In 2018, the Danish online platform for cleaning services in private homes, HILFR, signed a collective agreement with the trade union for domestic workers 3F. The platform distinguished between two types of contracts: the “Freelancehilfr” independent contractor (or self-employed) and the “Superhilfr”, that is the type of contract covered by the collective agreement.
According to the agreement, any worker on the platform would automatically change his/her independent contractor status to that of an employee after completion of 100 hours of work. The employee status ensured access to paid sick leave, holiday allowance and pension contribution.
The company fixed minimum hourly fees for the “Freelancehilfr” that could not be lowered by the contractor himself/herself. As for the “Superhilfr”, the collective agreement set the minimum hourly fees.
In August 2020, the Danish Competition and Consumer Authority (“DCCA”) assessed these peculiar statuses of workers and the relative fees in light of the European Union (EU) competition law rules.
It considered that “both Hilfr and Freelancehilfrs/Superhilfrs are undertakings, and that Freelancehilfrs/Superhilfrs, most likely, are not employees of Hilfr from a competition law point of view. Just like it is the DCCA’s assessment that Freelancehilfrs/Superhilfrs cannot be characterized as subcontractors or agents to Hilfr. This is primarily because Hilfr does not carry the financial risk for the Freelancehilfrs/Superhilfrs work”.
Furthermore, “it is the DCCA’s assessment that the minimum hourly fee may create a “price floor”, which may limit the competition between the Freelancehilfrs”.
To meet the concerns of DCCA, Hilfr committed to:
- remove the minimum hourly fee for “Freelancehilfrs” to ensure genuine competition;
- consider all “Superhilfr” as employees, subject to the collective agreement signed with the union 3F.
With these changes, the DCCA settled the case “by making the commitments binding on the involved parties of the case for an indefinite period of time”.
The DCCA decision on Hilfr is similar to the one adopted on the same day for the platform company Happy Helper (domestic services). The latter decision only concerned minimum hourly fees for “freelancers” who also are considered as undertakings.
Following these decisions, the Confederation of Danish Employers has expressed the need for the DCCA to be cautious not to interfere with the specificities, scope and balances of the Danish labour market and industrial relations systems. The scheme for the ”Superhilfrs” was determined through collective agreement but has now been made redundant by the DCCA - overriding the collective will of the social partners.
To provide readers with some context, as reported in the IOE policy paper on Industrial Relations and Independent Contractors (2019), at the EU level, there is a clear set of rules and definitions that prevails over the national laws of the EU member States. The extension of the right to collective bargaining to self-employed workers is not supported by EU Law, since it is in conflict with the competition rules of EU law, especially with regard to the scope of Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), which provides that “[t]he following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, […]”.
The conflict lies in the fact that “self-employed” (as defined by the national legislations) are considered as “undertakings” under the competition rules of EU law and therefore subject to Article 101(1) of the TFEU. Therefore, independent contractors have no legitimate possibility to negotiate and sign a “collective agreement”.
Such clear rules have been confirmed by the European Court of Justice in its case law, notably the case of FNV Kunsten Informatie en Media v Staat der Nederlanden.
However, it is to be noted that reform attempts are currently discussed within the European Commission and the European Parliament. In September 2020, the President of the European Commission, Ursula von der Leyen, underlined that the initiative to improve the working conditions of people working in the platform economy is one of the key new initiatives for 2021 to ensure that Europe is fit for the digital age.