This could lead to millions of gig-economists being fitsclassified as employees and allowing them to receive bene. This is the latest setback for digital platforms which rely on contractors to deliver food or offer rides.
Thursday's draft rules will clarify the labor status for app-based companies such as Uber and Deliveroo. They also provide oversight over the algorithms that they use to manage employees.
The gig economy workers and platforms are often left out of the existing employment legislation. The 27-nation bloc is currently considering measures that will help to clear up these gray areas. It would take many years for those measures to become effective.
App-based gig jobs have been booming in the digital economy, particularly during the COVID-19 crisis when food delivery services were in high demand. The apps offer short-term employment for millions, but their rapid growth has led to clashes between regulators and companies worldwide. Many gig work is attractive because of its flexibility. However, workers complain that they are paid less than the minimum wage and that they have the right to sick benefits, vacations, sick leave, and minimum wage.
These criteria include whether the app can decide pay levels, electronically monitor work performance, restrict worker's freedom to accept jobs or use subcontractors, dictate worker's appearance to customers or limit workers' ability to work for others.
Uber claims it is committed to improving working conditions, but concerns about the EU proposal "putting thousands at risk, crippling small business in the wake of pandemics and damaging vital services that European consumers rely upon", Uber said.
A statement by the ride-hailing company stated that any EU-wide rules would allow drivers and couriers to keep the flexibility they know is most important, while allowing platforms and other parties to offer more benefits and protections.
Just Eat Takeaway Amsterdam, which has 25 locations and operates brands such as GrubHub said it "welcomes" and "fully supports" the proposals. It also stated that its riders are employees and not food delivery companies. This "proves that flexibility does not have to be at the cost of workers' rights."
The European Commission, which is the EU's executive branch estimates that 28 million people in Europe are self-employed using digital platforms. This figure will rise to 43 million by 2025. However, it predicts that as many as 4.1million could be reclassified under the rules as employees. To ensure that everything is safe online, the EU has played a major global role in crackingdown on tech companies.
The commission stated that platforms can challenge the classification but they will have to prove they aren't employers.
Nicolas Schmit, EU Jobs and Social Rights Commissioner, stated that "no one is trying to stop, kill or hinder this platform economy's growth." He spoke at a Brussels press conference. It all comes down to quality jobs. ... We don’t want the new economy to only offer low-quality or precarious work.
Another blow to European gig economy businesses is the proposed EU rules. Recent court rulings in Spain and the Netherlands, as well as recent UK laws, require that food delivery drivers and ride-service drivers be granted employee status and not self-employed freelancers.
More than 100 European court decisions have been made on this issue. Most judges ruled that independent contractors were employees. This was something the commission considered when it wrote its directive.
Uber and other app-based companies, however, avoided California's attempt to classify workers in California as employees. However, the case continues in the courts.
The European Commission wants gig work platforms to make it easier for workers to understand the algorithms that are used to assign jobs and determine pay. It stated that workers should have the ability to appeal against any automated decisions and people should monitor the algorithms.
Sebastian Honorato, a gig worker who delivers motorbikes in Spain, claims that a new Spanish law has not brought the promised benefits. It only regulates food delivery riders; other drivers, such as Amazon package delivery drivers, are not covered.
Instead of directly hiring gig workers, Spanish tech platforms turned to temporary staffing agencies. Honorata, a spokesperson for the Association of Freelance Riders said that he used make more than 1,600 euros ($1,800 per month) after paying his social insurance costs, but now earns 900 euros per month.
Honorata, a Spanish resident, believes delivery workers should all be regulated in Europe the same way. However, she is concerned that Brussels' approach might produce similar results to Spain's.
"What we wanted wasn't to be employees, but freelancers. Honorata stated that they wanted an intermediate model similar to the one in California. Prior to the Spanish law, gig work was an economically viable model, even though it had a murky legal situation. We wanted it to have a legal framework but not lose its viability. It is now a disaster."
