The expansion of the so-called “gig economy” has brought about major changes on the labor market in Europe over the past 15 years. This is particularly evident in the area of digital platforms. Companies like Uber and Just Eat that provide transportation or food delivery services rely on a workforce that is hired on flexible terms, under which neither party has a substantial obligation to perform or perform work on an ongoing basis.
Drivers and passengers who work with these companies are generally subject to standard terms that state that they are acting as independent contractors. The platform operator positions itself as an intermediary between the end user and the freelance service provider and charges a commission to bring the two parties into contact.
In reality, however, the platform operator can retain a considerable amount of control over how its drivers and passengers carry out their work: including the price charged to the customer, the availability of the worker, the geographical area to be covered, etc. Also repeated non-acceptance gigs can have consequences: if a driver refuses three trips, for example, he can be temporarily separated from the platform. Likewise, drivers and passengers can be suspended or terminated if they are the subject of customer complaints.
Some platform workers appreciate the flexibility this type of work offers as it allows them to pursue a degree or other professional / personal project without being tied to fixed working hours. Others, especially those for whom platform work is the main or sole source of income, believe that their platform-imposed independent entrepreneurship status is a fiction that wrongly deprives them of basic labor rights.
Recently, drivers and passengers have filed lawsuits in various European countries in order to obtain employee status. The European Commission and various EU Member States are now considering legislation in this area. We describe some of the highlights below.
1. Legal claims to employee status
Recent court rulings in countries such as France, Italy, the Netherlands, Spain and the United Kingdom give the impression that courts sometimes find it difficult to analyze gig-based work according to traditional criteria in order to determine whether or not an employment relationship is an employment relationship .
1.1 UK Uber judgment
In the UK, the Supreme Court recently ruled in favor of two Uber drivers who were a test case for a large number of drivers claiming “worker” status. This is an intermediate status under UK law that applies to individuals providing personal services to a third party who is neither their employer nor their client / client but who can still exercise a significant amount of control over them. By being classified as an “employee”, individuals acquire certain rights, such as minimum wage and vacation pay, but do not enjoy full UK employment rights (such as unfair dismissal, severance payment, etc.).
The Supreme Court found that Uber’s complex contractual arrangements failed to obscure the true nature of its relationship with drivers. While drivers provided their own car and could determine when and where to work, Uber dictated the type of vehicle that could be used, monitored ride acceptance / cancellation rates, and imposed penalties if the cancellation rate exceeded a certain level. Uber’s level of control had meant that the drivers were really “workers”.
By the time these lawsuits reached the Supreme Court, Uber had already adjusted the standard contract terms of its drivers to reduce future misclassification risks, but has since announced that it will recognize all of its current drivers (but not Uber Eats’ delivery agents). as “workers” for purposes of UK law affecting approximately 70,000 drivers.
1.2 France recent court decisions
In France, the traditional test of employee status is based on the notion of a “subordination link”. According to established case law, this connection exists when the employee performs his duties under the direction and supervision of the company and can be sanctioned for misconduct or poor performance.
In 2020, the French Supreme Court ruled in favor of a number of Uber drivers claiming worker status. This took into account the fact that the taxi service was organized entirely by Uber, so the drivers couldn’t build their own clientele, couldn’t decide what price to charge the customer, or even which route to take. In addition, Uber had the right to separate drivers if they refused a certain number of trips.
However, the question of employee status for platform workers in France is far from being resolved and will continue to depend on the concrete facts. For example, there were two recent decisions regarding a grocery delivery company called Deliveroo:
- In February 2021, the Paris Labor Court sentenced Deliveroo, a driver paid by the hour, to pay damages for “hidden work” because he was in fact an employee.
- But on April 7, 2021, the Paris Court of Appeals ruled that another Deliveroo driver was an independent contractor. The court found that the driver is free to accept or refuse work, work for (and actually do) competitors, and subcontract the work. It’s worth noting that he was hired under different, more recent contract terms than the other driver (for example, he was paid by gig, not by hours).
We may have to wait some time to see what the Supreme Court makes of these two decisions if the parties actually appeal.
1.3 Spain Glovo decision
In September 2020, the Spanish Supreme Court ruled against an app-based delivery company called Glovo, concluding that the plaintiff drivers / drivers were in fact employees because:
- they were not free to choose the days and times they wanted to work, as this was subject to contractual terms (and, moreover, those who refused to provide services during peak hours were rated lower);
- the platform enabled Glovo to set delivery standards, issue technical instructions, set prices (so that drivers had no way of influencing prices) and collect payments directly from customers; and
- The rating system was, in fact, a rating system where drivers with lower ratings would be offered fewer gigs or even canceled. This was viewed by the court as exercising disciplinary power through the platform.
1.4 Italy Law enforcement and pressure from labor authorities
In February 2021, Milan prosecutors fined four grocery delivery platforms nearly $ 900 million for violating health and safety regulations regarding their couriers and ordered them (along with the Milan Labor Inspectorate) to get all of their 60,000 drivers within ninety Days as “pseudo-subordinate” workers (parasubordinati), with restricted labor rights.
Since then, the platform operator Just Eat has signed a collective agreement with the unions in which it undertakes to hire all of its passengers. It is currently unclear how the other affected platform operators are trying to resolve the situation.
2. Legislative developments
The European Commission (the executive branch of the European Union) recently launched a consultation process with the social partners (ie trade unions and employers’ associations) to address “challenges” related to working conditions in the platform work industry. Possible measures outlined in the consultation paper include introducing a rebuttable presumption of employee status or reversing the burden of proof (so that it would be up to the platform to prove that its employees are not employees). The Commission intends to put forward legislation by the end of the year.
On May 11, 2021, the Spanish government passed a law known as the “Drivers Act” introducing the assumption that drivers providing delivery services are employees when they are directly or indirectly under the direct or indirect organization, direction and control work on a digital platform that uses algorithms to manage the service or working conditions.
In addition, the Spanish Passenger Law obliges companies to inform their works council about algorithms or artificial intelligence systems that are used to make decisions about employment conditions, access to employment and continued employment, including profiling. The new rules will come into force in mid-August.
At the same time, in April 2021, the French government adopted a regulation establishing a system of collective representation for independent workers in the field of digital platforms. So in 2022, French platform workers can elect national representatives to negotiate with the platform companies, and the platforms will have to fund this new regime.
3. What’s next?
The European Commission will try to promote the protection of certain fundamental rights for platform workers, but it seems unlikely that it will propose the creation of some kind of new quasi-employed intermediate status.
Meanwhile, more litigation can be expected in this relatively new sector as labor law tries to keep pace with economic developments.
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