In Denmark, a historic collective agreement is turning the “bogus self-employed” into “workers with rights”

In a world first, as of this August, hundreds of workers for a Danish online platform for cleaning in private homes will benefit from significant guarantees under a new collective agreement signed in April. There are around 450 workers for Hilfr.dk, a website that provides cleaning services for around 1,700 customers across Denmark.

Hilfr co-founder Steffen Wegner Mortensen is quoted as saying that the agreement is “raising the bar for the gig economy and showing how we can all benefit from new technology without undermining labour rights and working conditions”.

Thorkild Holmboe-Hay, the author of the agreement, tells Equal Times: “With this agreement Hilfr domestic cleaners, who were formerly self-employed, become workers and are thereby protected by EU and national labour law.”

Holmboe-Hay, who works for the Danish trade union 3F, was the technical advisor to Tina Møller Madsen, 3F’s chief negotiator in dealings with Hilfr. 3F (the United Federation of Danish Workers) is the largest trade union in Denmark, with about 278,000 Danish members and over 48,000 members from other countries working in Denmark.

“An example of this protection,” Holmboe-Hay continues, “is that if Hilfr wants to remove [workers] from the platform, they have to give them notice and a reasonable cause.”

From 1 August onwards, in a one-year ‘trial’ agreement, any worker putting a profile on Hilfr’s platform will start off as a self-employed freelancer. But after 100 hours of work, the platform’s algorithm will automatically change their freelance status to that of an employee.

Employees, known as ‘Super Hilfrs’, will immediately be covered by the new union agreement and will automatically receive Hilfr pension contributions, holiday pay and sickness benefits.

Super Hilfrs will also receive considerably higher collectively agreed wages – a minimum of 141 Danish kroner (around €19) per hour. If after 100 hours a Hilfr worker wishes to remain self-employed, they will have to make a request to do so. At present, freelance Hilfr cleaners are paid about 115 Danish kroner per hour (approximately €15.50) and receive no pension contributions, holiday pay or sickness benefits.

A model for other sectors?

Dansk Industri (DI), the Confederation of Danish Industry, is a business and employer organisation with 10,000 member-companies covering around 500,000 employees in Denmark and abroad. Hilfr moved from affiliate to full membership because it was negotiating a collective bargaining agreement with the help of DI.

“It’s a one-year agreement so we’ll assess how it’s going after a year and work out if we can apply this agreement to the sector for cleaning in private houses. Today it covers just one company and their potential employees. We hope that it leads to a collective agreement covering other existing digital companies in this specific sector,” says Niels Grøn-Seirup, director of collective bargaining at DI. “It could also be a model for other sectors.”

The Danish Ministry of Industry, Business and Financial Affairs estimates that, in 2017, there were around 140 digital platforms in Denmark. Whilst it has no consolidated figure for the economic value of the sharing economy, in 2015 it determined that Danish consumption of car-sharing and private rental through platforms such as Airbnb was between 425 million Danish kroner (around €57 million) and 625 million kroner (around €83 million).

Danish workers are used to having collective agreements for everything. This is part of the Danish labour model, which is now being challenged by the platform economy .

Holmboe-Hay, who is a political advisor for 3F in the private service, hotel and restaurant sector (PSHR), describes what he sees as the growing problem of pseudo or false freelancers in the so-called ‘gig economy’.

“There is a trend for employers of digital platforms to ‘produce’ huge numbers of so-called self-employed workers and freelancers by telling them that the only way that they will get work with them is by signing a freelance contract,” he says.

“We’re talking about people at the edge of the labour market, such as refugees and other low-income earners trying to find a foothold in the labour market. Digital platforms are attractive to them because they don’t need specific skills. [But at the same time] they don’t want to sign [a self-employed] contract as they see themselves as workers,” he adds.

“This is building up into a big problem with non-declaration of revenue from workers to the tax authorities, which will probably need to be solved via legislation. We’ll probably also have to ask legislators to define the line between workers and being self-employed. But for now, many digital platforms are providing pseudo self-employment,” he says.

A significant “step forward”

Responding to questions from Equal Times by email, Agnes Jongerius, a former Dutch trade unionist and MEP with the Dutch Labour Party who sits on the European Parliament’s Employment and Social Affairs Committee, heralded what she described as a significant “step forward”. She wrote: “Nobody wants uncertainty.

Unfortunately, the gig economy brings with it a lot of uncertainty for people in the form of bogus self-employment. Workers have no basic rights, like a minimum income. This is a fundamental problem in Europe and it has to change. That’s why I’m very proud that the Danish Union 3F fought for the rights of the workers in the cleaning services sector. They are not bogus self-employed anymore but workers with rights!”

Asked about the prospect of future collective agreements with digital platforms, Holmboe-Hay says: “It is very hard to make one trade union agreement that all digital platforms will fit into. Things have to be negotiated for each individual platform. That’s a real challenge.”

He continues: “We have a lot of contact with major digital platforms and are at the stage of gathering experiences about the challenges before we start demanding union agreements across all digital platforms.”

Karolien Lenaerts, a research fellow in the jobs and skills unit of the Brussels-based think-tank, the Centre for European Policy Studies, points out that “collective agreements in the platform economy are currently still rare,” and argues that “social dialogue is required to make them more common”.

She went on to identify a major obstacle: “What is currently an issue is that not all platforms are willing to enter into negotiations with workers or trade unions, and that there are very few efforts towards organisation and representation on the platforms’ side, which is linked to their recent emergence and immaturity, as well as the fact that they often see themselves as intermediaries or as tech companies, rather than the employer.”

Holmboe-Hay points out that it was a suspected reduction in national tax revenues that indirectly led to the Hilfr-3F collective agreement. LO-Denmark, the Confederation of Danish Trade Unions, called for something to be done about the issue and Prime Minister Lars Løkke Rasmussen started talks with employers and trade unions about future challenges relating to the platform economy. This has become an ongoing dialogue within the tripartite ‘Disruption Council’, formed in 2017 by representatives of government, employers and trade unions, and in which digitalisation and the future of work are major themes.

“The Hilfr case has been an eye-opener for trade unions and employer organisations as well as government officials, as it shows that there are ways of dealing with difficult issues,” says Grøn-Seirup of DI.