bargaining, that the strong party to the contract continues the contractual relationship with the self-employed, since the termination of it in this case undermines the effectiveness of the right to collective bargaining. This hypothesis combines two different interventions in favour of contractual freedom: freedom of association and competition law. McCrystal and Hardy pointed out that protections may include protection against arbitrary termination.²⁷ Such a claim can be related to the protection against measures equivalent to dismissal provided by Article 18 of the Transparent and Predictable Working Conditions Directive, which includes certain self-employed workers within its scope.²⁸ More classically, a self-employed worker could have recourse to Article IV.2/1 of the Code of Economic Law if the principal imposes abnormal contractual conditions. According to the doctrine on this provision and in line with the draft guidelines, the judicial or administrative authority (the competition authority) would not only have to examine whether there is a clear imbalance of power and to detect the possible presence of abnormal market conditions, but also to take into account the effectiveness of the right to collective bargaining in order to remedy this.²⁹ If labour power is not in a position to remedy the imbalance of power, competition law would be an appropriate complementary answer.³⁰
11. In conclusion, the European Commission’s draft guidelines provide legal certainty in an area that has been on the agenda for the past fifteen years. Thanks to the Commission’s draft, many civil society organisations will be able to work more confidently to ensure the effectiveness of freedom to contract between workers and the clients to whom they provide work. The judicial and competition authorities, for their part, may be led to monitor more concretely the effectiveness of the right to collective bargaining, jointly to the scrutiny of abuses of superior bargaining position. More generally, the Commission’s action reminds us that European competition law has its roots in a context which perhaps has similarities with the contemporary era: that of significant technical progress coupled with the desire to promote both economic freedom and protection against exploitation.³¹ However, it does not guarantee the fundamental right that underpins the bargaining power of those that only have their work to provide : the right to strike.

1. For an account of how this right is enshrined: P. Pecinovsky, “Het recht op collectief onderhandelen voor economisch afhankelijke zelfstandigen”, T.S.R.-R.D.S. , 2019, 529.
2. C. Hießl, B. Waas, Collective Bargaining for Self-Employed Workers in Europe, The Hague, Kluwer Law International, 2021.
3. International Labour Organization Committee on the Application of Standards, Individual case, Discussion: 2016, Publication: 105th Session ILC (2016), Right to Organise and Collective Bargaining Convention, 1949 (No. 98) – Ireland (Ratification: 1955).
4. X. Beaudonnet, “Le droit de négociation collective des travailleurs considérés comme independants au regard des normes de l’Organisation internationale du travail”, in D. Dumont, A. Lamine, J.-B. Maisin (eds.), Le droit de négociation collective des travailleurs indépendants, Brussels, Larcier, 2020, 73.
5. Ibid, 77.
6. Competition (Amendment) Act 2017, 7 June 2017, No 12 of 2017, An Act to amend the Competition Act 2002 to provide that section 4 of that Act shall not apply to collective bargaining and agreements in respect of certain categories of workers; and to provide for related matters.
7. See mainly: Autoriteit Consument & Markt, Leidraad Tariefafspraken zzp’ers, July 2020.
8. Autoridade da Concorrência, 2021.
9. Avis 19-A-13 du 11 juillet 2019.
10. Draft Guidelines on the application of EU competition law to collective agreements concerning the working conditions of self-employed workers without employees, COM (2021) 8838 Final.
11. Point 22 of the draft guidelines.
12. CJEU, 24 October 1996, Viho Europe bv v. Commission, Case C-73/95, ECLI:EU:C:1996:405; CJEU, 14 December 2006, Confederación Española de Empresarios de Estaciones de Servicio, Case C-217/05, ECLI:EU:C:2006:784
13. CJEU, 24 October 1996, Viho Europe bv v. Commission, Case C-73/95, ECLI:EU:C:1996:405 ; J. Faull, A. Nikpay, The EU Law of Competition, 3^e ed., Oxford, Oxford university press, 2014, 197; Van Bael & Bellis, Competition Law Of The European Community, 5^e ed., New York, Kluwer Law, 2010, 22; L. Vogel, European Competition Law, 2^e ed., Paris, Lawlex / Bruylant, 2018, 55.
14. Ley 20/2007, de 11 de julio, del Estatuto del trabajo autónomo.
15. The example comes from the judicial saga which, together with the Irish case mentioned above, brought the issue to light: C.J.U.E. 14 December 2014, FNV Kunsten Informatie en Media, Case C-413/13, ECLI:EU:C:2014:2411.
16. This part of the draft guidelines is part of the Commission’s initiative to improve the working conditions of people working via digital platforms, of which the draft directive on the improvement of working conditions in the context of work via a platform is part (COM (2021) 762 FINAL).
17. Points 32 et seq. of the draft guidelines.
18. About the role of collective bargaining: L. François , Théorie des relations collectives du travail en droit belge, Brussels, Bruylant, 1980, 6-10. M. Jamoulle explains and refutes the theory following which collective bargaining is an expansion of contractual freedom. However, the basis, according to the author, of collective regulation “by a particular empowerment of the social legislator” refers to the dialectic between the associations and the State, and to the general economy of the Civil Code which the latter is trying to achieve. M. Jamoulle, Le contrat de travail, Tome I, Faculté de Droit, d’Economie et de Sciences sociales de Liège, 1982, 63-64. About the Civil Code and its relationship with the “civil society”: D. Singh Grewal, “The Legal Constitution of Capitalism”, in H. Boushey, J.B. De Long, M. Steinbaum, Th. Piketty, After Pikkety: The Agenda for Economics and Inequality, London, Harvard University Press, 2017, 471-490, 479-483.
19. About article L. 420-2 of the French du Code de commerce, see E. Claudel, “L’abus de dépendance économique : un sphinx renaissant de ses cendres ?”, RTDcom, 2016, 460.
20. Trib. entr. Antwerp (div. Tongeren), 16 April 2021, R.D.C.-T.B.H. 2021/5, 646-653; Tribr. entr. Gand, 28 October 2020, R.D.C.-T.B.H. 2021/4, 514-517; Pres. Trib. entr. Brussels, 16 March 2021, Competitio, 2021, book 2, 187; Pres. Trib. entr. Brussels, 11 February 2021, Competitio, 2021, liv. 2, 166; Pres. Trib. entr. Ghent (div. Ghent), 28 October 2020, Competitio, 2020, book 4, 369; Trib. entr. Brussels (ref.), 15 October 2020, Competitio, 2021, book 1, 58.
21. S. Lee, “Abuse of Economic Dependence in Competition Law From a Comparative Perspective”, ASCOLA Asia Regional Workshop 2022, 5 January 2022.
22. Points 40 to 49 of the judgment.
23. S.Paul, “Antitrust as Allocator of Coordination Rights”, U.C.L.A. Law Review, 2020, No. 378, 378-429.
24. J.Britton-Purdy, D. S. Grewal, A. Kapczynski, K. Rahman, “Building a Law-and-Political-Economy Framework: Beyond the Twentieth-Century Synthesis”, Yale Law Journal, 2020, 182
25. The authors explain that under the Competition and Consumer (Class Exemption – Collective Bargaining) Determination 2020, a group of franchisees may collectively bargain with their franchisor. S. McCrystal, T. Hardy, “Filling the Void? A Critical Analysis of Competition Regulation of Collective Bargaining Amongst Non-employees”, The International Journal of Comparative Labour Law and Industrial Relations, 2021, 37(4), 355-384, 371-375.
26. N. Tankus, L. Herrine, “Competition Law as Collective Bargaining Law”, Labour in Competition Law, Cambridge University Press, forthcoming, available at SSRN: https://ssrn.com/abstract=3847377.
27. S. McCrystal, T. Hardy, ibid, 361.
28. Directive (EU) 2019/1152 of the European Parliament and of the Council of 20 June 2019 on transparent and predictable working conditions.
29. On the abuse of economic dependence in Belgium: D. Philippe, G. Sorreaux, “L’abus de dépendance économique, les clauses abusives et les pratiques du marché déloyales entre entreprises : premières regards sur la loi du 4 avril 2019”, D.A.O.R. 2019/3, number 131, 22-51.
30. E. A. Posner, G. Weyl, S. Naidu, “Antitrust Remedies for Labor Market Power”, Harvard Law Review, 2018, 536-601.
31. D. Gerber, “The Origin of European Competition Law in Fin-de-Siècle Austria”, The American Journal of Legal History, 1992, Vol. No. 36, No. 4, October, 405-440; D. Gerber, “Implementing Competition Law in Asia: Using European and US Experience”, 2004, https://scholarship.kentlaw.iit.edu/fac_schol/234 (15 April 2021), 163.