03 Employees in the digital world

An employee here is understood as someone who does a job, an activity, an assignment for someone else. The following section deals with the legal basis of this activity, which has changed over the course of history and continues to change. This also raises the question of whether the law and jurisdiction are still in line with developments.

From the independent peasants to the click-workers

Until the 19th century, most people worked in their own family businesses, often in agriculture and trade. With the industrialisation of the early 20th century, the working environment changed fundamentally for the first time. Factories were built and more and more people were working there. This also had legal consequences. The International Labour Organization (ILO) was founded in 1919. Today it is a special United Nations Organization (UNO) whose mission is, among other things, to protect the rights of working people. The ILO has created international standards of labour law which have been transferred into the law of the member states via conventions. In recent decades, freelancing, in which contractors work independently for companies, has developed particularly in the areas of marketing and IT. Companies thus acquire on the one hand a lack of know-how and on the other hand manpower, which they can deploy on demand and thus with absolute flexibility. Recently, click-workers (see below) have been added to this development. What is special about these employment relationships is that, on the one hand, people work like freelancers (see below). On the other hand, however, how employees are integrated into the system of an Internet platform, such as that of the driving service agent Uber (see below), as soon as they click into the system. While the freelancers can be relatively well registered with the existing law, the click-workers somehow no longer fit into the system. They feel self-employed, act largely in this way, but, as in the case of Uber, are nevertheless integrated into digital systems. The question arises as to whether new law must be created for this new type of employment relationship (see below). Given the current development of employment relationships, it can probably be assumed that in future most employees will no longer work as salaried employees but as self-employed persons or in click jobs (see NZZ 28.01.2018).

Difference between employment and freelancing

In order to understand the problem with click-workers, it is necessary to know the difference between an employment relationship and a freelancing, i.e. an activity as a self-employed person.

According to Swiss law and case law, a person is an employee if he or she is integrated into the employer’s work structure. This point cannot be judged on the basis of individual circumstances, but only on the basis of the overall circumstances. In particular, the following elements, at least partially in combination, indicate an employment relationship: Right of the employer to issue instructions, fixed place of work (does not necessarily have to be given), fixed working hours (does not necessarily have to be given), prescribed work equipment, regular salary. Employees are subject to compulsory and compulsory labour law (in particular ArG, OR) as well as Swiss social security law.

A self-employed person (freelancer) is “free” insofar as he is not involved in a work structure at the moment. He receives an assignment from his employer, for the fulfilment of which he is completely free in the choice of working conditions and equipment. As a rule, the only requirement is the delivery of the agreed work within the agreed time. In a new decision (see BGE 9C_308/2017 of 17.05.2018 in NZZ 06.06.2018 Sieg für Ausgleichskasse), the Federal Supreme Court also comes to the conclusion that the entrepreneurial risk also points to independent activity. Freelancing is usually typified as a contract for work and services (owed is a success) or a contractual relationship (owed is a service, care).

The most important effect of the distinction between employment and freelancing is that an employer does not have to pay social insurance contributions for a freelancer (e.g. AHV, IV, AL, BVG, UVG) and does not have to pay social insurance contributions for him. However, this is also the greatest risk for an employer. This is because the social security funds can claim back social security contributions from employers of supposed freelancers, i.e. legally effective employees, for up to five years. This can lead to a heavy financial burden for employers, especially if an employer has several such cases. The question therefore arises as to how an employer can be sure of the legal relationship between the employees and the employer. Although there are no watertight solutions in the legal profession, in my opinion it is possible to contact the responsible compensation fund (see www.ausgleichskasse.ch) and obtain confirmation as to whether, in the opinion of the compensation fund, the person in question is employed or self-employed.

Click workers

Recently, in the media and in studies, one can read more and more about so-called “click jobs”, which are consequently done by “click workers”. Click-workers are characterised by the fact that they start their work by clicking into digital systems. The best-known example of this is probably the driving service agent Uber (see below). As the Uber case shows, the Uber drivers basically feel as self-employed, but are integrated into a work structure via the digital system, like employees. This makes them legally something between freelancers and employees. This status is no longer clearly recorded by current law. From a legal point of view, click-workers are “neither fish nor bird”. The problem and the approaches to solving it are described below. A comprehensive description of the new forms of work can be found in a study by a group of experts from the Foundation for Technology Assessment: www.ta-swiss.ch/flexible-neue-arbeitswelt.

Uber case

At Uber it can be said that the drivers are free to choose their working time and their working instrument (car). However, once they log into Uber’s system, they must follow its rules. I.e. they cannot drive around any passenger, but only one who is also logged in at Uber, they cannot demand any fare for the journey, but only the one already communicated by Uber to the passenger. In addition, I recently found out from a very friendly Uber driver in Brussels that the Uber system does not provide for a tip. On the other hand, one could argue that the Uber drivers simply use a Uber service when logging in to Uber, which is otherwise a self-employed activity. In Switzerland, the courts will still have to judge this. I assume, however, that the dependent elements predominate.

In a recent ruling, the Court of Justice of the European Union (ECJ) ruled that the smartphone app provided by Uber was essential for both drivers and passengers. In addition, Uber exerts a “decisive influence” on the conditions under which the drivers provide the services (see NZZ 21.02.2018 EU Court of Justice defines type of service provided by Uber).

Is the current law still sufficient for the new forms of work?

As always, new forms of work, such as the click-workers, can no longer or not sufficiently be covered by the current law, as they are something between employment and freelancing. The click-workers, for example, feel more self-reliant than employed. Nevertheless, they are dominated by digital systems and are also dependent on them. New rules are therefore needed which, on the one hand, leave the desired freedoms to the employees, such as the click-workers, but protect them from exploitation, especially of health, and in spite of their high degree of independence, safeguard them under social security law.

In principle, the Swiss Minister of Economic Affairs Schneider-Amann agrees (https://www.tagesanzeiger.ch/wirtschaft/unternehmen-und-konjunktur/schneiderammann-nimmt-uber-in-schutz/story/14353396). The Swiss think tank Avenir Suisse has put this into concrete terms in connection with a corresponding new study (“Wenn die Roboter kommen”, www.avenir-suisse.ch/publication/wenn-die-roboter-kommen). In this context, Avenir Suisse is of the opinion that social insurance should in future also cover small workloads and irregular employment relationships. In addition, the regulations on recording working hours should also be overhauled and the rules on working hours made more flexible (https://www.nzz.ch/wirtschaft/droht-die-robokalypse-ld.1320017).

Where is the workplace in the digital world?

The place of work has an influence on various factors of the employment relationship, such as the place of jurisdiction, the applicable law and, under certain circumstances, the salary.

If someone now works in the digital world, like the click-workers might even work in the cloud, the question arises where this person’s place of work is in the legal sense. Recently, the Swiss Federal Statistical Office asked me whether I worked in Zurich (where our law firm is based) or in Lucerne (branch office). My answer was that I work almost exclusively digitally and virtually, which is obviously not (yet) planned by federal statisticians.

In both national (Art. 34 CPC) and international relations (Art. 115 IPRG), the employee can sue at the place where he physically carries out his work. This means that employers in the digital world, e.g. those of click-workers, run the risk of being sued practically anywhere in the world. In addition, jurisdiction clauses at the employee’s expense, i.e. with exclusive jurisdiction at the employer’s location, are not permitted. The choice of law to the detriment of the employee or in favour of the employer would be partly possible in international relations (Art. 121 para. 3 IPRG), but in my opinion does not have as strong an influence on the proceedings as the place of jurisdiction. As far as wages are concerned, regulations to prevent dumping in the digital world are likely to fail because they are geared to the physical presence of employees in Switzerland (see https://www.personenfreizuegigkeit.admin.ch/fza/de/home/aufenthalt_und_arbeitsmarkt/flankierende_massnahmen.html).