The Social Security Position
of Teleworkers in the
European Union
Consolidated Report
WP/97/27/EN
EUROPEAN FOUNDATION
for the Improvement of Living and Working Conditions
© EUROPEAN FOUNDATION for the Improvement of Living and Working Conditions
General Report - the Social Security Position of Teleworkers in the EU
The Social Security Position of teleworkers in the
European Union
Consolidated Report
by
Frans Pennings
Consolidated Report based on the following national reports:
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
United Kingdom
Brigitta Mlinek
Anke Gieselink
Bent Greve
Asko Heikkilä
Jean-Jacques Dupeyroux
Peter Wedde
Ioannis Koukiadis
Nuala Butler
Tiziano Treu and Luciano Pero
Marc Feyereisen
Frans Pennings and Trudy Dijkman
António Nunes de Carvalho
Fermin Rodriguez-Sañudo
Niklas Bruun and Märeta Johnson
Sarah Podro
by
Frans Pennings
Tilburg University
PO Box 90153 Room Y 141
NL 5000 LE Tilburg
The Netherlands
Tel +31 13 4662157
Telefax +31 13 4663143
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© EUROPEAN FOUNDATION for the Improvement of Living and Working Conditions
General Report - the Social Security Position of Teleworkers in the EU
CONTENTS
0.
I.
II.
III.
IV.
V.
VI.
INTRODUCTION
The approach to teleworkers in this report
Legal tools
Central questions
DEFINITION OF TELEWORK
i National definitions
ii Analysis of the national definitions
1. The location
2. The use of telecommunication
iii The ILO and homework
iv Conclusions
CASES AND EXPECTED GROWTH AS DESCRIBED IN
THE NATIONAL REPORTS
SOURCES OF LAW RELEVANT TO TELEWORKERS
THE LEGAL STATUS OF THE TELEWORKER
i Contract of employment
Burden of proof
ii Homeworkers
iii Self-employed persons
iv Conclusions
THRESHOLDS FOR COVERAGE BY SOCIAL SECURITY SCHEMES
i Employees
ii Insured persons
iii Self-employed
iv Voluntary Insurance
COVERAGE BY SOCIAL SECURITY BENEFITS
a. Sickness Benefit
i Schemes for employees only
ii Schemes for employees and self-employed
iii Particular problems
a Exclusion from coverage
b Coverage during periods of no working during an employment relationship
c Working while being ill
d Conclusions
b. Maternity benefits
i Schemes for employees only
ii Schemes for employees and self-employed
iii Conclusions
c. Invalidity benefits
i Schemes for employees only
ii Schemes for both employees and self-employed
iii Coverage in case of insecure employment
iv Conclusions
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General Report - the Social Security Position of Teleworkers in the EU
d. Old age benefits
i Employees
ii Employees and self-employed
iii Conclusions
e. Occupational accidents
i Schemes for employees only
ii Schemes for employees and self-employed
iii Conclusions
f. Unemployment benefits
i Schemes for the employees only
ii Schemes for employees and the self-employed
iii Training while remaining in receipt of benefit
iv Conclusions
g. Survivors benefits
h. Social assistance protection
i. Family benefits
j. Housing benefits
VII.
EQUAL TREATMENT
Gender
Disablement, age and race
VIII. TRANSBORDER ISSUE
IX.
POINTS OF VIEW
X.
FUTURE DEVELOPMENTS
Developments
Views
Flaws in the existing system and developments
Desirable rules if telework becomes more important
Role of the European Union
XI.
ANALYSIS AND CONCLUSIONS
1. Two main categories
2. The relevance of the employee-self-employed distinction
3. The definition of telework
4. The problem of social dumping
5. Specific problems of social security
SELECTED BIBLIOGRAPHY
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General Report - the Social Security Position of Teleworkers in the EU
0.
INTRODUCTION
This report is part of a series of three consolidated reports on the legal position of teleworkers. In
these reports the labour law, the social security position and the safety and health protection of
teleworkers are dealt with respectively. Each report should be readable on its own. Therefore some
(introductory) parts of this report resemble those of the other two reports.
Telework has many faces. On the one hand, some categories of workers have traditionally worked
part of the week at home, such as, for instance, university professors. The fact that telecommunication
is now available is not a radical change.
Newer forms of work include telework in various forms and conditions: home based typing;
telebooking-sales and call centre functions; design from home; telecottages; telecentres; consultancy
from home; special needs group (e.g. the disabled) integration; translators from home; maintenance
via teleworking; mobile sales and a virtual telework organisation.1 Some of this work is done by
categories of workers who have not traditionally done the same work at home. Some workers now
have an opportunity to do work which they could not do before, because, for instance, their mobility
is seriously reduced, such as in the case of persons caring for another person and the disabled.
Another category of workers may exist of persons who are self-employed. Teleworking may even
increase the number of self-employed, as people are now able (or forced) to work in their own office
at home, whereas they had no work before.
There are many driving forces behind telework, among other things the technological revolution in
telecommunications. A very relevant aspect, is, however, the wish of increased flexibility, which is
partly at least to the benefit of the employer or contractor. In the future telework may become of
increasingly more importance as it has serious advantages for persons who want to have a particular
task done. Telework reduces the costs of office space.
Enterprises may ask a person not engaged under a contract of employment to do a particular task.
This may be very cost efficient. In many parts of the world enterprises do their utmost best to realize
a ’lean production’. Telework fits well with this development. It can therefore be seen as an integral
part of the fundamental changes, which characterise at present the labour markets of developed postindustrial societies. These changes are as dramatic as the shift which took place last century, moving
people from an agricultural society to an industrial society, when agricultural labourers were pushed
from the field and the barn to the enterprise as workers and dwellers of cities. In the future a lot of
work will be done by people operating in various, be it short and consecutive projects, in which they
will work in a rather independent way with for many, but not for all, a lot of room for initiative and
creativity.
Flexibility may be to the advantage of the teleworker. Such advantages may exist with respect to the
place of work, working time, pay and status, social coverage, possibly diminishing costs regarding
office space, increased productivity, less travel, the growth of the potential for networking even
across boundaries and the like.
1
Korte, W.B., Descriptions of typical teleworking situations, 1995. Mimeo.
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General Report - the Social Security Position of Teleworkers in the EU
The approach to teleworkers in this report
These developments of the labour market may mean that in the future the borderlines between the
categories described above, which was not an exhaustive enumeration, will disappear. For this reason
this project is an exploration of the legal aspects of teleworking in general. We will not restrict
ourselves to a particular group of persons working with telecommunications, as this might lead us to
overlook more general developments and problems. In the final section we will analyze which
problems are specific for (some categories of) teleworkers.
Legal tools
One thing is sure, namely that the traditional juridical tools which were developed over almost a
century and contained in individual and collective labour law of the Member States of the European
Union and of the Union itself, are not self-evidently appropriate to deal with the newer realities in the
world of work. The question arises whether the labour norms, developed to deal with a Taylorised
situation are adequate to cope with the problems, which go along with the present developments of
telework.
Our present law arsenal, with some nuances in a number of countries, divides the world of labour into
two categories of people engaged in work: employees and self-employed. The question is whether
that distinction is appropriate to deal with the new realities and the challenges which these
developments entail.
Central questions
The objective of this report is, therefore, first when examining the legal and contractual situation of
teleworkers in the Member States of the European Union to analyze their legal position.
Subsequently, we want to examine the social security law questions, which go along with telework
and to see how they are tackled today and what directions are envisaged for the future.
In this research project we will use a broad definition of teleworker, to be discussed below, as to
cover all categories of workers whose legal position may be affected by working by means of
telecommunications away from the traditional work place. On the basis of the material found we will
subsequently deal with the following central questions in the final sections:
1. the status of the teleworker: is s/he an employee or a self-employed?
2. what are the consequences of the present distinction between employee and self-employed for
teleworkers?
3. should there be a specific legal category of teleworker, like the one which existed in a number of
countries for homeworkers?
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General Report - the Social Security Position of Teleworkers in the EU
I. DEFINITION OF TELEWORK
(i) National definitions
Telework is, as most national reporters underline, not a legal category. This means that we have, as
far as the subject of this general report is concerned, to rely on a functional definition only. That
definition should be broad enough to embrace the various possibilities of telework, especially those
where newer work situations emerge.
Neither is there a definition of telework in social security in the various Member States. Probably
there never will be a seperate legal category of teleworkers, as many different categories of workers
use telecommunications on a place other than the traditional work place.
The national reporters tried to find a definition in the national literature or applied the definition
which was given at the start of the project, i.e. that a teleworker is a person working on a place which
is not the employer’s premises with means of telecommunication.
The Belgian, Swedish, Austrian and Irish rapporteurs define telework as a form of work involving the
use of telecommunications which is not done on a fixed traditional location. This may be the home of
the worker, a telecottage or any other place.
The Italian rapporteurs analyzed collective agreements and found that teleworkers are workers who
have transferred their workplace from their office to home and who do home-based teleworking.
Workers who have a mobile job (such as maintenance and technical assistance to clients or sales
personnel) are considered as teleworkers only in a broad sense, on the basis of the consideration that
they were mobile personnel before the introduction of telecom equipment and that these instruments
did not change the main characteristics of their work.
The Greek report defines telework as work at distance, which is done, either under an employment
relationship or as a self-employed worker, for an enterprise by means of telecommunications. This
report remarks that telework is mainly done in the services sector and is therefore white collar work.
Still, one could also think of making material products at home with the use of the computer. Also
this work has to be considered as telework.
The Dutch report mentions a definition of the Netherlands department of Social Affairs and
Employment: ’telework is a form of work in which the working place is divided geographically from
the (central) working place of the enterprise. The choice of the working place is determined by the
need of the person who does the work. The geographical distance is bridged by means of
telecommunication and micro-electronics.’ Teleworkers may be: (1) (A) persons working at home (B)
persons who visit their customers regularly, whose office is at home; (2) persons working in special
’teleoffices’.
(ii)
Analysis of the national definitions
In most definitions given, the national reporters retain two elements, namely:
(1) the place of work
(2) the use of telecommunication.
ad 1. The location.
The place of work is somewhere other than the traditional work place of the employer. This is most
often the home of the teleworker. The data available seem to indicate that the majority of teleworkers
work at home. Telework can, however, also be performed in an employer independent telecottage, in
hotels, or planes.
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General Report - the Social Security Position of Teleworkers in the EU
Working at a satellite office, organised by the employer, thus under the control of the employer, is for
obvious reasons not telework, since a satellite office belongs to the premises of the employer. The
same goes for forms of work like teledisponibility 2, teleconsultants or tele-actors.3
It is disputed whether there should be an indication of the amount of time spent as teleworker as
compared to working on the employer’s premises. The amount of time is relevant to some questions
only. If we want to know how many persons are teleworkers, it is important to give a definition in
terms of time spent working away from the employer’s premises, while using telecommunications.
For other questions the amount of time is less relevant. If we want to know the social security
position it is important to make an inventarisation of the position of workers at home regardless of
the time they spend working at home with telecommunications.
As an element of the definition it is also mentioned that the location is to be freely chosen by the
teleworker or can be a condition of the individual contract (of employment) to be concluded between
parties. If there are, however, persons who had no choice to become teleworker, it would not be
appropriate not to describe their legal possition. That element of the definition shows more a
desirable situation, but is not suitable as a definition for making an anlysis. For that reason we leave
that part out.
ad 2. The use of telecommunication
The second element retained in the definition concerns the technology used by the teleworker.
Teleworking involves the use of telecommunications: computer, fax, telephone, satellite, disks,
CD roms. By means of these instruments there is a telecommunicated exchanges of words, designs
and the like. It is different from traditional (home)work as it does not produce manufactured goods
like furniture, textiles or even books. Still, from the Greek report we learnt that some types may be
called telework, which is in between manual work and transfer of bits. This is the case of a person
who uses the computer to manufacture machines etc. at home.
The nature of telework done varies enormously, ranging from work of a very low level and rather
repetitive, like data-entry jobs, to contributions of the highest/creative level and thus having the most
added value, like in the case of research, development, consultancy, arts and so on.
(iii) The ILO and homework.
At this moment, the ILO is working on a convention on homework. In the reports which are made in
order to draft this convention, a lot of information on homework is given. In the draft convention it is
proposed to define ’homeworker’ as a person who in his or her home or in other premises of his or her
own choice, other than the workplace of the employer, carries out work for remuneration which
results in a product of service as specified by the employer, irrespective of who provides the
equipment, materials or other inputs used, as long as this person does not have the degree of
autonomy and of economic independence necessary to be considered an independent worker under
laws, regulations or court decisions. In the report of professor Blanpain the ILO-reports are quoted at
length. We restrict ourselves to mentioning that the ILO definition of homeworker is:
(1) limited to employees, and does not cover self-employed persons;
(2) includes teleworkers as well as other employees, working at a distance, also the traditional
homeworkers.
2
3
Employees, who can be reached by telecommunications (alphapage, car phone, or at home for urgencies).
Employees who can be reached for consultation by clients, e.g. in banks, especially in the evenings and on
Saturdays, giving additional flexibility regarding the working time for the employer.
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General Report - the Social Security Position of Teleworkers in the EU
This means that this definition is both smaller and broader than we need and it is therefore not
appropriate to define teleworkers. From the ILO report it appears that some Member States, such as
the International Ladies Garments Workers’ union (Canada), the Danish Employers Confederation,
France, and the United Kingdom, criticize the ILO for not paying attention to teleworking.4
(iv)
Conclusion
Both elements, constituting telework, namely the location of work and the use of the telecommunication and technology, need to go together. Indeed, employees who work exclusively or mainly on the
premises of the employer, using telecommunication are not looked upon as teleworkers. On the other
hand the use of telecommunications is crucial in our definition.
On the basis of these considerations we use the following (functional) definition of telework:
telework is the work performed by a person (employee, self-employed, homeworker..)
mainly or for an important part, at (a) location(s) other than the traditional
workplace for an employer or a client, involving the use of advanced technologies.
4
ILO Homework Report IV(1), Geneva, 1995.
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General Report - the Social Security Position of Teleworkers in the EU
II. CASES AND EXPECTED GROWTH AS DESCRIBED IN THE NATIONAL REPORTS
In the Finnish Experience on Telework research project a representative sample of five thousand
persons in the age range of 25-65 was questioned on the subject of telework. From the June 1994 June 1995 figures it appears that about 40 per cent of the wage-earners expressed interest in working
mainly at home. As many as 54 per cent of the interviewees opted for working at least one day a
week at home. The actual situation is, however, that only eight per cent of all employees actually do
telework. Teleworkers appear to be mainly well-educated and high earners and professionals in their
field. Some 74 per cent of them are wage-earners and about 23 per cent self-employed. The majority
are male (73 per cent ).
For the United Kingdom a research report was written by Analytica, from which it appears that 57 per
cent of teleworking schemes involved permanent employees, eight per cent were temporary
employees, two per cent employees of subcontractors, two per cent were directors of independent
companies, five per cent were partners in independent companies, one per cent was on retainers, and
23 per cent were self-employed. This appears to suggest that the majority of teleworkers have
employee status. However, the schemes with the largest number of teleworkers tend to be
concentrated in areas such as data entry, secretarial and administrative work, research and translation
where teleworkers are more likely to be self-employed.5
The Swedish report notes that restructuring of companies and government agencies in the 1990s led to
fewer regular employees and to more temporary workers. It became easier to employ people for a
definite period and private employment agencies have become legal; the rapporteurs consider this as
beneficial to the development of telework. More than 500,000 of a total of 2.1 million white collar
workers in Sweden are distant workers, which are not the same as teleworkers, as persons are included who do not work with telecommunications other than a telephone. According to this report the
average working time away from the workplace of the distant workers is 11.5 hours a week. The typical worker is a male aged 35-45 with university education. Seventy per cent of them work at home.
The Italian report mentions that there are not many well-known cases of telework in Italy. In a report
seven cases were found involving two to three thousand persons who worked principally in the areas
of software-services, of telesales and of computers maintenance via teleworking. Teleworkersemployees are employed by large and medium sized enterprises, whose work activities are regulated
by a collective agreement and for whom the status of teleworkers is officially defined by agreements
or at least recognised by social partners. These cases are generally well defined or formalised. In the
manufacturing industry, teleworking is used mainly for three different class of activities: mobile sales
and mobile maintenance activities, research and software development, telesales or telemarketing.
Some thousands are working here, according to the national report. In the second case different types
of teleworkers are reported: self-employed persons. Statistics show that this area of employment is
steadily growing.
The cases reported in the national reports did not show special issues concerning social security.
5
U. Huws, Teleworking in Britain. London, 1993.
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III.
SOURCES OF LAW RELEVANT TO TELEWORKERS
There are no special laws or regulations on the social security position of teleworkers in the Member
States. In some countries there are special homeworkers regulations which may be relevant as the
majority of teleworkers prove to be homeworkers. We will describe these in the following section.
Collective agreements may be relevant as in these often rules on supplementary old age pensions can
be found. These agreements define who is covered by these pensions and who is not. In addition
collective agreements can give rules on supplements to statutory benefits. This is relevant to
teleworkers only if they are within the personal scope of the collective agreement.
In Belgium the Law on collective labour agreements makes it possible for agreements concluded
within the National Labour Organisation to be generally binding by the King so that all employers in
Belgium and all their employees are bound by their stipulations. Important are, in particular, a collective agreement guaranteeing a minimum average monthly wage, declared generally binding, a
collective agreement creating a complementary benefit for workers dismissed after the age of sixty
(also declared generally binding). Branch agreements provide for additional unemployment benefits
and additional sickness and disability benefits.
So far, no mention is made of telework in Finish collective agreements. Finnish agreements may be
relevant to the social security position of teleworkers as these have supplements on maternity, paternity and parental leave and pay during sickness. There is, however, no comprehensive research
material available on these agreements. The same applies for the Greek and Italian collective
agreements.
In Sweden as a rule the regular collective agreements apply to teleworkers, but it is very rare that they
specifically address teleworkers. The Swedish branch of Siemens Nixdorf Informations System AB
and the local department of the trade union have, however, concluded a special local agreement as a
supplement to the general, current, collective agreement; the agreement regulates various issues, but
concerning social security matters it provides only that presence and absence should be reported
according to routines at each unit and that in cases of illness or injury, the same rules regarding
compensation apply to distant work as to work performed at the principal work place. Employers who
have concluded collective agreements with the trade union of wage earners, must take out AMF
insurance policies for their employees. The AMF insurance includes severance pay insurance,
negotiated group insurance for sickness, special supplementary pension insurance, labour market nofault liability insurance and occupational group insurance. Employers of employees are obliged to
take out ATP, sick pay insurance and supplementary pensions for their employees. The collective
insurances are compulsory on the basis of these collective agreements. This applies not only to
employers affiliated to the Swedish Employer’s Confederation, but also to employers who are bound
by a secondary form of collective agreement with a trade union. Since the rate of organisation in
Sweden is very high (approximately eighty-five per cent), most employed persons have insurance
benefits on the basis of collective agreements. The employees do not have to be union members to be
covered.
For historical reasons, complementary social security plays at present a still very small part in social
security in Portugal.
As telework is a very new phenomenon customs and practices do not yet form a source of law for
teleworkers.
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IV. THE LEGAL STATUS OF THE TELEWORKER
There are mainly two ways in which social security systems can define their personal scope: this can
be done on the basis of categories of employees and self-employed, or on the basis of residentship.
Both types can be found in the national reports, and in some countries both types exist alongside with
each other.
The type of schemes which require that claimants are a resident do not need much clarification. In
section VIII on Transborder Issues we will pay some attention to this.
The type of schemes which protect employees only is much more complicated to describe. With
respect to these schemes a first relevant question is whether persons have a contract of employment,
as employees schemes are in the first place meant for them. Coverage is sometimes dependent on
contributions by employees or self-employed respectively, but this is an indirect way of raising the
same question.
As far as this group is concerned the subject overlaps with that of the labour law report. Still,
generally social security schemes for employees often include groups other than those having a
contract of employment. Such other groups exist of persons who have a position which resembles that
of employees, in that this position is a dependent one: the person receives his or her work from a
particular person for remuneration. An important category of ’assimilated employees’ may be that of
homeworkers. As many teleworkers are homeworkers, we will spend a special section on this group.
After we have described the employees and the homeworkers, we are not ready yet. In the labour law
report, it could be simply concluded that labour law is not applicable to the self-employed. This is not
true for social security: in some countries the ’employee-schemes’ are also applicable, under some
particular conditions, to (some categories of) the self-employed. Therefore, we will have to pay attention also to the self-employed.
(i) Contract of employment
It is not easy to determine whether a teleworker works as an employee or otherwise. The Dutch report
mentions one exception: if a person has been engaged under a regular contract of employment, and
later starts to work, full-time or part-time, at home, it is generally assumed that his or her contract
remains a contract of employment (unless s/he agrees otherwise with his or her employer). Also in
Ireland teleworkers who switch from office-based to home-work based work are likely to be and to
remain permanent employees and the UK rapporteur, Sarah Podro, remarks that as far as is gathered
from interviews she did with teleworkers, it appears that those who move either to part time or full
time telework retain their employment status unless it is specifically agreed to change it.
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General Report - the Social Security Position of Teleworkers in the EU
This exception seems to be probable in other countries as well, but not all rapporteurs are certain on
this. The Portugese report mentions that in general subordination as it exists in reality is decisive for
the determination of the legal position, regardless of the qualification made by the parties. To this
rule is added that the entity which intends to change the initially settled relationship has the charge of
the proof that the real situation has changed. This implies that changes in the factual situation may
lead to a change in the legal position, which may be dangerous for employees starting teleworking.
Whether a person has a contract of employment or not depends on the rules of labour law. In this
respect there is a common Western tradition, which makes that the approaches in the various
countries have much characteristics in common. A common characteristic is that it is not relevant
how a relationship is denoted by the principal and the worker, but the criteria as established in the law
and the case law applied on the factual situation are decisive.
An example of an approach of distinguishing employees and self-employed persons from each other
can be found in the Belgian report. The criterion for distinguishing between a teleworker-employee
and a teleworker-self-employed is whether there is a subordinated party. A contract of employment
attributes authority to the employer, giving him the right to direct the work (management) and to
control the performances (survey). Irrelevant are the fact that the work is performed at home, or
whether it is registered in the staff files, whether an industrial accident bonus is paid, whether social
security contributions are paid, whether one is registered as self employed, whether one is subject to
VAT or registered at the Chamber of Commerce. On the other hand, the following elements are
sufficient to assume a contract of employment. A first element is that the employer decides upon the
type of work the homeworker carries out as well as the way in which it is done. Relevant is whether
the employer can control the work performance, whether the teleworker uses the materials and
instruments of the employer, whether s/he is paid at a fixed date or at regular intervals, instead of on
invoice, whether s/he works for one fixed employer, whether the employer ensures the continuity of
performance by means of providing the work and whether the teleworker is in the position to refuse
the work offered. In Belgium the field of application of a social security scheme for employees can be
extended to all persons by the King. A Decree was made to provide this extension. Examples of
persons thus covered relevant to this study are workers for offices for temporary work, home workers
and researchers of scientific institutions.
In Finland the characteristics of an employment relationship are that there is an employment contract,
the work is done on another party’s account, the work is paid for, and the employer is entitled to
direct and oversee the work.
Also in Italy the criteria for an employee prove to be difficult for teleworkers, as an employee is
defined as a worker who operates under the direction and control of the employer, inside the space
(and the organisation) of the enterprise and with an obligation of a continuous relationship. This
definition may be problematic for teleworkers, because it refers to the employer’s premises and to ’a
continuous relationship’. There is a special definition of homeworkers, see below, which may be
helpful to many teleworkers, but not to all of them.
Under Dutch law a contract of employment is a contract by which one party, the worker, obliges
himself to do work during a certain period for a certain wage in supervision of the other party, the
employer. As teleworkers do not work on the employer’s premises, there is a problem with the criterion of supervision. Homework or telework as such does not exclude supervision by definition, as
supervision can be realized by requiring a teleworker to reach a certain minimum production (per
hour, or per week, or per month) and to provide that s/he cannot refuse work without a good reason
and the right to refuse work exists only to some limits. If the teleworker is by contract allowed to
refuse work at will, the criterion of supervision is not satisfied. Whether the extent to which
instructions are given is decisive for the question whether a person is (not) an employee depends on
the circumstances; for this purpose a comparison with the same type of work which is done on the
employer’s premises is important.
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The law assimilates some categories who are, under some conditions, covered by the social security
schemes which cover employees. The first category consists of persons who have a contract to realize
personally a specific work, whereas this is not done as an enterprise or self-employed business and
neither as a homeworker; a second category is that of persons working as an agent whose job is to
make agreements between the persons s/he visits and another party (examples are persons who sell
insurances for an insurance company, whereas they are not employed by that company). A third
category is that of homeworkers, to be discussed below.
In Luxembourg recent case law seems to weaken the criterion of legal supervision and to accept a
contract of employment even in contracts where the employer’s interference in the performance of the
worker is not high.
Also in Portugal the definition of ’employee’ is wider than the one established by labour law. It also
comprehends contracts legally equivalent to the contract of employment, workers covered by special
rules imposing the application of this regime and those who will be covered by enactments widening
its scope. Thus, homeworkers (as defined in a decree) are covered by the general regime for
employees, with some adaptations.
The Spanish report remarks that the criteria which are traditionally used to decide whether someone
works in subordination to another person are problematic exactly in the case of telework; criteria as
the work place, the rules on the wages, the work times, the use of technical instruments are no longer
always useful to determine whether a teleworker is subordinated or not.
According to the Austrian report a person is an employee if s/he is a person who is employed for pay
in a both personally and economically dependent capacity. In recent case law non-substitutability is
considered the essential criterion of personal dependence. Economic dependence is always assumed if
a person uses equipment not possessed or hired by himself or herself.
In Greece the case law provides that those who work at home for a third person can be considered as
dependent workers if they prove that their work is done in subordination to the third person. Those
who work in places having less than 6,000 inhabitants, are excluded from the rules of labour law. In
cases of doubt on the existence of subordination, the courts take more and more account of the
elements which show an economic or social dependence to acknowledge their status of dependent
homeworker. Working for a single principal and working with machines of which the worker is not
the owner have become important criteria. Still, practice is different from theory, and in fact the
majority of homeworkers is considered as self-employed workers. This is also true for teleworkers.
Still Greek social security has its own criteria of who is covered; the rules provide that also
homeworkers and persons working not on the employer’s premises are obligatorily and automatically
insured.
In the United Kingdom references in social security law to particular groups of persons are made in
terms of Class x contributions. Employees pay Class One contributions, whereas self-employed
workers pay Class Two contributions and Class Four if their turnover is over a certain amount.
Class Two contributions are lower but exclude the payers of this type of contributions from
Unemployment Benefit. Benefits such as Statutory Sick Pay and Statutory Matenity Pay are noncontributory but are paid by the employer and are only available to workers with employee status.
For ’employees’ benefits’ most often Class 1 contributions are required. Only persons in employed
earner’s employment and their employers pay Class 1 contributions; an employed earner is a person
who is gainfully employed in Great Britain under a contract of employment. The criteria for
determining whether a worker is an employee are formally the same, whether the issue being
addressed is one relating to tax, social security or labour law. In the past courts looked whether the
employer controlled the work done by the alleged employee; in response to the growing complexity
of tasks performed by workers, courts now look at a range of factors of which the control exercised
by the alleged employer is only one. Now the court is attempting to assess whether the worker is inte-
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grated into the employer’s organisation (the ’organisation test’), integration being normally, though
not wholly, assessed by looking at economic rather than social factors. A consequence of this
development is that decisions of the courts have become much less predictable.
Relevant criteria for a contract of employment are that the employer has supervision of work and
powers of appointment and dismissal. Also the form of remuneration, duration of contract, equipment, place of work, obligation to work and discretion on hours of work are relevant.
In recent years a further issue has arisen in this context, which is that of mutuality, i.e. the proposition
that for a contract of employment to be found there must at least be an obligation on the employee to
do work for the employer and possibly also an obligation on the employer to offer work.
Home workers and casual workers are frequently confronted with an interruption of their employment
and they can in theory easily change from employer to employer. A court decided in one case that
casual workers (waiters) were self-employed as there was no overall contract between the parties and
6
the applicants were in business on their own accounts as independent contractors supplying services.
However, in another case the Court of Appeal decided that from a long relation with his employer it
follows that a worker has a contract of employment with his employer; the well founded expectations
of continuing homework had hardened or refined into enforceable contracts by regular giving and
taking of work over periods of a year or more and that outworkers had therby become employees
7
under contracts of service like those doing similar work at the same rate in the factory. The latter
case concerned a homeworker, who was paid on a piecework basis (putting pockets in trousers), and
worked only for a single employer.
In Ireland a category of worker is called ’outworker’ for the purposes of the Social Welfare Acts as a
person ’to whom articles and materials are given to be made up, cleaned, washed, altered,
ornamented, finished or repaired or adapted for sale in his own home or other premises not under the
control or management of the person who give out the articles or materials for the purpose or business
of the last mentioned person’ and such persons are considered to be in insurable employment for the
purposes of the Social Welfare Acts. However, it is clear from the terms of this definition that it is
intended to apply primarily to industrial-type workers who are carrying out in their own homes or
premises the type of work which would normally be done in a factory. It is not clear that this
definition is sufficiently broad to include the type of work which would be done by a teleworker.
Burden of proof
It can be concluded, that the traditional criteria for ’employee’ are not always easy to apply in practice.
Therefore, some countries have special legislation which helps the worker by shifting the onus on
proof to the principal to show that the worker is not an employee.
An example is Denmark where the general rule is that persons are considered employees unless a
person has no principal from whom he receives orders, or if he has his/her own company. A person
working free-lance will, for example, be seen as an employee because each part of his or her work is
ordered and supervised by another person or company. This implies that most teleworkers will be
considered as employees unless their income has been at a high level for a substantial period and they
bear the risk of their own enterprise.
In Sweden a worker who has not declared himself or herself to the tax authorities as being selfemployed, is assumed to be employed by the person requesting his services. The presumption is that
an employment contract is for an indefinite period but agreements on employment can under certain
8
conditions also be made for a specified period.
In Austria a person is not insured for social security if s/he can use a substitute. The organisations
representing the interests of employees fear that parties may agree on the possibility of substituting
6
7
8
O’Kelly and others v. Trust Houses Forte plc [1983] 3 All ER 456 (CA), ICR 728.
Nethermer (St Neots) Ltd. v Taverne [1984] IRLR 240 (CA), ICR 612.
For instance, if they are related to certain projects, if a person is a substitute for somebody else or if s/he is
needed because of a high temporary extra amount of work.
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other persons for the contractor, which is a way increasingly used to escape labour and social security
law. A recent proposal made in Austria to cover any person employed for pay for compulsory social
insurance would be to the advantage of teleworkers. The employers organisations responded to this
proposal by suggesting changes in the employee status, such as reversal of the burden of proof in
proceedings to determine whether someone is an employee. So far no agreement on this has been
made.
The German rapporteurs consider a reversal of the burden of proof to be a good solution to employers
from evading labour law. This is, however, not yet reality in German law; so far the courts consider
the factual situation. A solution could be to adopt a new definiton, such as that an ’employee is any
person who is not personally and economically independent’. Such definition differs radically from
the present situation in Germany.
(ii) Homeworkers
In some countries specific rules exist to assimilate homeworkers under some conditions with
employees, even when they do not have a contract of employment.
In Belgium the field of application of schemes for employees is extended to other persons by means
of a decree. Examples of persons thus covered home workers. Until recently, homeworkers were
covered only if were blue collar workers. In 1995 this was extended to all homeworkers, which is an
improvement for the teleworkers who work at home.
The Austrian report defines homeworkers as persons not engaged in a trade of business, and who
work at home or in a personally chosen workplace by commission and for account of persons giving
out homework. They are concerned with the production, handling, processing or packaging of goods.
They are treated in the same way as employees for the purpose of social security law. The concept of
homeworkers applies to manual workers only and therefore teleworkers are, according to the
rapporteur, not included.
The Italian law defines as a homeworker a person who is aided only by his family, who works under
the direction of an employer who pays a remuneration to him or her, when equipment and other technical engines are in the possession of the homeworker or the employer. Homeworkers are considered
a particular category of employees.
Under the provisions of a Spanish regulation a homeworker is a person who works at home or in a
place freely chosen by himself, without direct control by his employer. The absence of this element of
direct control does no mean absence of supervision for the law, but only one of its characteristic
elements are missing. The employer has to register the contracts of employment at the employment
office, and the law obliges the employer to pay at least wages equivalent to those paid to employees
of the same category for the activity concerned. The regulation defines the place of work, in order to
allow it to be checked on health and safety conditions.
Also in Portugal homeworkers (as defined in a decree) are covered by the general regime for
employees, with some adaptations. The contribution for the employer is 20.7% on the remuneration
paid and the worker is charged with 9.3%
In France the Labour Code gives specific provisions for homeworkers; these are workers who, either
by themselves or with the help of his or her spouse perform tasks at home given to them by a
principal at a piecework remuneration. It is not necessary to investigate if there is a subordination
relationship between the principal and the homeworker. They are covered by labour law and social
security law under this heading.
Also in Germany there is a separate law for homeworkers. A homeworker is, according to the law, a
person who works in a working place chosen by himself, works professionally for a principal, but
who leaves the use of the products to the principal. These persons have the same social security
position as employees.
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There is also a category of assimilated persons, who are homeworkers and who do not fulfil the
definition of homeworker given in the previous paragraph, but who need also social protection. These
persons are not protected for the unemployment insurance. If a homeworker is accompanied by
assistants the social security position is different; in this case only blue collar workers are protected
under some conditions.
In the Netherlands homeworkers may be assimilated with employees if they satisfy some conditions
(see next section on thresholds).
In the other countries homeworkers do not form a separate category.
(iii) Self-employed persons
The third category is that of self-employed persons. In some countries this is a rest category: those
who are not an employee or are not assimilated with employees. This approach is, however, not
always practical, as in some countries particular legislation exists for (categories of) the selfemployed, which provides social security coverage for them.
It has to be noted that social security not only has to do with protection but also with expenses: the
level of contributions may cause employers and employees to prefer self-employment because lower
or no contributions have to be paid.
In Belgium there is a general social security scheme for the self-employed. The field of application of
the social security provisions for the self-employed is only negatively defined: all persons in Belgium
carrying out an occupation not covered by the social security system for employees or of the public
sector are obliged to pay contributions for the social security provisions for the self-employed. Thus,
the self-employed are not a defined category but a residual group.
In Luxembourg persons with the appropriate professional certificate in the area of book-keeping or
secretarial work can receive a ’self-employment card’ for these activities. A development in the area of
telework can be that employers will engage persons with such card.
In Portugal persons carrying out a professional activity without being submitted to an employment
contract or to a legally equivalent contract and who are not bound, by express terms, to the regime of
employees, are subject to the social security regime of independent workers. The law states that
independent workers are person who carry out their work without subordination or who are engaged
to supply a particular result of their activities to another party. In order to facilitate the distinction, the
legislator established a series of presumptions based on the verification of certain circumstances, such
as capacity of chosing the ways and means to be used in the performance of the activity; not being
submitted to working hours or to minimum working periods unless they result directly from labour
law; non-inclusion of the worker in the structure of the production process, in the labour organisation
or in the hierarchic structures of the enterprise, etc.) or for certain kinds of work (intellectual
workers). In addition, also the criteria adopted by the tax legislation are relevant.
The self-employed can choose between a regime that corresponds to the obligatory regime (including
protection for motherhood, fatherhood, adoption, invalidity, old age and death), and an enlarged
regime (also comprehending illness, professional disease and family charges). For the first type
contributions are 25.4% of the wage settled as a calculation basis and for the second regime the relate
is 32%. The calculation basis is established by agreement, taking the levels forseen in the law as a
basis, the minimum being the equivalent of the minimum national wage.
In Ireland persons who are working on a ’freelance’ basis are considered to be self-employed. At
present it appears that a significant number of the persons who are teleworkers in Ireland are selfemployed.
In Finland for self-employed persons the legislation for the self-employed applies (the Self-Employed
Persons Act, the Accident Insurance Act, and the Unemployment Security Act). There is, however,
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no comprehensive, absolute definition of a self-employed person. A self-employed person as referred
to in the Self-employed Persons’ Employment Act is a person engaged in gainful employment
without working in the civil service or an employment relationship. The Unemployment Security Act
defines a self-employed person as someone required to take out pension insurance for his main
occupation under the self-employed persons’ pensions act. It is estimated that about 23 per cent of all
Finland’s teleworkers are self-employed persons.
In the Italian report three categories of self-employed persons are distinguished. The first is the
independent worker; this is a worker who operates without subordination to an employer, who is in
charge of the results of his work himself. Typical examples are retailers, artisans, but also persons in
the field of research, consulting, marketing and journalism. The second category exists of
entrepreneurs, who are defined as persons who carry on an economical and organised activity to
produce goods or services. The third category is an intermediate category between employees and
independent workers; an example is a worker who operates in a continuous relationship with a
principal but whose work is based on a personal contribution. The protection offered to them may
vary depending on the category.
If a teleworker is self-employed, his or her social security status depends on the category to which
s/he belongs. Independent workers (the traditional self-employed: artisans, retailers and farmers) are
covered by their specific fund; the professional independent workers, who are a member of a Public
Professional Association, are covered by a particular fund established by their association.
In Germany compulsory social insurance exists only for a few categories of the self-employed.
Relevant to this report is the category of journalists and publishers. For the other groups and the
homeworkers it is possible to join the statutory Accidents, Sickness and Disability and Old Age
insurance on a voluntary basis. In this case they have to pay the full amount of the contributions, as
there is no employer to pay part of these.
In Austria for some categories of the self-employed it is required that they become member of the
Federal Economic chamber. Compulsory insurance under the Social Security Act for Trade and
business is subject to membership of one of the chambers of the Federal Economic Chamber. There is
no threshold for this system. Persons for whom this applies are covered for health, disability,
accident, and old age insurance, but not for unemployment.
In the United Kingdom there are no statutes stipulating the criteria for determining employment
status, which are instead to be found in common law. The Inland Revenue (the fiscal authorities in
the UK) use criteria for defining a worker as self-employed such as whether they have the final say in
how the business is run; whether they risk their own money in the business; whether they are
responsible for meeting the losses as well as the profits; whether they own and maintain the tools,
equipment and materials used to carry out the work and pay for any insurance; whether they are free
to hire other people on their own terms to do the work they have taken on, and they pay them out of
their own pocket; whether they operate from their own premises; whether they have a contract for the
delivery of services and are responsible for their own time and expenses in correcting unsatisfactory
work.
Self-employed persons have to pay Class 2 (and sometimes Class 4) contributions and can by means
of these qualify for some types of benefits under the National Insurance system.
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(iv) Conclusion
In the individual circumstances it has to be investigated to which category a person belongs. For this
purpose the name of the contract under which s/he is working is not decisive; free-lancers, for
instance, can be employees or self-employed persons, their legal position depends on the fulfilment or
not of the criteria of the contract of employment.
On the other hand, because sometimes persons who do not have a contract of employment are
assimilated with employees, for the purpose of social security law the exact legal status is not as
important as it is in labour law.
Thirdly, a person who is not an employee, may be covered by a social security regulation for the selfemployed. Whether such protection is satisfactory will be investigated in the following sections.
Finally persons may be covered by residents-based schemes and in that case the distinction between
the employers and self-employed is not relevant. In the following sections the schemes based on
residency are described.
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V. THRESHOLDS FOR COVERAGE BY SOCIAL SECURITY SCHEMES
As a general rule persons who are engaged under a contract of employment are covered by the
employees social security schemes. In addition, assimilated workers, in particular home workers are
in some countries covered as well. However, not all the persons working under a contract of employment or assimilated persons are covered, as thresholds may appear in social security schemes, which
require a person to work a certain number of hours a week, or reach a certain income level a week,
before s/he is covered by the scheme. If s/he is not covered s/he is not obliged to pay contributions to
the compulsory scheme and, of course, s/he cannot qualify for benefit. A different subject are the
qualifying conditions for the various benefits, these will be discussed in a later section, Section VI.
A problem put forward in the Netherlands report, but which will occur in more countries is that
schemes which are based on the materialisation of the risk (Sickness Benefit, Disability Benefit,
Unemployment Benefit) require that a person is insured at the moment the risk materialises. If a
person loses a job, and starts to suffer from a particular problem afterwards, s/he is not covered. This
is especially problematic for persons in insecure employment, who have frequent interruptions of
their employment record, during which they can acquire a deficiency.
A related problem was put forward by the UK rapporteur with respect to a system in which employers
are responsible for the payment of Sick Pay: a problem for teleworkers on short term contracts could
be that they contract RSI which is a cumulative illness; they will find it hard to make one employer
responsible.
(i) Employees
In Germany employment performed under a contract of employment is covered for the social security
acts, except for those workers who work in small employment. These persons are not covered by the
statutory Unemployment, Pensions and Sickness Insurance acts, although they are covered by the
statutory Occupational Accidents act. By persons in ’small employment’ are meant those working less
than 15 hours a week and earning less than 333,50 ecu (old Länder) and 270,25 ecu (in the new
Länder). Also persons in jobs of this number of hours but who earn more than these amounts are not
included if the income of this work is less than one sixth of their total income (this excludes persons
who have this work as an additional job only). Furthermore persons who work for no more than two
months or fifty working days without a determined number of hours or remuneration are excluded
unless this work is professional work and the person earns more than 333,50 ecu. This threshold
excludes many persons (3.8 million persons, including pensioners and students), among whom also
persons who do have no other work than this job. If a person works in more than one small job, these
jobs are accumulated and this can lead to insurance for social security.
If persons in small employment would be excluded from collective agreements this would not be
accepted because of the equality principle as laid down in the Constitution.
In Austria persons under personal and economic dependence are covered as employees by the General
Social Security Act, but only if their income is above a certain level (ATS 3,452 in 1995). There are
special provisions for occasionally employed workers who are employed for less than one week. A
threshold does not apply for the Accident Insurance.
In Ireland there are eleven classes of insurance of which only three are relevant to a general
discussion of the social security position of teleworkers.
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Class A covers all employees under a contract of service who are earning more than 38 ecu per week
for all benefits9; Class J covers employees under a contract of service who are earning less than 38
ecu a week for occupational injuries benefits only; Class S covers self-employed persons working
under a contract of services for pensions only. If a person is employed by more than one employer
each employer is liable to pay contributions up to the appropriate statutory earnings limit.
In Luxembourg persons do not have to participate in the compulsory insurance who perform their
professional activity incidentally only and the duration of which must be no longer than three
calendar months.
(ii) Insured persons
In Great Britain with respect to contributory benefits a Lower Earnings Limit applies, which is 71,25
ecu a week. Only persons earning more than this threshold have to pay contributions and can qualify
for benefit.
For means tested income related benefits the threshold relates to the number of hours worked and
whether the claimant is considered to be working less than sixteen hours a week or more than sixteen
hours a week.
In the Netherlands homeworkers are assimilated with employees if they meet the following conditions: (a) the employment relationship is entered into for a period of at least thirty continuous days
and (b) the gross income earned in this employment relationship amounts to at least 40 per cent of the
statutory minimum wage (1,081.50 ecu per month). An to this rule applies for authors and persons
working for editors who work at home for their principal: they are insured only if this work is their
main occupation.
(iii) Self-employed
In Luxembourg the activities of the self-employed are excluded from the insurance of which the
professional income is no more than one third of the relevant minimum wage (this is 1,093 ecu a
month for the non qualified and 1,312 ecu for the non-qualified).
(iv) Voluntary insurance
In Germany homeworkers who have an enterprise and the real self-employed can join voluntarily the
statutory social insurance system (with the exception of the unemployment insurance). In that case
they have the full contributions themselves.
9
Normally class A employees pay a 5.5% contribution for social security; class A employees who are earning less
than 74 ecu per week do not have to pay an employee’s contribution but the employer still pays the relevant
employer’s contribution and the employee remains covered for all benefits.
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VI.
COVERAGE BY SOCIAL SECURITY BENEFITS
a) Sickness benefit
Below a distinction will be made between schemes which cover (i) employees only and (ii) schemes
which cover both employees and self-employed or where a country has separate schemes for
employees and self-employed.
(i) Schemes for employees only
The following benefits are payable to employees only.
In Ireland all employees under the age of sixty-six who are Class A contributors are covered. To be
entitled to receive a payment, an employee must satisfy the contribution conditions of 39 weeks paid
contributions. If a claimant has paid more than 260 weeks contributions, benefit can be paid
indefinitely; otherwise, it can be paid for up to twelve months.
In Denmark employees have to satisfy the condition that they have been in work during the last
thirteen weeks, in which they have been working for at least 120 hours before they are entitled to
sickness benefit. They can satisfy this condition also if they work for more than one employer in this
period. Benefit is payable for a maximum of 52 weeks in a period of eighteen months. Sickness
benefit is wage related for employees; they receive ninety per cent of their previous income (subject
to a ceiling). For persons in insecure employment, such as teleworkers, the average earnings of the
past four weeks before sickness are used. If the amount of these earnings are not known, a fixed
amount is taken.
In the Netherlands sickness benefit was abolished as from March 1996 for most of the employees;
instead the employer has to continue to pay wages (he has to pay 70 per cent of the earlier earned
wages with a minimum of the statutory minimum wage) for a maximum period of 52 weeks.
For some categories of persons who would be negatively affected by these rules the Sickness Benefit
Act still provides for benefit: this is the case of persons whose contract expires during the first period
of sickness and persons who do not have a contract of employment, but who are covered as
assimilated employees, such as homeworkers (under some conditions).
The benefit on the basis of the Sickness benefit act is earnings related and amounts to 70 per cent of
the previous daily wages. For persons who have a varying income specific provisions exist to
calculate the previous income: if a worker does not work on every working day, his or her daily
wages are proportionally diminished.
In Germany the employer is responsible for the payment of wages during the first period of sickness.
For employees the employer has to pay wages for a maximum period of six weeks. Regulations determine the calculation of the wage; for teleworkers it will be the average wage. For homeworkers as
determined in the Homeworkers Act special supplements are payable in order to reach the earlier
earned wage. For the assimilated homeworkers and the self-employed the law on the continuation of
wages does not apply.
After the six week period the employees and homeworkers are entitled to sickness benefit; the not
covered homeworkers and self-employed can apply for sickness benefit if they have entered the
sickness benefit fund on a voluntary basis.
In Italy employees are entitled to sickness benefit from the beginning of the fourth day for a
maximum of 180 days. Benefit depends on the earlier earned wages. Collective agreements
supplement benefit often to 100 per cent. The rapporteurs found no difficulties with teleworkers, as
the beginning of illness must be certified by a doctor.
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In Austria the amount of sickness benefit depends on the income earned in the calendar month before
and/or at the onset of illness. If employees are paid by piece-work or result, for this insurance the
average wage is relevant. Eligibility for sickness benefit exists only as long as an employee is
incapacitated for work because of illness.
(ii) Schemes for employees and self-employed
In Sweden every employee is entitled to receive wages and other benefits from his employer during
the first two weeks of illness. If s/he has been employed for only one month or less, however, s/he is
entitled to Sickness benefit if s/he has been employed for fourteen days.
No Sickness Benefit is payable for the first day; the following two days are compensated for 75 per
cent of the income and after that 90 per cent. Smaller companies can buy insurances for sick pay
costs. If the employee has several employers, they are liable for a proportional degree.
During day 15-365 the employee is entitled to a Sickness Allowance of 75 per cent. Until the
ninetieth day s/he is also entitled to Sick Pay of ten per cent from the employer if s/he is covered by
sick pay insurance included in a collective agreement. After one year of sickness the benefit is
seventy per cent. The right to sickness benefit ceases the very moment employment does.
According to the Act on National Health Insurance every insured working person who has an annual
income of at least 664 ecu is entitled to a daily Sickness Allowance, provided his or her work
capacity is lowered by 25 per cent or more. The benefit rate depends on the extent of decreased work
capacity. For teleworkers, the requirement on the 25 per cent decrease may be problematic, as it is
difficult to distinguish the work they can now do from work which would have been done if they had
been in their previous health. Therefore, when assessing the work capacity in cases when the sickness
is expected to be of short duration, special attention should be paid to the question of whether the
employee is actually incapable of performing his or her regular work.
Also self-employed persons have a right to Sickness Benefit when their work capacity is lowered by
twenty-five per cent and also this benefit is earnings-related.
In Portugal benefit is payable in case of loss of pay due to a temporary impossibility of working
caused by illness; a waiting-period of three days applies; benefit is payable, at a rate of 65 per cent of
the relevant wage of reference, for a maximum period of 1,095 days. The self-employed are covered
only if they have chosen for the enlarged regime (see section IV supra nr (iii)). Homeworkers are not
covered.
In the UK statutory Sick Pay provides cover for employees who have been incapable of work for at
least four consecutive days. Employees must earn a minimum gross wage per week (the lower
earnings limit discussed in section V). In the case of part-time workers an employer may control the
amount of work given to the worker in order not to reach the threshold which makes the payment
compulsory. On-call workers may be treated as employees but have no real guarantee of a fixed
number of hours, and therefore do not always earn above the stated minimum, and therefore may be
excluded from benefit.
Every day of the week counts for this purpose even if it is not a day which is normally worked. Sick
Pay is paid on a fixed weekly rate. Maximum entitlement in one period of entitlement is 28 times the
weekly rate in any period of incapacity for work. This may mean complications for teleworkers as
well as for other flexible workers who do not have a fixed work pattern. Claimants are entitled to
claim from more than one employer, though even they can only receive the set total and employers’
liability will be divided between the different employers.
Where teleworkers are being paid by results and effectively determining their own working hours it
may be difficult to establish which days have been ’worked’.
Self-employed workers are excluded from this benefit, something which may have serious
implications for teleworkers who may be classed as self employed, even when they only work for one
employer. Employees not entitled to Statutory Sick Pay may be entitled to Incapacity Benefit.
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Claimants must be assessed as or treated as incapable of work for every day for which they receive
benefit. They must have paid contributions as an employee or as a self-employed on earnings which
are equal to at least twenty-five times that year’s lower earnings factor. Claimants must also have paid
contributions on earnings equal to 52 times the lower earnings level in the last two contribution years
before the relevant benefit years (i.e. have an income of approximately 3,692 ecu in the last two
years).10 In theory, self-employed teleworkers may be entitled to Incapacity Benefit, but only if they
have made the correct number of contributions; according to the British report, in reality, selfemployed workers may not have paid enough contributions, and this may affect teleworkers in larger
numbers than on site workers because of the propensity of this group of workers to be on short-term,
temporary contracts. During the first 28 weeks of their illness they receive the lower rate. At this
point they have to satisfy the ’all work test of incapacity for work’. If they pass the test, after 52 weeks
the higher rate becomes payable.
In Luxembourg in addition to the employees also persons are insured for sickness benefit who
perform a professional activity for remuneration for somebody else. In addition, persons are covered
who for their own account perform a professional activity which falls under a Chamber of Commerce
or another Chamber or a professional activity with a predominantly intellectual character (and not a
commercial character).
Sickness Benefit is in principle an earnings related benefit. This benefit should not be lower than the
relevant minimum wage (in case of part-time work a proportional benefit is payable). Benefit is
payable until the claimant becomes entitled to a Disablement Allowance, with a maximum of 52
weeks. Often employees remain entitled to the continuation of wages during a certain period; in that
case sickness benefit is not payable.
For the self-employed Sickness Benefit corresponds to the income on which contributions were paid
at the moment the accident happened. The benefit is suspended until the fourth month after the
accident happened. In case a person performed several activities of a different nature, either as
employee or self-employed, the benefits can be added up until five time the minimum wage. If the
maximum level is exceeded the benefits are proportionally reduced.
In Belgium an employee is entitled to Sickness Benefit if s/he is incapable to work: ’If s/he has
stopped all occupational activities and if his or her injuries are recognised as reducing his or her
earnings capacities to one third or less of what a person of the same social condition and with the
same training can earn in the category of jobs to which the occupation of the worker belonged before
his incapacity or, considering his training in any other occupation he could be employed in’. The
benefit is for employees only and amounts to 60 per cent of the wages s/he is no longer to earn.
During the period of incapacity for work the beneficiary has to be available for the medical advisor of
the Mutual Fund and of the medical inspectors of the National Health and Disability Insurance
Institute.
The definition for incapacity for work of self-employed persons is different from that for employees.
One is incapable, if one is ’a person who because of injury has been compelled to terminate the
activities of his occupation as a self-employed worker and does not have any other occupation, either
as a self-employed or as a wage-earner or a public-service worker’. Thus, no mention is made of
reduction of earnings capacities; the only criterion is the stoppage of occupational activities.
In Finland all residents are covered by the Sickness Insurance Act, irrespective of nationality or
standing. This Act provides for a compensation of the loss of earned income as a result of short-term
(under one year) sickness or invalidity. Benefit is paid to those in gainful employment and those
working on their own account who are unable to perform their normal work because of sickness, on
10
Persons on a low income and not earning enough to pay contributions but who are registered with an Unemployment Benefit Office can acquire so-called credits in order to satisfy the conditions. This may present a problem to
on-call workers, wether home-based or not, who are not guaranteed work, but who are not deemed to be actively
seeking work and who cannot sign on as unemployed.
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the condition that they have done this work for three months prior to becoming unable to work. The
payment of benefit starts after a waiting-period of nine weekdays for a maximum of 300 weekdays.
During the first period (seven week days) the level is that of the normal wages of the employees. In
case of irregular workers, it is difficult to calculate the normal wages. This may be a problem for
teleworkers who are paid on the basis of output, but also in this case the average earnings of the past
six months are taken into account. Claimants must present evidence of their earnings and income
acquisition expenses during the period in question.
In Spain the height of sickness benefit, which is payable to employees for a maximum of eighteen
months, depends on the amount of contributions paid by the insured person. Benefit is earnings
related. In order to qualify for this benefit it is necessary to have paid contributions for a minimum
period of 180 days in the five years preceding the occurrence of sickness.
Also self-employed workers are eligible for benefit; benefit for them is calculated on the basis of the
sum of the number of contributions paid by them; for this purpose the law specifies some categories
of possible contributions. The rates and conditions are the same as those of the employees.
(iii) Particular problems
(a) Exclusion from coverage
A particular problem for Sickness Benefit (and Disability Benefit) may be that deficiencies which
existed already before the start of the insurance are not insured, as is remarked in the Netherlands
report. Such a condition is, as such, a familiar one to insurances. For workers in continuous
employment this condition applies only at the beginning of their occupational life (and not for the
following jobs if they immediately follow the preceding one), but people in insecure employment
may be confronted by this after each period of interruption of employment.
This involves that in particular irregular workers, among which can belong teleworkers, can come in
the situation that after a period in which they are not insured (e.g. because they had no work), they are
deemed to have entered a new insurance. This is problematic if they are ill by that time or have
acquired a deficiency.
The Danish rapporteur confirms that this problem also exists in his country. A claimant will,
however, not be excluded from Irish benefit because he has suffered from illness before the start of
his insurance or because he has already received benefit for this contingency in the past in relation to
the same illness.
(b) Coverage during periods of no working during an employment relationship
Another question which is relevant to persons in insecure employment is that of persons who do not
work full-time and/or who work at intervals under the same contract of employment and who fall ill
on a certain day. Normally a Sickness Benefit Act provides that one is not insured for this Act during
the days on which one does not work. For insecure workers special solutions may be necessary.
This problem was raised in the Netherlands report.
In Austria entitlement to Sickness Benefit is subject to the contingency occurring during a
compulsorily insured job. If a person has fulfilled a certain minimum period of insurance, coverage
extends to three weeks following the end of an unemployment spell. Thus a teleworker who has not
accrued the necessary minimum period or if s/he is employed over several weeks with week long
periods of employment may be such that they will not result in any compulsory insurance.
In Spain the rules of the general regime provide some solutions for specific circumstances, such as
the continuation of payment of contributions during periods of interruption of work.
In Sweden Sickness Benefit is paid only if the person would otherwise have actually worked those
days.
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In the UK each day for which benefit is claimed must be a qualifying day (i.e. a day of the week
normally worked if not sick; however, other days may be selected as qualifying days by agreement
between the worker and employer). If no pattern of normal work can be established all days of the
week except recognised rest days are qualifying days. Sick pay is only available to employees;
employees should normally have a contract of employment lasting over three months. However, there
are rules to stop employers avoiding their liability to pay Sick Pay by employing people on a series of
short-term contracts. These say that employees are entitled to Sick Pay if they have been employed by
the same employer on two or more short term contracts separated by eight weeks or less, and the total
periods specified in those contracts exceeds three months. This rule provides protection to casual
workers, including teleworkers.
In Denmark the system provides universal coverage and therefore lack of insurance is not seen as
problematic.
In Ireland the payment is related to the claimant’s weekly earnings and does not take account of the
actual number of days per week which the employee was expected to work. If an employee has a
varying income, the benefit is calculated according to an average of his earnings in the relevant tax
year.
(c) Working while being ill
As claimants in the UK have to rely on Sick Pay from an employer, they can not do the same work
for another employer while claiming Sick Pay. If they have more than one job, the case is different:
they may in this case be able to claim Sick Pay for one job and continue working on another contract,
if they perform very different tasks, for instance clerical and manual work, and their illness allows
them to carry out one task but not the other.
In Spain working is not allowed during sickness and in Ireland a beneficiary cannot engage in other
paid employment whilst receiving benefit, save in certain limited circumstances; the ’unfitness’ refers
to the work on which an employee is actually engaged. Since telework is generally regarded as ’light
work’ from a physical point of view, a teleworker might not qualify for benefit in circumstances
where the same injury might render a person engaged in more manual labour ’unfit to work’.
Once a worker in Austria can resume work and/or has resumed work, payment of benefit ceases.
In the Netherlands a question of the Sickness Benefit Act - as far as still applicable - is whether sick
teleworkers can be obliged to do work other than telework. Also this will depend on the circumstances, such as whether the person is able to travel and the family circumstances. An example can be
of a person who begins to suffer from eye problems and who is no longer able to work with a
computer. S/he may be required to work as a switchboard operator at an office. This may be required
when the sickness period is more than a short period; in practice it seems that the benefit
administration has practical problems to require such on a large scale. Employers have in most cases
to continue to pay wages to sick employees. It can be expected that they will try to find as much work
which can be done by their sick employees as possible.
(d) Conclusion.
Problems with Sickness Benefit will exist for teleworkers if they work in insecure employment. In
this respect there is no difference with other insecure workers.
In the future it may happen that sick employees are obliged to (or in other cases forbidden to) do
telework while being ill. In the first case this is a problem if it is disputed whether the work is
disadvantageous for the recovery of the employee. In the second case the problem is that this
condition is hard to check in case of teleworkers.
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b. Maternity Benefit
(i) Schemes for employees only
In Germany employees are covered for Maternity Payments and they receive a supplement from their
employer. These sums amount to the net wage for these workers. After the maternity allowance
period they can receive parental leave for eighteen months and this is 345 ecu a month. These rules
also apply for teleworkers who are employees or homeworkers. Self-employed persons do not receive
a Maternity Payment, but they can claim parental leave.
In Ireland a pregnant employee is entitled to fourteen weeks paid maternity leave. This entitlement to
leave applies to all employees no matter how long they have been in employment. There is no
obligation on an employer to pay an employee during her maternity leave.
All employees in Class A employment who have at least 39 weeks paid contributions in the twelve
months before the commencement of the maternity leave and 39 weeks in the relevant tax year are
eligible for benefit. A claimant will be disqualified from receipt of benefit if she engages in any
occupation other than domestic duties in her own household or fails to submit to a medical
examination. Benefit is earnings-related.
In the Netherlands Maternity Benefit is paid on the basis of the Sickness Benefit Act, which is still in
force for pregnant women and women in maternity leave. Maternity Benefit is earnings-related and
amounts to one hundred per cent of the previous wages of the employee concerned. If a pregant
woman claims that working with a screen is unhealthy already earlier than six weeks before the
expected childbirth and if this is accepted, she is entitled to benefit also in this period.
In Sweden an employee who has been employed for either the last six months or at least twelve
months during the last two years, is entitled to maternity leave for seven weeks before the expected
day of birth and for seven weeks after birth. She may be entitled to a Pregnancy Allowance sixty days
before the due date; the benefit rate is sixty-five per cent of the annual income during the first three
days; afterwards it is ninety per cent. After the birth of the child, one parent has a full-time leave
period of eighteen months and a reduced working time of seventy per cent of a full-time job until the
child has become eight. A Parental Allowance is payable for 360 days (80 or 90 per cent).11 The
allowance may be drawn at any time until the child has reached the eight of eight. A Pregnancy Pay
can supplement the Parental Allowance to the full wage for a limited period, depending on the branch
one is working in. A problem with teleworking may be, as the Swedish report notices, that a mother
may wish to start or is urged by the employer to begin early with teleworking after the birth of a
child. Teleworking and babysitting at the same time is often not a healthy situation.
(ii) Schemes for Employees and self-employed
In Belgium the maternity insurance for employees provides for benefit during 14 weeks and benefit is
payable at the rate of 82 per cent and 75 per cent (for the first thirty days and second thirty days
respectively). Also self employed persons are eligible for maternity benefit, but in this case benefit is
paid for three weeks only after the birth of the child and it is at a flat rate.
In Austria for employees Maternity Allowance is calculated on the basis of the net wage earned
within the previous three calendar months. Either parent who applies for parental leave before the
second birthday of the child will receive Maternity or Paternity Benefit. Entitlement exists if the
claimant has participated in a compulsory unemployment insurance scheme for a certain minimum
period of time during employment (52 weeks within two years before the start of the parental leave).
Maternity and Paternity Benefits are flat-rate.
11
It will be lowered to 75 per cent from January 1, 1996.
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Self-employed insured women in trade/business and farming are entitled to Enterprise Assistance
(which are benefits in kind) and to Maternity Allowance (which is a flat-rate benefit).
In Luxembourg the insured with a professional activity are entitled to a maternity benefit if they have
been covered for at least six months during the year preceding the maternity leave. This benefit is
calculated in the same way as the Sickness Benefit. The benefit is in principle payable for sixteen
weeks.
In Finland residence is the basic requirement for entitlement to benefit; thus also teleworkers,
whatever their employment status, are covered. The level of benefit is calculated in the same way as
Finnish Sickness Benefit; also medical care is paid on the basis of this law. A pregnant woman doing
dangerous work is entitled to a special Maternity Allowance if it is not possible to find other work for
her.
In Portugal Maternity Benefit is payable to female employees on the cocasion of childbirth,
corresponding to the global amount of the relevant wage of reference (with a minimum of fifty per
cent of the statutory minimum wage applicable). This benefit is payable for a period of sixty days
(and can be increased in some cases). Paternity Benefit is payable to employees of a newborn child,
in proven instances of the mother’s physical or mental incapacity or in the event of the mother’s death
durting the period of the maternity leave. The amount is the same as that of the Maternity Benefit.
The self-employed and the homeworkers are covered for this benefit also.
In Spain an employee is entitled to Maternity Benefit for a period of sixteen weeks; the amount is 100
per cent of the sum on which contributions have been paid. A contribution of 180 days in the five
past years is required. Also self-employed workers are entitled to benefit during this period and
according to the same rules.
In Denmark the same rules concerning calculation and maximum benefit apply as for Sickness
Benefit. In this case, however, also self-employed persons are covered, in the same way as
employees. In a free-lance agreement between the Danish Union of Journalists and publishers of
some magazines it is agreed that the publishers contribute to the Journalist and Press-photographers
Fund established in order to support free-lancers on maternity leave. This shows that it is possible to
create a specific extra coverage in case a collective agreement can be made, which is mainly possible
if teleworkers are working for the same employer.
In the UK all employees are covered by either Statutory Maternity Pay or by Maternity Allowance as
long as they have fulfilled the contribution conditions.
Statutory Maternity Pay is paid by the employer. This benefit is payable to all employees except to
those who earn less than 71.25 ecu per week. Women receiving Maternity Pay are not allowed to
work for another employer while in receipt of benefit from their original employer, except if they
have been working for another employer before their confinement. To qualify for this benefit, the
average weekly earnings for the period of eight weeks up to the last day before the end of the
qualifying week must be at least the lower earnings limit for social security contributions (see for the
LEL, Section V). These conditions effectively exclude many part-time workers as well as the very
low paid in general, whether home-based or on-site, if they are not earning the required minimum. On
call workers may be excluded if they have had a period without work, as will temporary employees
who are employed on short-term contracts.
To be entitled to this allowance, women who have given up or changed their job may be eligible for
Maternity Allowance.
Benefit is earnings-related; earnings are calculated over the eight weeks immediately before the
qualifying week. This means that if earnings are low, claimants receive less benefit; employees who
are on call and are not guaranteed a set income may be negatively affected; this may be relevant to
on-call teleworkers.
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Maternity Allowance provides coverage for women for a period of eighteen weeks (the earliest it can
start is from the beginning of the eleventh week before the expected birth). Claimants must have been
employed or self-employed for at least twenty-six weeks in the year ending at the end of the
qualifying week (i.e. fifteenth week before the week the child is expected).
Maternity allowance has two fixed rates; a higher rate is payable if the woman actually worked as an
employee during the qualifying week; otherwise the lower rate is paid.
In Italy work is strongly forbidden during the last two months of pregnancy and until the child is
three months old. Maternity benefits amount to eighty per cent of the wage during compulsory
absence and thirty per cent of the wage during the facultative absence. Collective agreements often
supplement this benefit to the full earlier earned wage.
Some categories of the self-employed (farmers, artisans and retailers) are also covered by this benefit.
(c) Conclusion
With respect to Maternity Benefit there is some more protection for the self-employed than in case of
Sickness Benefit. Also here the problems concern mainly insecure work. Furthermore the question is
relevant whether claimants are allowed or can be required to do telework during receipt of benefit.
c. Invalidity Benefit
(i) Schemes for Employees only
In Germany persons who are for 50 per cent incapable for work can claim a Disablement Benefit on
basis of the Serious Disability Act. This applies to employees and homeworkers under the
Homeworker Act only. All employees and homeworkers can also apply for a Disablement Pension on
the basis of the Rentenversicherung. This pension is earnings related (the employment record is taken
into account and the average wages); in this case a qualifying period applies of five years.
In Ireland an invalidity pension is payable if an employee has been incapable of work for more than
twelve months. All Class A employees are covered provided they have paid contributions during 260
weeks. A person in receipt of this pension is not allowed to work either as an employee or as a selfemployed person and the pension is payable as long as the claimant remains permanently incapable of
work.
In Luxembourg a person is considered invalid if s/he has as a result of prolonged illness or infirmity
lost partly or completely his or her working capacity which prevents him or her from working in the
profession s/he exercised before. In order to be entitled to an Invalidity Pension the insured person
must have been insured for at least twelve months in the three years before the date of the invalidity
or the expiry of the Sickness Benefit. In case of a professional disease this requirement does not have
to be fulfilled, provided the illness occurs during the insurance period. Beneficiaries are not allowed
to do any work as a self-employed from which the remuneration is more than one third of the
minimum wage. This is also the case if s/he receives remuneration from employees activities of more
than the maximum level, which is the average of the highest five yearly wages of his or her insurance
career.
In Finland in case of long-term sickness or invalidity (i.e. incapacity for work lasting for more than
one year) the loss of income is compensated with various invalidity pensions under the Employment
Pensions and National Pensions Acts. Employers in the private and public sector are required to
provide coverage for those in their services; the self-employed must arrange their own pension
coverage. Thus it depends on the legal position of teleworkers whether they are covered by their
employer’s provision or whether they have to make their own provision.
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(ii) Schemes for both employees and self-employed
In Belgium invalidity benefit is payable after one year of incapacity for work. The amount of benefit
for the employees depends on their family situation. Benefit is wage related, but a minimum statutory
benefit for the disabled applies. Self-employed persons receive a flat-rate benefit per day, the level
depending on the family situation.
In the United Kingdom employees not entitled to Statutory Sick Pay may be entitled to Incapacity
Benefit. This benefit has been discussed in the section on sickness benefit as well. Claimants must
have either paid the correct amount of national insurance contributions; to qualify contributions paid
as an employee or as a self-employed on earnings which are equal to at least twenty-five times that
year’s lower earnings factor paid in any tax year. Claimants must also have paid contributions on
earnings equal to 52 times the lower earnings level in the last two contribution years before the
relevant benefit years.
In theory, self-employed teleworkers may be entitled to Incapacity Benefit, but only if they have
made the correct number of contributions.
In Austria invalidity means invalidity for blue collar workers, occupational disability for white collar
workers and incapacity for gainful work for self-employed persons. Benefits are subject to a
minimum qualifying period of sixty insurance months within 120 calendar months (till the age of 55
for men and 50 for women).
For occasionally employed persons fifteen calendar days are deemed to be one calendar month; for
calculating the amount of benefit the best fifteen insurance years are used as a basis of assessment
whereby for each year an annual contribution basis is calculated. If the pension calculated from the
insurance periods is less than sixty per cent of the assessment basis, in principle supplements up to a
maximum of sixty per cent are paid until the age of 54.
The Danish invalidity benefit does not distinguish between the different groups who can be
teleworkers: it is based on the incapacity level, which has to be at least fifty per cent. It is payable to
all residents of Denmark. The claimants have to live in Denmark and must have at least worked for
three years in Denmark (for EU nationals periods abroad will be assimilated). This benefit can also be
granted for social and health reasons. The benefit for health reasons takes the income of the applicant
and his/her spouse into account; for singles the yearly income must be below 12,480 ecu (for a couple
18,720 ecu). A homeworker will therefore have the possibility of applying for an Invalidity Benefit
based on both strictly invalidity reasons (s/he is incapable for work for at least fifty per cent ) and for
social reasons, which may be the case, for instance, for a single homeworker whose income is
reduced and the possibility of getting a new income is also low. The claimants are paid a basic
allowance which is partially means tested. The income of the spouse is, however, not taken into
account.
In Spain one is entitled to Invalidity Benefit in case of physical or serious functional deficiencies
which mean for the worker a reduction of his or her working capacity. The pension is payable on the
basis of the paid contributions, of which at least one fifth must lie in the past ten years. The amount
of the pension depends on the degree of the reduction of the working capacity. The regime is mainly
the same for employees and self-employed persons. Beneficiaries are not allowed to do their previous
work.
In Italy all categories are eligible for coverage by invalidity pensions. If the capacity of a worker is
reduced to less than one third, s/he can claim benefit for three years, which can be renewed. When a
worker becomes totally unable to work in any way s/he can obtain a continuous benefit.
In order to qualify for benefit a worker must have paid contributions for five years, and three of these
years must lie in the last five years. Disablement Pension is totally incompatible with any work or
other social provisions. Temporary invalidity benefit is compatible with work (but submitted to
general rules which reduce overlapping of benefits). Thus a temporary pension is compatible with
teleworking, on condition that annual earnings are not more than 12,000 ecu (1994 amount).
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For excess earnings benefit is progressively reduced. Artisans, retailers and farmers are covered as
employees; independent professionals are covered as employees, but contributions must have been
paid for 5-10 years depending on specific categories.
In Sweden an insured person between 16 and 65 of age who has lived for three years in Sweden or has
earned three years of ATP points (i.e. 11,850 ecu - 1995 level) whose work capacity has been reduced
by at least twenty five per cent is entitled to a Disability Pension and Disablement Support. When the
assessment of his or her position is made not only the insured person’s capability but also his or her
actual possibilities to get a suitable job are taken into account. The benefit is at the same level as the
base amount (reduced by 2 per cent ) and for an individual the actual amount is a percentage
depending on his reduced capability to earn an income. If a person has a very low or no pension s/he
is entitled to a pension supplement. For employees in industry and commerce a supplementary
pension is payable.
In the Netherlands employees are covered by the Disablement Insurance Act. A second act is the
General Disablement Benefits Act, which covers all residents, but is not relevant to employees if they
receive benefit under the Disablement Insurance Act which is higher than the benefit under the
General Disablement Benefits Act. Persons who work frequently on temporary contracts with considerable periods of interruptions and persons who are not employees or assimilated persons will have
to rely on the General Disablement Benefits Act.
The General Disablement Benefits Act requires that claimants earn a ’minimum-income’ in the year
before the incapacity for work starts (see equal treatment section, Section VII) The minimum income
requirement could cause problems for teleworkers working in insecure employment: for a person who
works as a free-lancer or on-call without a specific minimum number of working hours it could be
difficult to reach the minimum income.
Both benefits compensate for the reduction in earnings capacity, but the Disability Benefits Act is
earnings related, whereas the General Disability Benefits Act is based on the statutory minimum
wage. The duration of the former benefit depends on the age of the applicant.
Persons who are less than eighty per cent disabled and who are unemployed can receive unemployment benefit, provided they satisfy the conditions of the latter benefit (see below).
Both Acts concerning disability give a definition of incapacity for work: the situation in which the
employee is not capable to earn the income that a comparable person as he/she can earn with
generally accepted work. ’Generally accepted work’ means that any existing work is relevant, so the
relevant work is not limited to telework jobs. If these regulations are applied to teleworkers, the question is relevant whether a teleworker who is not capable for work is able to perform a job other than
the work s/he has done before. If this is the case that other type of work (whether there is a vacancy or
not) is relevant to determine the level of benefit.
(iii)
Coverage in case of insecure employment
The Dutch report describes, just like in the case of Sickness Benefit, the problem that it is required by
the Acts that one is insured for the Disablement Benefits Act at the moment the illness starts. Just as
with the Sickness Benefits Act the employee with a temporary contract or who works ’on call’ can be
faced by the rule the insurance will be interrupted in weeks s/he cannot work.
(iv) Conclusions
The majority of invalidity schemes covers self-employed as employed earners. Some of the schemes
have rather high qualifying conditions, which is a problem to workers in insecure employment.
In future it may appear more clearly that persons who would otherwise have been incapable for work,
are still able to do telework. This may affect their benefit position. It wil be harder to check whether
beneficiaries are working next to claiming benefit, when they can do telework.
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d. Old age benefit
(i)
Employees
In Luxembourg all persons are covered who perform a professional activity for remuneration for the
account of somebody else or for their own account or who can show periods which are assimilated
with such periods of professional activities.
Persons of sixty five of age are entitled to a pension if they can show 120 months of coverage under
the compulsory insurance. Periods count for this purpose, among other things, if they are performed
under a professional activity, or as a self-employed or during which a person receives a replacement
income subject to contributions (such as unemployment benefit). A person of 60 can qualify if s/he
can show 480 months of insurance (or assimilated months).
In Austria persons are eligible for Pension Insurance Benefits subject to a statutory waiting period
covered by a specific number of insurance months and the additionally required special qualifying
conditions such as a specific qualifying age.
In order to qualify for benefit claimants must in principle be able to show at least 180 months of
insurance. The amount of benefit is calculated as in the case of Disability Benefits.
Collective agreements are relevant to provide supplementary provisions for employees. There is a
large variety of benefits and conditions. In general, however, persons are entitled to (Old Age)
Benefits only after a long period of attachment to the enterprise (a period of ten years can be
required). In case of company funds the periods after which no rights are lost are shorter, the
maximum period is five years. The number of company schemes is, however, relatively very low.
(ii)
Employees and Self-employed
In Belgium the old-age pension for employees is calculated on the basis of three elements: the length
of their career; the wages earned and the family status. These elements influence the height of the
wage-related pension. For the self-employed, the same elements are relevant, but this pension is to a
much larger extent calculated on a flat-rate basis.
In Portugal pension can be claimed from 65 years of age after having completed a period of work of
fifteen years. The amount depends on the level of the highest wage of reference in the last fifteen
active years. The self-employed and the homeworkers are covered by this regime as well.
In Ireland the Old Age Non-Contributory Pension is a social assistance payment available to anyone
over the age of sixty-six resident within the State who satisfies the means test.
The main pension is the Old Age Contributory Pension payable to persons over the age of 66 who
satisfy the relevant contributory conditions. The claimant must have commenced paying contributions
before reaching the age of 56, have paid 156 weeks contributions and have a yearly average of
between twenty and forty-eight weeks contributions over a certain period of time. The level of benefit
is determined by reference to the yearly average of contributions paid by the claimant. Beneficiaries
of this pension are allowed to work whilst in receipt of benefit.
Self-employed persons insured under Class S are covered for the Old Age Contributory Pension
subject to the same conditions as to eligibility and entitlement as employed Class A contributors.
With respect to Occupational pensions the Pension Act provides the regulatory framework for such
schemes. The Act provides for the compulsory preservation of occupational pensions entitlements
and their re-evaluation if members change employment. This is likely to be a valuable provision for
teleworkers given the increased flexibility associated with the nature of their employment. It means
that a teleworker can change employers and probably change from being employed to being selfemployed without losing the benefit of pension contributions already paid.
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In Spain employees are entitled to an Old Age Pension which is based on the amount on which
contributions were calculated in the eight years before pensionable age; in any case, fifteen years of
payment of pensions are required, of which two must lie in the last five years. The level of
contributions paid is relevant to the level of the pension. The same rules apply for the self-employed.
In Italy workers must have paid at least 35 years of contributions (or have reached pensionable age),
before they can claim Old Age Benefit, although in the public sector the amount was much lower
(fifteen years; in 1992 the minimum was raised to twenty years). Normally pensions are 98 per cent
of the wages in the last five years. The contribution rates are 32 per cent of the wages for employees;
self-employed workers are to pay, since the 1995 reforms, ten per cent of the income. The latter
provision is important because it reduces differences in labour costs between employees and the selfemployed. Contractors are obliged to calculate a part of the contribution on the invoices of selfemployed persons and to retain this part out of their pay.
The Finish old age pension is made up of an employment pension and the national pension. The
employment pension depends on the number of years worked and the person’s earnings. After
retirement pensioners can continue their work without affecting their pension (employees can even
acquire more benefit rights, but the self-employed do not).
The employees’ Pensions Act covers employment with a private employer (with the exception of
employment covered by laws mentioned below). Employment relationships are covered which lasted
at least one month if earnings from employment amount to a minimum of 194,52 ecu a month or the
person has been employed by same employer for three consecutive months, earning, each month, a
particular minimum.
The Freelance Employees’ Pension Act covers creative artistic or performance work on condition that the
employment is intended to last less than a year, and the earnings must be at least 1,167.11 ecu per year.
The Self-Employed Persons’ Pensions Act covers independent practice of a business or profession if
the self-employed activities have continued uninterruptedly for a minimum of four months after the
person turned eighteen and the work income is at least 4,668.48 ecu per year.
In Germany all employees, homeworkers and self-employed (for the latter only if they entered the
statutory scheme on a voluntary basis) acquire a statutory old age pension. This pension is earnings
related (the employment record is taken into account and the average wages). In addition there are
occupational schemes for additional pensions. These apply for employees and homeworkers only.
The Danish old age pension is payable irrespective of employment status; benefit is acquired by
residing between the fifteenth birthday and the age of sixty-seven in Denmark; in case of a stay
abroad benefit is proportionally reduced. The basic income is reduced in case of income (included
that of a spouse) above a certain level. Labour market supplementary pensions are payable only to
employees covered by a collective agreement in which such pension is included.
A special benefit is payable to persons who have for a certain time been in part-time work. For such a
reduction of work the consent of the employer is required; it may be difficult for a teleworker who is
an employee to qualify for a part-time pension, unless telework is part of a standardised agreement
with one employer. For self-employed persons it is required that they have been self-employed in
four of the last five years of which at least nine out of the last 12 months before applying for the parttime pension. The income from activities should be at least one-third of the basic amount.
All residents of the Netherlands are covered for the Old Age Pension Act. There is no condition that
claimants have to terminate their work in order to claim pension. The Old Age Pension Act provides
for flat-rate benefits, the amount of which depends on the household situation of the claimant.
Persons who have been resident of the Netherlands between their fifteenth birthday and pension age
(sixty-five) are entitled to the full amount; there is a reduction of two percent for each year the
claimant has not been insured (i.e. s/he was working abroad).
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The General Old Age Act provides for a basic income only. Many workers are covered by an
occupational pension scheme for an additional income. It depends on the branch of economy and/or
the employer for whom a person works whether s/he is covered by such an occupational scheme.
Employers can also buy pension insurances for their employees with an insurance company.
Sometimes the employer is obliged to do so on the basis of the contract of employment or collective
agreement.
There are a few pension regulations in which workers in insecure employment, such as free-lancers or
employees ’on call’ are excluded. Most times exclusion is due to conditions which require a contract
for an indefinite period with an employer or that a person must have been employed by an employer
for a determined minimum period. In 1994 new regulations were introduced to provide protection to
part-time workers. From now on persons who work less than the full working time can no longer be
excluded from the pension scheme; if the occupational pension scheme requires that persons earn a
minimum amount of wages, the scheme has to provide persons who work less than the normal
working time with at least a proportional pension entitlement.
These measures will have a positive effect for teleworkers who are working part-time. On the other
hand the new rules will not provide a complete solution to the (tele)-workers who do not have a fixed
number of working hours. Whether or not the latter group is covered is left to the social partners who
decide on the pension scheme regulations.
The UK old age benefit exists of two types; Retirement Pension A is payable on the person’s own
contribution record and Retirement Pension B is dependent on the spouse’s contribution record.
Eligible for Retirement A pensions are employees who are over pensionable age; benefit is paid at
fixed rates with higher rates for persons with adult or child dependants. There are two conditions on
contributions. Firstly, the contributor must actually have paid in any one tax year contributions on an
amount of earnings equal to 52 times that year’s lower earnings limit. Secondly, the contributor must
have paid contributions on earnings of 52 times that year’s lower earnings limit for the requisite
number of years. Benefits are paid at a reduced rate if the second contribution condition is not
satisfied for the requisite number of years, provided it is satisfied in at least twenty five per cent of
the requisite number. Such requirements are, of course, disadvantageous to persons in insecure
employment, such as some categories of teleworkers. Also self-employed persons may be entitled to
this pension if they have paid sufficient contributions for the self-employed.
All persons between sixteen and sixty-five who have lived in Sweden for at least three years or who
have earned at least three years of ATP-points (an ATP point is 3950 ecu) have the right to a national
basic pension, which consists of an old age pension, a pension for early retirement, a survivor’s
pension, a child’s pension special benefits such as disability allowance, care allowance, pension
supplement, and a special pension supplement. To obtain a full basic old age pension it is necessary
to have lived in Sweden for forty years or to have thirty years of ATP points; for each lacking year
the pension is proportionally reduced.
Conclusion
The old age pension is in most schemes available for employees and self-employed persons.
Thresholds exist sometimes, which make that persons in low paid employment receive a lower
pension. Few reports describe the situation concerning occupational pensions, but it will be clear that
these provisions (which lead to a more generous income) will be available for employees with lifetime occupations and often a considerable income only.
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e. Occupational accidents
(i) Schemes for employees only
In Belgium a person insured for the employees insurances can, if s/he suffers an accident at work or a
disease which is related to work, claim occupational accidents and diseases benefit, wherever s/he
may find himself or herself or wherever the accident may have occurred. The risk of accidents on the
way to and from work is an integral part of the industrial accident risk. A beneficiary of this type of
benefit is entitled to free medical care in so far as this is required by the accident or disease. This
person also receives a wage-related benefit, which rate depends on the extent of incapacity. The
legislation is without exception applicable to homeworkers. Self-employed workers are not insured
against the so-called professional risks.
In Ireland occupational accidents and diseases are defined as personal injuries sustained in an
accident arising out of or in the course of employment and certain injuries and diseases arising due to
the nature of the employment concerned. Persons in Class A and J are covered once they are in
insurable employment and there is no requirement to have any particular level of contributions paid.
There is a variety of benefits in this case.
Claimants of Injury Benefit must be unfit to work because of an occupational accident or injury. The
level of benefit is a personal rate payable from the fourth day after the accident or injury and is
payable for a maximum period of twenty-six weeks. After this period an employee has to rely on
Disability Benefit. A claimant is not allowed to work whilst in receipt of an injury benefit save for the
limited exception of light work for rehabilitation purposes.
A Disability Benefit is payable where an employee suffers a loss of physical or mental faculty as a
result of an occupational accident or injury which results in a degree of permanent disablement of at
least 1 per cent. If the disablement is greater than twenty per cent, the benefit is payable as a pension
and the rates vary according to the disablement. The benefit is not affected by the fact that a claimant
obtains alternative employment or retains the employment in which s/he sustained the injury,
It is likely that any employee who sustains an occupational injury or disease will sue his or her
employer for damages in negligence. Such claims are a significant feature of Irish employment. The
level of occupational injury amongst teleworkers is likely to be lower than amongst, for example,
manual, workers. However, claims have been successfully instituted by computer operators against
their employers both in respect of repetitive strain injuries to their hands from using keyboards and
eye strain injuries. Home teleworkers may face greater legal difficulties in establishing a negligence
claim against their employer because of the fact that the place of work is not under the direct control
of the employer.
In Spain entitlement to benefit does not require a minimum contribution period. During the full
period (eighteen months) of incapacity the amount is 75 per cent of the amount of contributions
which have been paid. After this period one can receive permanent benefits, which are more
favourable than incapacity pensions.
An occupational accident is defined as the damage which occurs at the occasion or as a consequence
of the work as an employee; it covers accidents on the way to and from work by definition. The
situation of teleworkers is different from the situations foreseen in this definition and it seems to
cause new problems. The Spanish rapporteur thinks that this does not require a new definition; it can
be left to the courts to apply the present definition to the new situations. The benefit in case of
occupational diseases is limited to those cases listed in a catalogue which is a closed list of diseases.
Diseases directly due to telework are not on this list.
Danish occupational accidents and diseases law is a statutory law which provides that all persons
doing either permanent or temporary work are covered. Self-employed persons are not covered. For
work diseases there is a list of the benefit administration which determines which diseases can qualify
as work diseases. The benefit depends on the loss of work capacity. If the work capacity is totally
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lost, benefit will be 80 per cent of the previous yearly income of the claimant (whereas there is a
maximum and a minimum yearly income; low paid workers are not insured). For persons with a
smaller loss of work capacity, benefit is proportionally calculated. Homeworkers are also covered for
this purpose.
In the United Kingdom all categories of employees are covered by several benefits, the main one
being Disablement Benefit. Benefit is flat-rate; the amount depends on the extent of disability.
Anyone who pays or ought to pay contributions as an employee is covered for this benefit, including
those who do not earn enough to pay contributions. This means that even part-timers are covered.
Additional benefits are paid as increases to cover costs of attendants etc. Excluded from coverage are
workers employed by their spouse whose employment is not for the purpose of his or her
employment, or whose earnings are below the Lower Earnings Limit. Neither are workers covered
who are employed by a near relative in a private house where the worker and their employer live if
the work they carry out is not for the relative’s trade or business based there. The British rapporteur
remarks that this means that a teleworker who is, for example, working for a spouse doing the
accounts or answering the phone from his or her home and earning less than the Lower Earnings
Limit will not be covered for accident and disease; if s/he is working for a relative on something
unrelated to a home based business s/he is not covered either. Employees are entitled to this benefit if
there is proof of either personal injury or an industrial accident suffered during work time, or of a
prescribed industrial disease or injury. In the case of an industrial accident there is case law which
refers to flexible hours and accidents in the home or outside the employer’s premises, but this does
not refer to teleworkers and home-based workers. The requirement that the accident must have been
caused during working time could cause problems for teleworkers who work flexible hours, with
work time interspersed with household duties. In the absence of witnesses or any clear statement of
which hours constitute working hours, it could be very difficult to establish that an accident occurred
during hours which could be legitimately regarded as the employer’s responsibility.
Self-employed workers are not covered by Disablement Benefit; they may be able to get Incapacity
Benefit (see Section c above).
In Finland all persons in an employment relationship are covered by statutory accident insurance. For
the Accidents Insurance Act, a special definition applies for employee: a person who works for and
under the direction and supervision of another party on the basis of an agreement, and for
remuneration is considered as an employee.The claimant has to satisfy the condition that s/he has
been incapable to work for at least three successive days. Benefit is payable for a maximum period of
one year; during the first four weeks, the allowance is the same amount as the person’s normal pay.
After this, the daily amount is 1/360th of the annual earnings. There are separate self-employed
persons’ accident insurances and voluntary insurances for others than employees; the employer can,
but is not obliged, to provide such protection.
In Germany the occupational accidents and diseases act covers employees and homeworkers.
The French report remarks that the main problems, the black gap of French social security, are in this
area. According to the law, an occupational accident is an accident as a result of or during work. Thus
the first alternative to qualify for this benefit is that the accident is a result of work. In the second
alternative, during work, an assumption plays a role, which has been established by the case law. This
is that an accident is an occupational accident if it happens to an employee when s/he is under the
authority of the employer, which will be the case if s/he was on the work place during work time.
This double criterion (place and time) of alternative 2 enables us to draw the field of the employer’s
authority. In case of a worker en route, these criteria do not work; in this case another criterion
applies: - alternative 3 - is the employee performing a task inherent to his or her job? These criteria
prove to be difficult for teleworkers. Alternative 1 requires that s/he proves, by means of witnesses
that the accident happened when s/he was doing his or her work. A worker not working at home who
wishes to rely on the second alternative has to prove that s/he was working during working time. This
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causes problems for single workers. If a worker cannot prove such a thing, the court will not take him
or her on his or her word.
If a person working at home who suffers an accident without witnesses, both the time and the place
criteria prove difficulties. What happens if a worker falls from the stairs? Is this an occupational
accident or a domestic accident? There is so far hardly any case law on this subject for homeworkers.
With respect to occupational diseases, a list of diseases is relevant. One category of the main diseases
a teleworker may suffer, eye diseases, are not on the list yet. If a disease is not on the list, the worker
can try to prove that the work is the cause of that particular disease. If s/he succeeds it is an
occupational disease.
In Luxembourg an occupational accident is an accident which happened to the insured person by
doing the work or during the work. There has to be a link between the insured work and the activity
that led to the injury. It is relevant, in particular, that the activity during which the accident happened
took place in the interest of the enterprise where the insured is engaged. In addition, the insured
person must be under the supervision of the employer at the moment of the accident.
An accident during the travelling to and from home is also covered, provided it is on the normal and
direct way to and from home. Coverage for accidents is limited to the public road.
A professional disease is defined as a disease
- which according to the medical knowledge is caused by specific influences;
- to which certain groups of persons are exposed as a result of their work;
- which the government has placed on a list and;
- which the insured person has incurred specifically while performing the insured work.
A benefit is payable if the victim is unable to work for a maximum of thirteen weeks after the
accident, The benefit is the same as the wages the victim would have earned. From the fourteenth
week of incapacity for work there is a temporary benefit of which the amount is fixed according to
the degree of incapacity. In case of a definitive incapacity for work a pension is paid according to the
degree of incapacity.
In the Netherlands there is no law for occupational accidents. All cases of disablement, regardless of
the cause, are dealt with by the Disablement Insurance Act and the General Disablement Benefits Act.
(ii) Schemes for employees and self-employed
In Italy employers who use (or are helped by) subordinated workers in the broadest sense of the word,
are obliged to declare what types of jobs and of materials and engines they use to the National Institute for Insurance on Occupational Accidents and Diseases. This insurance is compulsory by law.
Employers must pay annually an insurance contribution which is defined on the basis of insured
workers wages and on the level of danger of the job, engines and materials in use. All employees are
insured from the beginning of work on the very ground that they begin a specific work. Two types of
coverage exist: the temporary disability benefit is paid to workers for all the days which are necessary
for cure and recovery. This benefit is wage related; depending on the period which lapsed since the
accident. The so-called permanent invalidity benefit is paid when the worker is affected by a
permanent physical damage higher than ten per cent as a result of the accident. This is an earningsrelated benefit. Also some categories of self-employed persons are insured against accidents;
teleworkers or homeworkers as such are not such category.
In Portugal an employee who is a victim of an accident at work that causes a loss of earnings
capacity is entitled to a pension for permanent incapacity. The law requires a term of insurance of five
years (but this does not apply if the beneficiary has surpassed the 1,095 day period which corresponds
to the attribution of the sickness benefit and when there is permanent incapacity for work).
In case of illness contracted during the performance of work and caused by the employee’s exposure
to special risks arising from the nature of the activity, industry or work environment, benefits in kind
and in cash are payable. The homeworkers and the self-employed (enlarged regime) are covered for
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this risk as well.
In Luxembourg for the contingency of occupational accidents all industrial, commercial and
agricultural enterprises are subject to this insurance. In addition, independent intellectual workers are
covered. This is the case even if these persons are engaged without remuneration.
In Austria if the person concerned participates in a compulsory accident insurance scheme (employed
and self-employed) s/he may claim the following benefits:
(1) prevention of occupational accidents and diseases, occupational medical care
(2) assistance when the damage occurs (included compensation).
No waiting period is required for eligibility for benefit.
Entitlement requires participation in a compulsory accident scheme at the moment the contingency
occurs and a causal relationship between the occupation and the accident and its consequences.
Coverage includes occupational accidents in a strict sense and assimilated accidents; in some forms of
telework (self-employed working at home) problems arise when a cause-and-effect link is to be
established in terms of workplace and working hours, because the borderline between workplace and
the place of leisure and the border between working hours and leisure time is blurred.
Among occupational diseases only those are covered which are listed on the statutory list of
occupational diseases. In individual cases a disease may become a recognized occupational disease if
according to medical scientific findings it constitutes a disease which is caused exclusively or
predominantly by noxious substances or radiation at work. Before such a disease will be accepted for
telework, it will need several years of testing.
In Sweden employees, self-employed persons and, in certain cases, students are covered for
occupational injury insurance. An occupational injury is an injury caused by an accident at work; an
injury in the course of travel to and from work; some illness caused by infection; or an occupational
illness, which with a high degree of probability has been caused by harmful influences in the work
environment. If a person has been badly injured and can no longer work or has to work less s/he can
obtain an annuity. This annuity depends on the person’s income, the national basic pension and the
ATP. Employers are through collective agreements obliged to buy sick pay insurance and supplementary pensions for their employees. Theoretically there is no difference in coverage between
teleworkers and employees at the principal work place. Problems can arise if work is performed at
home as there might be difficulties in determining whether an injury should be classified as an
occupational injury or an injury incurred during a person’s leisure time. The insured person’s
statement used to be decisive and the burden of proof was therefore rather small. Since a couple of
years, the burden of proof has increased. Now a majority of reasons have to indicate that the injury of
illness is caused through the work.
Accidents which occur while working or near the time and place of work are covered by the normal
rules, whereas accidents which happen during the leisure time are not covered by the normal rules; in
these instances there is room for a fair amount of interpretation of circumstances in each individual
case.
(iii) Conclusions
In the area of occupational accidents and diseases we see a part of social security where telework has
its own problems. For a main part these are the same as those of homeworkers: when is an accident
which occurs at home or in the neighbourhood of the house of the teleworker an occupational
accident? Also in this area the burden of proof is important. The only report which gives a description
of the burden of proof, is the Swedish report, discussed in the preceding paragraph.
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f. Unemployment benefit
(i) Schemes for the employees only
In Belgium Unemployment Benefits for the employees are wage related and the amount depends on
the family situation. In order to be entitled to benefit, the beneficiary must show that s/he is a bona
fide worker by proving that s/he has performed a certain number of days of work, different by age
group, in the period immediately preceding the application for benefit. Self-employed workers are not
covered by unemployment insurance law. Special rules apply for homeworkers. A homeworker has to
show that s/he has had a full-time job. Furthermore, s/he has to fulfil a waiting-period of six days
before s/he can claim benefit. When these conditions are met the homeworker is entitled to a benefit
calculated on the basis of the average daily wages of the last four weeks before his or her
unemployment.
In Ireland employees must satisfy the contribution conditions of 39 weeks paid contributions and 39
weeks paid or credited in the tax year relevant to the claim. In order to be entitled to benefit a
claimant must be unemployed, capable of, available for and genuinely looking for work, and be
unemployed for at least three days in any period of six days. Benefit is payable for fifteen months.
Persons are not allowed to work whilst in receipt of Unemployment Benefit. However, there are
special provisions for persons engaged in systematic short-term work, so that a person who normally
works a two or three-day week may claim for the days not worked.
In Austria teleworkers are eligible for Unemployment Benefit if they are employees and have accrued
a certain number of qualifying periods. If benefit is claimed for the first time, the qualifying period is
fifty-two weeks within the last two years. Repeated claims require a qualifying period of 26 weeks
within the past twelve months. Teleworkers with frequent short-term assignments may have
difficulties to meet these requirements. The amount of benefit depends on the average earned income
of the past six months. Duration of benefit, which is earnings related, depends on the length of
qualifying periods. Beneficiaries are allowed to earn income up to a threshold.
In Spain employees are entitled to Unemployment Benefit, in case of loss or reduction of the working
day for at least one-third, for some specified reasons: dismissal for economic reasons, expiration of
the contract for a definite term, death or incapacity of the employer. The amount of Unemployment
Benefit is calculated on the basis of the sum of the contributions of the last six months. The duration
of this benefit depends on the record of paid contributions; in any case the claimant must have paid
contributions of a minimum of 360 days in the past six months. For those not entitled to benefit (e.g.
because their right has expired) a special benefit is payable of 75 per cent of the minimum wage for a
maximum period of twenty-one months. For older workers this benefit is payable until pension age.
In Italy most categories of employees who work in subordination are eligible for coverage on
condition that they paid at least two years of contributions. The amount is 30 per cent of the wages
averagely earned in the past three months. Benefit can be paid for a maximum of 180 days.
In Portugal employees must have been in work on 540 days during the 24 months immediately
preceding unemployment. Benefit is 65 per cent of the daily pay, averaged over the six months
preceding the last month but one before the starting of the unemployment, but, in any case, the
amount must equal the highest level guaranteed for the statutory minimum wage, and cannot be more
than three times that level. Benefit is payable for a period according to the age of the recipient,
ranging from 10 months for those under 25 to 30 months for persons age 55 and over. This benefit is
cumulative with pensions received in case of an accident at work or occupational illness.
In the UK only employees are eligible for Unemployment Benefit. Unemployment Benefit is payable
at a flat rate. This benefit is payable for one year to those who satisfy the conditions. For this purpose
a set amount of Class 1 contributions (payable by employees) must have been made in one
contribution year; the sum on which contributions have to be made must be at least 25 times that
year’s lower earnings limit. In addition, contributions have to be paid (or must have been credited) on
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a sum which is equal to fifty times the lower earnings limit in each of the last two complete
contribution years ending before the relevant benefit year.12
Each day for which benefit is claimed must fall within a period of interruption of employment. This
means that a day of unemployment must be followed by day of unemployment in a period of six
consecutive days.13
Also part-time workers may be entitled to Unemployment Benefit for days during which they do not
work; if they work, the earnings derived from that employment must not exceed 2,50 ecu for that day.
If workers, such as teleworkers, are paid piece rates it is clearly difficult to prove how many hours
they were (or are) really working. The teleworkers reported in the case mentioned above in Section a
on sickness benefit, doing data entry, for example, were paid per keystroke. These teleworkers are in
effect paid by results, and may earn more or less than the ’hourly’ rate depending on the speed at
which they work.
In Germany employees and homeworkers under the Homeworker Act are covered by the Unemployment Insurance Act. An exception applies for those working less than eighteen hours a week.
Beneficiaries remain eligible for benefit if they have worked for less than eighteen hours a week;
earnings exceeding a certain level are partially deducted from benefit.
In Luxembourg the following persons are covered by the Unemployment Benefit scheme:
- a person who is usually employed full time;
- a part-time worker provided that s/he is employed for at least sixteen hours a week;
- a worker who has several jobs, under the double condition that s/he has lost a job s/he has before for
at least sixteen hours a week and the monthly income which remains after the loss is less than 150 per
cent of the minimum wage;
- an unemployed person of at least fifty years old and an unemployed person of at least 30 and
unemployed for at least twelve months, on condition that his or her occupation requires at least 20
hours of work a week.
The claimant must show that s/he has been employed as an employee for at least twenty-six weeks
during the twelve months preceding the day of registering as a person seeking work.
The benefit is eighty per cent of the earlier earned gross wage. Maximum levels apply however.
The maximum duration of benefit is 365 calendar days in a period of 24 months. For older
unemployed persons the period can be prolonged.
The Netherlands Unemployment Benefit is payable only to employees and assimilated persons. In
order to be entitled to unemployment benefit a person must have worked during twenty-six weeks in
a period of thirty-nine weeks. Claimants receive a higher benefit if they also worked during four years
in the period of the last five years before becoming unemployed. In each of those four years one must
have worked at least 52 days.
Claimants must, in order to be entitled to Unemployment Benefit, suffer a minimum loss of five
working hours. Thus it is not required that the applicant has lost his/her job completely. The loss is
determined by comparing the average of the past 26 weeks with the remaining number at the time of
the claim. An alternative is that the employee loses half the number of his/her usual working hours;
this is relevant if s/he works less than 10 hours a week. If an employee loses more hours than these
minima, but does not lose all his/her working hours, a proportional amount of benefit is paid.
12
13
This means an income (or credits) for 50 times 71.25 ecu, which is 3,562 ecu per year. This may mean a
threshold to persons in low paid jobs and insecure employment.
The requirement of a period of interruption of employment is disadvantageous to workers in insecure
employment. A period of interruption of employment is linked with another such period provided these two periods are not separated by more than eight weeks. This rule is (among other reasons) necessary since benefit is not
paid for the first three days of any period of interruption of employment. Without the linking-rule the claimants
would have to serve the waiting-period each time they become unemployed.
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It is not required that beneficiaries are available for full-time work or their previous working pattern;
if they are available for fewer hours, their benefit is, however, proportionally reduced.
(ii) Schemes for employees and the self-employed
In Denmark employed persons can, under certain conditions, be a member of an unemployment fund
(which is optional) and such membership (of one year) is required for qualifying for Unemployment
Benefit. In order to qualify for a full-time benefit one should have been working at least 30 hours
within the last twelve weeks. Furthermore, for a prolonged right to Unemployment Benefit it is
required that one worked at least twenty-six weeks within the last three years. Unemployment Benefit
is ninety per cent of the previous income (below a certain ceiling). Unemployment is calculated on
the basis of the previous income in the last twelve weeks if the person has been working at least two
third of a full-time week. If a person worked less than full-time it is possible to have supplementary
Unemployment Benefit which is based on the number of hours worked. If the unemployed is working
during the unemployment period, benefit is reduced in proportion with the number of hours worked.
If the number of hours is unknown the calculation will be based on a fixed rate (i.e. 16,01 ecu) in
order to calculate the number of hours of work and thereby the reduction in Unemployment Benefit.
This rule allows teleworkers to claim benefit and to work at the same time, although this is not
possible for an indefinite period. Self-employed persons can be a member of an unemployment fund
if they are working as a self-employed more than for a temporary period and the self-employed work
is substantial. To a self-employed person a minimum benefit is payable if s/he stops to work as a selfemployed for more than a short period. In this case one must have been a member for at least three
years and have been self-employed for this period. After a period of five months of unemployment,
all beneficiaries can receive a benefit to start as a self-employed.
In Finland a person who has been out of work for at least twenty-six weeks during the last twentyfour months after working in a job for at least eighteen hours a week is entitled to an Unemployment
Allowance, provided s/he satisfies the regular conditions (e.g. he is available for work). This basic
daily allowance is intended to ensure a subsistence income to persons not entitled to an earningsrelated allowance.
The earnings related benefit consists of a basic component and an earnings-related component based
on the earlier wages; to get the earnings-related component the job-seeker must have been a member
of an unemployment fund for at least six months before becoming unemployed and s/he must fulfil
the other conditions for entitlement to this allowance. The allowance is payable for a maximum of
500 days of unemployment during four consecutive years.
If because of redundancy the employer reduces the weekly working period of an employee by at least
one day (wages are correspondingly reduced), the employee is entitled to a daily Unemployment
Allowance for these days. The rate of this allowance is calculated by deducting 80 per cent of the part
of wage or income exceeding 136,36 ecu a month from the daily benefit paid to a person who is fully
unemployed. This duration of payment of this benefit is subject to a maximum. In the case of work at
home, the previous employment requirement for the earnings-related allowance is fulfilled if the
home worker’s pay has been at least seventy-five per cent of the sum paid to a fully fit person of
eighteen and over under the terms of the collective agreement concerned; this rule also applies to
part-time work at home.
As of the beginning of 1995, self-employed persons have also been able to receive a daily
unemployment insurance benefit. All self-employed are entitled to the basic allowance and those
belonging to an unemployment fund are entitled to the earnings-related allowance; a certain period of
self-employment is required to qualify for the basic allowance.
In Sweden employees and self-employed alike have the right to basic coverage for unemployment.
Among other things, they have to satisfy the condition that they have worked at least five months
during the last twelve months; each month they must have worked at least 75 hours. There are five
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qualifying days, and after this period benefit is 27 ecu per working day. This benefit is payable for
150 days for persons under 55; for older persons larger periods apply.
In addition to this basic benefit one can claim benefit from Unemployment Insurance Funds,
administered by the unions. Most employees belong to such a fund. Membership of a union is,
however, not compulsory for joining a fund; self-employed persons can join the Unemployment
Benefit Society for the Self-Employed. In order to qualify for benefit from these funds, one has to
satisfy the conditions that one has paid unemployment contributions for at least twelve months and
has worked for at least 75 hours a month during a period of five months, or 65 hours a month during
a period of ten months. After five waiting days an allowance is payable for each working day, of
which the amount is eighty per cent of the previous wages, subject to a maximum of 62 ecu a day, for
a maximum of 300 days. The unemployment benefits for the self-employed are similar, but in order
to be eligible a person has to prove that s/he is no longer in possession of a company and that s/he has
been a member of the society for at least two years.
(iii) Training while remaining in receipt of benefit
A labour market subsidy is payable in Finland to those entering the labour market for the first time
and to those who have already received a basic or earnings-related allowance for the maximum period
of 500 days. This is a discretionary benefit, payable on need.
In the United Kingdom claimants can join Training for work schemes recognised by the government
and will receive a Training Allowance based on the amount of benefit they were getting immediately
before they started training, plus a training premium.
In the Netherlands there are few rules on training by beneficiaries. These provide that it is possible to
attend training while receiving benefit, but some restrictions apply with respect to the kind of training
one can attend. The training must not be for a particular enterprise. Moreover, the training has to be
necessary for the employee concerned, which means that it has to be sure that without the training
s/he will not be able to find a job.
In Austria the unemployed can and are obliged to participate in a suitable training programme. If they
refuse a suitable job or training offer benefits will be withdrawn for a certain period of time.
Teleworkers are faced with specific problems in this context because they usually work at a location
chosen by themselves. The public employment authority need not answer the request of teleworkers
for training or work at specific locations or their home. The employment offices are not obliged to
offer telework vacancies or employment at the place of residence of the job seeker provided that there
is some suitable accommodation and the job does not jeopardise family care.
In Germany a large set of training measures is part of the Arbeitsförderungsgesetz, benefits under this
act are (almost) exclusively for those who satisfy specific conditions on their employment record as
employee. This excludes the self-employed.
(iv) Conclusion
Only the Nordic countries have unemployment benefit schemes for the self-employed. In some
countries it is possible to receive a reduced Unemployment Benefit and earning from telework at the
same time.
g. Survivors Benefits
In Belgium both employees and self-employed are entitled to a pension (after one year of marriage).
In Finland there is a survivor’s pension for residents and an employment pension for the survivors of
an employee; the former is a subsistence income, the latter is earnings-related.
In Portugal a survivor’s pension depends on a period of insurance of 36 months; the level is 60% of
the full retirement or invalidity which would apply for the deceased. The self-employed and
homeworkers are covered for this risk as well.
In Ireland the widow/er of an insured contributor may be eligible for a Survivors Contributory
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Pension if the contribution conditions are satisfied. This pension is payable to all Class A
contributions and to self-employed persons under Class S insurance. The insurance record relied upon
may be that of the claimant or of his/her deceased spouse and must satisfy the condition of 156 weeks
of contributions paid to the date of the claim and a yearly average of between 24 and 48 weeks
contributions paid or credited over a certain number of years. The amount of pension payable will
vary according to the yearly average of contributions paid.
In the Netherlands a survivors pension exists for all residents who satisfy the conditions: the survivor
must have small children, or beyond a certain age or be partially disabled. As this is a national
insurance, all residents, workers or not, are covered.
There are no longer survivors pensions in Denmark; a survivor may be eligible for an old age
pension.
In Luxembourg a person is entitled to a survivors benefit if s/he survives a beneficiary of an old age
or disablement pension or as person insured for such benefit if he can show a contributory period of 2
months in the three years preceding the materialisation of the risk. The amount of the pension
depends on the duration of the insured periods.
In Sweden a widow/er may obtain an adjustment pension from the national basic pension scheme and
from the national supplementary scheme. The pension is payable for one year, but can be extended.
The pension is 96 per cent of the base amount. A person who cannot support himself or herself by
working and who does not receive any other pension may receive a special survivor’s pension. For
this purpose his or her capacity to earn must be reduced by at least fifty per cent due to labour market
reasons or impaired health.
In Spain survivor’s pensions are payable based on the sum on which contributions were paid. Pension
is earnings-related. For this purpose it is required that 500 days of contributions must have been paid
in the past five years. Similar rules apply to self-employed persons.
In the United Kingdom a widow’s payment is payable to women whose husband has died; men do not
receive benefit if their wife died before they reached pensionable age. To be entitled to a pension a
woman’s husband must have either satisfied the contributions conditions or have died as the result of
an industrial accident or disease. Contribution conditions are dependent on the spouse’s contributions
and therefore it is not relevant whether the claimant is a teleworker or otherwise.
In Austria the schemes for employees and the self-employed provide widow/er’s pensions. Pension
amounts to forty to sixty per cent of the pension due to the insured and depends on the income of the
surviving spouse in relation to that of the deceased at the time of death.
h. Social assistance protection
In Belgium a minimum income protection is attributed to a person living in Belgium without
sufficient means of existence if s/he is incapable of earning these means himself or herself and if s/he
is not entitled to other benefits.
In Finland persons are entitled to social assistance benefit if they lack income and cannot support
themselves in other ways. A self-employed person with a business which failed to survive can gained
social assistance. However, calculating the income of a private enterprise is a difficult task and
precise directives are not available. Beneficiaries are allowed to work, but the earnings are to be
deducted from the allowance. According to a governmental decision part of the income can be
disregarded when calculating the amount of the allowance. There is no official limit to the amount
and the municipalities have discretionary powers to determine the disregarded amount in the
individual case. In practice these powers are seldomly used.
The level of the basic allowance is linked to the minimum flat-rate old age pension level. It sums up
to eighty per cent of the full old age pension level.
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In Portugal unemployed persons who have exhausted their right to unemployment benefit and
persons who have not completed the full period qualifying them for such benefit are entitled to
unemployment assistance. The amount is pegged to the highest level guaranteed for the statutory
minimum wage and varies according to the existence and size of the family unit. Unemploment
assistance is available for half the period of entitlement of unemployment benefit if it follows on the
granting of the latter benefit, and for those who have not been entitled to this benefit, the periods is
the same as for unemployment benefit.
The young job-seeker’s grant is paid to young people age 18 to 25 who are seeking employment,
provided that they fulfil certain requirements (among which having been available for work for at
least six months and having a household income of not more than sixty per cent of the national
minimum wage).
Social assistance in Denmark depends on the income of the household. This makes it difficult, e.g.
for self-employed persons, to continue work while claiming this type of benefit, as also the
possession of equipment may disqualify a person for benefit. It is, however, possible for persons who
have been on social assistance to receive Income Support when they wish to start to work as a selfemployed. The main rule is that any income from work will imply a reduction in social assistance;
however, after having been on social assistance for more than three months, it will be possible to
receive income from work up to a certain maximum (281.69 ecu) without impact on the benefit
(although there is a maximum of 1,690.14 ecu in a six month period). This rule may be relevant to
teleworkers who after a longer period of social assistance wish to start to work as a self-employed
person without reduction in social assistance.
In Ireland specific assistance or pensions are available for persons who come within the category of
old age, unemployment or survivors and orphan’s claims. There are no specific assistance provisions
in relation to sickness, invalidity, occupational accidents or injuries and maternity payments and,
normally, a claimant who does not satisfy the necessary contribution levels to claim a benefit in
respect of these matters would be entitled to unemployment assistance if s/he is unable to work
during the period of such illness, disability etc. All residents are eligible to apply for social assistance
once they satisfy the appropriate criteria and the means tests.
If a person does not qualify for the benefits in Sweden s/he is entitled to social assistance protection
from the municipality. There is no minimum income in this country; the support is based on a
percentage of the base amount and depends on the type of household. All residents in Sweden are
covered.
Austria’s insurance system does not provide for any general minimum benefit level. Pension
insurance provides for claimants of small pensions who do not have any other income or income
support claims a scheme which supplements their pension with an amount which is redetermined
every year. Teleworkers having been insured as employees or self-employed persons will receive this
supplement if they receive the benefit conditions.
Social assistance is provided by the states and is granted if the needs of the individual cannot be
covered by other means.
In Spain the social assistance benefit, which did not exist before 1990, is payable only to old or
invalid persons.
In the United Kingdom income support is payable to those in need; to claim this benefit income must
be below a determined amount. If their spouse or partner is earning more than an absolute minimum
they will be expected to rely financially on them.
Neither the claimant nor the partner must work for over sixteen hours a week. If an irregular pattern
of work exists then hours are averaged out over the work cycle; if no pattern of work exists, as may
be the case with homeworkers, an average is worked out over five weeks.
Part of the calculation for Income Support is based on how much a person needs to live on. Under the
rules of Income Support, claimants receive an increase for dependent persons, which are only those
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under sixteen. So although the benefit is aimed at topping up low income, many workers, particularly
those looking after ’non dependants’, even if the latter have no income of their own, may find they can
claim very little. This could adversely affect women teleworkers, as is remarked by the British
rapporteur, who have been motivated to stay at home to keep an eye on older relatives living in their
home.
The Income Support rules allow claimants to earn 18 ecu per week without it affecting their benefit.
Because the disregareded amount is so low, it is often not worth taking up part-time work.
Income Support may be difficult to claim for self-employed workers because of the rules about
availability for work and limits on hours. Self-employed people may work a large number of hours a
week but they may be making very little money, and sometimes even running at a loss, but unless
they reduce their hours to less than sixteen per week they will be unable to claim benefit. The Social
Fund helps people with expenses which they find hard to pay out of their regular income for some
specific purposes.
In one case study of sixty teleworkers doing data entry, women teleworkers were treated as
employees, on 30 hour contracts, but not guranteed work. One woman currently had only twenty
hours work a week, but said that many of the other workers had no work at all, but were unable to
claim benefits.14 The women were unable to claim even though many were working under sixteen
hours a week, presumably because they were not regarded as ’actively seeking work’.
The Disability working allowance is a means tested benefit for people working sixteen hours a week
on low income who are ’at a disadvantage in obtaining work because of (their) disability’. However
the take up of this benefit is very low. This is due, among other things, to the fact that they are
entitled to another disability benefit and do not pass the ’disadvantage test’. This benefit may,
however, constitute an important benefit for disabled persons who wish to start teleworking.
The Invalid Care Allowance is benefit available for carers (people caring for old and disabled
members of their household). Carers are allowed to earn up to 58 ecu per week net (travel and
expenses can be deducted); telework could potentially offer these workers a way of working and
continuing to care for another person. Although it might just be possible to earn more than the Lower
Earnings Limit (71,25 ecu) as this is defined in gross income which would give them access to
contributory benefit, while still only earning below the level for this Care Allowance, as this is
defined as a net wage, these workers would have to calculate very carefully the advantages and
disadvantages of taking up (more) work.
In the Netherlands, as far as teleworkers are covered by the Unemployment Insurance Act,
Disablement Insurance Act, General Disablement Benefits Act and Sickness Benefit Act, they are
eligible for a supplement if the (earnings-related) benefit under one of these acts is below subsistence
minimum. For this purpose their benefit and income, if any, must be under the statutory minimum
applicable. The Law provides supplements to the income and benefit of the claimant up to these
levels, but with a maximum. Income of the claimant and of his spouse (cohabitant) is taken into
account for the purpose of entitlement to the supplement and determining the level of benefit.
The General Public Assistance Act guarantees a subsistence income to those who are not able to
reach that minimum by themselves. The Act is a safety-net to all persons who stay legally in the
Netherlands, which means that first recourse must be taken to other resources.
From January 1996, a new General Public Assistance Act is in force. Under this Act, the benefit
administration (which are the mayor and the aldermen of municipalities) have more powers than
before to require beneficiaries to accept a particular type of work and to make them available for more
hours a week than before. This may mean that persons who were used to do telework only are also
required to seek actively work other than they had been doing before.
14
Analytica, Teleworking in Britain. Third Interim Report. London, 1993
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Under the law, it is up to the Mayor and Aldermen to what extent income out of work is not taken
into consideration with a view to determining the amount of benefit
In Italy assistance is now 3,000 ecu per year; it is payable to all residents in need.
In Austria once entitlement to Unemployment Benefit is exhausted the unemployed may claim
Unemployment Assistance. It amounts to at least 92 per cent of unemployment benefit. This benefit
is means tested on the income of the spouse or cohabitant and on the claimant’s own income.
(i) Family Benefits
In Belgium teleworkers can, as everybody else, qualify for family allowances. Child allowances are
composed of a basic amount plus supplements under special conditions (e.g. for disabled children).
If the teleworker is resident of the Netherlands, s/he is insured for the Child Benefits Act. S/he is
entitled to child benefit if s/he has a child under 16, which belongs to his/her household.
In the United Kingdom Family Credit is a tax free benefit for working families with at least one child
under in principle the age of sixteen; the claimant or the partner must be working at least sixteen
hours a week and the benefit level is the same for everyone. Child benefit is a tax free weekly
payment for everyone.
Although receiving family credit might automatically entitle claimants to other benefits, it may also
count against them, for instance it will be counted as income when calculating Housing Benefit and
may reduce the amount they receive. This means that it may be better to work part-time or give up
work, and claim Income Support, which gives claimants access to a greater number of other benefits.
The sixteen hour rule could be a problem for teleworkers who might find it hard to prove the number
of hours they are working a week, though there has been a decision in the case law, as is reported in
the UK report, specifically referring to home workers which states that ’work’ includes self-employed
workers who are homebased such as childminders, writers and some carers if they are paid or expect
to be paid.
In Portugal workers are entitled to a family allowance for every descendant or person under legal age
tutored or adopted. When both father and mother are employees, only one fo them is entitled to this
benefit.
(j) Housing benefits
In the United Kingdom people receiving Income Support or without sufficient income may be able to
receive help with their housing costs if they are in rented accomodation. Housing Benefit is a meanstested benefit and is available to all categories of workers.
In theory teleworkers who have a seperate room for working may receive less benefit if it is
considered it is being used exclusively for business purposes. In practice it seems that if only one
room is used for teleworking it is unlikely for benefit to be affected.
In Germany doing telework is relevant to housing benefit only if it leads to a larger need for living
space (one cannot claim this benefit for a ’telework room’. Telework is relevant to benefit only
indirectly, in so far as the income from this work affects the level of housing benefit. There is no case
law on housing benefits in relation to home workers and in practice the administration does not
investigate for which purpose a house is used.
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VII.
Equal treatment
Gender
In Finland according to the 1994 Working Conditions Barometer, opinions of teleworkers concerning
equal treatment of men and women proved to be polarised. Some 68 per cent of all teleworkers were
men, and they felt that more equality existed for teleworkers than among employees in general. The
women doing telework, on the other hand, felt that equality was much less of a reality than female
employees felt in general. Whereas 44 per cent of the men thought that good progress was being
made on equality, only 22 per cent did. Only about ten per cent of the men thought that there has
become less equality between men and women, compared with 38 per cent of the female teleworkers.
The majority of homeworkers exists of women and this category of homeworkers often lacks a good
legal position. This sometimes raises accusations of indirect discrimination. The Dutch General
Disablement Benefits Act, for instance, required that claimants must have earned a certain minimum
income in the year before they applied for benefit. The Dutch highest court for social security ruled
that this requirement provoked indirect discrimination of women and therefore this condition is no
longer applied. In this area the case law of the Court of Justice of the EC is extremely relevant.15 An
example of a case in wich thresholds were considered indirectly discriminating is the Weber v. Bilka
Kaufhaus judgment.16 The Court considered that the number of female part-time workers was disproportionate as compared to the number of male part-timers, this scheme for part-timers could constitute indirect discrimination against women, unless it could be justified by objective reasons. The
Court ruled that it fell to the national court to decide whether, and if so to what extent, the grounds
put forward by an employer to explain the adoption of a pay practice which in fact affects more
women than men, could be considered to be objectively justified for economic reasons. The criteria
for assessing such criteria were developed in the Ruzius-Wilbrink case.17 The Court concluded that a
provision such as the one at issue led, in principle, to a discrimination against female workers in
relation to male workers and must be regarded as contrary to the objective pursued by Article 4(1) of
Directive 79/7, unless the difference of treatment as between the two categories of workers is justified
by objective factors unrelated to any discrimination on grounds of sex. When such reasons are put
forward, the national court has to consider whether the means chosen to implement the regulation are
adequate and necessary for that purpose. The national courts had to decide whether there were such
factors. For a long period, it seemed that this case law would be problematic for thresholds in social
security. In a recent decision, however, the court decided with respect to the thresholds in German
social security (the 18 hours rule in unemployment benefit, and the exclusion of people in minor jobs
from the invalidity and old age insurance), that the Member States are allowed to choose the means
which are adequate for the realisationb of the objectives of their social and employment policy. When
exercising these powers the Member States have a large margin of appreciation.18
This means that the Directive 79/7 will not be helpful to rely on in removing the thresholds in social
security. It is now up to the European Union and the Member States to consider whether the present
thresholds can be removed with a view to teleworkers.
Other aspects of equal treatment are the following.
The Swedish rapporteur remarks that as teleworkers are sometimes in insecure work; they may not be
eligible for training opportunities or fringe benefits which are applicable only to employees working
15
16
17
18
See, Frans Pennings, Introduction to Social Security Law. Deventer, 1994, or, by the same author, ’Europe’ in R.
Blanpain (general editor), The Encyclopaedia of Social Security Law (loose leaf).
Court of Justice 13 May 1986, case 170/84, [1986] ECR 1607.
Court of Justice 13 December 1989, case 102/88, [1989] ECR 4311.
Court of Justice 14 December 1995, case 444/93, not yet published.
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at the principal work place. If the teleworkers are mostly women and not compensated for this loss,
this could be seen as a case of indirect discrimination, provided no objective justification could be
given for this situation.
In the Austrian old age benefit rules there is still a difference in qualifying conditions between men
and women (men qualify at the age of 65, women at the age of 60); this difference is gradually
phased out.
The British rapporteur remarks that there are various ways of tackling indirect discrimination towards
women because of the number of women based in low paid, part-time work. These are: (1) by making
thresholds lower so that the low paid have more access to benefits. The problem with only doing this
is that you are only dealing with the problem in a more superficial way, without helping to challenge
discrimination towards women. (2) by having legislation which stipulates that the place of work does
not constitute a material difference, and that off site workers should receive the same as on site
workers. (3) by recommending more child care facilities so that women actually have a choice on
when and how to work.
Disablement, age and race
In Finland a multinational project called Teleworking for the Impaired Networked Centres
Evaluation (TWIN) assessed ways in which the disabled could contribute to working life through
telework. Two telework projects were established for the disabled. There is no comprehensive
research material in Finland on movement of the disabled into gainful employment and the
subsequent changes in social security benefits. The results of the TWIN project suggested that the
’benefits trap’ is one key factor hampering entry of the disabled into working life. If disabled people
engage in gainful employment, such as telework, their earnings may mean that they forfeit the social
security benefits they would have been entitled to. Therefore, the duration of the new work, or the
volume and the level of remuneration are crucial elements in deciding whether or not to take up this
work. In Finland proposals are made to launch a national campaign on jobs for the disabled; one
possibility is for as many companies as possible employing over fifty employees to provide telework
for at least one disabled person.
In Italy employers of more than 35 employees are obliged to hire disabled persons who have a
reduction in work capacity of at least 46 per cent.
In general it can be remarked that there are no specific rules or facts which show discrimination of
disabled persons and members of minority ethnic groups. They are, however, potential fodder for low
grade or low paid telework. It may well be that ethnic minorities who suffer from racism on the work
place, or who have linguistic problems, or women who need more women but whose communities do
not allow her to work outside the home may be targeted for tasks such as data entry. Such observations must lead to some caution towards continued assumptions about telework as the respectable
face of homework. This is often not the case.
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VIII.
Transborder issues
Most teleworkers work at home, and they are therefore unlikely to become migrant workers; telework
can be done also across the borders while staying at home. In addition, it is possible that persons are
employed in satellite offices, just across the border.
In case of cross border work Regulation 1408 is relevant. If a teleworker is working under a contract
of employment, as an assimilated worker, or as a self-employed person s/he is under the personal
scope of Regulation 1408.
The benefits described under the section (a) - (i) in the former section (except for social assistance
and occupational pensions) are under the material scope of the regulation.
In general Regulation 1408 deals with workers who go to work abroad. For these workers the
Regulation assigns as the legislation applicable the social security legislation of the State of
employment. This is done in order to avoid that employers would employ workers at lower contribution levels (which would distort competition). In the case of teleworkers who are homeworkers, the
situation is different: they stay at home, but work can come from abroad. This may lead employers to
bring their work to countries with low or no social security contribution on this type of work. The
question arises, therefore, whether the approach of Regulation 1408 is appropriate for teleworkers.
Note that if the teleworker performs also activities in his or her own country in which s/he lives
(Member State of the EU), the law applies of the state wehere s/he lives. This will be frequently the
case. In that case, the problem arises not of the protection as such, but how to maintain the rules.
Furthermore, such a situation can raise many uncertainties for the organisation of person who gives
the work to the teleworker to do.
The Austrian report points to the requirement that Regulation 1408 and art. 51 EC Treaty apply only
if employees, self-employed persons or dependents use their right of freedom of movement and
establishment. For transborder telework every individual case requires examination of whether work
is linked with some mobility of teleworkers, or whether it consists exclusively of a transfer of
services. This view restricts the application of Regulation 1408 to situations in which employed
teleworkers provide services as frontier commuters to an employer in another Member State by doing
alternating telework or telework in office pools or satellite offices; in addition the regulation applies
to self-employed teleworkers who make use of their right to freedom of establishment in a country
other than their country of origin and provide telework services there. The rapporteur is of the opinion
that situations where teleworkers provide telework services from their country of origin to persons in
other Member States are not under the scope of Regulation 1408.
I am not sure whether this interpretation is correct. In its decision of 22 September 199219, the Court
of Justice held that the rules of the Treaty ensuring the free movement of workers and the Regulation
1408 were not applicable to activities all elements of which were restricted to the territory of a single
Member State only (italics by me). This means that the Court does not require movement of workers,
but activities of which an element is lying outside the territory of a Member State in order to have
Regulation 1408 applied. If an activity is required by a principal who aside abroad, one could say that
this condition is satisfied and that thus the regulation applies.
If the employer resides abroad, s/he is still responsible for employers contributions for workers
working in another country, such as teleworkers. This may lead to practical problems.
French social security law has, however, a particular rule in order to solve practical problems; this
rule allows the benefit administration to recover the employer’s contributions from the employee.
19
Court of Justice 22 September 1992, Case 153/91, Petit, ECR 192, I-4973.
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IX.
Points of view
In Belgium the status of teleworkers relating to their position in the social security system is a matter
which has not yet been discussed by the government. Not only has the debate on telework and
homework been mainly concentrated on the labour law aspects of these a-typical work forms, but also
whenever social security entered the discussion, it was solely pertaining to homeworkers. The Law of
27 June 1969 opened the possibility to extend the field of application of the law on social security of
wage earners to homeworkers. The definition of homeworker has until recently been limited to blue
collar workers. Still, also in the previous situation this definition was not criticised by being too
narrow, but for being too large, as the self-employed did not wish to fall under the social security
provisions for wage earners. Therefore in a Royal Decree it was added that those working ’under
similar conditions as of a contract of employment’ are covered, thus excluding the real self-employed.
In 1993 a proposal was submitted by a senator which led to a bill issued in January 1995. The new
law will meet with the growing interest for homework by white collar workers, and is therefore interesting for teleworkers. The new act involves that teleworkers are made part of the group of home
workers covered by the Social security system. Furthermore, all homeworkers (teleworkers included)
should receive equal rights as other wage earners.
In Spain the phenomenon of telework is still very new and so far no public statements have been
made on this type of work by the social partners or the government. This also applies for Ireland.
Given the inherent nature of telematic communications, telework may be seen as a means whereby
employment can be created in Ireland. Therefore, it is likely, as is pointed out by the rapporteur, to be
of concern that no restrictive measures are adopted, even for the benefit or protection of teleworkers,
which would reduce the number of foreign companies prepared to invest in Ireland and to create
employment by means of telework.
In Finland the telework committee report pointed out that what was felt to be the drawbacks of
telework followed mainly from the fact that various social security benefits attached to gainful
employment are connected with working hours. The rapporteur remarks that if estimates of future
increases of more flexible work and working hours prove to be correct, this problem should be taken
into account in all legislation. The labour administration’s response to the report was that it is
important to define whether an employment relationship or other contractual relationship exists or
not. The employees’ organisations on their turn considered that there is a need to change the
legislation, especially the definition of employment relationship and related benefits.
In Denmark there is few discussion on the social security position of teleworkers; this seems to be
due to the fact that the social security system of Denmark is mainly based on residence. This
protection is a basic one, however, and coverage by a collective agreement for supplementary pension
is linked to employees only. Here there is still a problem for teleworkers.
The UK Government are, in general, in favour of teleworking. They consider teleworking to have the
potential to reduce traffic congestion; secondly, they regard all forms of flexible working as
conducive both to greater economic efficiency and to the promotion of equal opportunities. The
prevailing view is that there is no requirement for specific regulation of teleworking. In general, the
employers’ organisations follow the same line as the government. Trade unions do not have a single,
unified policy. Firstly, there are several trade unions representing more senior technical and
managerial staff, who are actively in favour of teleworking, provided it is voluntary and certain basic
conditions apply, among others that workers have employees’ status. A second group comprises trade
unions which already have a number of members working as freelance workers, such as the Union of
Journalists. Here, the concern is not so much with employment conditions but with such issues as
ownership of intellectual property and promptness of payment. Finally, there are trade unions
representing lower-grade white-collar and manual workers which express concern that teleworking
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may lead to social isolation, precariousness of employment and low pay. This group is in favour of
much tighter regulation of all forms of home based working.
There are a large number of other organisations in Britain with an interest in teleworking. These
include groups like the Telecottage Association and the National Association of Teleworkers, which
have been set up to promote the interests of existing teleworkers, and the National Group on
Homeworking, which represents traditional homeworkers in manufacturing and low-grade clerical
work, which campaigns for increased social protection for home-based workers.
In Italy employers and employees organisations are highly interested in teleworkers. Employers see
teleworkers as having a complicated relationship with the enterprise organisation; it is, therefore,
necessary to provide a mix of work at home and work in the office. Telework must remain strictly
connected with the enterprise; it is therefore necessary to define new agreements. The coverage
granted in social security legislation for employees is considered as acceptable and sufficient also for
teleworkers. Unions see as the main problem to avoid the negative results for teleworkers generated
by the absence of regulations and collective agreements of workers. They refuse, as most employers
do, to apply the old homework law and propose to experiment with local agreements to test new
solutions and rules. Unions claim the same protection for teleworkers as for employees; in case of the
self-employed, unions are in favour of a more specific regulation of social protection, in order to
reduce the differences in contributions (thus in labour costs) between the employees and selfemployed). Political parties have not yet expressed specific opinions on teleworking.
In Sweden employers in general emphasise the many work opportunities and possibilities of telework.
Since teleworkers are not excluded from the general scope of social security, the unions have not
expressed any particular opinion concerning the social security position of teleworkers. However,
since the labour market is becoming more flexible in general, concerns for the general social security
of atypical workers have been expressed. Since teleworking is often used in atypical work situations,
this is an area where teleworkers might be less protected than ’regular’ employees. Employees
employed for a definite period and part-time workers are often not covered by insurances through
collective agreements. A person has to work for at least sixteen hours a week, for instance and s/he
must be employed for six months in order to be covered by some of the insurances. To be included in
collective private pension plans, a person has to work for at least twelve months and be at least 28 of
age.
In the Netherlands telework as such is encouraged by (some of the) government departments. Some
of these have even organised telework projects. This type of work is seen as a means to reduce the
large streams of traffic of people going to or coming from their work. As the Netherlands is a small
country the effects of traffic are large (traffic jams), so this is a relevant topic.
As there is no fixed definition of telework, it is hard to give reliable figures. In general, it can be said
that higher educated workers regularly have the opportunity to work at home. From the social
security point of view, the position of these workers does not require special attention: their position
is similar to that of employees working on the employer’s premises.
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X.
FUTURE DEVELOPMENTS
Developments
There is a general tendency that more and more workers are engaged under a contract for a definite
period or on a contract other than as an employee. Employers wish to reduce their expenses to a
minimum, and they seek to recruit non-employees as their costs are lower. Furthermore, they can
dispense of these workers when they are not needed. Telework fits well with this development;
teleworkers can be given such a contract that they have to do tasks sent to them by the computer,
which they have to do for a certain amount of money. It may be possible for highly qualified workers,
such as software developers and translators to earn a good income in such a situation. For others, it
will mean often periods of inactivity and no income. It cannot, however, be the task of social security
to compensate all periods a person cannot work.
Employees are not very attracted by the idea to work always at home, because then they do not have
social contacts with their colleagues; neither do employers seem to be happy with the idea not to have
an eye on their employees. ’Part-time’ telework does, therefore, have the best prospects.
Views
In the Netherlands telework as such does not create very important problems for social security. As
persons assimilated with employees are covered by social security acts, the group of persons not
covered is rather small. Also benefit conditions do not really cause problems for telework as such.
The problem lies in particular in the case of those homeworkers who have insecure employment only
and who are not sure about the work they are given. Their income is low, and earnings-related
benefits are, by definition, even lower. This is a problem not specific for teleworkers and hard to
solve by social security. A better approach is to improve the rules of labour law.
The Spanish rapporteur remarks that so far the position of teleworkers did not really require special
attention although he found some issues which are problematic for teleworkers, such as the
definitions of accidents at work and occupational diseases. For the latter aspects, he adds, a European
regulation could be useful.
In Austria the protection is related to the concept of employee and that of the self-employed;
economic reality and the changes in employment relations caused by reorganisation and state-of-theart technology or employment relations intentionally construed by certain employers to circumvent
social protection, result in the loss of some elements which define the concepts, which means that
these workers lose protection. The majority of teleworkers is likely to do work in some form
assimilated with dependent work. This is why it seems pertinent and necessary, according to the
rapporteur, to extend the concept of employee within Austria’s labour and social security law to cover
these new forms of work by protective norms.
In Sweden no concerns have been raised in Sweden regarding the social security situation for
teleworkers as such. Much has however been discussed about the general social security situation and
major changes are under way to lower the overall cost; these changes do not seem to be co-ordinated
with the emerging flexible labour market.
Flaws in the existing system and developments
A general problem form, as is concluded by the Belgian rapporteur, the difficulties for distinguishing
employees and self-employed persons. The main criterion for making a distinction between them gets
easily blurred and lost in the variety of situations in which people perform telework in return for
remuneration. This classical distinction becomes less and less appropriate to meet with the future
demand for the protection of teleworkers.
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Desirable rules if telework becomes more important
In the Netherlands the trade unions proposed to make a rule as to provide that any work done as a
homeworker is done under a contract of employment, unless the other party can prove that it is not
contract of employment (reversed burden of proof). This will be an improvement for some of the
workers. There is so far no consensus on this proposal.
Role of the European Union
With respect to those who work under a contract of employment and who start to work as
teleworkers, no special rules are needed.
With respect to those who work in insecure employment, there are important problems, which are,
however, not exclusive to teleworkers. In this report we have explored and identified these problems
from a legal point of view. The EU can continue to investigate this area and suggest Member States
to tackle these problems and/or make this issue part of the social dialogue with the social partners.
For this topic it is important that some thresholds may be considered indirectly discriminating against
women. The task of withdrawing the thresholds belongs, of course, of course to the Member States,
because, as the Danish rapporteur remarks, if the treshold is changed for one specific group this will
raise questions in the national social security system and will increase national inconsistencies to
avoid the above mentioned problems for one group.
Telework is a type of work which can be done very easily across the borders. This can imply that
employers seek the cheapest teleworkers available in whatever country. If there is no good social
protection employment conditions can deteriorate as a result of the competition which might be
incurred by this development. Next to promoting the free movement of work, an important pillar of
the EU is the promotion of social life. Social dumping must not be the result of the free movement of
workers, otherwise the reversed effect occurs, that of distortion of competition.
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XI.
ANALYSIS AND CONCLUSIONS
In section 0 we raised some questions which will be answered here.
1. Two main categories
Teleworking can be expected to have interesting prospects, as it fits well with employers’ and
employees’ desires for flexibility. Although such desires may often considerably diverge, this will not
be the case in so far as the wish of the employee to work at his or her own place at his or her own
time corresponds with employer’s need to employ more workers at a certain period (for whom s/he
will not have enough office space) and to have workers who are able to work fully concentrated, not
disturbed by events at the office.
Still, we must acknowledge that telework can cover two radically different categories of workers,
although this distinction does not exist from a legal point of view. On the one hand, there are the well
educated workers, with a good job, who are allowed to work at home during some days a week. On
the other hand, there are persons who have a small job, either because they cannot find better work or
because they cannot leave home, for instance because of the care for children. This distinction is very
relevant to a good understanding of the legal position of the teleworkers, as this position is better
explained by the distinctive elements of these types than by other aspects.
The problems of the second group are, as is remarked in the UK report, the problems of flexible
workers in general. Self-employed workers, low paid workers and those on temporary or on-call
contracts are at a disadvantage to qualify for benefit or to receive benefit if they have some (small)
earnings. An important improvement could be to give benefits automatically, because at present,
among other things because of the frequent amendments to the regulations, claimants are often unsure
as to what they can or cannot claim. If the disregarded amounts low paid workers on benefit could
earn were raised this could provide a good deal more security to this group of workers as well as
reducing unemployment.20
If benefits were paid on an individual basis regardless of a partner’s situation more people might be
encouraged to take up teleworking on a part-time basis, because their earnings would not affect an
unemployed partner’s right to benefit.
2. The relevance of the employee - self-employed distinction
A second observation which can be made after reading the reports is that the distinction between
employee and self-employed is far less important then one would assume after reading the introductory remarks of the national reports. This is due to the fact that schemes exist in which selfemployed persons and homeworkers are to a large extent assimilated to employees or to schemes
which are based on residence. Few problems exist, in general, in the area of sickness benefit and,
even less, disablement benefit, survivors benefit, old age benefit. It must be acknowledged, however,
that for self-employed who are covered by such provisions, the benefit rate is often lower.
An exception applies in Austria and Italy as the protection of the self-employed is restricted to
traditional categories of the self-employed. Extension of this protection to self-employed teleworkers
could solve this problem; it is up to these Member States to take such a decision. This problem does
not seem to be of an unsurmountable nature.
It does not seem necessary to establish a new category in order to cover teleworkers, as a new
category would be very hard to distinguish from other groups, who are, from the point of social
security, in the same position. An alternative could be to make many new definitions, such as for
teleworkers-writers, teleworkers-data entry workers, etc. This does not seem to give an appropritae,
comprehensive solution.
20
H. Parker, Taxes, Benefits and Family Life: the Seven Deadly Traps. IEA London, 1995.
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The most appropriate approach for teleworkers, as far as systems are based on the employee - selfemployed dichotomy, is to elaborate (modernize) the definition of homeworker. Exclusion of white
collar workers from this notion seems to be unnecessary. Furthermore, in as far as one wishes to
distinguish between self-employed homeworkers and employees homeworkers, an interesting
improvement of the legal position of homeworkers can be seen in some countries where the
homeworker is an employee, unless the principal proves otherwise or where the homeworker has
deliberately chosen to be self-employed (e.g. by registering at a chamber of commerce).
The Danish rapporteur supports this suggestion as it gives a better legal position to teleworkers.
The UK report (Paul Davies) discusses the suggestion to classify all teleworkers as employees. He
supports this suggestion in so far as this attitude stems from a desire to prevent employers from
creating ’sham’ self employment (i.e. treating workers who are genuinely integrated into the
employers’ organisation as non employees). The problem of ’sham’ self employment is not confined.
however, to home or teleworkers, but to all ’atypical workers’. The proposal is therefore in particular
inappropriate so long as a definition of teleworkers is applied which is broad enough to embrace
genuine freelance workers for whom self employment status would seem fully appropriate.
3. The definition of telework
The study departed from a broad definition of teleworkers, which covers many different categories of
workers. This was deliberately done as to avoid overlooking particular types of situations. The
materials presented in the national reports did not lead to a specific subcategory of workers which has
specific characteristics; many of the findings are also relvant to homeworkers and the self employed.
We can even conclude that the element of the teleworker’s definition that the teleworker works ’with
means of telecommunication’ is not so very important for social security, apart from some specific
elements which may occur with respect to occupational accidents or injuries. In most respects the
social security position of teleworkers is the same as that of other homeworkers.
4. The problem of social dumping
The main consequence for social security of the fact that teleworkers work with telecommunications
lies in the fact that distance plays no longer a role and that it is very easy to accept work also across
the borders. It is also possible to accept work from several employers, or to do work during sickness,
disability, old age or maternity. We have seen in the preceding sections that in some cases this might
lead to difficulties (’working by pregnant women or during maternity is strictly forbidden’ in some
countries), but much more important will be the problem that it is in general very hard to check when
a person works and for whom a person works. In addition there is the problem that Regulation 1408
may assign the law of the state of employment as the law applicable, but employers who offer
irregular work to teleworkers will often not notify the benefit administration in the relevant Member
State and the worker will not present himself or herself either. In this respect there may be a distinction with labour law, as workers may be expected to claim wages after having worked, but they
will not always register as an insured person at a benefit administration, because it means that they
have to pay contributions. Later, when they would like to claim benefit, there may be a problem with
proving that they have done the work as an employee. In Section VIII we also discussed the problem
that Regulation 1408 is written for different situations of transborder work. The present rule may
encourage employers to seek ’cheap employees’. We have seen that some countries have taken some
provisions, such as France, which holds employees responsible for employers’ contributions. This is a
rather far going step, and it is not clear how it works in practice and whether the employee is
protected in this case (will he always be able to recover the money from the principal). Community
law can be a possible help in this case. It could be investigated whether it is more appropriate that
employers have to pay the social security contributions of the scheme of the country in which they
operate; teleworkers are covered by the schemes of the country where they work.
This rule may prevent social dumping. A further problem is how to check whether telework is done
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for the purpose of collecting contributions. We saw that in some countries self-employed persons
have to register at such and sometimes also employers have to register the people who work for them.
The Danish rapporteur supports the principle that the employer has to pay contributions in the
country where the teleworker works.
5. Specific problems of social security
Three main problems appear to exist in the case of benefits: (1) occupational accidents; (2) unemployment and (3) sickness benefit.
The problem with occupational accidents / diseases is connected with the very position of
teleworkers, and may exist for both categories of teleworkers. The problem is that this type of benefit
insures the employers’ responsibility and that such insurance should be restricted to the situation
where an accident actually happens in ’a work situation’, in other words, where it can be checked
when and why an accident occurs. This is difficult for persons working at home. In this case a
modernisation of the definition of occupational disease and accident may be needed and/or the shift
of the burden of proof to the principal may be helpful.
Unemployment is a particular problem especially for workers in insecure employment.
Unemployment will often occur for this category of teleworkers, as this fits well with atypical
patterns and ’on call’ work. In general benefit schemes will not compensate for any loss of work or
income and in the past years the qualifying conditions have even been tightened. This will mean that
many workers in insecure employment will rarely be able to qualify for benefit (apart from the issue
of being eligible in terms of employee-ship). Neither will workers qualify for public assistance in
many cases, as these workers in insecure employment will often have a partner with an income which
prohibits the fulfilment of the qualifying conditions. This problem is very hard to solve, as
unemployment benefits cannot merely subsidise workers (and employers!) whenever they wish. It is
more important to improve rules of labour law as to ban, for instance, on call contracts in which
workers are not guaranteed work or income at all. If this is not possible, a retainder for workers while
there is no work may prove useful to improve their position.
The third element which is mentioned is sickness benefit. The problem here is that persons in
irregular employment cannot qualify for benefit for the days they do not have work. It seems that this
problem will be hard to solve by rules other than labour law. The problem that their insurance is
interrupted, which may mean that they are no longer completely insured if they incur a disease during
a period of interruption of employment is a more appropriate issue to solve.21
21
The Danish rapporteur remarks that this suggestion with respect to sickness benefit does not apply to his country
because of the universality of the benefit system.
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