[Excerpt] When direct subordinated employment is disguised as self-employment, it is termed ‘bogus’. Work can be contracted in several different ways. The main distinction remains the one between ‘employment’ and ‘self-employment’: this is a prominent feature in all European legal systems, built around the concepts of ‘subordination’ and ‘autonomy’. Contracting work can therefore be done in one of two ways:
- through a commercial relationship/contract, between one client and a self-employed person or entrepreneur
- through a labour contract, between an employer and a worker/employee.
No definition of bogus self-employment has yet been agreed at European level. Various definitions have been proposed in several forums. Bogus self-employment refers to self-employed people ‘who declare themselves (or are declared) as self-employed simply to reduce tax liabilities, or employers’ responsibilities’ (OECD, 2000, p. 156). Generally speaking, a person is considered to be in bogus self-employment when the characteristics and activities of self-employment (autonomy, tendering for different clients and so on) are limited or non-existent. Thus, bogus self- employment contains features of subordinate employment relationships such as:
- long-term engagement with a single contractor/work donor/employer
- lack of control or autonomy over the organisation of work (working time, for example)
- lack of own resources and equipment.
However, the person concerned is bound by a commercial contract instead of a labour contract and therefore does not enjoy the protection and social rights provided by labour laws.
Bogus self-employment results in a situation of factual subordination and dependence, which is not recognised legally or institutionally recognised in terms of employment and social rights, nor in terms of employers’ liability and responsibility towards their employees. Thus, workers must comply with employers’ working methods, but are deprived of the various rights associated with employee status (such as severance pay in the case of dismissal, access to unemployment benefits, and health and safety protection) and therefore suffer negative consequences.