Work relationships

Work relationships refer to the relationship between workers and the economic unit for which they work. According to the International Labour Organization (ILO) “statistics on work relationships provide important information on the nature of the economic risk and authority that individuals experience at work, and on the strength and nature of the attachment of workers to the economic units in which or for which they work.”

International Classification of Status in Employment

To develop internationally comparable data on the employed population, the ILO introduced a classification of different types of work relationships: the International Classification of Status in Employment (ICSE). ICSE-18 classifies jobs based on two dimensions of work relationships: the type of authority and the type of economic risk.

Type of authority: The type of authority refers to the nature of control that a worker has over the organization of his or her work, the nature of the authority that he or she exercises over the economic unit for which the work is performed (including its activities and transactions), and the extent to which the worker is dependent on another person or economic unit for the organization of the work and/or for access to the market.

Type of economic risk: Economic risk refers to the extent to which a worker may (1) be exposed to the loss of financial or other resources in pursuance of an activity; and (2) experience unreliability of remuneration in cash or in kind or receive no remuneration. Workers in employment for profit have a higher economic risk than workers in employment for pay.

ICSE-18 can be organized along either of these two hierarchies as shown HERE.

Work relationships according to the type of authority

Independent workers

Independent workers own the economic unit for which they work and control its activities. They make decisions regarding the economic unit, have control over how they organize their work and are not supervised by other workers. Independent workers may work on their own account or in partnership with others and may or may not provide work for others. Independent workers include:

Employers - Employers are independent workers who are managing owners or co-owners of an economic unit and have employees on a regular basis. They are independent, meaning that they have full authority over organizing and controlling work processes in their enterprise and to make economic and strategic decisions regarding their enterprise, either alone or in consent with their owning partners.
Independent workers without employees (own-account workers) - Own-account workers or independent workers without employees are managing owners of an economic unit who, in contrast to employers, do not have employees on a regular basis. This does not mean however, that own-account workers necessarily carry out their work solely on their own. They can still run their business together with other co-owners and have household members or other family members outside the household working for them in a family business. In addition, they can also hire employees occasionally for a short duration.

Dependent workers

Dependent workers are workers who do not have complete authority or control over the economic unit for which they work. Dependent workers thus work under the authority of another economic unit. This includes working for an employer in cases where the worker is an employee, and otherwise, where another economic unit exercises control over aspects of work such as working time and the place where the dependent worker should work. Dependent workers include:

Dependent contractors - Dependent contractors are a new category in ICSE-18. The terms dependent and contractor may seem contradictory. Contractors are typically understood as workers with commercial agreements who are usually classified as independent. However, due to growing labour market flexibilization, grey areas have expanded, leading to situations where workers in self-employment arrangements work in a hierarchical relationship of dependency towards a client, creating dependent contractors. ICSE-18 provides a statistical definition for this type of worker. According to ICSE-18, dependent contractors are defined as (1) having contractual arrangements of a commercial nature; (2) being paid by commercial transactions; (3) in employment for profit; (4) not having an incorporated enterprise and (5) not employing one or more persons as an employee. These five characteristics are all shared with independent workers. But in addition, dependent contractors are also (6) operationally and/or economically dependent on another entity that exercises control over their productive activities and directly benefits from the work they perform: A characteristic they share with dependent workers, and most notably employees. This dependency can, for example, be in relation to a main client, an intermediary of clients, or a single supplier.
Employees - Employees are formally or informally employed by an economic unit and receive (or expect to receive) remuneration in return for time worked or for each good or service produced. The unit employing the employee can be a market or non-market unit or a household (for example as a domestic employee). Employed persons that have a commercial contract with an economic unit for the provision of goods or services are not considered employees. Usually, they should be classified as own-account workers in household market enterprises without employees or dependent contractors.
Contributing family workers - Persons who assist a family member or household member in their business, or in their job as an employee or dependent contractor, and who do not receive regular payments such as a wage or salary in return for the work they perform are classified as contributing family workers. Contributing family workers do not receive a regular payment for their work but may indirectly benefit from the profit or salary of the family/household member. Further, they do not take part in the essential decisions affecting the enterprise and do not have responsibility for it.

Multi-party work relationships

There are situations where the work relationship is not restricted to the relationship between a person and a single economic unit, but where multiple parties are involved. These multi-party work relationships include contractual arrangements where more than two parties participate. Relationships of this type may have an impact on the distribution of responsibilities and obligations as well as on the characteristics of the job.

The Resolution concerning statistics on work relationships identifies three main categories of multi-party work relationships among employees:

(a) Agency workers

(b) Employees providing outsourced services

(c) Workers in employment promotion schemes
A fourth group is also identified: i.e., dependent contractors in multi-party work relationships including in relation to digital platforms.

Click HERE to view the groups of workers involved in multi-party work relationships.

Bibliography

ILO. (2018). Resolution concerning statistics on work relationships. Adopted by the 20th
International Conference of Labour Statisticians, Geneva, 10–19 October 2018. Retrieved from
https://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents…