Disguised employment / Dependent self-employment

In the vast majority of legal systems across the world, there is a “binary divide” between employment and self-employment, with “employment” serving as the basis for labour regulation.

However, some employment relationships can be ambiguous when the rights and obligations of the parties concerned are not clear, or when there are “grey areas” in the law. Under dependent self-employment, for instance, the worker performs services for a business under a contract different from a contract of employment but depends on one or a small number of clients for their income and may receive direction regarding how the work is to be done.

The rise of the “gig” or “on-demand” economy in recent years, whereby work is mediated through online web platforms or apps, has brought renewed attention to dependent self-employment and disguised employment relationships. Workers in the gig economy are almost invariably classified as independent contractors, despite the fact that their work may be closely supervised and their pay is directed through a specific application or internet platform.

As these forms of employment are not formally part of an employment relationship, workers do not benefit from the protection offered by labour law, including minimum wage rates, social security coverage and paid sick leave. Moreover, workers in many cases risk being deprived from the full exercise of fundamental rights at work such as freedom of association and the right to collective bargaining, since many jurisdictions restrict these rights to wage employees.