Negotiating the new economy: The effect of ICT on industrial relations
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6. Industrial relations and the "atypical" worker – Self-employed Tom Malone of MIT has suggested that independent freelance workers, networking together electronically, will increasingly comprise the backbone of a new way of working and doing business in what he calls the "e-lance economy".72 It is certainly true that the number of people who work on a self-employed basis, rather than under a traditional employer/employee relationship, has been growing during the last ten years. The OECD, which has looked in detail at the situation in the OECD member countries, reports that the growth in self-employment has been concentrated in the fastest-growing parts of the economy. Some countries, such as Canada and Germany, have seen particularly marked increases in the numbers of people self-employed. There has also been a significant increase in the number of women self-employed. The OECD’s study of self-employment is reported in its Employment Outlook 2000 report, from which the Table 10 is adapted. Table 10: Average annual growth of self-employment and total civilian employment, 1990-199873
Source: OECD Employment Outlook 2000.
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The OECD also suggests that the boundaries between self-employment and employee status are increasingly becoming blurred, and that there has been an increase in what can be called false self-employment. This is the situation where an apparently self-employed worker works predominantly for one company in what is close to a traditional employer/employee relationship. This sort of quasi-self-employment may be advantageous to the company, as a way of sidestepping labour employment obligations and social protection measures. It may be also advantageous to the individual, if it means that they can save on their overall tax bill (in many countries self-employed people have opportunities to pay less tax on their income than employees), though there can also be profound disadvantages with forfeiting the protection of employment.
The same trend towards an increasingly grey area between employee and self-employed status has been identified in a high level expert report prepared for the European Commission under the chairmanship of Prof Alain Supiot, and presented in June 1999.74 The Supiot report offers a radical critique of conventional labour law, which it suggests is rooted in an industrial model which is being rapidly undermined by technological changes. Among other recommendations the report suggests that the occupational status of a worker should be based not on the restrictive concept of employment but on the wider concept of work. Labour law would be broadened to include self-employed workers.
Supiot himself has elaborated on this argument. He maintains that the emphasis in labour law on the employer/employee relationship is based on the traditional view of a typical worker in a large industrial enterprise, and as such is now increasingly becoming outdated. He also warns that most social protection systems are based on the same model. Interestingly, he suggests that national industry-wide collective bargaining is under pressure from two directions: "industry-wide representation at the national level is being undermined both by the decentralisation of collective bargaining to the enterprise level and by the process of consolidation into new higher-level bargaining units (groups, networks, territories, Europe)", he writes.75
However, whilst Supiot suggests that these changes pose profound challenges to industrial relations organisations and to employment law he ultimately comes down in favour of "some adjustment rather than an all-out overhaul" of existing forms of collective worker representation.
The debate at European Union level has been influenced both by the Supiot report, and also by a 1997 Green Paper, Partnership for a New Organisation of Work produced by the European Commission which was followed by a 1998 Commission communication.76 In its 2000 consultation with social partners the European Commission identifies economically dependent workers as an area where greater legal certainty is necessary. It defines this class of worker as those "who do not, or may not, correspond to the traditional notion of employee, but are economically dependent upon a single source of employment. Areas where these workers may need greater protection include health and safety, information and consultation, working time minimum requirements, updating of skills, equal treatment and social protection.
From the trade union perspective, one can perhaps distinguish two quite separate challenges to be addressed. On the one hand there is the question of false or quasi-self-employment, or what the European Commission calls "economically dependent workers". As we saw above in relation to the specific issue of telework, the first response from labour organisations has been to try to insist on the maintenance of an individual’s traditional employment status. Where this is not possible, another strategy is to redefine these people back as employees. The European Trade Union Confederation, for example, has argued that "the concepts "company" and "employee" must be broadened to take into account work conditions in the information society".77
Governments may prove allies in this task. In a number of countries, including Germany, Greece, Belgium and Italy, governments have recently taken steps against the spread of false self-employment.
The more substantive question, however, is to what extent trade unions should engage with the (genuinely) self-employed.78
If the age of e-commerce will really be a time for the "e-lance" worker, organisations which claim to be agents of industrial relations may need to address this constituency.
There is some evidence that trade union bodies are already aware of this issue. At the international level, for example, UNI has identified the organising of freelance workers as a priority area for its organisation.79 At national level, some unions have begun to establish organisations specifically for the self-employed. In the Netherlands, the Allied union in the FNV federation created FNV Zelfstandige Bondgenoten in 1999, described as the first Dutch union for the self-employed.80 Other Dutch unions which accept self-employed members include the Dutch journalists association and the Building and woodworkers union.81
In Sweden, the union of technical and clerical employees Svenska Industritjänstemannaförbundet (SIF) debated the issue of self-employed members in 1996 and after what was described as a lively debate agreed to admit them to the union. According to a report, "opponents saw the decision as a breach of the fundamental trade union principle of looking after workers’ interests in relation to their employer. Those in SIF who were in favour of admitting the self-employed stated that this was just a natural response to labour market developments. An increasing amount of work in industry is performed by consultants, subcontractors and one-person companies".82 The new arrangement began in 1998, and since then approximately 500 self-employed people have joined SIF, primarily consultants in the information technology field.
Interestingly, the Swedish trade union federation LO takes a more restrictive view of the place of the self-employed in the union movement. One 1998 LO report argued a union’s role is to assist members forced into self-employment but not those voluntarily opting for self-employment.83
It is the media and entertainments industries that trade unions have most experience of organising the self-employed, including performers, actors, musicians and writers. For example, most journalists’ unions accept self-employed freelance journalists as members, and for many unions they comprise a substantial percentage of the total membership. According to a study of 98 countries conducted by the International Federation of Journalists, about 80,000 of the 336,000 journalists organised in unions are freelance, representing about 23% of the membership. In the 28 European countries (whose unions represent the majority of IFJ’s membership) about one in five organised journalists are self-employed, as the Figure 1 shows.The significance of freelances is even more marked in central and south America, at 17,300 out of 35,200 union members, or almost exactly 50%.84
countries, compared with overall levels of union membership
Source :International Federation of Journalists, Freelance Futures
Unions organising in the media and entertainments sector are particularly acutely aware of the issues raised by the new digital media, made possible by ICT. Negotiating for reproduction rights in new media has become a major preoccupation; we shall return to this issue later in this chapter.
Trade unions which choose to develop their services to organise the new "e-lance" workers will have to bear in mind the implications. The needs of employees who work together in centralised workplaces may be satisfied by traditional union models of collective bargaining and representation, but self-employed members will require a more individualised service. Increasingly, unions will be called upon to answer individual enquiries from members – perhaps on legal or contractual matters, taxation or an occupational health matter. Unions’ own staffing structures – which typically reproduce the traditional hierarchical model of industry – may be ill-equipped to undertake this role. New methods of service delivery, such as advice hotlines or email newsletters, may need to be considered. Issues of trade union democracy, traditionally focused on the workplace branch, may also arise.
There may also be legislative restraints, in particular under anti-trust legislation, on the ability of unions to collectively organise what can been seen as individual competing micro-businesses. In the US, the CWA was restricted by anti-trust laws in the help it could offer to members of the Graphic Artists Guild. In the United Kingdom, the National Union of Journalists has in the past been required to convince the government’s Office of Fair Trading that its work in setting recommended fees for freelance members did not constitute promotion of a cartel.
Whether self-employed people choose to turn to unions to represent their interests perhaps depends on how much power they feel they have in relations with their clients – or put another way to what extent the prices they charge for their services are effectively externally set rather than being under their own control. It may also depend on whether they are employers of staff themselves.
There are other options open to them. For example, there are specialist small business organisations in a number of countries, operating separately from the main employers’ associations. These include Bundesverband der Selbständigen (Germany), Freier Wirtschaftsverband Österreich (Austria), Patrons Indépendants (France) and the Federation of Small Business (UK).