Self-employed can associate and bargain collectively

The European Commission has issued guidelines on the application of EU competition law to collective agreements regarding the working conditions of self-employed persons who are in the same position as employees. Under these guidelines, it will be possible for self-employed persons, to associate like employees for collective bargaining purposes without infringing on EU competition law.

Article 101 of the TFEU prohibits agreements between undertakings that restrict competition. As self-employed persons fall under the definition of an undertaking under EU law, they run the risk of breaching competition rules when collectively bargaining about their remuneration or other business conditions. Consequently, they may be subject to penalties of up to 10% of their worldwide annual turnover, which puts some self-employed persons at a significant disadvantage compared to employees. The newly adopted guidelines aim to address this issue.

The guidelines define the following categories of self-employed persons, who according to the Commission are in the same position as employees and should therefore have the right to bargain collectively without infringing on competition law. Specifically:

  • self-employed persons without employees (‘solo self-employed persons’) who provide their services exclusively or mainly to one counterparty
  • self-employed persons without employees working side-by-side with employees
  • self-employed persons without employees working through digital labour platforms
  • self-employed persons who may have difficulties in influencing their working conditions due to a weak negotiating position vis-à-vis their counterparty. 

This exception to general EU legislation prohibiting the conclusion of cartel agreements is to apply to all agreements concluded collectively between the above categories of self-employed persons on the one hand and the customers of their services on the other hand (collective agreements), if they concern the working conditions of these self-employed persons (e.g., remuneration, working hours, holidays, insurance, conditions for termination of services). The guidelines also allow self-employed persons to be covered by a collective agreement that has already been concluded and has so far applied only to employees. This means that self-employed persons in the position of de facto employees can now associate and bargain collectively without the risk of sanctions.

The guidelines follow the long-term development of the case law of the Court of Justice of the EU, which has repeatedly ruled that, under certain conditions, self-employed persons must be regarded as employees and be granted rights typically belonging to employees, including the right to bargain collectively. The guidelines were also adopted in the context of current changes in the labour market, in particular production process digitalisation, and the growing number of self-employed persons providing their services through online platforms (e.g., Uber or Bolt).

From our point of view, this is a step in the right direction, especially considering the number of people working through digital platforms, which was over 28 million in the EU at the beginning of this year, while further growth of this sector is expected. We therefore assume that collective bargaining for self-employed persons, whether in the form of negotiating collective agreements or founding trades, will be gaining importance in the Czech Republic as well.

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