The current legal framework for self-employed workers has been developed by the Labour Courts on a case-by-case basis. Consequently, the distinction between self-employed workers and ordinary employees is not clearly determined, giving employers free rein to enter into contracts with workers on a ‘false’ self-employed basis.

New legislation

The Self-Employed Statute provides a systematic legal framework for self-employed workers, i.e. individuals who carry out personal and continuous economic or professional activities for financial gain, independently of the direction and organisational powers of a third person. In particular, and provided that such requirements are met, the new law applies to: (i) working partners of general and limited liability partnerships; (ii) members of joint ownerships and irregular civil partnerships, provided that their tasks are not limited to the management of the goods that are held in common; and (iii) administrators or directors performing managerial functions for limited liability companies, provided they are remunerated for these specific services.

Although contracts entered into by self-employed workers in the performance of their services are of a civil or business nature, the new Statute provides that they may be oral or in writing. They must always be in writing however if one of the parties requests it. The object and duration of the professional relationship shall be determined by the parties.

Furthermore, the Statute identifies and establishes a specific legal regime for ‘economically dependent self-employed workers’. These are individuals who are self-employed, as specified above, but who obtain more than 75% of their professional income from one ‘client’. Any contract that the economically dependent self-employed worker enters into with such a client must now be in writing and filed with the relevant public authority. Any disputes that may arise from the contract will be dealt with before the Labour Courts. Moreover, economically dependent self-employed workers will now also be entitled to 18 working days’ annual leave.

Effect on employers

This new legislation will increase the formal obligations of ‘clients’, especially with regards to economically dependent self-employed workers. It will increase costs for employers since the definition of ‘self-employed workers’ may give the latter grounds to assert that they have been incorporated as ordinary members of staff and are therefore employees. There may also be a rise in litigation as the new legislation is yet to be tested. It is likely that disputes between dependent self-employed workers and their clients will be heard before the Labour Courts, in which proceedings are faster and cheaper than in the civil courts.