Introducing the autonomous employee category: The chance to create a flexible and secure employment relationship?

1. Who is an autonomous employee?

According to Article 17(1) of the WTD, an autonomous employee can be defined by two characteristics: (1) the duration of their working time is not measured and/or predetermined; or (2) the employee can determine their own working time themselves. Thus, ‘this derogation covers two main types of situation and both have to be assessed on account of the specific characteristics of the activity concerned’. ¹³

The European Court of Justice (ECJ) considers it important that autonomous employees must be able to decide the number of hours which they are to work; also, they are not obliged to be present at their place of work at fixed times. ¹⁴ The ECJ has also stated that so far as the scope of the derogation is concerned, it is apparent from the express wording of Article 17(1) that it applies only to employees whose working time as a whole is not measured or predetermined or can be determined by the employees themselves on account of the kind of activity concerned. ¹⁵ The European Commission (the Commission) adds that the derogation is not applicable to employees whose working time is only partially not measured or predetermined, or can only partially be determined by the employees themselves. ¹⁶ Hence, in the Commission’s opinion, it is entirely up to the autonomous employee to decide on the use of his or her working time and the employer cannot interfere in any way. As follows from the Commission’s interpretation, only a small number of employees may be excluded from the scope of the WTD.

The Member States have used the possibility to introduce the autonomous employee category variously; it is often specified to which work the working and rest time rules do not apply. ¹⁷ For example, according to §2(1) of the new Finnish Working Hours Act (Act 872/2019), ¹⁸ the Act does not apply to employees whose working hours are not determined in advance or whose use of working time is not controlled, and who may therefore decide on his or her own working hours. ¹⁹

According to the explanatory memorandum to Act 872/2019, when assessing working time autonomy, it is important to consider the employee’s actual ability to influence the quantity and scheduling of his or her working time. It is therefore not decisive that the employment contract does not specify working time or that the employer merely states that he does not actively monitor the use of the employee’s working time. Non-application of the Act is always assessed on a case-by-case basis in each individual employment relationship. In practice, the exclusion from the scope of the Act presupposes that the working hours of the employee have not been determined. ²⁰ Like the Commission, the explanatory memorandum emphasises that exceptions to the scope of application are set out precisely and must be interpreted narrowly. ²¹

There is no general regulation concerning autonomous employees in Estonia. Under the Legislative Intent, an autonomous employee is an employee who has autonomous decision-taking powers and defines his own working time in accordance with the employment contract, where the working time of the employee is not directly or indirectly defined by the unilateral decision of the employer or by agreement of the parties. ²² The Legislative Intent does not prescribe a list of works for which exceptions to the scope of application of the TLS may be established.

In the Legislative Intent it is explained that the introduction of the autonomous employee category allows for more flexible work organisation and better implementation of new ways of working, in cases where, due to the nature of the work, it is not possible for the employer to monitor compliance with working and rest time provisions. ²³ The flexibility resulting from the introduction of the concept of the autonomous employee has also been praised by employers’ representatives, who do not foresee any significant problems with the respective regulation. ²⁴ Trade unions have a similar attitude and remain neutral about the introduction of the new concept. ²⁵

Under the Legislative Intent, the employer and the employee agree whether the employee is an autonomous employee, and they may terminate such an agreement at any time, providing two weeks’ notice in such a case. From the author’s viewpoint, the approach of the Legislative Intent is too broad, the proposed Act must specify the work for which it may be considered whether the employee is autonomous. Nor can it be said that all employees who work in a certain way are autonomous employees. Thus, as the Legislative Intent describes the content of the proposed regulation in detail, the concept of the autonomous employee is not sufficiently developed.

Although the Legislative Intent has not been implemented and there is no general regulation in respect of the autonomous employee in Estonia, the definition of such an employee has been introduced into the Sports Act (SpS). ²⁶ Under §10⁴(1) of the SpS, an adult athlete who, based on the nature of his or her work, is free to decide on the organisation of his or her working time, can agree with an employer to be regarded as an autonomous employee, provided that the organisation of the work is not detrimental to the health and safety of the athlete. Pursuant to the explanatory memorandum to the Act amending the Sports Act and related Acts, ²⁷ this special rule allows for more flexible work arrangements, which is justified in the case of athletes due to the nature of their work.

In the author’s opinion, the regulation of the SpS is failed and is contrary to Article 17(1) of the WTD. As there is no general regulation and practice in respect of the concept of the autonomous employee in Estonian law, the introduction of the concept into a special law is confusing. Estonian law neither contains a legal definition of an autonomous employee nor regulates this legal status, thus it is not clear to those applying the law who is an autonomous employee; what it means to be free to decide on working time; whether all employees who are free to decide on the organisation of their working time are autonomous employees; and how to guarantee that such organisation of work does not damage the health and safety of the employee concerned. Also, the regulation of the SpS does not follow the requirements of the WTD because it does not include the rule that the employer may not interfere in the determination of working time in any way. ²⁸ Hence, the Estonian legislator has interpreted the derogation permitted under the WTD too broadly, and the SpS enables an agreement to be concluded under which an athlete is regarded as an autonomous employee, even in the case of an athlete who is not considered to be an autonomous employee in the light of the Directive.

Proceeding from the WTD, the concept of the autonomous employee must be interpreted narrowly. Such employees determine their whole working time themselves and the employer can not intervene in any way in the organisation of their working time. The idea of an autonomous employee is interpreted in the same way by the Finnish Act 872/2019. The Estonian legislator wanted to make the regulation of the working and rest time of athletes more flexible by introducing the concept of an autonomous employee, but as discussed above, the corresponding regulation has not succeeded in view of the aim of the WTD.

2. What is autonomous work?

According to Article 17(1)(a) of the WTD, autonomous employees are managing executives or other persons with autonomous decision-taking powers. The Commission provides the following explanation for this category of employees: ‘…the derogation could encompass certain high level managers whose working time, as a whole, is not measured or predetermined since they are not obliged to be present at the workplace at fixed hours but can decide on their schedule autonomously. Similarly, it could for example apply to certain experts, senior lawyers in an employment relationship or academics who have substantial autonomy to determine their working time.’ ²⁹

The interpretation of the Commission leaves the criteria for assessing whether an employee may be exempted from the scope of the WTD somewhat open. While emphasis is placed on full autonomy for managers (they are not obliged to be present), in the case of experts and others, there is substantial (not full) autonomy. However, the Commission strongly stresses that not all managing executives qualify for the autonomous employee exception. ³⁰ The derogation cannot be applied broadly to a whole category of employees ³¹ and it must be justified by the characteristics of the activity.

There are different professions in the Member States to which the category of the autonomous employee may apply. Often, autonomous employees are considered to be managers and employees who are experts in a particular field. Some Member States have clarified the concept in respect of managing executives, specifying the right to take decisions and manage the employer’s operations; or that they receive much higher remuneration than other employees in the company or sector. ³²

However, the Commission does not reasonably consider such an approach to be appropriate if a Member State has excluded certain categories of employee (e.g. an employee working from home; earning three times the minimum wage; or one who has an administrative function) from the scope of the WTD without explicitly stating that the exemption applies when the employee’s working time is not measured or predetermined or can be decided by the employee himself. ³³ This general principle must also be followed where the legislation sets out specific professions (e.g. scientists) to which the WDT does not apply.

The new Finnish Act 872/2019 is in line with the ideas of the Directive, first setting out a general principle (the Act does not apply to an employee whose working hours are not determined in advance or where the use of working hours is not controlled, and who may therefore decide on his or her own working hours) and then listing ³⁴ work for which non-application of the Act may be considered. ³⁵

Under §2(1)1) of Act 872/2019 an exception is provided for managing executives, specifying that they are persons doing work which, on the basis of the duties involved and regardless of the the status of the employee, is to be regarded as the management of a company or an independent part thereof. ³⁶ The work is regarded as management if the employee is independently responsible for a particular activity or entity and acts as a supervisor to other employees. Managers in such positions are usually set performance goals related to a particular function, and their performance is not measured in terms of time spent on the job. ³⁷ Thus, it follows from both the wording of the Act and its explanatory memorandum that the concept of a managing executive must be interpreted narrowly.

The derogation covers, inter alia, work which, due to the special features of the activities related to it, is performed in such circumstances that it is not possible for the employer to control the arrangements for the time spent on it (§2(1)(4) of Act 872/2019). A similar exception was provided for in the previous Act ³⁸ and set out in very general terms, so it seems that it leaves more room for interpretation. Pursuant to the explanatory memorandum to Act 872/2019, however, the scope of this provision is rather narrow: it excludes from the scope of the Act work performed, as a general rule, outside a fixed establishment, where remuneration is determined entirely or almost entirely on a performance basis. The norm would apply, for example, to sales agents, customer advisers and other similar mobile workers because such a form of work is very similar to work done in an entrepreneurial position. ³⁹

On the basis of the above, it can be concluded that the Finnish Act 872/2019 fully follows both the text of the WTD and its purpose. However, the same cannot be said of Estonian law. As previously discussed, ⁴⁰ there is no general regulation in respect of autonomous employees in Estonia but, through the corresponding concept, there is an aim to increase flexibility in employment relationships for groups of employees. Section 10⁴(1) of the SpS permits a derogation from the rules on working and rest time in the case of athletes. According to the Legislative Intent to amend the Study Allowances and Study Loans Act and other related Acts, there is an intention to also consider a doctoral student with whom an employment contract is concluded as an autonomous employee. ⁴¹

In the author’s view, such an approach is incompatible with the goal and content of the WTD. Groups of autonomous employees should not be determined by special acts, but a general regulation on autonomous employees, including the definition of such an employee must be introduced in the TLS. If the regulation of the autonomous employee category is established by special legislation, it may send the wrong signal to the person applying the law that certain groups of employees are automatically regarded as autonomous employees. In order to determine whether an employee is to be regarded as an autonomous employee, his or her status must be assessed in the light of certain criteria (laid down in the WTD). For this reason, it is better to include the regulation of the autonomous employee category in the general legislation.

It is questionable whether an athlete can be regarded as an autonomous employee at all. Under §10²(1) of the SpS, a contract entered into between an athlete and a sports organisation or sports school is, depending on the nature of relations between the parties, either an employment contract or another contract under the law of obligations on the provision of services. If an employment contract is concluded with an athlete, he or she may be an employee, to whom the rules on working and rest time may or may not apply; in the latter case, an athlete is an autonomous employee. Pursuant to §10⁴(1) of the SpS, an autonomous athlete is an adult employee who, based on the nature of his or her work, is free to decide on the organisation of his or her working time.

The question arises as to which athletes - in whose activities the sports organisation or school, as the employer, does not intervene at all - are left to determine their whole working time independently (as provided for in the WTD). These athletes cannot be team players (footballers, basketball players, volleyball players, etc.) whose activities must be coordinated in detail, and who practice, train and compete together, which requires a common timetable. ⁴² It is not conceivable that a team player can determine working hours at his or her own discretion, for example, without the intervention of a manager or a coach. Also, athletes in individual disciplines do not act alone and need at least the guidance of a coach, who is usually an employee of the sports organisation or sports school. It is likely that there may be only a few athletes who can be considered as autonomous employees. ⁴³

In the author’s opinion, the SpS steers the person who applies the law in the wrong direction, encouraging the conclusion of employment contracts with athletes, according to which they are not subject to working time restrictions. The explanatory memorandum to the Act amending the Sports Act and related Acts also acknowledges that not all athletes may be covered by the derogation provided for in the WTD, so there is a risk that a court may decide that athletes are ordinary employees who cannot be considered as autonomous employees, as they are not free to decide on the organisation of their working time. ⁴⁴

In summary, as the concept of the autonomous employee is interpreted narrowly, it does not include a large number of employees. This approach has also been adopted by the new Finnish Act 872/2019. In Estonia, the (planned) regulation concerning autonomous employees is too simplistic, it may lead to the unjustified application of the exception, and employees do not have protection that meets the objectives of the WTD. This is primarily due to the fact that there is no clearly regulated concept of the autonomous employee in Estonia, and a few provisions in the SpS ⁴⁵ are not sufficient to assess whether or not an athlete has independent decision-taking powers.

3. Organisation of working and rest time of the autonomous employee

As previously discussed, ⁴⁶ the autonomous employee is free to decide on the quantity and the scheduling of his or her working time. According to Article 17(1) of the WTD, the Directive does not apply to autonomous employees in respect of the following areas: daily rest; breaks; weekly rest periods; maximum weekly working time; the length of night work; and reference periods for the application of the weekly rest period, the maximum weekly working time and the length of night work. ⁴⁷

Hence, the provisions of the WTD governing the requirements for minimum rest periods and maximum working hours do not apply to autonomous employees. It must be borne in mind that they are entirely excluded from these provisions. ⁴⁸ However, the Commission explains that autonomous employees still remain within the scope of the WTD (they are therefore subject to the rules concerning annual leave; the protection of night workers; and the pattern of work). ⁴⁹

Since the WTD is precise and unambiguous in respect of the provisions that are not applied, the Member States have no room for manoeuvre in this matter. Section 2(1) of the Finnish Act 872/2019 establishes that autonomous employees are not covered by the Act. ⁵⁰ Under §10⁴(2) of the Estonian SpS, the rules on working and rest time of the TLS are not applied to the autonomous athlete in respect of the following: working time, overtime, compensation for night work and work done on public holidays, limits on time for performing work, the organisation of working time, restrictions placed on night work, daily rest time, weekly rest time and shortening of working time. ⁵¹ Also, the employer is not obliged to ensure the agreed working and rest time and keep account of working time as requires §28(2)4).

It is evident that in Estonia, the list of rules on working and rest time that are not applicable to autonomous employees, which is set out in the SpS, is longer than that provided in the WTD. The Estonian Act merely regulates certain working and rest time issues in more detail. However, looking at the content of these provisions, they are in line with what is allowed by the WTD. If Estonia introduces a general regulation in respect of the autonomous employee, it is also appropriate determine that these provisions should not apply to such an employee. ⁵² In the author’s view, the rules regarding on-call time ⁵³ and granting leave requests ⁵⁴ should also not be applied to autonomous employees, because if they apply to them, there is an assumption that the employer intervenes in the determination of the employee’s working time.

Under both the WTD and national regulations, the working and rest time arrangements of autonomous employees are very flexible. Therefore, the introduction of the category of the autonomous employee has positive effects for both the employee and the employer. As regards the employee, the right to determine his or her own working hours makes it possible to organise the work in the most suitable way and provides them with greater freedom to reconcile their work and private lives. ⁵⁵ In the case of the employer, the opportunity to employ autonomous employees relieves them of the obligation to apply complex working and rest time rules, including recording working time, to certain employees.

From a legal point of view, the introduction of the category of the autonomous employee brings the working and rest time arrangements of those whose work is organised differently (who currently work under normal working and rest time arrangements) into compliance with the law. On the other hand, as the concept of the autonomous employee is interpreted very narrowly, it does not significantly contribute to making employment relationships more flexible, affecting only small number of employees.

However, it should be borne in mind that the WTD was adopted in 2003 (and was developed even earlier), when employment relationships were different from those we see today. The WTD was thus created to regulate a different reality, at a time when new forms of work had not yet emerged. This has changed over the past two decades, mainly due to technological developments. The Commission notes that employees who are not listed in Article 17(1) WTD may also qualify as autonomous employees on account of the specific characteristics of the activity concerned. There is no case law yet on how the derogation could apply to employees in new forms of employment such as the digital platform economy, who fall under the scope of the WTD. ⁵⁶

As the WTD must be applied to ever-changing employment relationships, the principles of its interpretation must also be reviewed. The scope of the exception provided for in the WTD is narrowed by the interpretation that the employer may not intervene in the determination of working time at all.

The employer could be allowed to set the employee’s working hours indirectly, through tasks assigned to the employee, such as the obligation to attend a meeting, be present during visits, meet with the client at a pre-determined time, etc. According to such an interpretation, the derogation would cover a larger number of employees, who determine their working time predominantly themselves, with solitary interventions on the part of the employer. In this case, the exception would also include employees in flexible or new forms of work (e.g. ICT-based mobile work, work through an internet platform), for whom it is difficult to apply the general regulation of working and rest time.