Keywords

Premise

In the traditional perspective of labour law, subordination is the necessary prerequisite for accessing social protection and labour rights. Underlying this vision is the idea that subordination is a concept that expresses the axiological dimension of labour law to the extent that it refers to an asymmetrical contractual relationship that must be rebalanced in favour of the weaker party. Self-employment, on the other hand, would be the expression of a non-asymmetrical relationship between the parties, and therefore would not need any heteronomous rebalancing intervention. Using a modelling of the institutional economy, to which I will return shortly, we could say that while self-employment is a “market relationship”, the employment relationship is a “hierarchical relationship”.

I would like to put forward a different vision. Without denying that labour law has its traditional basis in subordination, I think that labour law is a much broader and more complex field, which must also include self-employment in its various forms and articulations. The juridical construction, founded on an oppositional dualism, suffers from the progressive indistinction of work, its being part of a “social space” where the different forms of work are placed along a continuum rather than on opposite and non-communicating spheres. Those opposing legal categories thus show all their inadequacy: on the one hand, they conceal the contradictions of the regulatory system in its aspiration to implement social justice, and, on the other hand, they distort the real forms occupying the social space of work in general.

First of all, we cannot exclude within the juridical-contractual dimension of self-employment, the dimension of power and heteronomy, that is, of the directive function in the broadest sense, connected to the valorization of capital (Perulli 2022). With reference to the Italian legal system, such elements are the following: (a) the presence of ius variandi (the power to modify the object of the obligation) within the managerial power (as the power to conform the work performance); (b) the presence of “instructions” in the mandate, agency, shipment contracts; (c) the general principle common to every performance of facere stating that the creditor’s power of will and choice guides the action of the debtor; (d) the “power” of coordination in contracts for continuative and coordinated services (art. 409, n. 3, code of civil procedure) such contract typology has led to the definition of “para-subordinated” work; and (e) the power to organize the “collaborations organized by the client” (art. 2, legislative decree n. 81/2015).

Furthermore, the dimension of the imbalance of power is also expressed in forms other than the power of the employer vis-à-vis the employee. However, such forms are no less meaningful and conditioning the social forms of self-employment “entangled” in the capitalist production relations. Refer, for instance, to the power to impose commercial or financial policies, as it happens in the franchising contract, or to the clauses within the commercial distribution sector, which impose through the monopolist supplier the sales prices and commercial premises, hence, the condition of “professional subordination” of self-employed worker.

Finally, the “economic dependence” increasingly emerging as a connotation of the new generation self-employment increases within supply chains (Perulli 2011). However, this doesn’t happen because dependence is inherent to the nature of the contract—which actually should exclude it—but as it derives from the deliberate will of the stronger party and/or from market conditions, which force the self-employed worker to operate on a single-client basis. This “economic dependence” constitutes, as it is well known, one of the main justifications for the transmigration of social protections from the sphere of employment towards self-employment in many EU countries,Footnote 1 and beyond.

In short, my thesis is that labour law is, and above all must be, a law related to work in general. It is therefore necessary to overcome the binary system in which all social guarantees are in the field of subordination and no social protection is in that of self-employment.

I will use four arguments to support my thesis: a sociological argument, a historical-juridical argument, an economic argument, and a comparative argument. These arguments have different disciplinary bases and have different functions, but they converge in the belief that labour law is currently, and should be in the future, the law of the work “in general” and not only that of employment.

Sociological Argument

The sociology of labour has for some time been analysing the characteristics of the new self-employment, which is defined as new generation or “second generation” to distinguish it from traditional self-employment, that is the typical liberal professions, such as lawyers, doctors, and architects, and, on the other hand, the manual independent work of the pre-capitalist tradition, that of small artisans and traders (Marx 1964). The second-generation self-employment is essentially the result of the great processes of outsourcing of production that characterized the end of the last century, with the transition from Fordism (with the vertically integrated company) to post-Fordism (with companies scattered throughout the territory, industrial districts, the network company, outsourcing). Actually, this second-generation self-employment seems to follow a paradigm which goes back to the German sociology of the Weimer period, which in the twenties and thirties analysed the phenomenon of self-employment when large multinationals began to use new skills in the fields of marketing, advertising, human relations, public relations, and so on. These workers were not employed but self-employed. The sociology of the time, of Marxist inspiration, envisaged a destiny of “proletarianization” of independent work (i.e. a tendency of middle class to gravitate towards proletariat) thus leading the way to the proletarianization of self-employed workers (defined as Proletaroiden) (Bologna 2021). However, it is mostly Braverman’s analysis in the middle of the 1970s to conceptualize the passage of the productive middle classes, self-employed workers, traders, professionals, artisans, into the sphere of the “working class”, as a characteristic of monopoly capitalism. Like the working class, the middle-class category does not have economic and employment independence; it is “employed” by capital, and in order to survive it must incessantly renew its work for the capital. In the wake of the Bourgeois-Capital relationship described by Kojève, self-employed workers now work for the capital and are themselves part of the class that embodies the capital (Kojève 1980). This means the passage from self-employment, placed even outside the distinction between productive and unproductive work, to capitalist work: the capitalist mode of production has subordinated to itself all forms of work, and by now all work processes are involved with capital, leaving behind them their own toll of surplus value (Braverman 1974). In this transformation we can find the underlying pathology of contemporary humanity, subjected to productive rationality and to the processes of capital accumulation, with no more exceptions: with a semblance of pertaining to an independent workforce, the self-employed worker moves towards the condition of subjugation, with the false awareness (which today characterizes the “neo-plebs”, Perulli 2021b) of being an independent subject of “one’s” work.

The great processes of outsourcing that characterized the passage of the millennium and, subsequently, the advent of a project-based capitalism have continued this path, entailing the relational contestation of personal skills and the independence of subjects. Rather than a proletarianization of self-employment, it was a continuous extraction of surplus value from forms of self-employment integrated into productive processes guided by cognitive capital, where the subordination of the worker to the employer is replaced (but in fact maintained) through a contract for the supply of services regulated by commercial law. These self-employed workers now fully participate in what Marx called the “misfortune” of being a productive worker. In its dissimulation, the juridical-capitalist system claims to have transformed the (“adjectives-less”) “worker” into an entrepreneur of him/herself, not participating in capitalist practices under the pressure of constraints or external stimuli, but by virtue of the strength of one’s own independent motivation to result, to performance.

In this ambiguous valorization of people’s self-realization, we find one of the most acute paradoxes of neoliberal capitalism. Self-employment accentuates its character of work “in production”, integrated into the production processes of others, coordinated and/or organized within spaces of fictitious freedom, economically dependent, subjected to excessive demands and insecurity, subsumed in a sphere of social de-solidarization. As if to say, on the one hand, that the scope of self-employment shifts from being a free space of self-organization to being eminently governed, “programmed”, coordinated, aligned with “projects” which the sphere of production uses to satisfy the homo oeconomicus fundamental needs; on the other hand, we might say that in this reference of self-employment to the projects of the total market, the links connecting all forms of work (employed and self-employed) to social citizenship are being deconstructed.

In this process, we can now see the extreme negation of the social value of self-employment, which can be found both in the gradual decrease in professional work and in the work contract in favour of a rampant recourse to the animal laborans, and in the activity of “dismantling of labour law”, in the name of flexibility, suited to the instability of markets and the volatility of goods and services. Labour law itself, in its collective social components, has attempted to defend its traditional core, without understanding that the animal laborans could also be found into the sphere of the new generation self-employment, in the sectors of logistics and transport, of services, of care-giving work, and in the various fields connected to industrial work (Perulli 2002).

The rhetoric upon self-employment, intended as a positive tendency of the post-industrial society to take advantage of the energies of subjects earning high incomes and independently providing for their own social security needs, is therefore partial, if not mystifying. The new professional self-employment, generated by the outsourcing processes in addition to the effects of cognitive capitalism, is matter-of-factly characterized by conditions of economic dependence. While it is true that the new sectors of the knowledge economy and digital platforms are creating new opportunities for self-employment, it must be recognized that they are often characterized by insecurity and income discontinuity, with very little or no chance to have any social protection. Consequently, new labour law policies aimed at building social protections linked to personal work in favour of others should be advocated for, regardless of the contractual form and regardless of its attributability to the legal category of employment.

At the same time, many second-generation self-employed workers (knowledge workers, intellectual workers, freelance workers, etc.) claim their condition of independence, do not want to be classified as employees, and express their subjective propensity not to be employees. Many sociological researches confirm this subjective diversity of the new self-employment and disprove the hypothesis of their forced proletarianization (and their subsumption in the category of employees); obviously this does not mean that such workers should not be re-qualified as subordinate workers if they are in fact “false” self-employed). However, these analyses highlight at the same time the social need for protection of these workers and the lack of social protection for self-employed workers, and that this lack of basic protection often becomes an obstacle for people to pursue this form of independent activity. Sociological analysis on new generation self-employment represents a picture of a regulatory deficit of social protection for weak, economically dependent self-employed workers with low and intermittent incomes, without social safety nets (the COVID-19 pandemic has highlighted this lack of social protection). Such workers often lack adequate union or collective representation, are far from fully realizing their personality with strong social ties, and are unable to satisfy their need for social “recognition”, a vital source for their identity and existence.

Historical Argument

Concerning history, we are led to believe that labour law was first conceived with subordination, that is, with the creation of an employment contract. However, the matter is much more complex. In reality, social legislation came before the employment contract and does not only concern those relationships that today would be considered subordinate but also self-employment relationships. In the continental tradition the service performed for others has for centuries found its place in the context of the “locatio et conductio”. While in the proto-capitalist Anglo-Saxon world it was administered by the kind of “labour code” represented by the Statute of Artificiers of 1563 and from the Poor Law system. These laws were independent from contractual “types” and referred both to farmers and to artisans due to the universal obligation to work on the part of all those who were able to work.

For a long time, the legal perception of work reflected indistinct and undifferentiated forms of activity in favour of others, which find their basic paradigm in the scheme of the lougae d’ouvrage and the mandate: faire quelque chose pour autrui (articles 1710 and 1784 Code Nap.) (Troplong 1841). The preparatory works of the Napoleon Code show that workers are compared to minors, to servants, placed next to ancient and independent work activities, while in the articles of the code the word “ouvrier” indicates an artisanal type of work (“Les maçon, chapentiers et autres ouvriers” … “les achitectes, entrepreneurs, maçon et autres ouvriers”). This demonstrates that the word ouvrier is at the same time synonymous of “master”, to the extent that it normally referred to anyone who operated, performed a service, both as a boss and an employee and as an artifex (Lavasseur 1901, p. 309; Brizon 1926, p. 39 ss.): that is, someone performing a service in a non-servile way, cultivating an art.

Throughout the nineteenth century, the reference of all jobs to the employment agreement (locatio) is presented as a realistic acceptance of the law of supply and demand and as an expression of the common legal and economic identity characterizing the various services.

The large social-economic territory where labour law will invent the employment contract is therefore a “world in transition”, populated by peasants who are no longer entirely peasants, by artisans who are no longer entirely artisans, by independent craftsmen-workers, by workers who began to unite forces and to claim social rights. A world where the alleged social-legal distinctions of work are contradicted by historiographical analysis, which gives us images of a fluid and moving reality, such as that of home workers where independent artisan activities, care work, coexist in the same person. Modern labour comes from this world in transition, where the great dichotomy between subordination/independence reveals its nature as a largely ideological construct.

Even the regulation of work in common law systems did not contemplate for a long time a clear distinction between employment and self-employment. In England, throughout the nineteenth century, law did not recognize the distinction between dependent employment and self-employment, while the field of application of labour legislation did not depend on the type of contract but on the nature of the work performed in favour of others (Deakin 2001; see also Countouris 2007, which sees in the decline of status the core element for the spread of the employment contract).

The legislation on wages, as well as that relating to other matters of the employment relationship, applied to specific categories of workers, such as agricultural labourers, artificers, and colliers. The main test adopted by the Master and Servant law was based on the criterion of the exclusive service, which, as a rule, should have excluded task contracts and causal hiring from the scope of the law. However, Courts applied the test with flexibility, verifying the existence of a reciprocal obligation between master and servant “to serve and to provide work” for a defined period (thus the mutuality of obligation test has been introduced, still in use in English jurisprudence). This interpretation has allowed groups of professional craftsmen with a tradition of independence and a large market power to gravitate into the field of application of labour legislation. The lack of a clear conception of the employment contract (and therefore of a clear distinction between the servant and the independent contractor) meant that the Master and Servant law was applied to heterogeneous figures of “workers”, such as labourers, artisans, or servants, with the exclusion of higher status workers, such as managers, agents, and clerks.

In conclusion, we can say that both in civil law systems—where the employment relationship was placed in the unitary scheme of the locatio-conductio operis—and in common law systems not influenced by the Roman tradition, the discipline of employment relationships was largely dependent on the status of people rather than on the “type” of employment contract. Not surprisingly, the most widespread form of employment contract in the sector of small and medium-sized enterprises, the apprenticeship, was dealt with by all the laws of the time (from Germany, Denmark, and France) regardless of the type or contractual category. While the model of the locatio-conductio, still unitary in the German code of 1896, did not prevent the legislator from promoting the idea of social protection advocated by Otto von Gierke.

However, it was, in hindsight, a rather widespread perspective also in legal doctrine. The codes of the late nineteenth century defined the employment contract as a broader social phenomenon which included persons economically dependent on others, such as workers from home and the self-employed: “By the early twentieth century, the Continental countries had witnessed the establishment of the contract of employment as an autonomous legal category distinct from other types of contract, such as subcontracting, self-employment and mandate” (Virassamy 1986, p. 68). And this indistinct category of workers also includes domestic servants, English domestic workers, excluded from the labour laws of the time (1875 Employment and Workmen Act, 1882 Shop Hours Act). Such fact was due to the servant’s patriarchal power over their household, which made the relationship immune from the intervention of legislation (Albin 2012, p. 233 ss.).

This perspective was confirmed in Italy by Ludovico Barassi. Barassi in his pioneering volume on the employment contract of 1901 states that labour law “has a remarkable unusual breadth, since it generally includes all practical forms of paid work. It is not limited only to the industrial work of the workers, to which the designation of ‘employment contract’ mostly refers.” However, it embraces, in addition to all other cases of service performance, the locatio operis in all its forms and other intermediate relationships, such as the mandate or the commercial commission.

In his 1915 book Barassi writes that all the forms of paid work, coming from a contract, have common elements that allow them to be subsumed within the same fundamental type. The tendency towards conceptual unification, typical of Barassi’s thought, therefore also includes self-employment: “it is only a scientific myopia—he writes—that can now lead us to believe that the two great branches of the employment contract belong to two different fundamental types”. Barassi did not write this only animated by systematic needs, typical of the civil lawyer, he was aware of the need for social protection of the self-employed. In fact, Barassi refers to the French legislative guidelines, which tend to equate certain economically elementary forms of self-employment to the legal treatment of employment (contracts, work performance).

In Germany, Philipp Lotmar’s two books on the employment contract reconstruct the autonomous category of the employment contract, as a form of development of a modern labour law, based on the principle of the personality of work, attributing the same dignity to all contracts including a work performance (Lotmar 1902 (I), 1908 (II); on Lotmar, see Nogler 1997, p. 129 ss.; on Lotmar and the Italian labour law see Pedrazzoli 2014, p. 145 ss.). Lotmar separates labour law from the locatio-conductio operis, denying that the civil code contracts differentiate in the economic position of the parties. He did this as he was aware of the absolute social-economic transversality of such distinction that was not clear to him at all and that, in any case, he did not agree with. For this reason, the German jurist can be said to have developed an all-encompassing concept of labour that was timeless and free from the obligatory reference to twentieth-century capitalism.

In the same years, moreover, another great German jurist, Gustav Rümelin wrote that “if the employment contract had as its object only employment, then it would be easy to understand with the term subordination a complete dependence, but it is clear that cannot be limited to this very restricted area”.

Moreover, according to Sinzehimer too, workers were not only those who worked under a contract of employment but also civil servants, apprentices, home workers, and the unemployed workers (Dukes 2014).

Once a real system of labour law was built, grown as a body of specific rules for employed workers, the exclusion of other categories of workers (the self-employed) from its scope actually coexisted with a tendency to heal the divisions between the two forms of work. This latent tendency was found to be minor compared to the opposed vision that is still undoubtedly dominant today (despite the controversial “crisis” of axiological rationality of labour law). As a matter of fact, Gerard Lyon-Caen planned it in terms of the construction—instead of an employment labour law—of a “droit de l’activité, qu’elle soit” (Lyon-Caen 1990) and Alain Supiot in his Report imagined it in terms of an extensive form of labour market statute. In Italy, Tiziano Treu has been the main advocate of either a statute of work, or for a statute of self-employment, unfortunately lacking in results in terms of the legislative conversion of his proposals. It is no coincidence that Treu has recently theorized a “remedial” approach, which addresses the needs of social protection with a pragmatic approach and not tied to legal categories.

Although—as Umberto Romagnoli wrote—labour lawyers will tend to enormously expand the distance between employed workers and other workers, the underlying persistence of a link between the various forms of work performed for others will go along with the evolution of social relations.

Such a historical fil rouge linking the two spheres of employment and self-employment is today recognized also in the European and international field. A proposal for a Recommendation of the European Council points out that “the evidence shows that non-standard workers and self-employed workers have insufficient access to the sectors of social protection that are most closely linked to participation in the labour market” (Council Recommendation on access to social protection for workers and the self-employed, Brussels, 15 October 2019). According to the Recommendation (point 17), “Social protection is considered to be adequate when it allows individuals to uphold a decent standard of living, replace their income loss in a reasonable manner and live with dignity, and prevents them from falling into poverty while contributing, where appropriate, to activation and facilitating the return to work. When assessing the adequacy, the Member State’s social protection system as a whole needs to be taken into account, which means that all social protection benefits of a Member State need to be considered.”

The universalist vision of the ILO leads towards the same conclusions, which reached its full maturity with the 2019 Report on the future of work presented by a “Global Commission” on the occasion of the ILO’s centenary. With this programmatic document, the regulatory action focuses on the protection of the person in order to promote the search for solutions aimed at expanding the field of social protection through a Universal job guarantee, to be applied “regardless of their contractual arrangement or employment status”. For this reason, we need to be aware of the need to expand the protection and subjective rights and capabilities of persons, regardless of legal categories, in order to rebalance situations of social vulnerability and democratic deficit in the context of contractual employment relationships.

The Economic Argument

Let us get now to the economic argument. The “great dichotomy” between subordinate and self-employed work has found important confirmations on the part of the neo-institutional economic analysis. In particular, according to the theory of transaction costs, the raison d’etre of the employment contract is referred mainly to the reduction of transaction costs (Coase 1937, where it is stated that management is the element that precisely characterizes the essence of the legal concept of “employer and employee”, and this notion coincides with the economic concept developed by the Author). The employment contract represents, in this order of ideas, a typical example of an “implicit” contract, as opposed to “explicit” contracts (e.g. the sale contract) as the parties agree on the exchange between an “employment salary” and a range of work performances subject to the constraint of authority and the ius variandi. In particular, the employment contract, within an environment characterized by information asymmetry and uncertainty, is characterized by time constraints (working hours) and duties for the agent (in order to avoid moral hazard), incentives with low potential for the agent (unfair salary), and no ownership rights on assets.

The replacement of the classic market exchange with contracts governed by the internal hierarchy entails advantages in organizational terms and in terms of reduction of renegotiation costs to adapt the relationship to the changing circumstances and needs of the company. In this perspective, employment contracts provide for “acceptance zones”, where orders are executed without resistance, this not being the case with commercial contracts (Williamson 1986).

However, these acquisitions of economic theory have undergone revisions and corrections on the part of many scholars on business theory, also in relation to the structural changes that have taken place in the morphology of organizations. The decentralization of production, the de-verticalization of the company, and the great outsourcing processes that have characterized the strategies of companies in the last 20/30 years are phenomena that have called into question the clear distinction between market and hierarchy.

It is true, on the one hand, that the revision of the notion of subordination in the field of work organization studies (Billinger and Workiewicz 2019) has not eliminated the function of “hierarchy” from the theories of the firm. However, the legal-economic research of recent years has shown that in organizational contexts based on “relational” bargaining, market and hierarchy increasingly tend to hybridize (Blair and Stout 1999, p. 247 ss.; Blair and Stout 2005).

Within the relational model, which does not qualify a type of contract but a different approach to the theory of the contract, the spot contract (isolated) is replaced by a system of complex, long-lasting relationships inspired by the rules of collaboration and trust, also governed by social and customary rules, which allow the flexible adaptation of the contractual relationship to contingencies. These contractual forms indicate the different level of autonomy maintained by the parties, polarized between a maximum (discrete transactions), a minimum (hierarchical transactions), and an intermediate level (hybrid transactions). Therefore, relational contracts do not necessarily correspond to relationships of employment, and long-term transactions tend to be structured in quasi-hierarchical mechanisms.

In light of these arguments, the economic thesis recognizing a clear contrast between market and hierarchy (and therefore between employment and self-employment) as tools for regulating the interactions between contractual parties is no longer adequate (Geis 2009, p. 99). The most recent economic studies suggest overcoming the traditional dichotomous visions. On the one hand the market, once conceived as opposed to hierarchy, is allowed to enter the company. On the other hand, relational cooperation includes hierarchical mechanisms based on forms of economic supremacy that come from market power to finally result as asymmetries of bargaining power (Williamson 1986). In essence, the transaction costs do not concern only exchanges on the market but also internal relations within the company. While the use of the external market can be incorporated into a governance structure, the company: born as an anti-market entity (as it involves lower transaction costs), it must bear the governance costs of the network of contracts that structure the internal hierarchy.

The boundaries between market and hierarchy become mobile, according to the criterion of relative efficiency. Hybrid forms of quasi-market and quasi-hierarchy are being used, offering the company a synthesis between the benefits (and costs) of opens market transactions and internal ownership. As Williamson writes, the study of contractual relations can no longer be limited to the examination of “discrete markets” on the one hand and of the hierarchical organization on the other, because the spectrum of exchange includes all forms ranging from pure market to hierarchy. This means a continuum of transactions taking place in organized markets where the element of cooperation is minimal, until the intensity of hierarchical relationships is reached, passing through “intermediate areas”. The transactional environment thus becomes the place where we have hybrid organizational formulas of “organized market”, places of conjunction between the pure market of classical political economy and other organizational forms typical of the hierarchy and the “clan”. From an economic point of view, relying on the intermediate forms of the “organized market” for the management of employment relationships can be motivated not only by the mere reduction of costs but also by the desire to safeguard or increase “idiosyncratic” professional skills and qualities. The latter are otherwise difficult to manage in the context of hierarchical relationships and consist in entrepreneurship and innovative capacity of the subjects. “Para-subordination”, self-employment contracts, and all forms of self-employed work coordinated or organized by the client represent an elective ground for testing the various possible contaminations between market and hierarchy in the light of the theory of relational contracts and of the fluctuating company boundaries. Even the experience of “economically dependent” self-employed work is emblematic of the hybridization, in a formally independent relationship, of elements of the market and hierarchy, of the “discrete transaction”, and of the “relational contract” (which instead are opposite elements within the “great dichotomy between subordination and autonomy”). Thus, we have mixed forms of negotiation. On the one hand, the client’s organizational project pre-defines the debt sphere with a peculiar effect of “reduction to the present” of the obligatory expectations of the parties. On the other hand, the coordination and continuity of the relationship guarantee the satisfaction of a lasting organizational interest of the client.

The main and extreme consequence of this view, argued by Alchian and Demsetz, is the superficiality of the distinction—proposed by Coase—between allocation models based on authority and allocation models based on prices (Alchian and Demsetz 1972).

The control of the residual claimant is by no means explained in terms of a hierarchical authority but as a prerogative that does not differ from the contractual power of choice exercised by the consumer in the act of purchasing a particular product: “No authoritarian control is involved; the arrangement is simply a contractual structure subject to continuous renegotiations with the central agent” (Alchian and Demsetz 1972, p. 794). Translated into legal terms, this thesis reduces the managerial power of the employer to the power of a creditor towards his/her debtor, so that it is no longer possible to distinguish between contractual transactions (self-employment) and the orders by the authority characterizing the hierarchy (employment): the owners of the factors of production who intend to make use of their “human resources” will in any case have to start a bargaining activity to be carried out in the market or within a company.

The legal-economic analysis therefore confirms the relativity (if not the overcoming) of the “great dichotomy” between employment and self-employment in a logic that highlights the development of intermediate transactions between market and hierarchy. Moreover, it includes the combination of “governance structures” of transactions that are more articulated than the market/hierarchy dualism. What Williamson calls the overcoming of the “bimodal law of transactions” in favour of a wider “normal distribution”, relative to the intermediate range (hybrid transactions), corresponds for labour law to the overcoming of the standardized polarization between self-employment and employment.

The following image summarizes this concept (with reference to the Italian context) (Fig. 4.1):

Fig. 4.1
A graph of protections, low and high versus hierarchy and market plots the share of self employment. Hierarchical relations, article 2094, and quasi hierarchy, article 2 p dot 1, have high protections. Quasi market article 409, c p c p a r 5 b i s, and market contractual relations, article 2222, have low protections.

Share of self-employment (2007 vs. 2020)

Full size image

The legal analysis must therefore question the regulatory developments of this methodological syncretism between economics and law, focusing in particular on the jurisprudential and legislative mechanisms that are taking the system “beyond” subordination. In what terms can the revision or overcoming of labour law take place (and is actually already happening), being it based on the “great dichotomy” and on the all-inclusive category of subordination? And how can we re-define the typological scenario that we use to exercise our reconstructive and interpretative activity?

The Comparative Argument

These questions lead us to the fourth argument, the comparative. The main result of the comparative analysis confirms not only the historical relativity of the “great dichotomy” between employment and self-employment in the major European legal systems but also the substantially artificial nature of the model. Despite the consolidation of the binary vision in the second half of the twentieth century (more than a century after the industrial revolution produced its social effects), the legal regulation of work persisted in being conditioned by its nature and the status of people, rather than by the type of contract. The famous transition from status to contract has never actually been completed and has never fully concerned the specific subject of the employment contract, in consideration of the different social-economic conditions of the contracting parties. We may actually find a fil rouge—rooted both in the past and in the present—connecting the different European legal systems and demonstrating that the dichotomy of subordination/autonomy cannot hide the forms of domination that client exercises over the other party, even in the relations of non-subordinate work. It is therefore necessary to advocate changes in protective models being excessively focused on dependent work, pushing regulatory action towards other forms of personal activity performed for others, albeit classified as independent (Countouris 2019).

In France, the choice of the criterion of lien de subordination juridique to the detriment of the doctrinal thesis on “economic dependence” has not prevented the proliferation of extensive regulatory regimes. Self-employed workers and even entrepreneurial subjects, who employ subordinate workers and have all the prerogatives of the employer (such as non-subordinate managers of branches, exclusive dealers, service station managers, and franchises), are “assimilated” to employees with selective application of the Code du Travail, with no need to establish the existence of a lien de subordination. As if to say that the French legislator decided to go “beyond” subordination by creating a real “common labour law” applicable to situations of economic dependence. The assimilation mechanism has allowed to extend the main protections of employment to “self-employed managers”, whose business consists in selling products supplied by a commercial or industrial company (Jeammaud 2002).

The prerequisite for this extension is given by three cumulative conditions: an exclusive or almost exclusive link with the privileged partner (the supplier), the sale price and conditions established by the latter, and the execution of the activity in a location supplied or authorized by the same main partner. Subsequently, the “self-employed managers” of the branches of food companies or consumer cooperatives were considered as employees, even though they had full freedom to organize their work and did not have a fixed salary but a remuneration according to the extent of sales. In this way, these genuinely self-employed workers were able to obtain additional remuneration (in line with the legal minimum wage), consideration for additional hours of work, allowance for paid leave, reimbursement of professional expenses, allowances deriving from the application of the regimen of dismissals upon termination of their contract, and finally the regime of termination of the contract for the non-fulfilment of the obligations deriving from the Code du Travail (Virassamy 1986, p. 182).

This protection legislation is not based on the presence of the bond of subordination but on the observation that the self-employed workers covered by such norm are in a situation of “economic (and partially ‘organizational’) dependence” that may justify a (limited or total) extension of the discipline of employment.

Albeit to a lesser extent, even in Germany para-subordinate self-employment has been receiving a series of selective protections for some time, especially in terms of collective rights. The category of arbeitnehmeränliche Personen was introduced at the beginning of the 1970s (par. 12aTvg), although the idea of providing for the protection of workers who are not qualified as “subordinate” pursuant to Section 136 of the Industrial Code (Gewerbeordnung) dates back to the North German Federation (Norddeutscher Bund), the first German federal organization established in 1866 (Waas 2017, p. 114).

Pursuant to the law (par. 12aTvg), if the work or service is performed by a self-employed worker who is in a condition of economic dependence (i.e. deriving at least half of its total income from a single client), the laws governing procedural protection, social security, holidays, harassment in the workplace, and collective bargaining are to be applied.

In the United Kingdom, the distinction between contract of service and contract for service, based on the criterion of control, is much more recent than one might suppose. According to Simon Deakin only in the middle of the last century, with the National Insurance Act of 1946, the fundamental distinction between employed and self-employed workers was established.

Moreover, in order to identify the contract of service, Courts abandoned the old distinction between workers with “low status” and with “high status”. Also in the United Kingdom, the “great dichotomy” was overcome in the 1990s with the introduction of the notion of worker, performing “personally any work or service for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”. Some basic protections are applied to this worker provided by the 1996 Employment Rights Act and the 2010 Equality Act, confirming the typically “cumulative” character assumed by the evolution of labour law over its long path. According to some scholars, the category of worker should be reformulated and expanded to define a regulatory status of “dependent contractor”, also in order to better characterize this figure, that is more exposed to the risk of social vulnerability and exploitation than the independent contractor (Good Work. The Taylor Review of Modern Working Practices 2017, p. 34 ss.).

The English legislation has inspired other common law systems even if they do not include intermediate categories such as that of workers. In the context of the US doctrinal debate, some scholars, starting from the limits on self-employed workers in the field of collective bargaining imposed by the Hinton jurisprudence in application of the Clayton Act, aim to introduce the category of “independent workers” between employees and independents contractors (Harris and Krueger 2015). This is to provide social safeguards to self-employed workers who employ platforms or intermediaries: such protections include the right to organize trade unions or the payment of social security tax and medical assistance on the part of the client. In Australia, the 2006 Independent Contractor Act allows Courts to assess the fairness of the remuneration of self-employed workers in order to establish if the contract provides for a lower remuneration than that paid to an employee performing a similar task (Section 15). The 2009 Fair Work’s section 342 is related to “adverse actions” suffered by self-employed workers, and its object concerns above all the prohibitions of discrimination in the workplace in matters like termination of employment and terms and conditions of the contract. Legislation in states such as Victoria (Equal Opportunity Act of 2010) is even more explicit in extending the prohibition of discrimination to self-employed workers with regard to promotions, relocation, training and other benefits, dismissal, and any other matter that may affect the relationship of employment. On this basis, the most recent Australian doctrine proposes to further extend the field of application of the protection principles to all employment relationships. Such principles include information rights, income security, the right to collective bargaining, and access to dispute resolution, thus transforming labour law into a regulatory system that must be respected by all those who have “the power to impact upon another’s capacity or ability to work” (Blackham 2018).

Concerning Spain, where we have the concept of economically dependent self-employed worker (trabajador autònomo econòmicamente dependiente). Such figure is granted a large array of rights, including minimum wage, annual rest periods, remedies in case of illegitimate termination of the relationship, permits for family and health reasons, as well as the right to collective bargaining.

In Switzerland, jurisprudence has created an intermediate category of employment contracts qualified as mixed contracts (gemischte Verträge).

Sweden—while probably presenting the widest notion of employee in Europe (Rönnmar 2004)—has been dealing with the category of dependent contractor since the 1940s (jämställda/beroende uppdragstagare). This figure is currently defined by Section 1 (2) of the Codetermination Act (1976) as someone who “works for others without being subordinate (‘employed by them’), despite having a position that is essentially the same as that of an employee”. The consequence is that these self-employed workers, while not benefiting from the Employment Protection Act (1982), have the right to collective bargaining, particularly widespread in the field of freelance journalism (Norbäck and Walter 2019, p. 124 ss), as well as the rights of information, consultation, codetermination, and strike at par with employees (Westregard 2019a, b, c). Think, again, of the intermediate category of dependent contractor recognized by Canadian legislation and Courts on the basis of the criterion of economic dependence (Davidov 2017; Perulli 2011, p. 137 ss.; Waas and van Voss 2017).

These comparative examples demonstrate how labour law has never ceased to look beyond the category of subordination and to tend towards self-employment in terms of an expansive trend within itself. This trend has been realized in many European legal systems not only through the extensive redefinition of the category of subordination (mostly of jurisprudential matrix) but also through a selective extension of the protections to forms of self-employment.

Therefore, the “overcoming” of subordination as an exclusive category of labour law has deep roots in time. Even at the peak of the industrial-Fordist phase, which most put work categories on opposite fronts to meet the needs of hierarchy, of standardization and stabilization of labour, labour law has persisted in weaving the fil rouge binding the two opposing but actually communicating universes. Today, labour law is fully capable of extending its protections beyond the area of employment, building a common regulatory ground for work in all its forms and articulations.

By consolidating a trend towards the extension of social rights, Italian labour law has moved towards the use of “assimilation” techniques to the point of widening the entire application spectrum of the employment relationship regulation, without amending art. 2094 of the Italian Civil Code. In fact, when the legislator came up with the norm on work performance “organized by the client” (Article 2, paragraph 1, Legislative Decree no. 81/2015), the notion of “hetero-direction”, typical of subordination (art. 2094 civil code), was maintained. However, the different concept of “hetero-organization” was put forward with the intention of extending the discipline of employment to cases within the “gray area” between subordination and autonomy (Perulli 2021a). The Italian Foodora riders’ case very well exemplifies this expansive trend of labour law, through categories defined as “intermediate” or “third”, which, as we have seen, are not an Italian prerogative.

Lastly, the OECD Employment Outlook (2019) put forward the extension of protections beyond subordination, identifying the imbalance of bargaining power between the parties and the existence of monopsonist labour markets as the causes of the vulnerability of self-employed workers, proposing to act in a double direction.

On the one hand, we have an area characterized by a “genuine ambiguity” in the qualification of employment relationships (genuine in the sense that the related relationships are not attributable to the category of “false self-employed”). In this “gray” segment of the labour market, a series of legal protections should be extended beyond standard employees to be guaranteed to independent workers (in terms of fair pay, regulating working time, occupational safety and health, anti-discrimination, employment protection).

On the other hand, the improvement of the conditions of self-employed workers should be implemented through social dialogue and collective bargaining, training programmes, and social protection schemes. What’s more, there should be exceptions to the prohibition of collective bargaining for groups of genuine self-employed workers characterized by strong imbalance of bargaining power.

Conclusions

I have put forward four arguments showing, from different points of view, how self-employment is not to be considered a separate and alternative category to employment but as a way of providing the activity for others in a personal way. Often this activity is continuous, without ties of subordination albeit in conditions of partial dependence, which in some cases can be economic (economic dependence), in others organizational (hetero-organization), or both at the same time.

Thinking of simply taking this segment of the labour market into the area of subordination, perhaps on the simple assumption that it is “false” self-employment, or that the only category of work that deserves to be protected is subordinate-dependent work, would be an error of method condemning workers to be protected only if employees.

Self-employment goes along with employment and is contaminated with it and has the right to have adequate rights according to the needs of social protection expressed by subjects who are classified in categories other than subordination.

(1) First of all, it is necessary to recognize the Union rights and collective bargaining for self-employed workers. An erroneous assimilation of self-employment within the company law is denying these collective rights to self-employed workers on the assumption that the collective bargaining of self-employed violates European competition law. The orientation of the Court of Justice is firm in delegitimizing collective bargaining concerning the economic and regulatory treatment of self-employed workers for two reasons. On the one hand, because—according to the Court—there is no rule which, like the European law (articles 153 and 155 TFEU, as well as 1 and 4 of the agreement on social policy) “encourages self-employed workers to establish a similar dialogue with employers to whom they provide services under an employment contract and, therefore, to stipulate collective agreements with such employers in order to improve their employment and working conditions”.

On the other hand, because Unions representing self-employed workers do not act as a “social party” but as an association of companies. The Court of Justice established that the only possibility to avoid conflict with competition law is to verify whether the workers whom the Unions have negotiated for are not “false self-employed”, that is, workers whose independence is only fictitious and hides a real employment relationship. This appears utterly unreasonable, and, barring improbable revisions by the Court, the solution to such problem requires a modification of European competition law in a derogatory sense with respect to the prohibition of anti-competitive agreements pursuant to art. 101 TFEU. It is necessary to ensure that the latter provision ceases to constitute a barrier to the collective bargaining of self-employed workers, as requested by the European trade unions and as the Commission itself proposes with the recent Communication “Guidelines on the application of EU competition law to collective agreements regarding the working conditions of solo self-employed persons” (C (2021) 8838 final).

(2) Fundamental social rights, defined by the ILO Conventions, must be interpreted in an extensive and universalistic way, as the doctrine is starting to do by analysing the preparatory works, the opinions of experts, and by taking into account the evolution of the social-economic system (De Stefano 2021). The Committee of Experts for the Application of the ILO Conventions and Recommendations has repeatedly stated that self-employed workers have the right to collective bargaining and called on the Dutch government to introduce the necessary changes to guarantee this universal right to all workers. In this way, the right to collective bargaining was granted universal value as a fundamental social right enshrined in Convention no. 87 of the ILO, by art. 28 of the EU Charter of Fundamental Rights, art. 6.2 of the European Social Charter and art. 11 of the ECHR. The legal bases for such a revision can now be strengthened also thanks to the European Pillar of Social Rights, which guarantees fundamental rights for self-employed workers and other atypical workers.

(3) The rights of social protection, income protection, training, and assistance in professional transitions of self-employed workers must be added to the rights mentioned above. Moreover, the fundamental rights of employment relationships must be recognized for self-employed workers. Working hours, remuneration, prohibition of discrimination, protection of dignity and professionalism, and withdrawal are all aspects of the self-employment relationship that cannot be left to individual regulation among the parties. General protection against the abuse of economic dependence as provided by the Italian legislator in 2017 is not enough (legislation that has not given any significant fruit): specific subjective rights must also be granted to self-employed workers. The Italian legislator has followed this path with the law 128/2019 on riders, even if the first choice, confirmed by the same legislator, consists in attributing to these platform workers the status of hetero-organized workers, with application of the protections of employment.

Labour law has a future ahead if it opens up to this unitary perspective, which is both universalistic and selective. On the contrary, it is inevitably going to be at stake if it will persist in the defence of subordination as the only category of its paradigm.