When Does a Platform Operator Become an Employer?
An employee is someone who is integrated in the employer’s operational organization, who carries out its instructions and is in a subordinate relationship with the employer.
According to case law of the Swiss Federal Supreme Court, the question of whether someone is self-employed or employed is to be judged upon the economic circumstances, rather than the legal nature of the contractual relationship between the parties.
Federal Supreme Court holds that Uber drivers are not self-employed
A person who is dependent upon a work provider from an economic perspective and who does not personally bear any specific business risk is considered to be an employee. According to the judgment of the Federal Supreme Court in the Uber case, a dependency is particularly likely to exist if the service provider (in this case Uber driver) has to adhere to a specific work plan, report on the status of the work and is reliant on the employer’s infrastructure.
One factor which indicates that a role could be considered self-employment, is undertaking activity for several customers in one’s own name. In this situation, it is not the legal ability to work for several clients which is determinative, but the factual situation regarding assignments.
Which factors indicate an employment relationship?
As can be seen from the Federal Supreme Court decision mentioned above, the actual structure of a collaboration is key to determining whether a person is self-employed or not.
The existence of an employment relationship cannot be excluded, even if common elements of an employment contract are missing from a cooperation agreement.
For example, in the Uber case, it was held that instructions which were defined as recommendations in the cooperation agreements were actually directions under employment law. In the court’s view, the Uber drivers had no real choice in whether or not to follow the “recommendations”. (See also: Social Security Court holds that Uber drivers are employees).
Other important criteria include acquisition of customers, setting of prices, administrative processing of orders and, in particular, the assumption of collection and credit risk.
If customers are acquired exclusively by the platform operator and passed on to the service provider without further action by the provider, this indicates an employment relationship. A further indicator of employment is where the service provider has either no ability or a very restricted ability to structure prices. Finally, if the entire administrative processing of an order is undertaken by the platform operator and if payment to the service provider occurs following deduction of its charges by the platform, then it becomes very difficult to make a case for self-employment.
Checking the individual situation is key
In conclusion, the entire circumstances of the relationship must always be considered when deciding which form of employment applies.
As in practice characteristics of both self-employed and employed activity often come into play, according to the Federal Supreme Court those characteristics which predominate in the specific case will be decisive.
With this in mind, all operators of service platforms should ensure they consider these questions as early as possible. The working relationship with service providers should be structured from the outset to ensure that they remain as independent as possible from the platform in practice, and not just on paper. Otherwise, there is a risk that retrospective employment law claims could arise, affecting a relatively large number of people.