My thanks to the committee for the opportunity to speak to it. My interest in this area is as the professor of law and head of the law department at Maynooth University. My area of research and teaching is employment and labour law. I am interested in the definition of the employment relationship, how we define in law employees and others who provide services. The questions, in law, of who is an employee and who is an employer, are extremely important. They open the gateway to a range of statutory protections, including minimum wage laws, unfair dismissal laws and working time laws, which are among the most important. The definition of someone as an employee also determines an individual's access to social security systems, unemployment insurance, sick pay and other matters, and has implications for taxation. In terms of commercial or company law, employees are often granted particular rights in the event that their employer becomes insolvent, which are not granted to non-employees.
An issue in which I have been interested recently relates to collective bargaining and is the interface between collective bargaining rights and competitive or anti-trust laws. The situation in the case of non-employees is that independent undertakings are generally forbidden from coming to mutual arrangements over basic terms such as minimum payments, as they would likely contravene competition laws. It is very difficult for non-employees to engage in effective collective bargaining.
In recent years, concern has been expressed that a strict divide between employees and independent contractors is not appropriate for contemporary employment relationships. We see that in the European Court of Justice has recently noted that the boundaries between the self-employed and employees are not as easy to determine in the fluid employment market, in which we currently exist, and it identified a category of workers which it called the "false self-employed", namely, service providers who are in a situation comparable to that of employees.
The difficulty of classifying people doing work into employees or self-employed is not new. The question of false or bogus self-employment has long been identified as a challenge in the construction sector, for example, in particular. However, it has gained more attention recently, domestically and worldwide, due to the growth of work in the so-called platform or gig economy. Web-based platforms are thriving and they function as online intermediaries between a client or end-user who require a service, and those who are providing the service, doing the work.
There is no comprehensive statutory definition of either employee or contract of employment in Ireland. Instead, it has been left largely to the courts to define these concepts, and for the scope section in the Department of Employment Affairs and Social Protection, in particular, to seek to classify workers for PRSI purposes. In doing so, the courts have identified factors such as control, integration into the business, mutuality of obligation, risk or investment, and other such categories.
Some jurisdictions have introduced a third category of employment status, between employed and self-employed. For example, in the UK it is referred to as a worker in legislation. Such workers are entitled to limited labour protection under the legislation. The argument for creating such categories is to offer some labour law coverage to workers who do not fit within the classic definition of an employee. In the widely known Uber litigation in the UK, for example, a group of Uber drivers successfully argued before the UK courts and tribunals that they had worker status under UK law, and therefore were covered by minimum wage and paid annual leave laws. The possibility has also been discussed of introducing a statutory presumption of employment status, whereby it is assumed an employment relationship exists until the party resisting the status has proven otherwise.
The European Union has proposed a new directive on predictable and transparent working conditions. I gather political agreement was reached on furthering it just this week. In the explanatory memorandum to the proposal, the European Commission notes that in 2016 a quarter of all employment contracts were for "non-standard forms of employment" and in the past ten years more than half of all new jobs were "non-standard". The Commission goes on to note that these trends have also led to instability and an increased lack of predictability in some working relationships, especially for workers in the most precarious situations. Inadequate legal frameworks can subject workers in non-standard employment to unclear or unfair practices and make it difficult to enforce their rights.
The proposed new EU directive sets out an EU-wide notion or definition of worker as a person who for a certain period of time performs services for and under the direction of another person in return for remuneration. It is important to note, however, that this definition would only apply in the context of the rights in the directive itself which focus on clearer and more complete information on the essential aspects of the work and some matters to do with uncertain work.
Under EU and Irish competition law, it is not possible for the self-employed to conclude collective agreements. The Competition (Amendment) Act 2017 provides that section 4 of the Competition Act 2002 which prohibits cartel action shall not apply to collective bargaining and agreements in respect of certain categories of worker. There are three such categories. First, the Act specifically applies to voice-over actors, session musicians and freelance journalists. Second, the Act introduces the concept of the "false self-employed" worker and, third, the concept of the "fully dependent self-employed worker". A trade union that represents a class of false self-employed, or fully dependent self-employed, workers may apply to the Minister to include the class of workers in question as falling within the scope of the Act in order to allow the union to bargain collectively and conclude collective agreements on behalf of the workers. This legislation represents an innovative attempt to extend collective bargaining rights to vulnerable workers who do not fit within the classic "employee" definition and sets out in law the principle that collective representation should not be automatically denied to those who cannot satisfy traditional tests of employee status. I also point to the importance in this area of a focus on collective standard setting and, in particular, sectoral standard setting. Sector or industry-wide standards reduce the incentive to undercut commercial rivals, providing a level playing field where competition is not on the basis of wage depreciation.
In Ireland the Industrial Relations (Amendment) Act 2015 introduced the concept of sectoral employment orders, SEOs. For example, the Sectoral Employment Order (Construction Sector) 2017 took effect from 19 October 2017 and provides mandatory terms and conditions in the construction sector generally which exceed statutory minimums such as the minimum wage. A very recent proposal made in the United Kingdom has been to draw up a "sectoral map". This would be done by governments but in consultation with employers and trade unions. The purpose is to identify relevant sectors and sub-sectors which would be set down in law and subject to SEO-like orders.
It seems to be particularly important that sectors in which trust, confidence and safety are key concerns be the subject of State regulation. Examples include domestic care services and passenger transport services. The advantage of sectoral minimum standards is that one-size-fits-all solutions are not applied and the flexibility of collectively bargained standards means that adjustments can be made in response to changing economic and social trends. It seems to be important that the State, particularly in the context of public procurement processes, monitor very carefully any sub-contracting relationship to ensure proper classification of all those working on State projects and, therefore, that proper tax and social security payments are being made. In that regard, obligations might be placed on principal contractors to ensure compliance by sub-contractors, in particular with PRSI obligations.
The issue of employment status is one with which Legislatures across the world are grappling. Achieving a balance in regulation between ensuring decent work, protecting business flexibility and ensuring appropriate contributions are made to the State is a difficult but vital and necessary task.