Introduction
In recent decades, it has been widely recognised that the so-called standard employment relationship (SER) of formal, full-time and permanent waged employment is becoming ever less the SER. This is problematic. The SER has been the main means of allocating rights and social protection, and its demise raises issues regarding working conditions, rights and benefits. The SER is being replaced not only by non-standard forms of employment (NSEs), including part-time, fixed-term and agency employment (Eichhorst et al. 2013; Hatfield 2015; Pedersini and Coletto 2010), but also self-employment, where workers have a contract for services or civil contract with those to whom they supply their labour, and therefore do not normally have the same protective rights as dependent employees (Fondeville et al. 2015; ILO 2016).
In recent years, furthermore, there is a growing concern that many employees are being falsely classified as self-employed by their employers in order to circumvent collective agreements, labour laws (e.g. minimum wages, working time legislation), employment tax and other employer liabilities implied in the standard contract of employment, and that the emergent âplatformâ economy is accelerating this trend (European Commission 2014; European Parliament 2013; Fehringer 2014; Williams and Horodnic 2017). âDependent self-employmentâ is therefore seen to exist where workers are self-employed but have a de facto employment relationship, if not de jure, in the sense that they either only work for one employer, do not have the authority to hire staff, and/or the authority to make strategic decisions about how to run the business (Eurofound 2016a, b; Williams and Lapeyre 2017).
The aim of this paper is to advance understanding of such dependent self-employment by evaluating its scale and distribution in the European Union. This will put under the spotlight the dominant depiction of dependent self-employment as a precarious form of work, conducted by marginalised groups of workers with poorer working conditions than the rest of the employed population. To do so, this paper reports the only major data source available on the prevalence of dependent self-employment in the European Union, namely the European Working Conditions Survey (EWCS) . To commence, the next section briefly reviews the emergent literature to reveal a series of dominant depictions about its prevalence, distribution and the job quality. Section âMethods and Dataâ introduces the EWCS ; section âFindingsâ reports the findings on the prevalence of dependent self-employment in the European Union, who engages in this form of work and their working conditions. The last section then addresses what can be done about dependent self-employment and the implications for the future of work.
Dominant Depictions of Dependent Self-Employment: Prevalence, Distribution and Working Conditions
Reviewing the literature, there is no universally accepted definition of dependent self-employment (MĂŒhlberger and Bertolini 2008), not least because the legislation varies across countries in terms of what constitutes self-employment and dependent employment (ILO 2015). Moreover, even within countries, self-employment is defined differently in labour law, tax law, trade law and social security law (Spasova et al. 2017) or not even defined at all in some countries such as the UK (Jorens 2008). When it is also recognised that some authors try to differentiate between dependent self-employment and bogus self-employment, defining what is meant by dependent self-employment becomes even more problematic. Indeed, analysing the 35 ESPN (European Social Policy Network) national expertâs reports, the conclusion is that âcurrently no single, unambiguous definition applicable in any of the countries (except for Slovenia) drawing a clear-cut distinction between âgenuineâ, âdependentâ and âbogusâ self-employedâ exists (Spasova et al. 2017: 11).
However, the consensus in literature is that both forms belong to the âgrey zoneâ of employment relationships that exists between genuine self-employment and pure dependent employment. To denote the disguised employment relationships in this grey zone, various terms have been used including âbogusâ, âfakeâ, âfalseâ, âshamâ, âinvoluntaryâ or âmisclassifiedâ self-employment, or âdisguised employmentâ (Böheim and MĂŒhlberger 2006; Eichhorst et al. 2013; Harvey and Behling 2008; Kautonen et al. 2009, 2010; Mandrone et al. 2014; Pedersini and Coletto 2010). Examining the most common criteria used to define genuine self-employment, Eurofound (2013, 2016b) defines the dependent self-employed as workers who report themselves as self-employed without employees and meet two or more of the following characteristics: they do not have more than one client; they do not have the authority to hire staff, and/or do not have the authority to make important strategic decisions about how to run the business. Based on these criteria, therefore, dependent self-employment is in this chapter defined as an employment relationship where workers are self-employed but have a de facto employment relationship, if not de jure, because they either only work for one employer, do not have the authority to hire staff, and/or do not have the authority to make important strategic decisions about how to run the business.
The widespread assumption is that employment relationships in this âgrey zoneâ between genuine self-employment and pure dependent employment are growing. This is mainly because it is cheaper for employers to hire self-employed persons to perform work than it is to hire employees. Indeed, in the UK, the incentive for employers to hire self-employed workers through outsourc...