Defining and Protecting Autonomous Work: A Multidisciplinary Approach 3031063961, 9783031063961

Table of contents :
Contents
Notes on Contributors
List of Figures
List of Tables
1: Introduction
References
Part I: Introduction
2: Autonomy in and Outside the Employment Relationship: An Organizational Perspective
Introduction
The Labor Law Debate
Autonomy at Work: A Processual Perspective of Analysis
In the Employment Relationship
Outside the Employment Relationship
Concluding Remarks
References
3: False Starts, Wrong Turns, and Dead Ends. How (Not) to Ensure Social Protection for All Workers
Introduction
Troubling Issues
Job Creation
Tax Compliance
Basic Facts
Is Self-Employment on the Rise?
Gig Work
Outstanding Questions
A “Double Contribution Challenge”?
Unemployment Protection
Diverging Approaches
Greece
The Netherlands
Concluding Remarks
References
4: Beyond Subordination: Four Arguments
Premise
Sociological Argument
Historical Argument
The Economic Argument
The Comparative Argument
Conclusions
References
5: Employee and Self-Employed in Working Life: Is There a Real Difference?
Introduction
Theoretical Background
Job Characteristics
Workload
Work Pace
Work-Life Balance
Relational Tasks and PC Tasks
Work Changes
Job Outcomes
Work Engagement
Job Satisfaction and Job Strain
Individual Outcomes
Health and General Life Wellbeing
Self-Confidence in Work and Long-Life Learning
Social Outcomes
Extra Work Activities Commitment
Empirical Analysis
Method
Results
Job Characteristics
Workload, Work Pace and Work-Life Balance
Relational Tasks and PC Tasks
Work Changes
Job Outcomes
Work Engagement
Job Satisfaction and Job Strain
Individual Outcomes
Health and General Life Wellbeing
Self-Confidence in Work and Life-Long Learning
Social Outcomes
Extra Work Activities Commitment
Discussion and Conclusion
Limits and Future Research
References
6: Genuine Autonomous Work: Toward a Tailor-Made Social Protection
Autonomous: What’s in a Name
Risks and Events
Needs
Who Cares?
Conclusions
References
Part II: At the Boundaries of Labour Law: Discovering New Regulatory Horizons of Autonomous Work
7: Introduction to Blockchain: Between “Autonomisation” and Automatization, Challenges and Risks for Labour Law
Introduction
Blockchain: A General Approach
Digital Labour Market and Digital Labour Law: Blockchain and Smart Contracts
Digital Transformation, Disintermediation, Risks
Conclusions
References
8: Abandon Hope All Ye Who (Press) Enter Here. Collective Rights of Platform Workers: An Illusion or Hope?
Introduction: Do I Dare Disturb the Universe?
Mechanical Manager
Constant Tracking of Workers’ Behaviour
Constant Performance Evaluation of Workers
The Automatic Implementation of Decisions, with Little or no Human Intervention
Workers’ Interaction with a “System” Rather Than Humans
Lack of Transparency
Platform Workers Unite!
Let the Machines Negotiate
The Limbo or the Light at the End of the Tunnel?
References
9: Labour Rights Beyond Employment Status: Insights from the Competition Law Guidelines on Collective Bargaining
Introduction
Digital Transition and a Changing World of Work
Platform Work
Labour Market Monopsonies
Rediscovering the Normative Function of Labour Law
The Emancipatory Rationale
A Paradigm Shift
Commission Guidelines on Competition Rules and Collective Bargaining
The Background
Towards the Regulatory Relevance of the Imbalance in Bargaining Power?
Final Remarks
References
10: Social Security for Self-Employed in EU Law: A Minimum-Level Playing Field?
Introduction
Self-Employment and Social Security Coverage?
The Recent Acquis Communautaire in the Field of Social Security
Is There Any Place for a Binding Solution?
A Directive on Minimum Requirements: Art. 153, para. 2, TFEU
The Complicated Recourse to the Flexibility Clause
Concluding Remarks
References
11: Income Support Policies for “Weak” Liberal Professionals: A Pathway for Coordinated Conditions in a Common Market?
The Income Support Issue for Liberal Professionals in Europe: A Real Need?
Supporting Liberal Professionals on the Market: From Tariffs to More Structured Juridical Frameworks
Italy: A “Fair” Blanket for Exploited Liberal Professionals
Spain: Even Liberal Professionals May Become Economically Dependent
France: A Collaborator in a Professional Firm Is Not a Self-Employed Like Everyone Else
Public Benefit Schemes: Liberal Professionals Swinging Between No Coverage and the Newcomb’s Dilemma
The EU Dimension: From Antitrust Issues to a Pathway for a (Possible) Coordination
Conclusions
References
12: Conclusion: Protecting Work, Beyond Categories
Autonomy: A Concept of Growing Complexity
Regulating Complexity
Protecting Work: (A) The Self-Employment Perspective
Protecting Work: (B) The Subordinate Employment Perspective
Index

Citation preview

Edited by Tindara Addabbo · Edoardo Ales · Ylenia Curzi Tommaso Fabbri · Olga Rymkevich Iacopo Senatori

Defining and Protecting Autonomous Work A Multidisciplinary Approach

Defining and Protecting Autonomous Work

Tindara Addabbo Edoardo Ales  •  Ylenia Curzi Tommaso Fabbri Olga Rymkevich  •  Iacopo Senatori Editors

Defining and Protecting Autonomous Work A Multidisciplinary Approach

Editors Tindara Addabbo Department of Economics Marco Biagi University of Modena and Reggio Emilia Modena, Italy Ylenia Curzi Department of Economics Marco Biagi and Marco Biagi Foundation University of Modena and Reggio Emilia Modena, Italy Olga Rymkevich Marco Biagi Foundation University of Modena and Reggio Emilia Modena, Italy

Edoardo Ales University of Naples “Parthenope” Naples, Italy Tommaso Fabbri Department of Economics Marco Biagi and Marco Biagi Foundation University of Modena and Reggio Emilia Modena, Italy Iacopo Senatori University of Modena and Reggio Emilia Modena, Italy

ISBN 978-3-031-06396-1    ISBN 978-3-031-06397-8 (eBook) https://doi.org/10.1007/978-3-031-06397-8 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and ­transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

1 I ntroduction  1 Tindara Addabbo and Olga Rymkevich Part I Introduction  13 2 Autonomy  in and Outside the Employment Relationship: An Organizational Perspective 15 Ylenia Curzi and Tommaso Fabbri 3 False  Starts, Wrong Turns, and Dead Ends. How (Not) to Ensure Social Protection for All Workers 31 Manos Matsaganis 4 Beyond  Subordination: Four Arguments 51 Adalberto Perulli 5 Employee  and Self-Employed in Working Life: Is There a Real Difference? 79 Daria Sarti and Teresina Torre

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vi Contents

6 Genuine  Autonomous Work: Toward a Tailor-Made Social Protection109 Edoardo Ales Part II At the Boundaries of Labour Law: Discovering New Regulatory Horizons of Autonomous Work 121 7 Introduction  to Blockchain: Between “Autonomisation” and Automatization, Challenges and Risks for Labour Law123 Stefano Bini 8 Abandon  Hope All Ye Who (Press) Enter Here. Collective Rights of Platform Workers: An Illusion or Hope?143 Joanna Unterschütz 9 Labour  Rights Beyond Employment Status: Insights from the Competition Law Guidelines on Collective Bargaining167 Silvia Rainone 10 Social  Security for Self-Employed in EU Law: A Minimum-­Level Playing Field?193 Leonardo Battista 11 Income  Support Policies for “Weak” Liberal Professionals: A Pathway for Coordinated Conditions in a Common Market?217 Matteo Avogaro 12 Conclusion:  Protecting Work, Beyond Categories253 Iacopo Senatori I ndex263

Notes on Contributors

Tindara  Addabbo is Full Professor of Economic Policy in the Department of Economics Marco Biagi at the University of Modena and Reggio Emilia, Italy. She is member of the Scientific Committee of the Marco Biagi Foundation. Edoardo Ales  is Full Professor of Labour Law and Industrial Relations in the Department of Law at the University of Naples “Parthenope”, Italy. He also teaches Social and Labour Market Regulation at LUISS, Rome, Italy. He is Invited Professor of Comparative and International Labour Law at the Pontifical Lateran University, Vatican State.  He is Extraordinary Professor at the University of Western Cape, South Africa. He is member of the Scientific Committee of the Marco Biagi Foundation. Matteo Avogaro  is a postdoctoral researcher at ESADE, Ramon Llull University Barcelona, Barcelona, Spain, in the Horizon2020 project Equal4Europe, finalised to develop and implement Gender Equality Standards for institutions throughout Europe. Before, he was a collaborator of the EU Agency Eurofound (2019–2020), and in 2019 he obtained his PhD in Labour Law from the University of Milan, Italy. Leonardo Battista  holds a PhD in European Law, is Research Fellow in Labour Law at the Alma Mater Studiorum—University of Bologna, Italy, and the publishing manager of the Italian Labour Law e-Journal. vii

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Notes on Contributors

Stefano Bini  is Assistant Professor of Labour and Social Security Law at the University of Córdoba, Spain, where he teaches Labour Law I and II at the School of Employment Relations. He holds a PhD cum laude in “Law” from the University of Seville, Spain, and in “Law and Business” from the Libera Università Internazionale degli Studi Sociali (LUISS), Italy. Ylenia Curzi  holds a PhD in Business Science and is Associate Professor of Organization and Human Resource Management in the Department of Economics Marco Biagi at the University of Modena and Reggio Emilia, Italy. She is a member of the Scientific Committee of the Marco Biagi Foundation. She was a visiting scholar at Cardiff Business School, Wales, UK. Tommaso  Fabbri is Full Professor of Organization and Human Resources Management and the dean of the Department of Economics Marco Biagi at the University of Modena and Reggio Emilia, Italy. He is Coordinator of the Scientific Committee of the Marco Biagi Foundation. Manos  Matsaganis  is Full Professor of Public Finance at Polytechnic University of Milan, Italy, and the Head of the Greek and European Economy Observatory of the think tank in Athens. His current research focuses on the future of work and social protection in Europe. Adalberto  Perulli  is Full Professor of Labour Law at the Ca’ Foscari University of Venice, Italy. He is the director of the  Master in Global Economics and Social Affaires (GESAM) Master in collaboration with the ILO.  For many years he has been a visiting professor at the Paris Nanterre University, France, where he teaches comparative and international labour law. Silvia Rainone  is a researcher at the European Trade Union Institute, Brussels, Belgium, covering developments in EU labour and social policy—with a predominant focus on the future of work, platform work and European socio-economic governance. She is a member of the Institute for Labour Law at Katholieke Universiteit (KU) Leuven and is part of the coordinating committee of the European Lawyers for Workers Network.

  Notes on Contributors 

ix

Olga Rymkevich  is Researcher in Labour Law and Industrial Relations at the Marco Biagi Foundation, University of Modena and Reggio Emilia, Italy. Daria Sarti  is Associate Professor of Organization Studies and Human Resource Management at the University of Florence, Italy, where she served as a research assistant and assistant professor between 2005 and 2020. Her primary research interest is in human resource management, work engagement and the impact of ICT on employees’ well-being. Iacopo Senatori  is Assistant Professor of Labour Law at the University of Modena and Reggio Emilia, Italy. He is a member of the Scientific Committee of the Marco Biagi Foundation at University of Modena and Reggio Emilia. He has been the principal investigator in several international research projects co-funded by the European Commission. Teresina  Torre  is Full Professor of Organization Studies and Human Resource Management at the University of Genova, Italy. She is the coordinator of a PhD programme in management and security. She is the co-editor of the journal Impresa Progetto—Electronic Journal of Management. Joanna Unterschütz  is Professor of Labour Law and Social Security and head of the Sub-Department of Labour Law and Social Security at the University of Business and Administration in Gdynia, Poland. Her research interests include national and European Labour Law, offences against individual and collective workers’ rights and human trafficking.

List of Figures

Fig. 3.1 Share of self-employment (2007 vs 2020). (Note: Data for Germany, Latvia, Norway, and the United Kingdom are for 2007 vs 2019. Source: OECD (2022)) Fig. 4.1 Share of self-employment (2007 vs. 2020) Fig. 5.1 Our research model. (Note. (+) means self-employed individuals score higher than salaried employees, (−) means self-employed individuals score lower than salaried employees)

36 66 92

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List of Tables

Table 1.1 Table 1.2 Table 1.3 Table 5.1 Table 5.2

Respondents’ employment status Self-employed workers by their declared status Choice of self-employment status Hypotheses and the results of their tests—complete picture Relevant variables means’ comparison for self-employed and salaried workers Table 11.1 Net monthly income of self-employed without employees and holding a tertiary education degree, 2015

2 2 3 98 99 221

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1 Introduction Tindara Addabbo and Olga Rymkevich

Autonomous work and the process of employment autonomization are at the core of this volume offering the reader an interdisciplinary view of the two concepts and empirical evidence in different countries and sectors and on the factors leading to an intensification of the process of autonomization. The very perception of autonomous work status can be unclear and that is why in the last European Working Conditions Survey (EWCS 2015) a set of questions have been asked for detecting the respondent’s self-employed or employee status (Eurofound 2017).

T. Addabbo (*) Department of Economics Marco Biagi, University of Modena and Reggio Emilia, Modena, Italy e-mail: [email protected] O. Rymkevich Marco Biagi Foundation, University of Modena and Reggio Emilia, Modena, Italy e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 T. Addabbo et al. (eds.), Defining and Protecting Autonomous Work, https://doi.org/10.1007/978-3-031-06397-8_1

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Table 1.1  Respondents’ employment status Q7—Are you working as an employee or are you self-employed? Employee Self-employed Total

M

F

Total

79.26 20.74 100 21,867

86.49 13.51 100 21,400

82.63 17.37 100 43,267

Source: Our elaborations on EWCS 2015 data Table 1.2  Self-employed workers by their declared status Sole director of their own business A partner in a business or professional practice Working for yourself Working as a sub-contractor Doing freelance work Paid a salary or a wage by an agency Other

M

F

34.3 8.83

22.35 8.43

41.92 2.49 9.8 0.68 1.98 4823

51.81 0.97 10.23 0.68 5.53 3042

Source: Our elaborations on EWCS 2015 data

Actually, considering the whole respondents to EWCS survey, those who state to be self-employed are 17% (21% amongst male and 14% amongst female) in the 27 EU Member States plus the United Kingdom, Albania, the former Yugoslav Republic of Macedonia, Montenegro, Serbia and Turkey as well as Norway and Switzerland (Table 1.1). When we disaggregate by declared self-employment status, we can observe the difference in the gender distribution of those who state to be the sole director of their own business (34% male and 22% female self-­ employed). On the other hand, the percentage of self-employed women who work for themselves is 10 percentage points higher for women (52% of those women who state to be self-employed are working for themselves against 42% of male self-employed). More men than women work as a sub-contractor (2% of male self-employed and 1% of female self-­ employed workers). The percentage of professional or agency worker and freelance is similar for men and women who state to be self-employed (Table 1.2).

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1 Introduction  Table 1.3  Choice of self-employment status Q10—Self-employed, was it mainly your own personal preference or you had no other alternatives?

M

F

Total

Mainly through own personal preferences No other alternatives for work A combination of both Neither of these reasons Total

57.3 24.1 15.2 3.4 100

48.1 32.3 14.8 4.8 100

53.8 27.2 15.0 3.9 100

Source: Our elaborations on EWCS 2015 data

EWCS data allows to distinguish whether self-employment has been a choice or the self-employed workers did not have any alternative. As shown in Table 1.3, men in a higher percentage with respect to women have chosen self-employment for personal preferences (57% of male self-­ employed against 48% of women self-employed) and women are working as self-employed not having other alternative more than men (32% women self-employed stated to have no choice, against 24% of men). As expected, having no alternatives than being self-employed significantly reduces workers’ job satisfaction that on average is 10 points lower for those self-employed who have not chosen to be self-employed for personal preferences. This heterogeneity with regards to the type of selfemployment status and the extent it has been a choice related to one’s preferences rather than an absence of alternatives will be considered in this volume to take into account how working conditions can differ by different types of self-employment work. Turning to other dimensions of working conditions, by considering the earnings distribution for employees and self-employed, according to Pantea’s (2022) analysis on EU-28 countries based on quantile regressions estimated on European Union Statistics on Income and Living Conditions data, the earnings gap at the disadvantage of the latter occurs for workers at or below the median income distribution with higher, with regards to employees, earnings only for workers at the top quantiles of earnings distribution. The lower coverage of self-employed with employees in Pantea (2022) makes the results representative mainly for self-­ employed without employees. The latter have also been found by other analyses, with a lower level of earnings on average for solo self-employed

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(a group of self-employed workers whose share on total self-employed is increasing) than employees and entrepreneurs (Schneck 2020). Distinguishing amongst self-employed types, the dependent self-­ employment from other types of self-employed workers allows to see that they do not differ in terms of physical and social environment and intensity of work, but they do differ in terms of poorer job prospects, less ability to use their skills and discretion than “true self-employed” but higher quality of time quality (Horodnic and Williams 2020). Actually, ownaccount workers who rely for a large share of their income on a single client/employer (dependent self-employed) have been estimated to be about 16% of self-employed and their share is increasing (OECD 2019). The importance of distinguishing amongst different types of self-­ employed workers is recognized in Boeri et al. (2020) who, by using survey data from the United Kingdom, Italy and United States, allow to distinguish between solo self-employment and self-employment with dependent employees and in so doing to detect worse working conditions for the former, especially for the higher occurrence of liquidity and hourly constrained and of lower earnings. Another important finding is about the impact of a higher share of self-employed on income polarization. The increase in the share of self-­ employed is found to lead to higher income polarization in the labour market as Schneck’s (2020) analysis based on German Socio-Economic Panel data shows. The blurring of the boundaries between employee and self-­employment status further developed with the increasing flexibility, outsourcing and subcontracting activities and the use of new technologies leading to a fragmentation of new forms of employment (Eurofound 2020). The heterogeneity in employment status is also connected to a different access to social protections, benefits and rights (De Micheli et  al. 2018; OECD 2018, 2019). Inequalities that became even more visible during the COVID-19 pandemic with lower access to income support or delays in receiving them but also recognized with new policies that introduced in a set of countries new cash transfers for self-employed workers (OECD 2020). The adverse impact of COVID-19 on employment and hours of work, taking into account the work status and individual characteristics, has

1 Introduction 

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been shown to be higher for unincorporated self-employed workers by Kalenkoski and Pabilonia (2021) who estimated random effects and difference-­ in-difference-in-differences models on monthly panel data from the US Current Population Survey. Among unincorporated self-­ employed workers the negative impact on employment and hours of work has been higher for mothers. This result suggests disaggregating data on different types of self-employment also when analysing the impact of the crisis on employment and working conditions. Reuschke et  al.’s (2021) analysis on the impact of COVID-19 on working conditions of self-employed workers in the United Kingdom find a worse effect on women in particular on the reductions in hours worked and earnings. From this introduction showing the heterogeneity of self-employment as well as the blurring boundaries from self-employed and employees and the inequalities arising in terms of working conditions, impact of the business cycle and social protection pave the way to introduce the readers to the book’s content. The book is divided into two thematic sections. Part I aims to provide a general contextualization of the book by offering a critical interdisciplinary assessment of the evolving notion and theoretical concepts of autonomous work as well as the processes accompanying the increasing “autonomisation” of employment which seriously challenge the traditional dichotomy of autonomy and subordination and put in doubt the adequacy of the existing legal categories and regulatory mechanisms at national and international levels. The chapters offer a contribution to the ongoing scientific debate regarding the complex dilemma between the possible revision of the traditional interpretative and normative toolkit regulating the relationship between employers/platforms and workers and an application of selective and tailored set of protections adapted to the specific categories of workers. Within this framework, Chap. 2 by Ylenia Curzi and Tommaso Fabbri focuses on the interpretative challenges that digitalization and its possible work-related implications represent for the organizational and labour law scholars. Against this background, the chapter draws attention to the concepts and analytic distinctions drawn from non-mainstream organizational theories which reflect a processual conception of

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organization, highlights how they may inform the empirical analysis of the organizational regulation of work and summarizes the insights they offer on the issue of autonomy in and beyond the employment relationship. Manos Matsaganis in Chap. 3 discusses the main reasons why policymakers should be wary of self-employment. In particular, he analyses job creation potential and perverse tax compliance incentives. The author further illustrates how the relative weight of self-employment and gig work varies across countries and over time. In addition, he examines two problems regarding the extension of social rights to the self-employed, that is, the appropriate social contribution rate and the range of social risks covered. Finally, taking into consideration the provisions of the European Pillar of Social Rights, the chapter provides a critical assessment of the diverging national approaches to the integration of self-­ employed workers into social protection in the Netherlands and Greece. Adalberto Perulli in Chap. 4 provides a critical insight on the binary structure of labour law with the categories of subordinate work and self-­ employment. The distinction between these two categories is discussed on the basis of four arguments of a historical, sociological, economic and comparative nature. These arguments show that the binary distinction is being overcome, if not completely overcome, and that labour law must cover work in all its forms (subordinate and autonomous) with a modulation of universalism and selectivity in the allocation of labour rights and social protections. Chapter 5 by Daria Sarti and Teresina Torre aims deepen two different types of employment status such as “salaried employees” and “self-­ employed workers”. By investigating some crucial dimensions, the authors try to deal with the question if and where they are conditioning working practices and if it is possible to confirm or not the existence of a gap between the two—apparently?—different “worlds”. In their analysis the authors use the sixth European Working Conditions Survey (EWCS) conducted in 2015 on a large sample of workers which offer the opportunity to compare the situation in many European countries in order to understand if the employment status continues to be useful or not to capture the evolution of work.

1 Introduction 

7

Chapter 6 by Edoardo Ales aims at providing a conceptual framework to the social protection of genuine autonomous work, with a reference to solopreneurs, analysing socio-economic risks and needs they are facing and that may differ from the traditional ones profiled on subordinate work. The author criticized the “package approach” of some legislators that just extends Labour Law and Social Security protection typical of subordination to autonomous work. He reflects on the potential of reflexive labour law to set up a regulatory system based on a “self-organized diversity” where the interests of individuals, groups and society can find an adequate balance. The author draws three conclusions in the perspective of: singling out the very notion of genuine autonomous workers, outside the shadow of the “false self-employed” doctrine; removing any existing ungrounded legal obstacles to self-organization of autonomous workers; and promoting self-organization of autonomous workers on platforms. Part II is aimed at providing a critical overview of the legal status and working conditions of self-employed workers including new categories of gig workers and traditional categories of liberal professionals. Particular attention is paid to the existing mismatch between the scope of protective regulations and the established criteria for the classification of workers which are apparently unable to guarantee the respect of fundamental rights to working individuals and combat the abusive and exploitative practices. In this regard a crucial role may be played by social partners as collective representation constitutes one of the most important tools to ensure basic labour rights for autonomous workers. Considering particular characteristics of this category of workers, the chapters address innovative strategies adopted by trade unions to better meet the needs of these workers trying to get better advantage from technological achievements. Finally, the attention is reserved to the barriers that competition and anti-­trust law create with respect to the exercise by autonomous workers of the fundamental rights for collective bargaining and collective representation. In the first chapter (Chap. 7) of this section, Stefano Bini proposes a critical reflection on the fact that labour law is called to rethink, in the light of autonomization in employment and automatization in decisions, some of its landmarks and, probably, the same perimeter of its borders, which become increasingly porous. Taking the cue from the analysis of

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the existing regulatory sources at the Italian and European levels—also through a contamination with other spheres of knowledge—the chapter offers a theoretical analysis and a critical reflection on the impact that blockchain produces on employment relationship and labour regulation. The author explores this new disruptive technology as a sort of fertile ground for experimentation of a new relationship between humanism and technique. Joanna Unterschütz in Chap. 8 focuses attention on the most innovative trade union strategies towards the organization of platform workers, for example, worker-centred API (application programming interface), arguing technical progress opens a number of opportunities to deal with workers’ representation and new technology can be a strong ally not only to employers but also to workers and trade unions. A rapid increase in the number of platform workers reveals numerous problems in relation to their labour rights, including the collective ones challenging the traditional institutions of collective labour law such as the freedom of association, the right to collective bargaining and the right to strike that, in the author’s view, should be adapted to the new realities and needs of the changing world of work. Chapter 9 by Silvia Rainone is dedicated to the recent regulatory developments concerning atypical and non-subordinate workers in terms of extending the protection to self-employed. By reflecting upon the inadequacy of the current legal framework with regard to the scope of application of labour law, the author argues the artificial nature of binary division between workers and self-employed which brings to the violation of the instruments of international law, including the fundamental right to collective bargaining. Thus, the chapter illustrates the different coexistence of the EU competition law and collective bargaining in the attempt to explore the potential conflict between the two disciplines in order to reconsider them in the light of their normative function. On the basis of this “return to the origins” a paradigm shift regarding the scope of the right of collective bargaining is proposed alone with some concrete examples of how this paradigm shift could be applied considering current EU competition law reform proposal. Leonardo Battista in Chap. 10 draws attention to the available legal options in the framework of EU law for the creation of a minimum-level

1 Introduction 

9

playing field in social security system for self-employed workers. Due the impact of digitalization and technological development, new forms of work are emerging in various sectors, bringing a marked shift away from traditional employment relationships to non-standard forms of employment and self-employment, traditionally less covered by social security as well. European institutions, aware of this issue, are dealing with possible measures capable to cope with this phenomenon. The chapter thus deals with two different proposals: one based on the art. 153, comma 2, TFEU and one on exploiting the so-called flexibility clause (art. 352 TFEU). Two different legal options with a similar political obstacle, namely the unanimous approval by the Council. Chapter 11 by Matteo Avogaro provides a comparative analysis of the income support measures applied to liberal professionals. During the last decade, the increasing income inequality made income support policies one of the main topic in the labour law debate encompassing both traditional income support instruments—like an update of unemployment benefits and more straightforward ones like the introduction of minimum compensation schemes to prevent worker exploitation. By analysing statistical data, the chapter challenges a deeply rooted bias that liberal professionals do not need income protection as they are able to ensure a decent life income. In support of this argument the chapter provides a comparative benchmark exploring the situation in France, Italy and Spain sustaining the idea of the need of a coordinated European strategy aimed to strengthen income and working conditions of weaker liberal professionals across the EU-27 and arguing its compatibility with the existing EU legal framework and anti-trust law. Finally, Chap. 12 by Iacopo Senatori provides a summary of the main findings of the book with an aim to cast light on the ongoing global trends in the field of self-employment affected by technological transformation and digitalization, determine open questions and topics for further research and possible fields for intervention by social partners and policymakers, and suggest useful policy proposals. In a broader perspective a reflection upon the adequacy of the existing traditional forms of workers representation and their interrelation with the emerging alternative forms of representation as well as with the legislative provisions in different countries is proposed.

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References Boeri, Tito, Giulia Giupponi, Alan B. Krueger & Stephen Machin. 2020. “Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs”. Journal of Economic Perspectives: (1)34, 170–195. De Micheli, Barbara, Francesco Figari, Feliciano Iudicone, Amerigo Lombardi, Manos Matsaganis, Michele Raitano and Patrik Vesan. 2018. Access to social protection for all forms of employment: assessing the options for a possible EU initiative. European Commission. Eurofound. 2020. New forms of employment: 2020 update. New forms of employment series. Publications Office of the European Union. Luxembourg. Eurofound. (2015). Sixth European Working Conditions Survey: 2015, https:// www.eurofound.europa.eu/surveys/about-eurofound-surveys/dataavailability#datasets Eurofound. 2017. Sixth European Working Conditions Survey—Overview report (2017 update). Publications Office of the European Union. Luxembourg. Horodnic, Ioana and Colin C. Williams. 2020. “Evaluating the working conditions of the dependent self-employed”. International Journal of Entrepreneurial Behavior & Research: (2)26: 326–348. https://doi.org/10.1108/ IJEBR-­07-­2018-­0445. Kalenkoski, Charlene Marie and Sabrina Wulf Pabilonia. 2021. “Impacts of COVID-19 on the self-employed”. Small Business Economics: An Entrepreneurship Journal: 1–28. doi: https://doi.org/10.1007/s11187-­021-­ 00522-­4. OECD. 2020. OECD Employment Outlook 2020: Worker Security and the COVID-19 Crisis. OECD Publishing. Paris, https://doi.org/10.1787/ 1686c758-­en. OECD. 2019. OECD Employment Outlook 2019: The Future of Work, OECD Publishing, Paris. https://doi.org/10.1787/9ee00155-­en. OECD. 2018. The Future of Social Protection: What Works for Nonstandard Workers?, OECD Publishing. Paris. https://doi.org/10.178 7/9789264306943-­en. Pantea, Smaranda. 2022. “Self-employment in the EU: quality work, precarious work or both?” Small Business Economics: An Entrepreneurship Journal: 58(1), 403–418. Reuschke, Darja, et al. 2021. “Testing the Differential Impact of COVID-19 on Self-Employed Women and Men in the United Kingdom”, IZA

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Discussion Papers. Available at: https://search.ebscohost.com/login.asp x?direct=true&AuthType=ip,sso&db=edsrep&AN=edsrep.p.iza.izadps. dp14216&lang=it&site=eds-­live&scope=site. Schneck, Stefan. 2020. “Self-employment as a source of income inequality”. Eurasian Business Review: 10(1). 45–64.

Part I Introduction

2 Autonomy in and Outside the Employment Relationship: An Organizational Perspective Ylenia Curzi and Tommaso Fabbri

Introduction Autonomy at work has always been a central theme in organizational studies since at least the 1950s with the development of the socio-­ technical system approach (Emery and Trist 1960; Trist and Bamforth 1951). Today, the new opportunities for organizational change opened up by the digital transformation of work and organizations are revitalizing the organizational scholarship interest in the issue, stimulating a debate which, with only a few exceptions, appears dominated by two opposite theses. On the one hand, the thesis that digital technologies-enabled opportunities for organizational change translate into increased autonomy at work, both within and outside the employment relationship, leading to

Y. Curzi (*) • T. Fabbri Department of Economics Marco Biagi and Marco Biagi Foundation, University of Modena and Reggio Emilia, Modena, Italy e-mail: [email protected]; [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 T. Addabbo et al. (eds.), Defining and Protecting Autonomous Work, https://doi.org/10.1007/978-3-031-06397-8_2

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empowered entrepreneurs, enjoying flexibility and choice (Marini 2018; Sundararajan 2016). On the other hand, the thesis that digitalization paves the way for an ever-increasing tendency toward a comprehensive, strict work structuration, with progressively narrower space for human input and contribution to automated work processes (Cattero and D’Onofrio 2018; Rosenblat and Stark 2016; Schörpf et  al. 2017; Staab and Nachtwey 2016). Referred to as digital Taylorism, this phenomenon would affect both the workers formally employed by an organization and (formally) self-employed workers selling goods and services in the market through online platforms. Some attempts have also been made to attend to the issue empirically. Since these studies are descriptive and exploratory, they do not provide large and adequate enough evidence to support definitive conclusions about the issue of work autonomy in highly digitalized work settings (Albano 2020). However, they indicate that human experience-based knowledge and judgment continue to play a key role in formalized, standardized and automated digital work processes (e.g. Albano et al. 2018). The available empirical studies also suggest that this occurs both within the employment relationship and in platform work, where judgment and experience are key job requirements that remote crowd-workers in the creative industry as well as platform-mediated in-person service providers (e.g. Uber’s taxi drivers) are expected to meet. If these findings help to exclude a clear, generalized trend toward a comprehensive and rigid predetermination of digital work, they, however, leave unanswered the question of how such a distance from digital Taylorism should be interpreted. In this regard, some scholars maintain that autonomy in digital work has so far been more hypothesized by organizational scholarship than deeply explored empirically, precisely because an empirically grounded account requires more specific research on the issue, stronger research design, as well as analytic conceptual schemes (Albano 2020). Most existing empirical studies, instead, adopt an overly fuzzy definition of autonomy (i.e. the latter is not clearly distinguished from other concepts such as discretion) and do not address the levels of analysis and the aspects of work possibly concerned by autonomy. The use of nonanalytical concepts to empirically investigate autonomy at work seriously impedes a better understanding of whether and in what

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ways the organizational regulation of work is changing in digital work settings. As addressed below, this, in turn, has relevant implications for the juridical regulation of the newer forms of work and the capability of legal rules to ensure adequate protections to the involved individuals.

The Labor Law Debate Like the mainstream organizational theory, labor law scholars and interpreters have always employed an overly fuzzy definition of autonomy. The latter is  conceived as a residual, catch-all category that encompasses all cases in which the concrete modes of carrying out work by the worker do not correspond to subordination meant as hetero-direction (Digennaro 2020), that is, the subjection to the employer’s three managerial powers of (1) giving instructions to the worker on how, where and when work is to be carried out; (2) controlling and monitoring the worker while he/she is working; (3) sanctioning possible defaults (breaches of contract) (Pietrogiovanni 2019). The above concepts of autonomy and subordination are the building blocks of a binary approach to contract/relationship classification which leads to a clear-cut legal division/opposition between subordinate work/employment, where the involved worker is seen as being the weaker party in the contract and the relationship is governed by labor law, and self-employment, where the self-employed worker and the client are considered as equal contractual partners and the relationship is governed by commercial law and general contract law (Perulli 2002). Although such a division can be found in all European member states’ legal systems and in international law, labor law scholars have increasingly been questioning its capability to produce materially rational effects in light of the evolving nature of work carried out within the employment relationship, the spread of outsourcing and contracting out practices and the upward trend in both phenomena fostered by digitalization. On the one hand, the forms of organizing work within the employment relationship are increasingly characterized by new scope for workers to decide how, where and when to perform their work. On the other hand, the newer opportunities for companies to outsource economic activities over the Internet are boosting the growth of forms of work (also referred

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to as “economically dependent self-employment”) in which workers have no subordinate status in a legal sense and nonetheless experience vulnerability and express relevant social protection needs due to such characteristics as the personal or mainly personal nature of work; its continuity in time; the coordination of the work performance with the client’s activity; the reliance on a few clients (Perulli 2020a). By apparently blurring the boundaries between subordinate and self-employed work, those phenomena seem to support the idea of a generalized escape from subordination, leading to an impasse which is clearly exemplified by such key questions as “Which work does deserve protection?” and “Which protection does work deserve?” which are currently dominating the labor law debate (Pietrogiovanni 2019, p. 55). Among the solutions advanced to addresses these issues, two positions are particularly notable of consideration. Both  aim to adjust the labor law’s scope to the complexity of the socio-economic reality while preserving its main function of regulating inherently potentially conflicting socio-economic relationships consistently with the principles of equality and protection of fundamental human rights. The first position consists in re-thinking the concept of subordination as “double alienness” (Pietrogiovanni 2019, 2020). Applied for the first time by the Italian Constitutional Court in 1996 (Judge Prof. Luigi Mengoni), “double alienness” defines subordination as the “incorporation of someone’s work in a productive organization on which the worker has no power of control, being formed for a purpose in respect of which [they] ha[ve] no (individual) interest legally protected.”1 According to its proponent, the main advantage of this concept is its usefulness in detecting subordination where it would otherwise appear to be absent (i.e. wherever the interpreter uses the notion of subordination as hetero-­ direction to analyze the concrete ways workers carry out their work in current production processes) (cf. Pietrogiovanni 2019, p. 62). This innovative concept of subordination is the only concept of subordination that groups together the unskilled worker, the driver of a CEO, the high-­skilled engineer, and the manager of a department, because they all enjoy different levels of hetero-direction, but do not own the outcome of their activities, nor do they own the organisation in which their collabora-

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tion is inserted. Double alienness perfectly represents the rationale behind the legal institution of the employment contract as an object of legal protection by a Constitution. [… It] seems to be a very useful tool in the so-­ called ‘grey zone’ of the labour market, where traditional indices of subordination coexist with elements of autonomy (Pietrogiovanni 2019, pp. 64–65)

Other scholars, on the other hand, have argued that such an enlarged interpretation of subordination does not capture differences that may justify differential treatment, thus failing to balance universalism and selectivity (Perulli 2018). Therefore, some scholars call for the introduction of an intermediate category as a way for the selective application of labor laws to workers who work for others and share some characteristics of employees, but cannot be classified as subordinate and are therefore excluded by a binary “all or nothing” system (Davidov 2018, p.  67). Specifically, the basis for expanding the scope of labor law (universalism) through the application of some (but not all) protections (selectivity) relates to the fact that the client/employer does not directly control the work performance, by means of ongoing instructions on how, when and where the worker should carry out work, but nonetheless is able to condition it indirectly because of the power-dependence asymmetries between the worker and the client/employer, which make the latter capable to unilaterally predetermine the organizational context within which the worker’s primarily personal work must be integrated (Perulli 2020b). Moreover, the introduction of intermediate categories rests on an (at least partial) reconceptualization of subordination and autonomy, in the sense that rather than being regarded as a dichotomy, the two are meant as the opposite poles of a continuum ranging from subordination (i.e. hetero-­ direction) to autonomy—that is, the cases in which the workers can determine both the results and ways to perform their work (Perulli 2020b)—and including a number of intermediate categories lying halfway between the two.2 The two approaches (“double alienness” and “intermediate category”) differ in some important respects. Nonetheless, they seem to converge on the basic idea that the repeated challenges faced by labor law in fulfilling its basic function of promoting equality and social justice are conceptual

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in  nature, and therefore must be addressed by resorting to alternative concepts that might assist the interpreter in managing the phenomenological complexity of the varying forms of organizing work better than the classical legal categories of autonomy and subordination. Both positions move in that direction and either implicitly or explicitly underline the potential value of contributions from—among others—organizational scholars (Pietrogiovanni 2020). Since turning to the mainstream organizational research is of little help as briefly presented above, the following section draws attention to the insights offered by non-mainstream organizational theories which share a processual conception of organization (Barnard 1938; Maggi 2003/2016; Simon 1947; Thompson 1967/2003).

 utonomy at Work: A Processual Perspective A of Analysis Among the many theories advanced in the field of organizational studies, we focus on those which consider the organization as a process of actions and decisions, which are based on intentional and bounded rationality (Simon 1947) and “develop diachronically, along infinite ends-means chains, as well as synchronically, at multiple levels” (Albano et al. 2020, p. 6). Specifically, at the micro level—that is, the work situation which involves individual workers or groups most immediately; at the meso level—that is, the formal organization where a “dominant coalition” is responsible for making the decisions regarding the organizational goals, the firm’s formal structuration of work processes, the systems/criteria for organizational assessment and resources’ allocation; and at the macro level—that is, the relationships between an organization and the stakeholders in its environment (Albano et al. 2017; Thompson 1967/2003). Consistently, structuration is the conscious coordination of interdependent work activities and people aimed at achieving common organizational goals, bearing efficiency, effectiveness and people’s wellbeing in mind (Barnard 1938). “In real organizational processes, the rules [of control and coordination, i.e. structuration] always spring partly from

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heteronomy and partly from autonomy, to an extent depending on the intra-organizational power relationships and relationships of domination that characterize the historical action system” (Albano et al. 2020, p. 17). Introduced into the field of organizational studies by Bruno Maggi (2003/2016), the distinction between autonomy and heteronomy refers to the variability of the source of rules. True to its etymological roots, autonomy denotes the ability to produce one’s own rules for the self-­ governance of the processes in which one is involved. In contrast, heteronomy refers to the rules of control and coordination which spring from outside (i.e. are produced by other organizational processes). Maggi (2003/2016) clarifies that there is no organizational process which is completely autonomous or heteronomous. In real organizational processes, autonomy and heteronomy are always simultaneously present at all levels of analysis. Moreover, Maggi (2003/2016) introduces the analytical distinction between autonomy and discretion. The latter denotes the room for maneuver in a pre-regulated process, where the subject must choose from a set of alternative courses of action and decision which have already been predetermined by heteronomous rules. What would happen if these concepts and analytic distinctions were adopted in the analysis of work? Which insights might they offer into the issue of work autonomy within and outside  the  employment  relationship? We drill down into these issues in the following sections.

In the Employment Relationship Simon (1951) underlines that the employment contract is a means of “planning under uncertainty” which creates an authority relationship between the employer and the employee. Following Barnard (1938), he conceptualizes authority as a relational concept: the employer exercises authority over the employee to the extent that the latter permits the employer’s decisions and rules to guide his/her own behavior, namely, the ways he/she contributes to achieving common organizational goals. Employees have their own personal objectives and interests that cannot be automatically satisfied by the achievement of the organizational goals; they accept the employer’s authority when his decisions and rules are

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understandable, are perceived as being consistent with the organizational goals and their individual interests and are aligned with the employee’s knowledge and abilities to attend to the employer’s decisions (Barnard 1938). In “Administrative Behaviour,” Simon (1947) states that the authority relationship is a relationship of subordination: the employee accepts that heteronomous rules and decisions will guide his actions, decisions and contribution to the organizational process. Yet, the employer’s decisions aiming at coordinating the workers’ contribution toward the organizational desired outcomes do not necessarily find expression in detailed, strict, rigid rules and instructions and ongoing work performance monitoring. In this regard, Albano (2013) points to four distinct ideal-typical modes of structuring interdependent working activities and subjects’ work contributions at the micro level of analysis. The first type is the “standardization of task execution,” which denotes control and coordination based on the imposition of rigid heteronomous rules. Workers have neither autonomy nor discretion over key aspects of their work (i.e. objectives; task control and coordination; individuals’ control and coordination—i.e. who performs which task with whom, where, when, how, as well as the ways of workers’ involvement—knowledge required to perform the tasks). Supervisors closely monitor how workers execute their tasks and the extent to which they follow instructions. This type remarkably aligns with the traditional legal notion of hetero-direction. The second ideal-typical mode of control and coordination is the “standardization of professional competences.” Workers have no autonomy but can make discretionary decisions about the way of carrying out their tasks (i.e. with whom to interact, where, when, how to perform them) by choosing from an even possibly wide range of alternative options which have already been determined by previous heteronomous rules. Although task execution is not directly and closely predetermined, it is nonetheless controlled indirectly, for instance, through the standardization (i.e. heteronomous predetermination) of the skills and knowledge required to do the job, as well as of the process key performance indicators. Clearly,

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mainstream performance management systems play a key role in this respect. “Mutual and autonomous regulation” is a third type of control and coordination in which the structuration of key aspects of work, including the operational goals, springs from autonomous rules produced by a collective of work—that may be formed by organizational members as well as external stakeholders—via direct and ongoing mutual communication in the course of action. For instance, the innovation processes analyzed by Pfeiffer et al. (2010) approach this ideal-typical mode of control and coordination. The last type, “feed-forward regulation,” is associated with a condition of sequential interdependence between the phases X and Y where the output of X, which is characterized by high variability, becomes the input for Y, that should deal with such variability through local adaptions with no possibility of feedback. Accordingly, the action program to achieve highly variable desired outcomes spring from autonomous rules produced in the course of action by a collective of work whose members share their knowledge and expertise, and seek to pursue the process effectiveness through compromise, conflict and cooperation. The abovementioned modes of controlling and coordinating work are four ideal-types in the Weberian sense of the term (Weber 1904, Eng. transl. 1949/2011). Therefore, that typology can be employed to interpret the organizational structure variability of whatever real organization, the differences between organizations or parts of the same organization, as well as the way in which the work process structuration may change in the same organizational part over time. For instance, the use of this typology to interpret the micro-level organizational changes associated with digitalization suggests that digitally transforming organizations are integrating new digital technologies into work processes in a way which entails a recursive transformation of workers’ autonomy into discretion. While this must remain merely a hypothesis in the absence of adequate empirical evidence, it definitively deserves further investigation. The abovementioned typology also points out that the variability of real structuration modes not only include the modes of control and coordination which approach the simplest and the most complex ideal-types but also those which approach the “standardization of professional

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competences” and “feed-forward regulation” and cannot be ordered along the certainty—uncertainty continuum. The “standardization of professional competences” leaves workers some scope to make discretionary decisions and nonetheless reflects the same logic underlying the “standardization of task execution”—that is, workers must adapt to a process whose regulation is determined from the outside. The other two modes of control and coordination, instead, admit genuine organizational autonomy. By contributing to the production of autonomous rules, workers can not only apply knowledge and experience that they already possess but also develop new competences (de Terssac 1992). This increases their power, namely, their ability to influence the inducements/contributions contract (Thompson 1967/2003, chapter 8), which, in turn, can improve the organizational process efficiency, meant as the organization’s ability to meet individual objectives and needs which—as said above—do not coincide with the organizational goals (Barnard 1938). As suggested above, like the “standardization of task execution” and of “professional competences,” the modes of control and coordination which admit organizational autonomy spring from decisions relating to another level of analysis—the meso level which, in effect, includes the decisions about the structuration of work processes. Therefore, to the extent that such decisions remain prerogative of the dominant coalition and cannot be affected by the workers, workers remain subordinate to the employer even if their work is coordinated through “feed-forward regulation” or “mutual and autonomous regulation,” which allow them to produce autonomous rules. Under such conditions, far from representing mutual exclusive elements or the opposite poles of a continuum, autonomy and subordination (heteronomy) are simultaneously present at the same (micro) level of analysis.

Outside the Employment Relationship The ability to determine the key decisions at the meso level of analysis and the idea that autonomy and heteronomy are always simultaneously present at all levels of analysis are key notions to address also the issue of autonomy outside the employment contract.

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A processual perspective of analysis suggests that self-employed workers are autonomous to the extent that they are capable of determining such key aspects as the organizational goals, the modes of control and coordination of their work processes, the criteria to assess organizational performance and allocate resources (i.e. meso-level decisions). Autonomy, however, does not mean independence since there is no real organizational process which is self-sufficient (Thompson 1967/2003, chapter 3). Any real organizational process is immersed in a complex web of relationships with relevant stakeholders in its environment that are able to affect the abovementioned decisions, both providing support and posing constraints and contingencies. Therefore, in order to assess self-employed workers’ autonomy, it is necessary to expand the analysis beyond the meso level by focusing also on the macro one and analyzing the power-dependence relationships between the focal organizational process and the relevant stakeholders in its environment. Specifically, in order to assess self-employed workers’ ability to make autonomous decisions at the meso level of analysis, it is essential to ascertain their actual or potential ability to structure the relationships with the external stakeholders whom they most significantly depend on in a way that increases their power over the external environment, and thus their ability of future self-regulation.

Concluding Remarks As just the last example of “disruptive” phenomena challenging the concepts we use to interpret and regulate the ever-changing socio-economic reality, the digital transformation of work and organizations has revitalized the debate around the future of work, drawing increasing attention from labor law and organizational scholars to the issue of work autonomy. In organizational studies, however, most of the existing empirical studies draw from mainstream organizational theories an overly fuzzy definition of autonomy, often used interchangeably with that of discretion. Moreover, they do not address the levels of analysis at which work autonomy is declined and the aspects of work over which it is exercised, thereby leaving unanswered the question of how we should interpret the distance

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of digital forms of work from digital Taylorism and hindering the renewal of a stagnating debate. Labor law scholarship, on the other hand, clearly points to the need to rethink the categories used to interpret and regulate the world of work in order to adjust labor law’s scope to the complexity of the socio-economic reality. Prominent attempts in that direction are the concept of subordination as “double alienness” and the idea of reconceptualizing the traditional legal notions of subordination and autonomy as opposite poles of a continuum including intermediate categories, so as to achieve a balance between selective and universal labor laws’ application. Either explicitly or implicitly, the above positions acknowledge the contribution that organizational scholarship may offer to advance reflections in their respective directions of analysis. Therefore, this section succinctly (and boldly) summarizes the main insights into autonomy at work in and outside the employment relationship provided by the conceptual framework for the analysis of the organizational regulation of work presented above. Formed by concepts and analytic distinctions drawn from the organizational theories that conceive the organization as a process of actions and decisions based on bounded and intentional rationality, such framework proposes a concept of subordination which is distinct from that of hetero-direction and aligns with that of “double alienness.” On the other hand, it suggests that the variability of the concrete modes of control and coordination of work cannot be analyzed in terms of variable levels of hetero-direction. Albano’s (2013) typology, in fact, underlines that the “standardization of task execution” (i.e. hetero-direction) is just one of the possible modes of control and coordination, alongside three other distinct ones which cannot be interpreted through the lens of hetero-­ direction. This suggests that subordination can be detected even where hetero-direction is absent and that it can coexist with (genuine) autonomy. Overall, the four ideal-typical modes of control and coordination help to distinguish different situations, and thus to identify distinct groups of subordinate workers with different needs/interests that may justify differential treatment, thereby offering useful insights for the proposal of selective application of labor laws and protections.

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The proposed conceptual framework can also offer insights for the labor law doctrine focusing on the introduction of intermediate categories (e.g. economically dependent self-employed work). First, the ideal-­ typical modes of control and coordination suggest that the variable ways of organizing personal work, even where this is carried out in the context of a long-term relationship with the client, can hardly be interpreted as a continuum between hetero-direction and autonomy. Second, that typology, combined with the distinction between autonomy and discretion, unveils that the absence of hetero-direction does not imply that workers enjoy genuine autonomy. In a similar vein, that typology and the autonomy versus discretion distinction highlight the continuity between the logic of control underlying the Taylorist/Fordist ways of organizing work (i.e. which approach the “standardization of task execution”) and that at the root of solutions which approach the “standardization of professional competences” and allow workers to make decisions about the how, when and where of their work within an organizational setting which is pre-set from the outside. More importantly, the proposed analytical framework points to the conclusion that in order to assess autonomy in self-employed work, it is essential to shift the analysis from the micro level—that is, the concrete modes in which the worker carries out work—to the meso level—that is, the worker’s ability to autonomously define organizational goals, structure, criteria for assessing organizational performance and allocating resources—and the macro one—that is, the worker’s actual or potential ability to affect the decisions of external stakeholders on whom he/she most significantly depends.

Notes 1. Case No 30/1996 (Judgment) Constitutional Court of Italy (12 February 1996) 1–2 (cited in Pietrogiovanni 2019, p. 64). 2. This interpretation remarkably aligns with the idea that the variable, concrete ways of structuring economic relationships can be ordered along a continuum whose opposite poles are hierarchical forms of control, on the one hand, and pure market transactions, on the other; an idea that has been advanced in the field of organizational studies by transaction cost theory (cf. Perulli 2015).

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Schörpf, Philip, Jörg Flecker, Annika Schönauer, and Hubert Eichmann. 2017. “Triangular love–hate: management and control in creative crowdworking.” New Technology, Work and Employment 32(1): 43–58. Staab, Philipp, and Oliver Nachtwey. 2016. “Market and labour control in digital capitalism.” tripleC: Communication, Capitalism & Critique. Open Access Journal for a Global Sustainable Information Society 14 (2): 457–474. Sundararajan, Arun. 2016. The sharing economy: The end of employment and the rise of crowd-based capitalism. Cambridge, MA: MIT Press Terssac, Gilbert de. 1992. Autonomie dans le travail. Paris: Presses universitaires de France. Thompson, James D. 1967. Organizations in Action. New York: McGraw-Hill (2003. New Brunswick (USA) /London: Transaction Publishers). Trist, Eric L., and Kenneth W. Bamforth. 1951. “Some social and psychological consequences of the longwall method of coal-getting: An examination of the psychological situation and defences of a work group in relation to the social structure and technological content of the work system.” Human Relations 4 (1): 3–38. Weber, Max. 1904. “Die Objektivität sozialwissenschaftlicher und sozialpolitischer Erkenntnis.” In Gesammelte Aufsätze zur Wissenschaftslehre. Mohr: Tübingen. English edition: Weber, Max. 1949. On the Methodology of the Social Sciences (Translated by Edward A. Shils, and Henry A. Finch). Glencoe, IL: Free Press (2nd ed. 2011 with a new introduction by Robert J. Antonio, and Alan Sica).

3 False Starts, Wrong Turns, and Dead Ends. How (Not) to Ensure Social Protection for All Workers Manos Matsaganis

Introduction Ensuring universal coverage for health, pensions, and other benefits and services is the mark of a truly civilised society. At present, the self-­ employed, and especially gig workers, are both less eligible for a range of social benefits and at a higher risk of poverty. In view of that, it is welcome that the European Pillar of Social Rights has called for the right to adequate social protection to be extended to all workers, and, under comparable conditions, the self-employed, regardless of the type and duration of their employment relationship. Nevertheless, self-employment also poses challenges for social and, more broadly, public policy. Because of these, policymakers ought to tread a very fine line between integrating the self-employed into social protection (which is necessary if the goal is to avoid gaps in coverage), on

M. Matsaganis (*) Polytechnic University of Milan, Milan, Italy e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 T. Addabbo et al. (eds.), Defining and Protecting Autonomous Work, https://doi.org/10.1007/978-3-031-06397-8_3

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the one hand, and actively encouraging self-employment (which might be undesirable on economic and social grounds), on the other hand. The structure of this chapter is as follows. The next section discusses two reasons policymakers should be wary of self-employment: limited job creation potential and perverse tax compliance incentives. The section “Basic Facts” shows how the relative weight of self-employment, in general, and gig work, in particular, varies across countries and over time. The section “Outstanding Questions” examines two questions that need to be answered for social rights to be extended to the self-employed: the appropriate social contribution rate, and the range of social risks covered. The section “Diverging Approaches” critically reviews two diverging national approaches to the integration of self-employed workers into social protection, as revealed by recent developments in the Netherlands and Greece. The final section concludes by tracing a possible way forward.

Troubling Issues The explicit promotion of self-employment has been official EU policy since the launch of the European Employment Strategy in the late 1990s (Goetschy 1999, p. 127). One of the main periodic publications of the European Commission’s Directorate-General for Employment, Social Affairs and Inclusion has recently stated that: Promoting entrepreneurship and self-employment […] has a strong potential to create jobs, strengthen the EU’s innovation capacity and give unemployed and disadvantaged people an opportunity to fully participate in society and the economy. (European Commission 2016, p. 41)

This can be problematic. Two issues in particular stand out: limited job creation potential, and perverse tax compliance incentives.

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Job Creation As it turns out, not all entrepreneurship is good for employment and growth. The literature distinguishes between “necessity-driven” versus “opportunity-driven” entrepreneurship. The former tends to be more common in emerging economies, the latter is more prevalent in advanced ones. Specifically: A larger portion of new businesses in emerging market and developing economies is “necessity driven”—occurring out of economic need when other options for work are absent or unsatisfactory. In contrast, “opportunity-­driven” entrepreneurship, which is more closely related to innovation, is relatively more prevalent in advanced economies […]. An important development goal in many emerging market and developing economies is therefore not so much to increase business entry itself, but rather to increase the share of entrepreneurship that is driven by opportunity. (IMF 2016, p. 39)

Within advanced economies, rates of necessity-driven entrepreneurship vary widely by country. According to the latest Global Entrepreneurship Monitor report, 82.2% of total early-stage entrepreneurial activity in Italy was somewhat or strongly motivated by a desire “to earn a living because jobs are scarce”. At the other extreme, the corresponding figure in Norway was only 23.1% (GEM 2021, pp. 67, 204). Furthermore, the job growth potential of self-employment and entrepreneurship hinges on whether new firms, which inevitably start small, stay small or not. As a matter of fact, the vast majority of micro firms (employing 0–9 workers) make little or no contribution to job creation. To cite the latest Eurostat figures (from the third quarter of 2021), of the 25.4 million self-employed throughout the EU, 17.3 million (68%) were “own-account workers”, that is, had no employees. The evidence shows that most net employment growth is generated by a few young firms, irrespective of size (Haltiwanger et al. 2013). What is more, micro firms tend to be less innovative, less productive, and, ultimately, less successful. As an IMF report on fiscal policies for innovation and growth has snappily put it: “new, not small, is beautiful” (IMF 2016, p. 41).

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The question for policy, therefore, is how to encourage small firms to grow. Tax and other policies favouring small businesses, in the misguided belief that this is the way to promote job creation, may inadvertently encourage small firms to remain small. This is the case of the “small business trap”, brought about by disincentives for firms to grow created by size-based preferential tax treatment. “Bunching”, that is, an abnormally high density of firms with income just below the level beyond which the size-based tax preference is removed, is one illustration of the “small business trap”. Research shows that bunching may be caused both by genuine under-investment (or inefficient business fragmentation), as well as by income under-reporting (IMF 2016, pp. 42–43).

Tax Compliance The European Commission publication cited previously, in its analysis of self-employment and entrepreneurship as an engine of employment growth, also struck a note of caution: [W]hen labour and corporate income are taxed at different rates there may be an incentive to choose the form of employment that involves the lowest tax rate, as the following examples illustrate. First, if it is easier to under-­ report taxable income when self-employed (through an incorporated business) than as a wage earner, then people may be incentivised to become self-employed—particularly in cases of weak tax law enforcement. […] Moreover, where tax-deductible business expenses are suitable for both business and private use (such as a car) there may be an additional incentive to become self-employed. (European Commission 2016, p. 51)

In fact, there is evidence that the high level (or recent rise) of self-­ employment is induced by policy. In particular, taxation rules discriminating in favour of the self-employed act as an incentive to take up self-employment. A recent OECD study concluded that in countries where this tax treatment differential is large (e.g. the Netherlands or the UK), “the tax system may be a driver of increased self-employment” (Milanez and Bratta 2019, p. 8). That was also the conclusion of a UK report, which argued that one of the key drivers of the fast growth in self-­ employment in the country (from just over three million workers in 2000

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to almost five million in 2016) was the substantial tax advantages enjoyed by the self-employed and by the firms contracting them (Tomlinson and Corlett 2017). Obviously, the relation between taxation and self-employment goes the opposite way too. That the self-employed are more prone to tax evasion and avoidance than employees is an established fact of public finance, supported by plenty of evidence. In Italy, the share of selfemployment income that is concealed from income tax reports was recently put at over 40% (Bazzoli et al. 2020). In Greece, the EU member state with the highest share of self-employed workers, the rate of income under-­ reporting on their part has been estimated at 48% (Artavanis et al. 2016). It should be emphasised that the common assumption that the low tax compliance of self-employed workers stems from low administrative capacity is mistaken. No-one doubts the professionalism and incorruptibility of the Internal Revenue Service, the US government’s tax agency. (After all, the US is the country where Al Capone was famously jailed for tax evasion, not mass murder.) Nevertheless, the share of income under-­ reporting on the part of self-employed workers is, if anything, higher in the US than in Italy or Greece, between 57% and 59%, according to the best estimates currently available (Slemrod 2007, 2019). From a social policy point of view, tax evasion is doubly unfortunate. On the one hand, it deprives the (welfare) state of precious resources. On the other hand, it increases inequality significantly relative to a no tax evasion counterfactual (Bazzoli et al. 2020; Matsaganis et al. 2012).

Basic Facts There is no doubt that standard employment (full-time, open-ended) has declined in recent decades. Conversely, other (“non-standard”) forms of employment are on the rise. The latter are usually defined as (1) part-­ time, (2) temporary, and (3) self-employment. For instance, part-time work has become more prevalent in the EU (15.1% of all employment in 2020, from 10.3% in 1984), and so has temporary work (13.6% of all dependent employment in 2020, from 8.5% in 1984). Can the same be said of self-employment?

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Is Self-Employment on the Rise? Aggregate data for the EU as a whole—only available for the last two decades—show that the relative weight of self-employment has actually declined (from 18.3% of all employment in 2000 to 15.2% in 2020). Judging from those countries for which data exist over a longer period, the gradual decline of self-employment started earlier, and was nearly universal. Between 1981 and 2020, the share of self-employment fell from 23.6% to 14.5% in Ireland, from 28.8% to 22.5% in Italy, and from 51.9% to 31.9% in Greece (OECD 2022). The impression that self-employment is not, generally speaking, on the rise is confirmed by Fig. 3.1, which compares the share of self-­employment 40

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in 2007 (i.e. just before the onset of the global financial crisis) and in 2020 (i.e. the latest year for which data are available) in 30 OECD member states in Europe and beyond. The figure is easy to read. Below the diagonal are the countries in which the share of self-employed workers was lower in 2020 than it had been in 2007; above the diagonal are those where the share of self-employment increased during 2007–2020. Obviously, the countries in the top right featured a higher share of self-­ employment, while the opposite was true for those in the bottom left. Clearly, in most OECD countries, the share of self-employment has decreased since 2007. The decline was most striking in the countries where that share was higher to start with. In Poland, the relative weight of self-employment fell by almost 3 percentage points; in Italy and Greece, by 3.5; in Portugal, by over 8 points. Among the rare exceptions were France (+1.4  pp.), the UK and New Zealand (+2.3 and 2.5  pp., respectively), and the Netherlands (+3.2 pp.). A significant proportion of self-employed workers can be classified as “dependent”. Data from the 2015 European Working Conditions Survey (EWCS) implied that 18% of all self-employed workers in Europe were “economically dependent”, defined as “self-employed without employees who have only one client and/or have no authority to hire staff and/or to make important strategic decisions” (Eurofound 2017). Similarly, data from the ad hoc module of the 2017 European Labour Force Survey showed that the incidence of own-account workers who generally have one dominant client was around 16% in the EU as a whole (OECD 2019, p. 146).

Gig Work The rise of the gig economy has further contributed to rendering work more fluid, and labour markets more “informal” (and often precarious), for example, by further blurring the distinction between dependent employment and self-employment. The number of workers in the platform economy is difficult to establish with precision. In the US, a survey by Pew Research Center (Smith 2016) found that 8% of the workforce were active in online job platforms, of which 44% were employed full-time and 26% considered

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themselves to be employees of the platform they used. In Europe, a survey of 32,400 internet users in 14 countries (Pesole et al. 2018) found that platform workers, defined as those earning more than half of their income via platforms, accounted for 2.3% of the workforce, and were more likely to be male, young, and well-educated than the general population. Less strict definitions yielded higher figures: 5.6% of respondents spent at least 10 hours a week on platform work, while 6.0% earned at least a quarter of their income this way. In Italy, a survey of 15,000 independent workers found that 5% of those who worked primarily as self-­ employed can be described as gig-economy workers, defined as workers who perform tasks on demand through a digital platform or intermediary. (The corresponding figures for the UK and the US were 7% and 14%, respectively.) Gig work in Italy seems to be characterised by low work intensity (median: 5 hours per week) and low hourly wages (median: 7 euros per hour) (Boeri et al. 2020).

Outstanding Questions Historically, the preferred approach of policymakers, especially in countries where social protection mostly relied on “Bismarckian” (contributory) social insurance, was to create separate systems for the self-employed. This approach has had serious implications for the social entitlements of self-employed workers. Relative to permanent employees, the self-­ employed are often excluded from access to a range of benefits either de jure (e.g. protection against unfair dismissal, minimum wage, severance pay, sickness leave, maternity leave, unemployment insurance) or de facto (e.g. reduced eligibility for contributory pensions) (Spasova et al. 2017). An analysis of Labour Force Survey data found large gaps in coverage. In 2014, 38% of self-employed workers aged 15–64 in the EU failed to qualify for sickness benefits. Moreover, 46% of self-employed women aged 15–49 were not entitled to maternity benefits. The corresponding figures for part-time temporary workers, the second most likely category to face incomplete coverage against social risks, were much lower: 10% and 13%, respectively (Matsaganis et al. 2015). Sometimes, the exclusion of the self-employed is explicit: that was until recently the case of contributory family allowances (assegni familiari) in Italy.

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Gaps in coverage might have been less unacceptable if poverty rates among self-employed workers were not as high. A recent analysis of EU-SILC data found that the incidence of in-work poverty in the EU was 39% for self-employed workers, compared to 8% for permanent workers, in 2015 (De Micheli et al. 2018, p. 17). The occupational fragmentation of social protection is not only an affront to universalist aspirations: it is also ill-suited to the requirements of a dynamic economy. In view of that, the drive to extend social rights to the self-employed is commendable. To that purpose, Principle 12 of the European Pillar of Social Rights (proclaimed in November 2017 by the European Parliament, the Council, and the Commission at the Gothenburg Summit) states that: Regardless of the type and duration of their employment relationship, workers, and, under comparable conditions, the self-employed, have the right to adequate social protection. (EPSR 2017, p. 19)

The question is how. In particular, two issues are likely to prove difficult to resolve in practice: the appropriate social contribution rate, and the range of social risks covered.

A “Double Contribution Challenge”? The difference in treatment on the benefit side is sometimes mirrored on the contribution side, though rarely in an actuarial sense. In a few countries, such as Austria and Italy, the dependent self-employed are for the purposes of social insurance treated as a separate category: they are liable for higher social contributions than other (“independent”) self-employed workers and are eligible for a wider range of social benefits. In Austria, their social contribution rate is now equal to that for employees (Fink and Nagl 2018); in Italy, it remains lower (Raitano 2018). In both countries, the social contribution rates for the dependent self-employed (defined as “independent contractors” and “exclusive collaborators”, respectively) were raised considerably in recent years. The increase in the contribution rate was followed by a significant reduction in the number

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of workers covered, which suggests that the previous arrangement may have corresponded more to the demands of employers seeking to minimise their personnel costs, than to the needs of dependent self-employed workers themselves. In many EU countries, including Sweden, Finland, Germany, the Czech Republic, and Spain, the social contribution rate for self-employed workers is exactly equal to the sum of employee and employer contribution rates for dependent workers (MISSOC 2021). Beyond Europe, this is also the case in the US, where the self-employment contribution rate is 15.3%, consisting of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance) (IRS 2022a). This is exactly equal to the total for employees, for which the current contribution rate is 12.4% for social security (6.2% for the employer and 6.2% for the employee), and 2.9% for Medicare (1.45% for the employer and 1.45% for the employee) (IRS 2022b). The latter solution has been contested. A recent ILO report on extending social security to self-employed workers argued that: In many cases, self-employed workers face a ‘double contribution challenge’: in the absence of an employer, the burden of paying the full contribution (employer and employee parts) falls on them. Unless adapted mechanisms are in place, self-employed workers with very low earnings cannot afford to pay the required social security contributions. (ILO 2019, p. 3)

For an economist, the so-called double contribution challenge is a non-­ issue. What matters to employers is total labour costs (i.e. gross wage plus employer social contributions). What matters to workers is take-home pay (i.e. gross wage minus employee social contributions minus taxes). How the difference is formally split between employers and employees is largely symbolic, or at most relevant only in the short time it takes for the market to settle. Furthermore, the economics of tax incidence suggest that how the real burden of social contributions is shared between employers and employees (i.e. how total labour costs and take-home pay adjust to changes in social contributions) depends on the elasticity of labour demand and labour supply and is entirely unrelated to legal

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provisions (Boeri and van Ours 2021, pp. 619–620). It follows that to ensure parity with employees, social contributions for the self-employed must be set equal to the sum of employee and employer contributions. The search for alternative solutions inevitably boils down to two options (and points in between). Option 1, accepting lower benefits in exchange of lower contributions, fails to solve the problem of gaps in coverage and of reduced entitlements. Option 2, allowing self-employed workers to pay lower contributions for the same benefits as employees (in effect having the state or social insurance agencies cover the employer part of their social contributions), is unfair and perverse. From the perspective of employers, it encourages unscrupulous ones to resort to “bogus” self-employment (treating their employees as freelance workers). From the perspective of workers, it makes own-account work more attractive relative to dependent employment—and, in the process, discourages business growth (“small is not beautiful”).

Unemployment Protection The fact that self-employed (and other non-standard) workers are often disenfranchised de jure with respect to sickness and maternity benefits is at odds with the universalist aspirations of the European Social Model, not to say outright indefensible. So is the fact that self-employed (and other non-standard) workers are also often de facto discriminated against in terms of access to retirement benefits. As argued in the concluding section, both issues are more easily dealt in the context of tax-funded systems where social protection is a citizenship right, than in the context of contributory social insurance with thresholds, ceilings, and other barriers to access. Extending unemployment protection to non-employees is fraught with difficulties. On the one hand, self-employment earnings are self-­ reported (and hence, hard to verify by the tax authorities) and volatile (subject to fluctuations from month to month). On the other hand, the decision to stop working is to a larger extent endogenous for self-employed workers than it is for employees. As a result of all that, unemployment

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insurance systems devised for employees may not be fully appropriate for the self-employed. In several EU member states, self-employed workers are in fact eligible for contributory unemployment insurance (MISSOC 2021). Nevertheless, eligibility is typically extended on condition of full exit: in order to obtain unemployment benefit, self-employed workers must have closed down their entire business first (except, of course, if they have also worked as employees). This is in addition to the requirement of having paid contributions into the unemployment fund for a number of years as well. (The same goes for non-contributory unemployment assistance, where it exists separately from general means-tested social assistance.) More broadly, for most self-employed workers, including “gig workers”, the issue is not so much unemployment as such, but low work intensity and/or low earnings. This calls for a drastic redesign of income support. One might hypothesise an unemployment protection scheme (more accurately: an income stabilisation fund) for self-employed and other non-standard workers whose function would be to smooth earnings on an actuarial basis. But that would not be achieved by extending current unemployment insurance schemes to the self-employed.

Diverging Approaches The treatment of self-employed workers by the social protection system has recently known twists and turns in Greece (where their share is high but declining) and in the Netherlands (where it is moderate but rising).

Greece From the birth of national social insurance (in 1931) to the 2016 reform, there existed separate schemes for own-account workers and liberal professions, each with their own social contribution schedule for retirement and health insurance benefits. On the whole, contributions were flat-rate, varied by “insurance class”, and increased with time: insurees were placed at a low insurance class on entry and graduated to higher ones after a

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fixed number of years. The distributional effects of this arrangement were highly regressive (Matsaganis 2011). In 2016, when the country was under international economic surveillance following its debt crisis, social insurance was unified. On the insistence of the EU-ECB-IMF Troika, the social insurance contributions (for pension and health benefits) paid by self-employed workers were made income-related, and rates were set equal to the sum of employer and employee contributions (Matsaganis 2020). The reception of the reform was hostile. Given how favourable to self-­ employed workers the previous system was, having them pay the same contributions (at given earnings) as employees amounted to a very significant increase in their tax burden. As a result, some self-employed workers were driven out of business, while others (presumably, many more) responded by under-reporting their earnings and/or by raising the price of the goods and services they provide to consumers. In fact, receipts from social contributions paid by the self-employed in 2017 (under the new system) were 30% lower compared to 2016 (under the old system). As own-account workers and liberal professionals—such as lawyers— clamoured for a return to the previous system (which is never inconsequential, in a country where the self-employed are well represented in Parliament and in the electorate at large), they were vindicated by the Constitutional Court, which ruled unconstitutional the “double contribution”. Following this verdict, the government was forced to change the law. From 2019, the self-employed paid only the employee portion of social insurance contributions (which in Greece is one-third of the total, rather than half as in the US). Even though the Constitutional Court had not challenged the principle that self-employed workers ought to pay income-related contributions, in 2020, the new government restored flat-rate contributions. These were similar to the pre-2016 system, in that contributions varied by insurance class, except this time insurees were allowed to opt for whichever class they preferred, with no provision for a gradual progression to a higher one after a certain number of years in the profession. Under current rules, a surgeon can legally pay lower social contributions than his cleaning lady.

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Apart from the patent unfairness of this legislation, its effects on the economy are also likely to prove deleterious. An influential commission, appointed by the Prime Minister, headed by Sir Christopher Pissarides, winner of the 2010 Nobel Prize in economics, urged the government to remove the obstacles that prevent Greek firms from growing. (Greece has the greatest share of micro and small firms in the EU.) The preferential tax treatment of the self-employed, and the resulting counter-incentive to hire employees, was rightly identified as one of the most important such obstacles, newly restored by the current government (Pissarides Commission 2020, p. 103).

The Netherlands A recent OECD study examined how tax systems influence a worker’s choice of employment form by comparing the “payment wedge” (i.e. the net amount that the government receives as a result of taxing a worker’s labour income, inclusive of social contributions, as a proportion of total labour costs), across three employment forms: standard employee, unincorporated self-employed worker (independent contractor), and incorporated self-employed worker (owner-manager of own company, organised as a corporation), in eight countries. According to its findings, the Netherlands stood out in terms of the gap between the tax and social contribution wedge for employees (51.0%) and that for the unincorporated self-employed (22.3%) (Milanez and Bratta 2019, pp. 55–57). The study identified two reasons the tax treatment of self-employed workers in the Netherlands is so unusually favourable: lower social contributions, and deductions from personal income tax that are not available to employees. The study concluded that: As a result, unincorporated self-employed workers have the lowest payment wedge, both at the average wage but also across the wage spectrum. This translates into a tax system incentive for firms to contract labour rather than offer standard employment contracts, potentially misclassifying workers in the process. It also implies a tax system that incentivises individuals to become self-employed. (Milanez and Bratta 2019, p. 66)

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Paradoxically, the growth in self-employment was to some extent an unintended consequence of the social rights parity achieved by part-time workers in the 1980s (Visser and Hemerijck 1997). As part-time work became more “standard” (and more common: 45.6% of all employment in 2019), entrepreneurs explored other avenues for non-standard work. As a result, temporary work and self-employment grew significantly. This may be about to change. In January 2020, the high-level Borstlap Commission on the Regulation of Work argued that the growing share of independent employees is becoming a drag on Dutch competitiveness and advised the government that “everything must focus on reducing the difference between employees, self-employed and flex workers”. According to the Commission, the choice between dependent employment, temporary work, and self-employment should not be driven by tax or regulatory arbitrage but be based on substantive grounds (Commissie-Borstlap 2020). The Covid-19 pandemic, and the fiscal support for businesses and households that it rendered necessary, has been a catalyst for change: Before the pandemic, the high-skill vocal segment of the self-employed strongly opposed integration into a social security regime for all. As many independent jobs came under immediate threat, the Dutch government has come forth to soften the blow for freelancers and platform workers. The upshot is that the Rubicon is crossed to bring the self-employed under the roof. (Eichhorst et al. 2022)

While it remains to be seen whether the Borstlap Commission recommendations will eventually make it to the statute book, the Balanced Labour Market Act, which entered into force in January 2020, has already phased out the permanent self-employment tax deduction, and introduced a minimum coverage for disability insurance for all workers. Furthermore, the OECD has endorsed the Borstlap Commission recommendations, urging the Dutch government to align taxes and social security contributions between contract types for workers doing similar jobs (OECD 2021).

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Concluding Remarks While the intention of the European Pillar of Social Rights to extend social rights to the self-employed and other non-standard workers is laudable, exactly how to do this remains controversial. The task facing policymakers is how to integrate the self-employed into social protection, without introducing perverse incentives. Allowing lower contributions for self-employed workers should be avoided: subsidising the contributions of self-employed workers or retaining the current differentials in contribution rates relative to employees, would be unfair and strengthen the incentive of employers to disguise their employees as bogus independent contractors, if they can get away with that. Extending unemployment insurance to the self-employed is also problematic and should come with strict conditions to avoid abuse (Boeri and van Ours 2021, pp. 507–508). An income stabilisation fund for the self-employed (and other non-standard workers), smoothing earnings on an actuarial basis, might be more appropriate and more useful than unemployment insurance. In view of this, starting from dependent self-employment might be a sensible strategy. While no easy solutions present themselves, it may be that a promising course of action is to expand coverage where possible in piecemeal fashion. The writers and artists’ social insurance in Germany is an interesting model: workers are covered for health, pension, and long-­ term care insurance (though not for unemployment insurance); in exchange of this, they are liable for the employee share of social contributions, while those buying their services pay 60% of employer contributions, with a public subsidy making up the remaining (Tobsch and Eichhorst 2018). A broader challenge regards the future of the welfare state. If the goal is to ensure worker mobility between jobs while at the same time guaranteeing a high level of social protection to all citizens, irrespective of their employment status, there seems to be no alternative to abandoning occupational fragmentation in favour of making European welfare states more universal. The outlines of a possible strategy readily follow from that: make health care, child care, and other social services universal; introduce or strengthen basic income schemes for children (child allowances) and

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for the elderly (first-tier citizens’ pensions); render contributory schemes (second-tier pensions) more actuarially fair; rethink means-tested income support (housing benefits, minimum incomes) in view of volatile earnings; step up efforts to obtain accurate information of earnings in the platform economy (and from other informal activities). The corollary of a shift from contributory to non-contributory social benefits would be a corresponding shift in funding, from social contributions to general taxation, and from taxing labour to taxing real estate, emissions, and value added. Recent efforts at EU level to limit the scope for tax arbitrage on the part of multinationals, including high-tech giants, are also steps in the right direction. Lastly, while policymakers may be unwilling to contemplate the wholesale adoption of an unconditional basic income, the current interest in the idea, and experimentation with versions of the scheme, in Finland and elsewhere, are to be welcomed (Atkinson 2015; Kangas et al. 2021).

References Artavanis, Nikolaos, Adair Morse and Margarita Tsoutsoura. 2016. “Measuring income tax evasion using bank credit: evidence from Greece. The Quarterly Journal of Economics: 131 (2) 739–798. Atkinson, B.  Anthony. 2015. Inequality: What can be done? Cambridge MA: Harvard University Press. Bazzoli, Martina, Paolo Di Caro, Francesco Figari, Carlo V. Fiorio and Marco Manzo. 2020. Size, heterogeneity and distributional effects of self-employment income tax evasion in Italy. EUROMOD Working Paper No. 18/20. University of Essex. Boeri, Tito and Jan van Ours. 2021. The economics of imperfect labour markets (3rd edition). Princeton NJ: Princeton University Press. Boeri, Tito, Giulia Giupponi, Alan B. Krueger & Stephen Machin. 2020. “Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs”. Journal of Economic Perspectives: (1)34, 170–195. Commissie-Borstlap. (2020) Eindrapport van de Commissie Regulering van Werk. Den Haag: Rijksoverheid (Available on: https://www.rijksoverheid.nl/documenten/rapporten/2020/01/23/rapport-­i n-­w at-­v oor-­l and-­w illen-wij-­ werken).

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De Micheli, Barbara, Francesco Figari, Feliciano Iudicone, Amerigo Lombardi, Manos Matsaganis, Michele Raitano and Patrik Vesan. 2018. Access to social protection for all forms of employment: assessing the options for a possible EU initiative. European Commission. (Available on: https://ec.europa.eu/social/ main.jsp?catId=738&langId=en&pubId=8067). Eichhorst, Werner, Anton Hemerijck and Gemma Scalise. 2022. “Welfare states, labour markets, social investment, and the digital transformation.” In Busemeyer Marius, Achim Kemmerling, Kees Van Kersbergen and Paul Marx (eds.). Digitalization and the welfare state. Oxford. Oxford University Press. EPSR. 2017. European Pillar of Social Rights. Luxembourg: Publications Office of the European Union (Available on: https://ec.europa.eu/info/sites/default/ files/social-­summit-­european-­pillar-­social-­rights-­booklet_en.pdf ). Eurofound. 2017. Non-standard forms of employment: Recent trends and future prospects. Dublin. European Foundation for the Improvement of Living and Working Conditions. European Commission. 2016. Employment and Social Developments in Europe 2015. Luxembourg. Publications Office of the European Union. Fink, Marcel and Wolfgang Nagl. 2018. “Austria: How social protection rules affect self-employed and independent contractors”. In The future of social protection: What works for non-standard workers? Paris. Paris: Organisation for Economic Co-operation and Development. https://doi.org/10.1787/ 9789264306943-­6-­en. GEM. 2021. Global Report 2020/2021. London: Global Entrepreneurship Monitor. (Available on: https://www.gemconsortium.org/report/gem-­ 20202021-­global-­report). Goetschy, Janine. 1999. “The European Employment Strategy: Genesis and development”. European Journal of Industrial Relations. 5 (2) 117–137. Haltiwanger, John, Ron S. Jarmin and Javier Miranda. 2013. “Who creates jobs? Small versus large versus young”. The Review of Economics and Statistics. 95 (2) 347–361. ILO. 2019. Extending social security to self-employed workers: Lessons from international experience. Issue Brief No. 4/2019. Geneva: International Labour Office. IMF. 2016. Fiscal monitor. Washington DC: International Monetary Fund. IRS. 2022a. Self-Employment Tax (Social Security and Medicare Taxes). Washington DC: Internal Revenue Service. (Available on: https://www.irs. gov/businesses/small-­b usinesses-­s elf-­e mployed/self-­e mployment-­t axsocial-­security-­and-­medicare-­taxes).

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IRS. 2022b. Topic No. 751 Social Security and Medicare Withholding Rates. Washington DC: Internal Revenue Service. (Available on: https://www.irs. gov/taxtopics/tc751). Kangas, Olli, Signe Jauhiainen, Miska Simanainen and Minna Ylikanno. 2021. Experimenting with unconditional basic income: Lessons from the Finnish BI experiment 2017–2018. Cheltenham: Edward Elgar. Matsaganis, Manos. 2011. “The welfare state and the crisis: the case of Greece”. Journal of European Social Policy. 21 (5) 501–512. Matsaganis, Manos. 2020. “Safety nets in (the) crisis: the case of Greece in the 2010s.”. Social Policy and Administration. 54 (4) 587–598. Matsaganis, Manos, Chrysa Leventi and Maria Flevotomou. 2012. The crisis and tax evasion in Greece: what are the distributional implications? CESifo Forum. 13 (2) 26–32. Matsaganis, Manos, Erhan Özdemir, Terry Ward and Alkistis Zavakou. 2015. Non-standard employment and access to social security benefits. Social Situation Monitor Research Note 8/2015. Brussels: European Commission. (Available on: http://ec.europa.eu/social/BlobServlet?docId=15687&langId=en). Milanez, Anna and Barbara Bratta. 2019. Taxation and the future of work: How tax systems influence choice of employment form. OECD Taxation Working Paper no. 41. Paris: Organisation for Economic Co-operation and Development. MISSOC. 2021. Self-employed. Mutual Information System on Social Protection. (Available on https://www.missoc.org/missoc-­database/self-­employed/). OECD. 2019. Employment outlook. Paris: Organisation for Economic Co-operation and Development. OECD. 2021. Economic policy reforms 2021. Going for growth: Shaping a vibrant recovery. Paris: Organisation for Economic Co-operation and Development. OECD. 2022. Labour market statistics. Paris: Organisation for Economic Co-operation and Development. https://doi.org/10.1787/data-­00046-­en. Pesole, Annarosa, Cesira Urzi Brancati, Enrique Fernández Macías, Federico Biagi, Ignacio González Vázquez. 2018. Platform workers in Europe. Luxembourg: Publications Office of the European Union. Pissarides Commission. 2020. Growth plan for the Greek economy: Final report. Athens: Ministry of Finance (in Greek). Raitano, Michele. 2018. “Italy: Para-subordinate workers and their social protection”. In: The future of social protection: What works for non-standard workers? Paris: Organisation for Economic Co-operation and Development. https://doi.org/10.1787/9789264306943-­9-­en.

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4 Beyond Subordination: Four Arguments Adalberto Perulli

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”.

A. Perulli (*) Ca’ Foscari University of Venice, Venice, Italy Paris Nanterre University, Nanterre, France e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 T. Addabbo et al. (eds.), Defining and Protecting Autonomous Work, https://doi.org/10.1007/978-3-031-06397-8_4

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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.

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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,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

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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

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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

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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.

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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

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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.

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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

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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

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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

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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

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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,

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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”

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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

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Fig. 4.1  Share of self-employment (2007 vs. 2020)

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): 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

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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

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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

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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

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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

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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

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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,

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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

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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.

Note 1. According to the European Commission the concept of “economically dependent work” is a way to cover “situations which fall between the two established concepts of subordinate employment and independent self-­ employment”, COM(2006) 708 final GREEN PAPER, Modernising labour law to meet the challenges of the twenty-first century. The document stated that those workers “occupy a ‘grey area’ between labour law and commercial law. Although formally ‘self-employed’, they remain economically dependent on a single principal or client/employer for their source of income.” The Commission initiated a study by A. Perulli, Economically dependent/quasi-subordinate (parasubordinate) employment: legal, social and economic aspects. Study for the EU Commission, Brussels, 2002.

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5 Employee and Self-Employed in Working Life: Is There a Real Difference? Daria Sarti and Teresina Torre

Introduction Among the big changes that have been observed in the working world in the recent decades (Supiot et al. 2001; Billett 2006; WEF 2016, 2018), the reshaping of the traditional difference existing between “salaried employees” and “self-employed workers” seems to be one among those little-studied issues. According to the classic literature, these typologies represent two completely separate situations, having a strong and relevant reference in their legal dimension (Perulli 2017a; Del Vescovo 2018). Therefore, for a long time, this split has coherently represented the “reality” of two distinct and different working worlds, each of them

D. Sarti (*) University of Florence, Florence, Italy e-mail: [email protected] T. Torre University of Genova, Genoa, Italy e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 T. Addabbo et al. (eds.), Defining and Protecting Autonomous Work, https://doi.org/10.1007/978-3-031-06397-8_5

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established on some constitutional elements, which define their respective working conditions. Specifically, we refer to the concepts of “autonomy” and “discretion” and to the connected one of “control”, which can be considered the basis for understanding how these working universes are diverse. Indeed, autonomy is the prior reference for self-­employed workers; control focuses on results, and clients exercise it. Discretion describes the possibility of managing according to their point of view for employees who have undergone control by their superior and are essentially displayed on working activities. Coherently, the two groups ask for different attitudes and skills from their members and suggest a related way of life, expressing different orientations towards the ideas of work and job themselves (Pugliese 2015). Recently, it has been ascertained a rapid and steady increase in the number of self-employed individuals (Chay 1993; Hatfield 2015). Many reasons have been suggested to explain this trend Minola et al. 2016). First, it seems to be the effect of the persisting crisis, which is accompanying economies in these last decades. On one hand, the intense processes of expulsion from enterprises reducing their working population push skilled people to invent their own enterprise to continue working and promote their knowledge to play an active role. On the other hand, difficulties for young people to find jobs in enterprises can suggest that they try and create start-ups (Fumagalli 2015). This is well related to the increasing attention toward the concept of employability, which is promoted and implemented with specific policies at the European level. This concept includes an individual attitude toward proactiveness and entrepreneurship developed extensively in an autonomous context (Dvouletý and Lukeš 2016). At the same time, changes from individual and social perspectives are emerging. A different way of considering the role of work in individual life, which reinforces a larger appreciation of work-life balance to the detriment of a greater commitment to work success, seems to emerge as a qualifying aspect for new generations. An increasing request for flexibility is expressed by women, interested in not renouncing either to maternity and/or to work, and then looking for adaptable solutions in terms of hours of work, in place of work and work tasks (Klyver et al. 2013; Craig et al. 2012). Also, new technologies characterized by adaptability and innovativeness favor different working styles and different

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ways of organizing work, which sometimes seems to blur and eliminate the barriers defining what is employed and self-employed work. So, in recent years, it has become evident that this clear division does not correspond to the effective and substantial content of work and how work is done. With this chapter, we aim to deepen these two different working statuses entering into some crucial dimensions to understand if and where they are conditioning working practices and if it is possible to confirm or not the existence of a gap between the two—apparently?—different “worlds”. We are firmly committed that this topic is really relevant and essential nowadays to understand what is happening to work, starting from the evidence that the conceptual distance between the two positions is reducing and the reciprocal possibility of shift is increasing (Dagnino 2015; Corsetti and Mandrone 2010). To examine these aspects, we use a large international dataset (the sixth European Working Conditions Survey (EWCS) conducted in 2015 on a large sample of workers from the EU35, which is the most recent at disposal). It offers the opportunity to compare the effective situation in many European countries, enabling the possibility to understand if this way to classify working status continues to be useful or not to grasp the evolution of work. Moreover, and to the best of our knowledge, this is the first research aimed to deepen features of work from the two perspectives suggested by the literature, to confirm or contest literature acquisitions and propose a starting point for future in-depth study analysis. To pursue our goal, the chapter is organized in the following manner. The second paragraph exposes the theoretical background, and the hypotheses, which the research wishes to test, are introduced. The conceptual model we build to examine our topic is also presented at the end of this part. The third part is devoted to the empirical research: first, the methodological approach is described, and then the main results are exposed. In the fourth part, conclusions are proposed to summarize acquisitions and discuss critical emerging points. Finally, limits are reported, and future development paths are suggested.

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Theoretical Background The interest in the differences between the two occupational groups— that is, salaried workers and self-employed ones—has always been particularly high in the legal field (Perulli 2017b), offering a picture of the phenomenon from this valuable perspective to frame outlines. In addition, scholars in the domain of the occupational psychology (e.g., Chay 1993; Tetrick et  al. 2000) and positive psychology (e.g., Gorgievski et  al. 2010) have shown attention to these conditions. In detail, it has deepened the comparison between the two occupational groups in terms of individual traits and outcomes, focusing on some specific aspects. It is, for example, suggested that running a business is a demanding activity both in terms of physical and mental efforts. Indeed, significant differences in work patterns and personality characteristics between salaried employees and self-employed are remarked, also in a relationship with the fact that the owner of an enterprise is the one who is mainly responsible for its success or failure (Chay 1993). At the same time, it is underlined that there is no difference in wellbeing between the two occupational groups (Chay 1993). In addition, some researchers in the field of human resource management argue that some personality characteristics are different in the two sub-samples, for example, concerning the risk-taking propensity (e.g., Shane et al. 2003). Others show evidence that self-employed individuals are often characterized by achievement-related traits (Rauch and Frese 2007). Furthermore, in their study on personality traits, Zhao and Seibert (2006) demonstrate significant differences between entrepreneurs and managers on four personality dimensions. In particular, authors comparing entrepreneurs and salaried employees found higher scores for the formers on conscientiousness and openness to experience and lower scores on neuroticism and agreeableness. Despite many researchers comparing these two occupational categories in relation to their personality traits and competencies, concerns have been raised on whether such comparisons are meaningful (Gorgievski et al. 2010). In detail, doubts have been raised on whether the constructs here under investigation are perceived as equivalent or not among the

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members of the two different groups, with reference to the fact that the two occupational categories represent an expression of two qualitatively different sub-cultures. So, it seems evident that other paths could be followed to examine these groups. A relatively good number of scholars in business economics (e.g., Millán et al. 2013) have devoted attention to comparing the features and traits of self-employed and salaried workers. Within the theoretical domain of entrepreneurship and economic literature, scholars have dedicated significant care in considering self-employment—and entrepreneurship—as an occupational choice (Millán et  al. 2013). In these studies, it is suggested that demographics (basic individual characteristics and family background), education and experience, health conditions, labor market issues and financial issues drive the decision to enter the self-employment field (Simoes et al. 2016). In addition, job satisfaction has been identified as a possible determinant of the choice for a self-­ employed occupation or of the switch between wage-employment and self-employment (Guerra and Patuelli 2016). Research has also indicated that two of the primary reasons for opting for self-employment are autonomy and flexibility (Barnett and Bradley 2007; Smeaton 2003). Authors in the entrepreneurship field of studies suggested that “passion for work, creativity and innovativeness” are typical features of entrepreneurs (Sexton and Bowman 1985), thus distinguishing them from salaried employees. Starting from these indications, we think that it could be interesting to enrich knowledge on our topic, develop more analysis and focus the attention of research on other elements useful to explore the two typologies of workers we are interested in and propose specific observations on them. We also believe that wide-ranging research can contribute to tracing a large profile of the phenomenon. In detail, we suggest organizing our in-depth analysis considering two aspects: the first concerns job characteristics to deepen which elements influence work activities perceptions; the second includes outcomes; the outcomes, in turn, are grouped into three types, namely, job-related outcomes, individual outcomes and social outcomes, to study which implications can be underlined.

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Job Characteristics Workload Some scholars from the positive psychology domain include in the debate on the difference between self-employed and salaried employees the behavioral tendency of workaholism, suggesting that self-employed individuals experience higher levels of it. Workaholism is defined as “an individual’s steady and considerable allocation of time to work-related activities and thoughts, which does not derive from external necessities” (Snir and Harpaz 2004, p. 522). Peiperl and Jones (2001, p. 388) consider workaholics as “hard workers who enjoy and get a lot out of their work”, thus highlighting workaholic personality as passionate involvement and job of creativity through work. In a less favorable meaning, Oates (1971, p. 11) suggests that workaholism is “the compulsion of the uncontrollable need to work incessantly”. In the present work, we consider the three main features of workaholism, as introduced by Scott et al. (1997). They are: spending a great deal of time in work activities and being qualified as hard workers; being reluctant to disengage from work and persistently think about work in their free time; working beyond what is reasonably expected from a worker to meet organizational requirements. According to the authors, self-employed individuals possess higher levels of workaholism in all the three dimensions authors report. Observing this situation from the objective work point of view, we can discuss the number of work people are doing. In the same vein, studies demonstrate that self-employed individuals, compared to other occupational categories, work more hours per week (Snir and Harpaz 2004), work excessively long hours (Gorgievski et al. 2010) and score significantly higher on the workload scale. Indeed, as Chay (1993) reported, a very high proportion of small business owners work more than 50 hours per week. Coherently with these indications, we posit that:

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Hp. 5.1 Self-employed workers experience higher levels of workload compared to salaried workers.

Work Pace Despite the high levels of workload associated with self-employed workers, it is demonstrated that being a self-employed worker allows more control over the number of work hours, over work pace and spatial arrangements compared to paid employees (Smeaton 2003). It is also proved that being self-employed doubles the likelihood that a worker has the chance to vary his/her work time scheduling (Golden 2001). Hence, we state that: Hp. 5.2 Self-employed workers experience lower levels of work pace compared to salaried workers.

Work-Life Balance Coherently with what is so far suggested about workaholism, self-­ employed workers persistently think about work even when they are not at work so that work goes, sometimes, beyond what is reasonably expected from them. In this vein, the concept of work-life balance is here considered a central one in the possibility of deepening effective situations. It is strictly related to work-family conflict, which refers to a clash arising from different spheres of life—that is, work and family—which risk becoming and are perceived as mutually incompatible (Greenhaus and Beutell 1985). Commonly, researchers distinguish between work-to-­ family conflict and family-to-work conflict (Carlson and Frone 2003), underlying in this way which is the primary source of difficulty, if it is work which asks too much or family which does the same. Studies have demonstrated that psychosocial working conditions are important because work demands and control influence self-employed workers’ work-life balance and wellbeing. Evidence from a European

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study shows that self-employed individuals experience a lower work-life balance than those who are employed (Nordenmark et al. 2012). Some authors postulate that self-employment is attractive because it facilitates work-life balance; in contrast, results of a study carried out on self-employed individuals in the IT industry show for them a strong preference toward financial advantages and a weak impact of work-life balance (Tremblay and Genin 2008). Thus, we posit that: Hp. 5.3 Self-employed workers experience higher levels of work-life balance compared to salaried workers.

Relational Tasks and PC Tasks Regarding the nature of work, it has been observed that it can be considered as composed of two dimensions: one is the relational dimension, which implies dealing with both internal and external clients (Sulistyo 2016); the second is the desk dimension, which means that most of the work activities and time are developed individually using PC. It is underlined that self-employed workers are more occupied in relational tasks, first, because they run small businesses strongly oriented to service. In this perspective, we posit that: Hp. 5.4 Self-employed work is more relational work than salaried employees. It is mainly devoted to relational activities (dealing with clients) rather than desk-­ work (working with PC) activities.

Work Changes Changes represent a crucial aspect of work. They are connected to work content, work activities and rewards. Evidence suggests, for example, that the income of self-employed workers tends to be more variable than that of paid employees (Van Praag and Versloot 2007). It also seems

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reasonable that self-employed workers experience more changes than salaried ones, just because of their specific context. Thus, we state that: Hp. 5.5 Self-employed workers experience higher levels of work changes compared to salaried employees.

Job Outcomes Work Engagement Coherently with literature on entrepreneurial motivation and positive psychology, authors demonstrate that self-employed individuals score higher than salaried employees do in work engagement (Gorgievski et al., 2010). The recent construct of work engagement has been adopted as well for self-employed individuals. According to Schaufeli et al. (2002), it is “a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption. Rather than a momentary and specific state, engagement refers to a more persistent and pervasive affective and cognitive state” (p. 74). It is suggested (Gorgievski et al. 2010) that this construct shares some similarities with other constructs that emerged in research on entrepreneurs motivation, such as “passion for work” (Baum and Locke 2004) and “passionate love for the work” (Shane et al. 2003). According to Smilor (1997), passion is “the enthusiasm, joy, and even zeal that come from the energetic and unflagging pursuit of a worthy, challenging and uplifting purpose” (p. 342). Also, due to this characteristic of their personality, there is evidence that self-employed workers score higher than measuring role ambiguity, under-utilization of skills (Harris et al. 1999) and role conflict (Tetrick et al. 2000). So that, despite the wide recognition that entrepreneurial jobs are highly demanding, in terms of quantitative work overload, they also provide job resources that entrepreneurs highly value, such as job control, feedback and social recognition. This may as well have important consequences on self-employed job strain. Thus, considering the position of the largest part of scholars related to these aspects, we suggest that:

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Hp. 5.6 Self-employed workers compared to salaried employees score higher in work engagement.

Job Satisfaction and Job Strain Job satisfaction refers to the “degree to which people like their work” (Millán et al. 2013, p. 653). This construct is highly investigated because it is proved that high levels of satisfaction are related to work performance and—both directly and indirectly—to organizational performance in terms, for example, of its effectiveness, employee turnover and customer satisfaction (Millán et al. 2013). Studies on comparison between these two categories of workers show that self-employed workers have a higher level of job satisfaction (e.g., Bradley and Roberts 2004) and professional satisfaction than salaried employees (Tetrick et al. 2000). However, some studies show contrasting evidence. For example, in the study of Buttner (1992) on a sample of entrepreneurs and managers, it is demonstrated that entrepreneurs are generally less satisfied with their work than managers. Studies on entrepreneurship demonstrated that job satisfaction is an important predictor of the choice that leads to self-employment and its existence. At the same time, job dissatisfaction represents a factor that pushes employees to quit and seek the solution of self-employment as an alternative to salaried employment (Brockhaus Sr 1980). In addition, according to the study by Tetrick et  al. (2000), self-­ employed workers experience higher levels of emotional exhaustion than salaried workers. Coherently, in the study by Buttner (1992), it is demonstrated that entrepreneurs experience higher levels of stress than salaried employees because of their role ambiguity. Further, the author indicates that self-employed individuals may be affected by a more significant number of health problems and are less able—compared to salaried employees—to release work-related tensions. In conflict with these indications, other scholars demonstrated that the self-employed score significantly lower, compared to salaried employees,

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on scales measuring role ambiguity, under-utilization of skills (Harris et al. 1999) and role conflict (Tetrick et al. 2000). Despite the wide recognition that entrepreneurial jobs are highly demanding (e.g., quantitative work overload), they provide job resources for entrepreneurs (e.g., job control, feedback and social recognition), which may have important consequences on reducing self-employed job strain. Thus, considering the position of the largest part of scholars related to these aspects, we suggest that: Hp. 5.7 Self-employed workers compared to salaried employees score higher in job satisfaction. Hp. 5.8 Self-employed workers compared to salaried employees score higher in job strain.

Individual Outcomes Health and General Life Wellbeing According to prior evidence, entrepreneurs experience significantly higher job control levels than salaried employees. So, it is possible to suggest that autonomous workers feel so-called active jobs and, by consequence, they may have positive effects on their health, which also depends on positive feelings, as it is known. So, for example, evidence from the research by Stephan and Roesler (2010) proves that entrepreneurs show significantly higher wellbeing and more favorable health indicators. In another study on quality of working life as perceived by self-employed and salaried managers, Naughton (1987) finds no differences in psychosomatic illnesses, energy and free time satisfaction. However, in contrast with previous evidence, in a study on work stressors and mental health among employees and self-employed workers, it emerges that self-employed workers are associated with

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relatively few mental health benefits (Parslow et al. 2004). In addition, in a more recent study from the United States, it is proved that self-employed workers report more health problems, lower physical wellbeing and lower levels of life satisfaction compared to salaried employees (Bencsik and Chuluun 2019). In this vein, we state that: Hp. 5.9 Self-employed workers compared to salaried employees score lower in health perception and general wellbeing.

Self-Confidence in Work and Long-Life Learning It is suggested that entrepreneurs display more remarkable achievement, motivation, values, persistence, and self-confidence than other workers, so one of the characteristics of a successful entrepreneur is self-confidence (McClelland 1987). Coherently, we state that: Hp. 5.10 Self-employed score higher in self-confidence and work identity compared to salaried employees. Literature on entrepreneurs’ education and training highlights some deficiencies, including the lack of a coherent policy agenda and national strategy for entrepreneurial training, reduced financial resources, lack of access to markets and low literacy levels (Ladzani and Van Vuuren 2002). In contrast, vast efforts and resources are addressed to education and training programs for salaried employees. Thus, we posit that: Hp. 5.11 Self-employed score lower in long-life learning compared to salaried employees.

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Social Outcomes Extra Work Activities Commitment As Wilson and Musick (1997, p. 251) advised, referring to a citation of Marx and Durkheim, “jobs have consequences for workers’ lives outside the workplace”, this aspect has to be considered. Indeed, in their research, the authors prove that occupational self-direction increases volunteering. In the same vein, Rotolo and Wilson (2006) show that the sector and nature of employment may have a critical role in volunteer work. Evidence shows that nonprofit and public-sector employees are the most likely to volunteer, followed by self-employed (Rotolo and Wilson 2006). Thus, we posit: Hp. 5.12 Self-employed workers devote less free time to extra work activities devoted to society (volunteering). In entrepreneurial studies, it has been suggested that family may have a pervasive effect on entrepreneurship (Aldrich and Cliff 2003), sometimes leading to a state of conflict between the entrepreneurial role and other roles in the family (Ufuk and Özgen 2001). We can also observe that orientation toward care for his/her own house and family seems to be coherent with the search for a better balance between professional and private dimensions. Thus, we posit: Hp. 5.13 Self-employed workers are less committed to housework and caring relatives than salaried employees. In the following figure, the whole research model is represented with the trend we suggest to be prevailing for self-employed workers to summarize what we expect to emerge from the analysis (Fig. 5.1).

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Note. (+) means self-employed individuals score higher than salaried employees, (-) means self-employed individuals score lower than salaried employees.

Fig. 5.1  Our research model. (Note. (+) means self-employed individuals score higher than salaried employees, (−) means self-employed individuals score lower than salaried employees)

Empirical Analysis Our empirical research is based on data gathered from the sixth European Working Conditions Survey (EWCS) database conducted in 2015 on a large sample of workers from the EU35, which is the most recent at disposal. Only people who declared their status of self-employed or employee were included in the analysis coherently with our goal. So, our final sample is composed of more or less 35,000 salaried employees and 7800 self-­ employed workers. See Table 5.2 for the exact number of respondents for each examined variable.

Method For this analysis, an independent-samples t-test among relevant variables was run using SPSS version 21 to understand the differences between salaried employees and self-employed individuals. T-test statistic is generally used to determine whether the means of two groups are equal to each other. The null hypothesis is that the two means are equal, and the alternative is that they are not. Using independent-samples t-tests, we obtain the findings shown in Table 5.2, placed at the bottom of the chapter. Relevant items enabling us to investigate the areas of interest as expressed in the previous hypothesis were included and are presented in the following section.

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Results In this section, the results of the comparison of the means using t-test independent-samples analysis are presented considering different dimensions of the two sub-samples: salaried employees and self-employed workers. For each item, the number of respondents per sub-sample, mean, standard deviation and significance are presented in the text and Table 5.2. It is important to acknowledge that a large proportion of the questions of the EWCS here are reverse coded so that an effort in reading results accordingly is requested to the reader. When the figures presented are related to reverse-coded questions, it is signaled in Table 5.2 with an asterisk (*).

Job Characteristics Workload, Work Pace and Work-Life Balance According to our hypotheses (Hp. 5.1, 5.2, and 5.3), we expected higher scores for self-employed individuals for workload and work pace and lower scores for self-employed individuals in work-life balance. For workload, our hypothesis (Hp. 5.1) is confirmed for all the five items investigated and referring to this variable, which are: “hours worked per week”, “times a mouth work at night”, “times a mouth work on Sundays and Saturdays”, “Times a month work more than 10 hours a day”. For example, a significant difference is demonstrated (t = −17.743, p