Abstract
The subjective scope of application of Labour Law is set by the Statute of Labour. Nevertheless, the interpretation of the Courts is crucial to understand who is a worker in Spain. In this study, the criteria set by the Spanish courts and their evolution are analysed. Recently, the Spanish Supreme Court seems to have abandoned the ‘control test’ criteria for classifying workers and has moved towards a personal conceptualisation of work. This paper shows rulings that prove this evolution. Moreover, Spain has its own Self-employed Workers’ Statute applicable to common self-employed workers and economically dependent self-employees (TRADEs). In this paper I analyse the concept of both types and the individual and collective rights granted to them by the Self-employed Workers’ Statute. Two main conclusions can be drawn: first, the TRADEs are not an intermediate category between employees and self-employees but instead a subcategory of self-employees. Second, the protection granted by the Self-employed Workers’ Statute is clearly insufficient.
Keywords
Workers and self-employees
Concept of employee
Article 1.1 of the Statute of Labour establishes a definition of a worker/employee in Spain (in this article I will use the words ‘worker’ and ‘employee’ as synonyms, since there is no legal category called ‘worker’ that is different from an employee). This definition states as follows: employees are those who voluntarily provide their paid services for others and within the scope of an organisation and under the direction of another person, either physical or legal, called an employer.
The five requirements for an employment contract
This is the main legal rule used by the courts to distinguish between an employee and a self-employed worker. The generic definition made an interpretation by the courts necessary. The judgments focus on five characteristics in order to distinguish a true employment contract from any other civil, commercial or administrative contract: i) voluntary work, ii) personal work; iii) dependency; iv) working on another’s behalf (ajenidad); v) compensation. In theory, the five elements have to be present in the relationship in order to classify a services contract as an employment contract. However, some of them are more important than others and can be nuanced by jurisprudence in some cases.
Voluntary work
This element is used by the literature to exclude only some legally mandatory work from the employment contract. For example, when the law makes it compulsory to go to (work at) the polling station during general elections. This kind of work is excluded from the employment contract as it is not voluntary but instead compulsory by law. However, the economic necessity of the worker has never been a criterion used to understand that work is not done on a voluntary basis only if it is compulsory by law.
Personal work
This element is used to exclude from the employment contract cases in which the services provided are carried out by a substitute or a subcontractor or even if the service provider hired someone else to perform the work. However, the mere contractual possibility of outsourcing is not enough to exclude the employment contract. The Spanish Supreme Court, in this sense, ruled that the inclusion of contractual clauses that allow for the possibility of substituting the worker or outsourcing the work has no relevance unless this possibility was actually used by the service provider (Supreme Court Judgment (STS) of 15 June 1998 rec. 220/1997, 17 January 2000 rec. 1093/1999, 22 January 2001 rec. 1860/2000). In fact, even the occasional substitution of a worker by another worker is not relevant in excluding the employment contract (STS of 25 January 2000 rec. 582/1999). On the contrary, the inclusion of clauses forbidding outsourcing would be considered relevant to affirm that there is an employment relationship.
Dependency
Traditionally, the courts have considered that there is dependency when: the worker has regular working hours, there is exclusivity in the contract, there are instructions and orders from the principal, and monitoring carried out by the latter (SSTS of 10 July 2000 rec. 4121/1999, 15 October 2001 rec. 2238/2000, 7 October 2009 rec. 4169/2008). In particular, any instruction from the employer in order to obtain a better execution of the services by a self-employee is an illegitimate interference in the freedom of a truly independent contractor, thereby making her an employee (STS of 24 June 2015 rec. 1433/2014).
In the same sense, the fact that the services were provided using the brand of the principal has been considered a sign of an employment contract (STS of 19 December 2005 rec. Ud. 5381/2004). Moreover, cases in which the principal gave training to the alleged self-employed worker or even simply paid for such training (STS 19 of June of 2007 rec. 4883/2005), and even when the supposed self-employed worker paid for her own training because the contract with the principal makes that training compulsory, have been interpreted as an indicator of a false self-employed worker (STSJ of Madrid of 28 December 2008 rec. 4883/2005 and of 23 February 2009 rec. 220/2009).
Ajenidad
This characteristic aspect of the employment contract can be interpreted from different perspectives. First, ajenidad can be viewed as the fruits of labour 2 or the patrimonial utility of the work 3 . This means that in an employment contract, the worker gives away the fruits of her labour to the employer who owns them in exchange for some compensation. Second, there is ajenidad in respect of business risks. In this sense the worker is not the one who assumes the company’s losses. That said, this does not mean that an employee cannot have a variable compensation connected with the results of the company 4 . Third, is ajenidad regarding the means of production; in this case, the worker does not own the relevant elements required to produce goods or services 5 . Last, ajenidad in respect of the market means that the worker is not offering services to the market but only through her company. All these faces of ajenidad are different perspectives of the same reality, according to the Supreme Court (STS of 31 March 1997 rec. 3555/1996) and so they have to be analysed together.
The Supreme Court has understood that there is ajenidad even though the workers are compensated with a percentage of the business income (STS of 20 June 1999 rec. 4040/1998). In the same sense, there is an employment contract despite the fact that the worker has agreed not to receive a commission in cases in which the buyer is not paying for the product sold in order to get a commission (STS of 7 October 2009 rec. ud. 4169/2008 and STSJ of Cantabria of 29 December 1994 rec. 929/1994). In conclusion, the employment contract still exists when the worker takes on certain business risks.
In addition, the employee can be the owner of some work tools or means of production as long as these means of production are not economically important or relevant (STS of 19 July 2002 rec. 2869/2001). The courts endorse the idea that there will be a civil contract only when the service provider makes a meaningful investment to provide the services. 6
Compensation
The last characteristic of the employment contract is crucial, as it refers to the fact that the main obligation of the employee is pay the prices of the services (STSJ of Catalonia of 20 November 2003 rec. 148/2002). This means that the worker is neither a volunteer nor does he do the work exclusively in order to accomplish a greater good or a public good. On the contrary, employees work mainly to earn a salary. However, the lack of compensation will not always mean that there is a civil or some other kind of contract. Indeed, sometimes the lack of compensation is simply a breach of the employment contract (SSTSJ of Andalucía of 8 July 2015 rec. 1178/2015). So, the relevant thing will be whether the worker’s intention is to work in exchange for compensation or for altruistic reasons.
Legal presumption of employment contract
It is not clear whether we have a legal presumption of employment contract in Spain. Historically, the courts interpreted that we do have it in Article 8.1 of the Statute of Labour 7 . However, in recent times this presumption has been used less and less by the courts. The literature argues that the aforementioned Article 8.1 only describes what an employment contract is again – as in Article 1.1 of the same Law. 8 That is why this part of the doctrine supports the non-existence of a legal presumption of the employment contract. Nevertheless, today some courts still use the legal presumption when the judge wishes to make his motivation for the ruling stronger.
In conclusion, the burden of proof of the existence of the employment contract is not clear in Spain.
Irrelevance of the nomen iuris
Something that has been argued for a long time – and still is – is the irrelevance of the nomen iuris. Indeed, the Spanish Supreme Court argues that the real legal nature of a contract does not depend on the name given to it by the parties involved but on the real content of the obligation and what really happens in the relationship. 9 Because of this, in order to determine the real legal nature of the contract, the Court has to look into the acts performed by the parties during the relationship and not the words of the contract, or the name of the contract agreed by them or even the original will of the parties. 10 This means that the parties cannot ever change the real legal nature of the contract only by its formal designation on the written contract.
The concept of a self-employee
As already established at the beginning of this paper, an employee has to meet the five requirements cited earlier. However, not everyone who provides services without an employment contract is a self-employed worker. The concept of a self-employed worker is also determined by the law. In its first article, the Spanish Law 20/2007, of 11 July, on the Self-employed Workers’ Statute (Ley del Estatuto del Trabajador Autónomo) defines a self-employed worker as follows: ‘natural persons who habitually, personally, directly, on their own account and outside the scope of the direction and organisation of another person carry out an economic or professional activity for a lucrative purpose’.
This is not the time or the place to analyse this concept, but the important thing in this moment is that the law describes a self-employed worker as a worker who does personal work as in the case of having an employment contract. The difference between an employee and a self-employed worker lies in the concepts of dependency and ajenidad.
As will be explained below, self-employed workers have certain rights and certain obligations, such as compulsory payment of Social Security contributions. In order to have these obligations and rights, the worker has to fit in this classification.
A subcategory of self-employed workers: TRADEs
Within the Self-employed Workers’ Statute, Spanish law regulates another kind of worker, called the economically dependent self-employed worker (‘Trabajador autónomo economicamente dependiente’ – TRADE). This institution is regulated in Article 11 of the Self-employed Workers’ Statute in the following terms: ‘those who carry out an economic or professional activity on a lucrative basis and in a habitual, personal, direct and predominant manner for a natural or legal person, called a client, on whom they depend economically to receive at least 75 per cent of their income through income from work and from economic or professional activities’.
It is therefore clear from the regulations that TRADE is not a third category of workers or an intermediate category between employees and self-employees. On the contrary, first TRADEs have to be completely self-employed workers, and then if they fulfil another additional requirement – 75% of their income comes from one client – they will be TRADEs. This is why, in my opinion, TRADEs are a subcategory of self-employed workers.
In reality, however, those two requisites are difficult to find. Indeed, it is difficult to find a real self-employed worker if she is economically dependent on one client. In this sense, usually if a service provider depends on just one client, this service provider is adapted to the client’s main business, something that would mean that she is not really self-employed. Apart from that, the economically dependent service provider knows that she has to comply with the wishes – instructions – of the client as her whole survival depends on that.
To sum up, even though the category exists in the norm, this kind of worker is scarce in reality, as the definition contradicts its own terms. Currently, the official data say that there are only 10,000 TRADEs registered in the whole of Spain. This accounts for less than 0.33% of all self-employed workers and less than 0.05% of the total number of workers in Spain. Nevertheless, the Self-employed Workers’ Statute grants some particular rights to self-employed workers, including collective rights. These rights are in addition to the right that they have because they are self-employed workers.
Individual and collective rights of self-employed workers
Fundamental rights
Protection against discrimination
The Constitutional right to not be discriminated (Article 14 Spanish Constitution) is directly applicable to private citizens, which means that it is applicable to all relationships or contracts (civil, commercial, administrative and labour). However, apart from that prescription, in its Article 4.3 a) the Statute of Labour establishes that self-employed workers have the right to not be discriminated in the exercise of their professional activities.
Moreover, this provision, in its Article 6.3, establishes that any contractual clause that breaches this anti-discriminatory right shall be void.
Right to privacy
The fundamental right to privacy is equally applicable in the case of the self-employed worker. Article 4.3 c) of the Self-employed Workers’ Statute establishes that the self-employee has the right to privacy and dignity and adequate protection against sexual and gender harassment or harassment of any other kind. This means that the client has to respect these limits and autonomy if the parties are limited by these rights. Again, these limits stem directly from the Constitution (Article 18.1) and so the Self-employed Workers’ Statute only repeats something that has already been established in a superior regulation (Pérez Agulla 2016).
Individual rights: working conditions of the self-employee
Working hours
The nature of independent contractors seems incompatible with any regulation or limitation of working hours. In fact, there is no specific regulation about time or working hours for self-employed workers; that is, there is no regulation about a minimum number of rest hours or about paid holidays or any other kind of leave (Mercader 2017).
There are, however, specific regulations regarding working hours in some sectors (e.g. transportation) (Trujillo 2014).
Compensation
The remuneration will be that which is agreed upon. There is no minimum wage for self-employed workers. However, the Self-employed Workers’ Statute establishes (Article 4.3.f)) limits to the term of payment for work done by self-employed workers. In particular, the payment has to be made within 30 days as of the time when the service was provided by the independent contractor. This period can be extended to 60 days if the parties agree to do so.
The same regulation also establishes that, in case of infringement of this period, the client will have to pay interest. The interest rate shall be that agreed to by the parties or the European Central Bank interest rate from last semester plus 8 points.
Collective rights
Freedom of association
The Self-employed Workers’ Statute includes a series of collective rights for individual practice. Specifically, it establishes that self-employed workers are entitled to:
a) Join the trade union or business association of their choice, in the terms established in the corresponding legislation.
b) Join and found professional associations specific to self-employed workers without any prior authorization.
c) Exercise the collective activity of defending their professional interests.
In this way, self-employed workers, firstly, are entitled to join union organisations and business associations that have already been constituted. Therefore, Article 19.1 a) of the Self-employed Workers’ Statute grants self-employed workers the right to join organisations that are not their own but have already been constituted.
Regarding the possibility of affiliation of the self-employed worker, it is important to remember that Article 3.1 of the Organic Law on Freedom of Association grants the possibility of affiliation to the self-employed who do not have workers at their service. Thus, it seems that the right to join a union will be conditional on the self-employed worker not having other workers in his charge. Therefore, if he has workers at his service, he can only exercise his right of association, on the one hand, through business associations and, on the other hand, by becoming part of the specific associations of self-employed workers referred to in Article 19 of the Self-Employed Workers’ Statute.
In this way, self-employed workers, first of all, will be entitled to join union organisations and business associations that are already constituted. Therefore, Article 19.1 a) of the Self-employed Workers’ Statute grants self-employed workers the right to join organisations that are not their own, but which have already been constituted.
Self-employed workers will thus have the individual right to join unions, business associations or professional associations of self-employed workers in the terms previously established. However, what truly self-employed workers do not seem to have is the right to create their own unions referring to a specific company/client or even a sector of activity. Conversely, what does exist is the possibility of creating associations (but not unions) specific to self-employed workers, either as a platform or as a business sector.
Indeed, section b) of this same article allows the right to affiliation and foundation of specific associations of self-employed workers. Therefore, the right to affiliation to union and business organisations and the right to affiliation and the foundation of specific self-employed workers’ associations can be distinguished, since the law draws a distinction between them.
Hence, together with the right to join organisations that already exist, the Self-employed Workers’ Statute recognises the right of self-employed workers to found their own associations which have as their objective the protection and defence of their rights and interests as such.
Lastly, Article 19 of the Self-employed Workers’ Statute recognises the possibility for self-employed workers to exercise collective activity in defence of their professional interests. This refers, as is to be expected, to the possibility of collective disputes and collective bargaining. However, it must be said that this collective activity to defend their interests does not come from the fundamental right to freedom of association, but from the private or common associationism of Article 22 of the Spanish Constitution, which will limit the possible actions in this collective dispute. In fact, the Law of the Self-employed Workers’ Statute does not develop the possibility of exercising this collective activity in a specific or differentiated way as a private association (e.g. consumer associations).
Collective bargaining
In principle, collective bargaining between entrepreneurs is not allowed under competition law. However, in a judgment of 4 December 2014, the Court of Justice of the European Union declared that a collective labour agreement (CLA) that establishes minimum rates for self-employed service providers is acceptable and is not included within the scope of Article 101 (1) of the TFEU (inter-company practices designed to adversely affect competition in the EU market) but only insofar as these suppliers are ‘false self-employed’ workers.
Conversely, it must be understood that it is not possible, in accordance with current jurisprudence, to accept minimum fee agreements if the providers are truly self-employed.
Despite this interpretation, international doctrine understands that collective bargaining should be considered a Human Right of all people (Valerio 2018). Specifically, this doctrine has criticised the interpretation made of competition law, and applied by the Court of Justice of the European Union, which excludes certain groups, such as small entrepreneurs or freelancers, from the possibility of collective bargaining. It is understood that this interpretation of competition law seriously harms the interests of (normally unprotected) collectives that have common interests and which should be able to associate and negotiate their working conditions together, as regards both remuneration and working hours, among other aspects.
This interpretation undoubtedly has its complications when it comes to applying it, since it is not clear who would be the counterpart in the hypothetical collective bargaining, although it could be a more or less simple task to group the self-employed by professions or sectors of activity. However, the clients or any other opposing party in the negotiation will not share those necessary homogeneous characteristics. Without a counterpart, in collective bargaining, there could be no real negotiation, but instead we could find a series of remuneration scales agreed upon by the self-employed workers’ association itself. This would be detrimental to competition. Collective bargaining needs a homogenous counterpart or association to bargain with. This is something that is not easy to find in every economic sector.
Right to strike
In Sentence 11/1981 of 8 April, the Spanish Constitutional Court analysed the scope of application of the right to strike established in Article 28.2 of the Spanish Constitution. In this judgment, the highest court concluded that, when the Constitution speaks of the workers’ right to strike, it does so in the sense of labour workers included within the scope of application of the Statute of Workers. In this regard, the Constitutional Court did not hesitate to exclude other types of subjects, such as small entrepreneurs, self-employed workers and assimilated assumptions, from the constitutional protection of the right to strike.
In the same sense, the Law of the Self-employed Workers’ Statute maintains this interpretation by not making any reference to self-employed workers’ hypothetical right to strike. In fact, no reference is made to the existence of a right to collective dispute or a specific regulation.
However, I think that this interpretation made by the Constitutional Court was a restrictive interpretation of the right to strike in view of the current extension of self-employment. It could be understood that, since the Constitution does not make a distinction (when it speaks simply of workers), the courts should not do so with their interpretation either. Specifically, in my view, self-employed workers should have the right to collective dispute and to strike, especially when it can be determined that there is a set of general interests that affect a generic collective susceptible to individual determination. I will argue that, at the very least, the self-employed should be afforded the right to stop work, in order to use it as a measure of pressure, without this being considered a breach of contract.
In any case, this interpretation that I defend is not currently supported by Spanish jurisprudence and, therefore, it would require either a change of criteria by the Constitutional Court that modifies the principle maintained in Sentence 11/1981 of 8 April or an extension of the right to strike for self-employed workers via legislation.
Individual and collective rights of TRADEs
Individual rights: Working conditions
Working time
According to Article 14 of the Law of the Self-employed Workers’ Statute, the working hours of TRADEs are set out in the contract or Agreement of Professional Interest (collective agreements of TRADEs). This document establishes the regime of schedules and working hours, as well as the weekly rest-time, the holidays and the maximum amount of activity per day or even of its weekly distribution in cases where days are computed over months or years. In addition, the regulations provide for the possibility of adapting the working hours to suit workers who are victims of gender violence in order to ensure their effective protection or their right to comprehensive social assistance.
Therefore, the working hours of economically dependent workers will be agreed upon by the parties. Article 14.3 of the Law of the Self-employed Workers’ Statute allows for an activity to be voluntarily established for a longer time than that agreed to in the contract, but with limits. The limit will be established in the Agreement of Professional Interest or, if this does not exist, a subsidiary document with a maximum limit of 30% with respect to the initial time individually agreed upon in the contract.
It can therefore be seen that, unlike the self-employed worker, in the case of the economically dependent worker there seems be the possibility of setting a maximum number of working hours. However, the parties can decide on this contractual maximum without a maximum legal annual reference, as in the case of employees.
Now, once this limit to the number of working hours has been set, it must be respected by the parties, but even if they agree upon a maximum number of working hours, the client platform could legally demand up to 30% more than the initially agreed number of hours.
It seems that, in the case of the economically dependent worker, it can be thought that, since the majority of the work comes from the same client, that client can calculate approximately what days the economically dependent worker is needed and, therefore, include it in the contract. In contrast, in the self-employed without a main client, it does not seem possible to calculate a working day with each of their clients.
Compensation
The Self-employed Workers’ Statute does not establish any specific regulation regarding remuneration for TRADEs. It will thus have to be subject to the general regulation for all self-employed workers regarding the matter already analysed in the section on self-employed workers.
Interruption, suspension of the contract and leave of absence
In accordance with Article 16 of the Self-employed Workers’ Statute, duly justified causes of interruption of the activity by an economically dependent worker will be considered as those based on:
a) Mutual agreement of the parties.
b) The need to attend to urgent, unexpected and unpredictable family responsibilities.
c) A serious and imminent risk to the life or health of the self-employed worker, as provided for in section 7 of Article 8 of this Law.
d) Temporary disability, maternity, paternity, adoption or fostering.
e) Risk during pregnancy and risk during breastfeeding of a child under 9 months of age.
f) A situation of gender violence, so that the economically dependent self-employed worker draws on their right to protection or to comprehensive social assistance.
g) Force majeure.
2. Other causes of justified interruption of the professional activity may be established by means of a contract or agreement of professional interest.
3. The causes of interruption of the activity foreseen in the previous sections cannot constitute the basis for the termination of the contract by the client’s intention foreseen in 1 f) of the previous Article, all without prejudice to other effects that for such cases may be agreed upon by the parties. If the client considers the contract terminated, this circumstance would be considered as a lack of justification for the purposes of unfair dismissal.
This same Article also says that despite these rights, when in the cases contemplated in s1 d), e) and g) the interruption causes significant damage to the client that paralyses or disturbs the normal performance of his activity, the termination of the contract may be considered justified.
The assumptions of maternity, paternity, adoption or foster care, and risk during pregnancy and breastfeeding of a child under 9 months of age, referred to in 1 d) and e) of this Article, will be exempt from the provisions of the paragraph above, when the economically dependent self-employed worker maintains the activity.
Holidays
Regarding holidays, in Article 14.1, the Statute establishes that ‘the economically dependent self-employed worker shall have the right to an interruption of his/her annual activity of 18 working days, without prejudice to the fact that said regime may be improved through a contract between the parties or through agreements of professional interest’.
Contract termination
In order for any right to be effective, it is essential that there is a strong regime regarding unfair contract termination, since otherwise the request or requirement of any other right (e.g. the minimum wage) could end in the termination of the contractual relationship, thereby giving rise to the very non-existence of the requested right. Likewise, such an absence could result in the non-application of these rights by the rest of the workers due to a fear of this type of reprisal.
Thus, the regulation establishes a regime for the termination of the contract in Article 15, specifically by establishing that the contractual relationship between the parties will be extinguished by any of the following circumstances:
a) Mutual agreement of the parties.
b) Causes validly consigned in the contract, unless they constitute abuse of the law.
c) Death and retirement or disability incompatible with the professional activity, in accordance with the corresponding Social Security legislation.
d) Withdrawal of the economically dependent self-employed worker, in which case the stipulated notice must be mediated or in accordance with custom and usage.
e) Will of the economically dependent worker, based on a serious contractual breach by the counterparty.
f) Will of the client for a just cause, the stipulated notice being mediated or according to the uses and customs.
g) By decision of the economically dependent independent worker who is forced to terminate the contractual relationship as a result of being a victim of gender violence.
h) Any other legally established cause.
In turn, it is established that when the contractual resolution is produced by the will of one of the parties based on a breach of contract by the other, whoever resolves the contract will be entitled to receive the corresponding compensation for the damages and losses caused.
When the termination of the contract occurs by the will of the client without just cause, the economically dependent self-employed worker shall be entitled to receive the compensation provided for above.
If the decision is made by withdrawal of the economically dependent worker, and without prejudice to the notice provided in 1 d) of this Article, the client may be compensated when said withdrawal causes significant damage that paralyses or disturbs the normal performance of his activity.
When the party entitled to compensation is the economically dependent worker, the amount of compensation shall be that set out in the individual contract or in the agreement of professional interest that results from its application. In cases in which they are not regulated, for the purpose of determining their amount, the remaining time of duration of the contract, the seriousness of the client’s default, the investments and expenses anticipated by the self-employed worker shall be taken into consideration, among other factors. Such factors include the investment made by the economically dependent worker linked to the execution of the contracted professional activity and the period of notice given by the client prior to the date of termination of the contract.
TRADEs’ Collective Rights
Freedom of association
The freedom of association of TRADEs is quite indistinct, in accordance with the regulation emanating from the Self-employed Workers’ Statute, from the right to freedom of association of common self-employed workers. Indeed, there is no specific regulation that establishes differences in the content of the right to freedom of association applicable to the particular case of TRADEs.
In this way, TRADEs will have the individual right to join unions, business associations or professional associations of self-employed workers. In turn, the TRADE will have the right to found specific associations for TRADEs, since the freedom granted by Article 19 of the Self-employed Workers’ Statute to create professional organisations must include the right to set up professional associations exclusively for TRADEs. This is justified by the differences in the applicable legal regime (where those differences do exist as in collective bargaining) between the common self-employed and TRADEs. These differences include the possibility of the latter to negotiate Agreements of Professional Interest that the common self-employed do not have.
Finally, these exclusive associations of TRADEs can be organised through the creation of an association of TRADEs of a specific company or a specific activity sector or even the creation of TRADEs associations whose field of defence of interests is the entire economy (intersectorial). However, and as mentioned earlier, what does not seem possible is that TRADEs have the right to create their own unions referring to a company or even to a sector of activity.
In addition, TRADEs may also join already existing trade unions, business associations or professional associations of common self-employed workers (not specific to TRADEs).
However, the rights of these associations are very limited by their regulation. Indeed, there is no legal provision on the possibility of TRADEs holding an assembly or meeting at the client company itself, as in Article 77 of the Statute of Labour for unions of employees. Nor is any reference made to the use of bulletin boards or of the premises of the client company to the benefit of the associations of TRADEs, as in Article 81 of the Statute of Labour for employment trade unions.
In the case of common self-employed workers, it would be difficult, if not impossible, to grant self-employed workers’ associations the right to use the bulletin boards of the premises or even the right to hold assemblies of the self-employed association in respect of any client. The reason for this is that it would impose a very large burden on a client, who probably had no relationship with the majority of the self-employed represented.
However, in the case of TRADEs, in my opinion, it does not seem so difficult to think that sections of that association of TRADEs could be created in the company itself. And they are sections, similar to the union sections, that could have the right to use the corporate intranet or bulletin boards for their communications or they could even hold an assembly on the company premises.
In my view, the most representative associations of TRADEs should be able to create said associative sections in different companies where they are established.
Finally, once again, this right could only exist, either through an extensive interpretation, by the Constitutional Court, of the content of freedom of association contained in the Spanish Constitution that included the TRADEs or by an extension of these rights thought a change in legislation.
Collective bargaining
The major differences between the regulations of the self-employed and TRADEs are to be found in the legal regime of collective bargaining. In this sense, while the Self-employed Workers’ Statute does not expressly recognise the right to collective bargaining of associations of self-employed workers, it does for TRADEs, through the figure of Agreements of Professional Interest.
In this sense, associations of self-employed workers can negotiate Agreements of Professional Interest for economically dependent self-employed workers who are affiliated or associated with them. This figure is regulated in Article 13 of the Law of the Self-employed Workers’ Statute, which states that:
‘The Agreements of Professional Interest set forth in section 2 of Article 3 of this Law, concluded between the associations or unions representing the economically dependent self-employed workers and the companies for which they carry out their activity may establish the conditions of manner, time, and place of execution of said activity, as well as other general contracting conditions. In any case, the agreements of professional interest will observe the limits and conditions established in the antitrust legislation.
2. Agreements of Professional Interest must be concluded in writing.
3. The clauses of the Agreements of Professional Interest contrary to legal provisions of necessary right will be considered null and void.
4. The agreements of professional interest will be agreed under the provisions of the Civil Code. The personal effectiveness of these agreements will be limited to the signatory parties and, where appropriate, to the affiliates of self-employed associations or signatory unions that have expressly given their consent to do so.’
Therefore, the first thing that can be affirmed is that any association can enter into this type of interprofessional agreement. Indeed, the law does not limit the possibility of negotiating this type of agreement to the most representative associations, but any type of professional association that represents TRADEs may negotiate and agree to such an agreement.
The second issue of relevance is that these agreements will not be applicable in general and erga omnes nor will they have a normative nature as do the collective agreements on employment. On the contrary, the law establishes the contractual nature and the subjective scope of the effectiveness of these agreements. Therefore, the agreements of professional interest will only be applied to those TRADEs that are affiliated to the trade unions or professional associations that have agreed upon that particular agreement of professional interest with the client company. In short, agreements of professional interest will only bind the signatories of the agreement.
The content of these agreements can be quite broad given that they can be regulated collectively in any type of labour conditions, including the conditions of contracting and extinction of TRADEs. This allows the negotiators a wide range of possibilities.
Third, the Article makes clear references to the antitrust legislation as a limit for this kind of collective bargaining of TRADEs. In Spain there is no judgment or administrative decision made by the Spanish competition authority in order to establish these limits. However, it is important that, given the right to collective bargaining of TRADEs, the law should make specific reference to these antitrust limits. That probably means that this law is not giving a right to collective bargaining above the competition law or it is making an exception to the applicability of the antitrust law in favour of TRADEs.
In the end, this collective bargaining for TRADEs would depend on how narrowly or extensively we apply competition law.
TRADEs: not such a useful regulation
It should not be forgotten that the Spanish National Institute of Statistics currently sets the number of workers who receive the majority or all of their income from a single client at more than 1,200,000 workers, while in the Official Register of Economically Dependent Workers the figures hover around 10,000. This means that there are more than 1 million workers in Spain who, despite being economically dependent, are not applying the TRADE legal regime. Undoubtedly, the causes of this divergence between the actual number of economically dependent workers and the number of economically dependent workers registered are due to many variations.
In my view, the lack of protection is the first reason. This includes the lack of a legal maximum number of hours for TRADEs, the absence of a minimum wage, no special health and safety protection, and so on. As a result, the self-employed workers have no real reason to identify themselves as TRADEs. Apart from that, there is no tradition of association in TRADEs, which means that there is no collective bargaining even when the law allows for this possibility.
In short, this is not the time to conduct a complex study of the causes or the failure of the TRADE regulation, but what is less doubtful is the conclusion: the need to rework the entire regulation of TRADEs if the legislator wants it to be of some use in the economic world.
Personal work relationship and the concept of workers: The recent Spanish Supreme Court interpretation
In recent times, the Spanish Supreme Court has been carrying out a deep reinterpretation of the concept of workers. Indeed, the High Court seems to have abandoned – or at least reduced to the minimum expression – the ‘control test’ as a way to identify an employee.
In this sense, in a multitude of judgments, the Supreme Court has claimed that there exists an employment contract even though the employee has freedom to choose his or her own schedule or working hours. 11 In the same sense, it has been understood that there can be an employment contract even if there are no instructions from the employer. 12 The highest interpreter of the law also agrees that the worker’s ability to reject assignments from the employer do not automatically exclude the possibility of being an employee. 13
However, it is true that, on other occasions, the control test has been used to confirm an employment relationship. 14 Here, the Court said that any instruction from the employer in order to achieve a better execution of the services by a freelancer is an illegitimate interference with the freedom of a true self-employed worker, thereby making her an employee (STS of 24 June 2015 rec. 1433/2014).
Thus, the classic ‘control test’ – schedule, working hours, control, instructions and so on – seems to be a way to confirm the employee status but not the other way around when there are other circumstances. Indeed, for a long time now, the literature in Spain has defended a broad interpretation of subordination in the following terms: you are a subordinate if you are inside an organisation that is not yours (Rodríguez-Piñero 1966).
At the same time, the Spanish Supreme Court has said that the ownership of some working tools or means of production – the value of which is not high – does not exclude the existence of an employment contract. 15 Not even the fact that the workers assume some of the business risks is a reason not to consider them as employees, 16 or the fact that it has been proven that the workers provided services for more than one company – a non-exclusivity agreement. 17
So, the Spanish Supreme Court is progressively abandoning, in my view, a rigid interpretation of subordination in which only the ones who ‘pass’ the control test are employees. In contrast, it seems that this Court is supporting a broad interpretation in which workers are all those who do personal work.
In this sense, the Court defines the concept of personal work as opposed to that of one who provides services within an enterprise. Of course, there will still be some interpretative doubts as it is not always easy to define what an enterprise is. However, the Spanish Supreme Court, in a recent judgment, made an approximation to the concept with enough relevant elements to identify it.
The Supreme Court Judgment of 16 November 2018 (rec. 2806/2015) – Ofilingua – concerned translators. In this judgment, the workers – formally freelancers – had freedom as regards their schedule and working hours, and they could reject an assignment to do interpreting work following the offer from the company without any negative consequences for them. There was no training provided by the company, no authorised or paid holidays – indeed, the company never asked to be informed when the workers wanted to take a holiday. There were no instructions about how they had to do the job, there was no exclusivity and it was proven that the translator did work for other clients apart from the company in question. The enterprise did not provide any tools to do the job and if they needed them, the workers had to use their own, including paper, pens, computer, dictionaries, and so on.
Hence, despite all of these facts that prove a lack of dependence, the Supreme Court rules that they were employees. In order to reach this conclusion, the Court used the following six criteria (although later on we will see that they can be summarised in just two): First, it is understood that there was an employment contract because the employer (false client) was the one who made the decisions concerning the market and the relationship with the public. Second, the company was the one that decided the prices of the services. So, the salary was not negotiated with the freelancer – on the contrary, the supposed self-employed worker could only accept it or would no longer be able to work there. Third, the company selected the final clients or the services to be provided. Fourth, the Supreme Court said that there was an employment contract because the salary was calculated on a criterion closely related to the work provided. This meant that the salary was connected with the number of hours worked and not with other business criteria. Fifth, regarding the compensation there was a lack of ‘special profit of the entrepreneur’. Last, the Supreme Court concluded that there was a false self-employed worker because the workers provided services without a relevant business structure.
These six arguments are clearly not in line with the classic ‘control test’. These arguments have the aim of proving that these workers who provide services are not a genuine enterprise.
In this sense, the Spanish Supreme Court relied on the interpretation in which the scope of labour law must not be limited by the dependent employment contract, but to all personal services while they are not a genuine company. In line with Freedland and Kountouris (2011), 18 it is necessary to distinguish between services provided by companies and services provided by personal work. Thus, in the world of services, they are divided into subordinate work, self-employed work and companies. With this purposive interpretation of the concept of workers (Davidov 2016) 19 the first two fall within the scope of the Statute of Labour, excluding only the companies. 20
In fact, in my opinion, even though the Supreme Court established six arguments in order to defend the existence of an employment contact, these arguments had only one aim: to prove that these service providers were not a real company. In this sense, the fact that the workers did not make any decisions concerning the market or the public, the fact that they did not select the final clients, the fact that they did not fix the prices or even the fact that the compensation depended on the number of hours that they worked, are not arguments about whether they were subordinated or not, but instead arguments in favour of the notion that they were not a genuine company. Specifically, this is so because: i) they could not negotiate the labour conditions; and ii) they were not a genuine company because they did not manage one of the most important parts of any business – marketing, getting and retaining clients, choosing prices, and so on.
The inexistence of a business structure owned by the service providers was highlighted at the end of the judgment in order to conclude that there was an employment contract. The lack of elements with which to determine that they were a genuine company – non-existence of important business areas, lack of relevant assets (material or immaterial) – seems to have been decisive. In fact, in this case, the need to have a computer to do the job, and the fact that the computer was owned by the freelancer, was not relevant because the computer was not very expensive and this activity could not be described as a ‘capital intensive activity’.
To sum up, only if the services provided require an economically relevant amount of capital and these elements belong to the provider and it also manages the areas of the business needed to operate the business can it be considered a genuine enterprise.
The lack of the ‘special profit of the entrepreneur’ as a criterion may mean two things. First, it could mean that the compensation received is low and so that would be a criterion used in order to conclude that they are employees. However, it does not seem that a high compensation excludes the existence of an employment contract – not even in complex cases. In particular, the Spanish Supreme Court Judgment of 19 February 2014 (rec. 3205/2012) is a well-known case about a radio reporter whose compensation was far higher than the average Spanish compensation and the Court ruled that he was an employee.
Second, the other possibility is that the Supreme Court was referring to the surplus value, in other words, the concept that economics defines as the gains made by the employer though the work of others. In this sense, the Supreme Court could mean that these translators generated profits through their own work and not because they managed a company in which other people who were hired by them were doing the job.
In my opinion, the second one is more logical due to the fact that, if there are no workers hired by the service provider, this means that she does all the work herself. This situation is hardly a genuine enterprise. Moreover, this last interpretation is in line with other judgments (from courts in other countries) that support the idea that, in order to be considered a real freelancer, she has to have a compensation from something apart from her own work (e.g. special knowledge investment in capital) and she has to have real perspectives of business growth other than making more money if she works more hours. 21
In conclusion, the Spanish Supreme Court seems to adopt a purposive interpretation of the employment contract in order to apply the concept to all personal providers of services regardless of whether they are subordinate or self-employed. If only the provider of services does the work, she can be a genuine enterprise and, thus, all the labour protections are applicable. However, there are still doubts about who a genuine entrepreneur really is.
In order to clarify the matter, the Supreme Court seems to see two main characteristics as being the most relevant: on the one hand, the fact that a real company has to have a business structure, meaning that it owns – or manages – relevant material (buildings, machines, etc.) or immaterial (brand, data, clients, specific software) elements. 22 On the other hand, a real business has to have sufficient organisation, which means having elements to provide the services but also elements to manage the business (such as a marketing policy, business administration, making the significant decisions, and so on). Second, a real enterprise will be one that hires workers and they are the ones doing the work from which the entrepreneur gains her profits/compensation.
In my view, this purposive interpretation has to be applauded, because with it the labour law accomplishes its main goal, that is, the protection of all those who make a living from their work.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This research is part of the Regulation Research Group at the University of Valencia, and have been funded by the Spanish Government (Ministry of Economy and Competitiveness Research Plan, 2016-2019: by the Research project DER2015-67613-R «The regulation of sharing economy».