August 20. 2022. 8:27

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EU launches bid to regulate gig economy


The EU executive has tabled a long-waited rulebook for the gig economy at a time when the business model of these companies is leading to contradicting court decisions across the bloc.

The European Commission proposed legislation on improving the working conditions for platform workers on Thursday (9 December), estimating that 28 million people are currently working via digital platforms covering services ranging from food delivery companies such as Deliveroo and Just Eat to mobility services such as Bolt and Uber.

As a directive, the EU law would set minimum requirements across the bloc, which national lawmakers might decide to develop further.

Between flexibility and precariousness, all eyes are on Brussels’ move on platform workers

The European Commission, which is due to present its proposal on platform workers on 8 December, faces a tricky balancing act: ensuring decent working conditions while maintaining the flexibility of a booming sector.

Presumption of employment

At the core of the law is the so-called ‘rebuttable presumption’, a provision that would automatically classify workers who meet certain criteria as employees, unless the platform is able to prove otherwise.

The criteria include determining the remuneration, requirements such as wearing a uniform, overseeing performance, preventing workers from organizing their own working schedule, and restricting the possibility to work for someone else.

If two of these five criteria are met, the workers would automatically qualify as an employee, with all the legal consequences that that entails. These measures were made looser compared to a previous draft of the proposal in mid-October, seen by EURACTIV, which only required meeting one criterion out of nine.

“We have to make sure that people enjoy their basic rights as workers, without having to go to court against a massive opponent such as Uber or Deliveroo,” said centre-right MEP Dennis Radtke.

Leftist MEP Leila Chaibi endorsed the provision stressing that lawmakers “do not accept that there are companies that respect the rules and labour law and others that defraud.”

According to the Commission, these measures would result in reclassifying up to 4.1 million people, who would earn €120 more on average as they would be covered by collective agreements.

Conversely, as many as 3.8 million people would be certified as self-employed.

While welcoming the proposal, centre-left MEP Gaby Bischoff warned that practical details are still missing.

Platforms push back

Most platforms have pushed back against the proposal, arguing that workers should be able to choose their own form of employment and that, based on employee status, they will no longer be able to work for more platforms or to decide their working hours.

“We believe that addressing working conditions does not require a change in employment status”, said a FREE NOW spokesperson, complaining that the proposal follows a “one-size-fits-all” approach.

Uber warned that the proposal will be “putting thousands of jobs at risk.”

A recent study, conducted by Copenhagen Economics on behalf of Delivery Platforms Europe, which includes all major platforms involved, estimated that up to 250,000 couriers could quit if legislation curtailed flexibility concerning working hours and schedules.

Think tank Bruegel has dismissed these arguments as “overstated” and “speculative” because they do not take into account the possibility of new business models emerging.

However, critics of the measures point to the case of Spain, as the country spearheaded similar legislation in this area that resulted in Deliveroo leaving the Spanish market altogether and 8,000 of its couriers losing their job.

The legislation is expected to bring some legal clarity, as the platforms’ business model has been repeatedly challenged in national courts across the EU.

Last September, the Paris Court of Appeal ruled that the employment relationship between a driver and Uber could be “analysed as an employment contract”, whereas a Belgian court sided with Deliveroo on Wednesday.

Deliveroo wins court battle on riders’ status in Belgium

Deliveroo riders in Belgium cannot be requalified as employees with contracts heaping social security and tax obligations on the company, a Belgian court ruled on Wednesday (8 December).

Algorithm management

The Commission proposal follows similar lines to a motion the European Parliament adopted in September.

Digital platforms would have to inform their workers on how automated systems monitor their performance and support the decision-making process in terms of assignments and earnings. The platform would also be responsible for monitoring the impact of such systems on working conditions.

The draft proposal provides that “platform workers have the right to obtain an explanation from the digital labour platform for any decision taken or supported by an automated decision-making system.”

In other words, every significant decision will need to go through human review, giving the workers the possibility to contest it.

The text also makes reference to the upcoming Artificial Intelligence Act, which is to complement this provision as AI systems used in employment, worker management and access to self-employment are labelled as high-risk.

MEPs also proposed to include interoperability measures to ensure workers can keep the same profile, including its ratings, across different platforms and avoid the so-called ‘lock-in effect’. In relation to that, the European Commission is going to support the development of codes of conduct to promote the establishment of industry standards.

MEPs push to shape working conditions of the gig economy

The European Parliament adopted by an overwhelming majority a resolution on social protection for platform workers, anticipating key parts of an upcoming EU legislative proposal expected to come out before the end of the year.

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