While the use of information technology can enhance personal self-determination, its use in the context of the gig-economy also creates the risk of entrenching casual, precarious and exploitative working conditions. A crucial question that arises is how far gig-workers are able to shape their work conditions. Within the sphere of employment law, the right of workers to organise collectively provides the opportunity to achieve just that.
This paper, available here, aims to analyse the barriers posed by EU competition law to collective labour rights of gig-workers. It argues that EU competition law, as currently interpreted by the Court of Justice, would hinder collective organisation of those serving the gig-economy. It also advances an interpretation of the competition provisions which would allow EU competition law to adapt to recent developments in labour markets. It is structured as follows:
A first section sketches the basic features of the gig-economy.
The gig-economy is mainly characterised by the extensive use of IT for the distribution, allocation, evaluation, grading and payment of work. The literature distinguishes two main organisational models of the gig-economy: app-work and crowd work. In practice, working arrangements can fall within a continuum between these two archetypes. App-work uses technology to match customers with persons delivering work in the real world, such as offering a ride (cab services), delivering items (courier services), caring for children, the elderly or pets, gardening, or other craft services. Crowd-work consists of IT-based work, such as designing a web page, typing text or numbers into forms (e.g. for billing services), contacting customers, or even working the “apps” for app work. IT is used in order to source this work from an anonymous group of “bidders”, who are referred to as the crowd.
App-work seems more prone to being classed as an employment relationship, as is also evident from the case law. Cases have proliferated in the United States and, recently, UK employment tribunals which have classified Uber drivers as well as cycle deliverers as employees. While crowdsourcing has also spawned litigation, it has less frequently resulted in the grant of employee status for those servicing the gig industry.
A subsequent section explains how collective bargaining falls outside the scope of EU competition law.
Collective agreements limit competition between individual workers. In cases of multi-employer bargaining (i.e. if several employers or employer associations are party to a collective agreement), collective agreements may be perceived as amounting to collusion (i.e. a cartel) between undertakings not to compete on the price of labour. Multi-employer bargaining, in particular if coupled with the option to adopt collective agreements of general application, also contributes to the creation of institutions (e.g. social security institutions) holding a dominant market position which may abuse that position. The authors review these two types of conduct under EU competition law.
The European courts have long held that employees are not undertakings for the purposes of EU competition law, since they are incorporated into their employers’ organisation. The courts also recognised that certain restrictions to competition are inherent in collective agreements between organisations representing employers and workers, and that the social policy objectives pursued by such agreements would be seriously undermined if management and labour were subject to competition law when seeking jointly to adopt measures to improve conditions of work and employment. Collective employment agreement are thus exempt from competition law if they meet two conditions: they result from “collective negotiations between organisations representing employers and workers” and have the purpose to “jointly adopt measures to improve conditions of work and employment”. This second criterion, relating to the purpose of the agreement, has been subject to extensive interpretation by both the ECJ and the EFTA Court, and held to extend to health and pension schemes. As regards abusive practices, the European courts have found that social security schemes can abuse its dominant position when they amount to undertakings.
The question, given this, is whether the collective bargaining exemption set out above could extend to micro-entrepreneurs and gig workers. In a number of cases, the European courts have refused to extend the competition law exemption to agreements where the beneficiaries are not employees. The definition of employee requires one to work under the direction of another, economic dependency and integration into the organisation of another. Those found not to be employees include self-employed medical consultants (Pavlov), farmers not under the direction of slaughterhouses (FNCBV), and substitutes for orchestra musicians hired under a services’ contract (FNV Kunsten). In short, it seems that gig workers are currently not exempt from competition law: even if most of them are economically dependent, many are not organisationally dependent.
A third section discusses whether collective organisation and bargaining can be of use for gig-economy economy workers.
Crowd and app-workers, in particular if denied the protection of employment law and social insurance, can be classed as part of the new precariat independently from their classification as employees, workers or self-employed micro-entrepreneurs. Their situation chimes with the earliest justification for collective bargaining: to correct the structural imbalance of labour markets in favour of employers by allowing workers to combine as well as to take collective industrial action. The authors also discuss human rights’ justifications for granting gig workers collective organisation rights. At the same time, they acknowledge that specific features of the gig-economy may render collective organisation difficult: reliance on technology allows one to work without engaging in personal contact, leading to efficiency gains by individualisation but also to the reduction of face-to-face communication.
There are thus good arguments supporting the use of collective bargaining as a regulatory technique in the gig-industry. However, EU competition law scrutiny would put such techniques under severe stress. EU competition law is enforced via onerous administrative procedures which can lead to substantive fines. Procedures are geared to investigating large corporations and can quickly deplete the resources of small organisations of micro-entrepreneurs in the gig industry, and even of traditional trade unions. In this way, competition law can obstruct emerging collective bargaining structures. Promises by “giggers” to each other not to engage any app or a crowd-working platform not agreeing to certain minimum prices or minimum data protection would risk attracting the wrath of the competition authorities – as evidenced by fines imposed on professional organisations because they recommend minimum fees for their self-employed members.
Finally, the paper presents suggestions on how to allow gig workers to improve their working conditions collectively under competition law.
To overcome the obstacles outlined in the previous sections, the authors make a number of proposals regarding the interpretation of EU competition law. A first step would be to develop a functional notion of “worker”. In particular, a truly economic approach to the concept of “worker” would recognise that shifting commercial risk onto economically dependent self-employed persons is an expression of economic dependency on the part of the worker or micro-entrepreneur. This should lead to a restructuring of the concept of employee through a functional interpretation of the notion of undertaking under EU competition law that would support an exemption for all collective bargaining processes aimed at overcoming the dependency of economically dependent service providers, irrespective from whether they are self-employed or not.
Another option is to grant competition immunity to collective agreements where the trade union involved seeks to protect its members from anti-social dumping strategies. For example, gig-workers and their trade unions could bargain for tariffs to be charged by independent contractors who work as a hobby and are not economically dependent.
Even if a collective bargaining agreement is not exempt and falls under Article 101 (1) TFEU, the Court should not automatically assume that an agreement on wages is an object restriction, and should assess the effects of the agreement more broadly. Furthermore, the courts could find that collective bargaining agreements contain ancillary restraints which do not have the object or effect of restricting competition under the Wouter case law.
This is a short, to-the-point paper which provides a solid overview of how workers are treated under EU competition law, and explores avenues for ensuring that competition law does not prevent private/social forms of labour regulation in the digital economy.
Personally, I would have liked a more extensive discussion of the situations in which the exemption for collective employment agreements could/should extend to gig workers. I would also have reviewed regulatory alternatives, which strike me as being a more straightforward way to address the authors’ concerns. Nonetheless, this is an interesting paper for anyone interested in the interaction between labour and competition law.