It is a long-standing problem that Article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits agreements between undertakings that restrict competition to the extent that self-employed persons may be considered as “undertakings” under EU competition law and collective bargaining agreements they collectively enter into risk breaching EU law under Article 101 TFEU.

Draft guidelines published by the European Commission in December for consultation by stakeholders now aim to “clarify the applicability of EU competition law to collective bargaining by solo self-employed” in order to “ensure that competition law does not stand in the way of collective agreements to improve the working conditions of certain self-employed persons, who may have little influence over their working conditions, while guaranteeing that consumers and SMEs continue to benefit from competitive prices and innovative business models, including in the digital economy.”

Responding to the draft guidelines, the European Confederation of Independent Trade Unions (CESI)

• recognises that the guidelines are an important step towards assuring effective collective bargaining rights of solo self-employed persons;
• welcomes in particular the European Commission’s assessment that Article 101 TFEU should in the future be interpreted in a narrow manner which does not stand in the way of collective bargaining for the self-employed – because the bargaining of vulnerable groups of workers cannot be equated with illicit cartel-forming under EU competition law;
• appreciates the wide scope of the guidelines to cover all collective agreements to the extent that they concern working conditions in the broadest sense, as well as in principle all forms of collective negotiations including through social partners or other interest representatives;
• notes in this context however that the presupposition that the conclusion of collective agreements precedes “a certain degree” of coordination between multiple negotiating parties but that this coordination should remain “necessary and proportionate” is vague and open to interpretation – and necessitates a further specification by the European Commission on how it will assess cases under Article TFEU 101 in terms of “a certain degree” of “necessary and proportionate” coordination between negotiating parties;
• agrees with the European Commission’s considerations that economically dependent solo self-employed persons, solo self-employed persons working ‘side-by-side’ with workers, as well as solo self-employed persons working through digital labour platforms should fall within the scope of the guidelines and be exempted from the meaning of Article 101 TFEU
• however emphasises in this context that the guidelines should not serve as a tool to cement the status of bogus solo self-employment. According to CESI, bogus self-employment remains unlawful, even if  complemented by a right to collective bargaining. Regardless of the guidelines, the social partners and the legislators have a clear role to treat bogus self-employed as regular employees and thus endow them with core social and labour rights – including collective bargaining, but also beyond;
• generally welcomes the European Commission’s foreseen abstention from intervention on the basis of Article 101 TFEU in cases of collective agreements concluded by solo self-employed persons with counterparties “of a certain economic strength” and of collective agreements concluded by self-employed persons pursuant to national legislation, or, for artists and performers, under the EU Copyright Directive 2019/790;
• stresses in this context however that the criterion of “a certain economic strength” of the counterparties of the self-employed and their position in the market cannot be the only indicators to assess imbalances in bargaining power. Indeed, the imbalance in the bargaining power of the parties can be caused by various factors other than the market power of the counterparty. These include the number of clients, authority over oneself to make strategic decisions about one’s own economic activity, as well as the specific situation of the labour market and the unemployment rates that vary significantly among the Member State and the vulnerability of the self-employed person depending on the sector, profession and type of employment;
• in this context also takes note that the European Commission foresees to assess the economic strength of counterparties based on a pre-defined and fixed annual turnover of the counterparty and the size of its staff – regardless of the market in which the self-employed operates – and emphasises that considering the large differences in the markets of the Member States, such a flat-rate approach can be questionable. Indeed, genuine self-employed persons that work with counterparties without a “certain economic strength” might be left out of the scope of the guidelines as they have been drafted and be denied the right to collective bargaining under EU law. The guidelines should be more sensitive to persons in this situation, which are in many cases among the most precarious solo self-employed.

CESI Secretary General Klaus Heeger said: “A general prohibition of collective bargaining for the self-employed via trade unions on the grounds that there may be cartel-forming through joint wage negotiations is not in line with the spirit and the purpose of EU competition law. Justifying the prohibition of collective bargaining by reference to the need to maintain the integrity of the single market would be a misplaced contextualisation of EU law, especially when it is applied to vulnerable and precarious self-employed persons. An effective right to collective bargaining especially to the precarious and the vulnerable self-employed would be desirable.”

CESI’s full contribution to the European Commission’s consultation can be accessed here.