A challenge for the Nordic model, the social partners and the legislation
Annamaria Westregård, Department of Business Law, Lund University
» Full paper: ilera-2019-paper-110-Westregard.pdf
Workers in the new digitalized economy, crowdworkers, often find themselves outside the existing labour contracts, collective agreements and not covered by the existing legislation. Whether the crowdworker is regarded as employee or self-employed in the European binary system depends very much on the business model of the platform. In EU Law there is no single definition of ‘worker‘ as it varies according to the area in which it is to be applied such as right to workers, the social fields or the freedom of movement for workers etc. To this comes that the Member States decides themselves who is to be considered a worker in their national law. The definition of the crowdworker as a worker or self-employed is important as it gives the scope for legislation and collective agreements.
The protection for the employees in legislation and collective agreements where designed for permanent employees with regular, full-time work and for temporary employees, with irregular working times and incomes, and those with more than one employer and the `false self-employed´, different problems arise. Therefore, several new and precarious forms of work in the digitalized economy remain in the grey zone. They have problems entering the protection in legislation and collective agreements, insurances and the calculation of benefits that could be in disadvantage for crowdworkers.
By tradition social partners enjoy a strong legal status in the Nordic model and the collective agreements is often the most important regulative instrument for working conditions, and only the collective agreements contain e.g. minimum salary and important supplementary social security regulations. The unions are interested in organizing crowdworkers – both employees and self-employed - and do so already. They also want to regulate the conditions in collective agreements, but if the collective agreements are extended to self-employed and regulate conditions for them, it can easily create a conflict with the competition regulations and Article 101 on the Treaty on the Functioning of the European Union (see FNV Kunsten Informatie in Media, C-413/13 Judgment EU:C:2014:2411). This legal conflict is not yet solved for in the legislation.
A new business model that has been rapidly adopted in Sweden, keeping pace with the rise of the collaborative economy, is a variant of the umbrella company where the platforms use umbrella companies as middlemen. These umbrella companies have a special structure. The performing party bids for work and, if successful, arranges both the work and the remuneration with the client. The performing party then makes sure the client has signed a contract with the umbrella company. The client is invoiced by the umbrella company, which in turn employs the performing party for the duration of the assignment. Once the client has paid the umbrella company, the performing party is credited, after deductions for tax, social security contributions, and the umbrella company’s commission. The parties rarely meet in real life, with all contact between them conducted electronically. One might indeed say that the performing party hires its own employer. This is a completely new construction and both the legislator and the social parties have difficulties to handle this structure.
In this paper I will analyze, from the perspective of the Nordic model, the problems arising for social partners as they seek to regulate conditions for crowdworkers subject to a collective agreement, as well as from the emergence of fundamentally new types of employers. I will also analyse the Swedish experience of the legislative amendments in labour law and social security, created to improve conditions for those with precarious work in the digitalized economy.