Fake self-employment: independent collaboration incompatible with disciplinary sanctions

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Date:
10 Nov 2016

On 10 October 2016, the Supreme Court overruled a judgment of the Labour Court of Appeal of Antwerp. This judgment deemed that a security guard could perform his activities for a security company on a self-employed basis despite the company being able to apply disciplinary sanctions provided by the company’s work regulations. The Supreme Court has found this to be incompatible with a contract for self-employment. 

An employment relationship can take different legal forms, including an employment contract or a service contract. If the relationship is based on an employment contract the worker will be considered as an employed person, whereas the worker will be considered as a self-employed person if the relationship is based on a service contract. 

From 1 January 2007 to 31 December 2008, a security guard performed activities for a security company on a self-employed basis. After the security guard’s contract was terminated, he took the security company to court (Labour Court of Antwerp). He claimed that in reality he was subordinated to the security company and accordingly that his service contract should be reclassified as an employment contract. The security guard argued that the security company could impose sanctions provided in its work regulations, and that this power to impose a sanction was incompatible with a contract for self-employment.

Even though the Labour Court found in his favour, the Labour Court of Appeal of Antwerp subsequently reversed the judgment considering that the security guard had not substantiated any incompatible element with a self-employment contract. While it is recognised that the judge will first examine how both parties have classified their employment relationship, he can only reclassify this relationship if he considers that the elements submitted by the applicant are incompatible with the classification as agreed upon by both parties.

In this particular case, in overruling the judgment of the Labour Court in Appeal, the Supreme Court did state that the fact that a party to an employment relationship reserves the right to apply a sanction provided for in the work regulations to the other party is incompatible with a contract for self-employment based on the four general criteria provided for in the Act of 27 December 2006 on the nature of employment relationships. These criteria are: party autonomy, the (lack of) freedom to organise the working time, the (lack of) freedom to organise the work and the existence of a hierarchical authority.  

> Action point
Given the far-reaching consequences of a reclassification of a fake self-employment on the fiscal and parafiscal level it is, now more than ever, important to tread with care when drawing up the framework of a self-employed relationship. Extending the application of the sanctions provided for in the work regulations to self-employed persons with whom the company works together must be avoided at all times.