Intensification Expected in EU Battle over Worker Rights in Gig Economy

The battle for worker rights in the gig economy in Europe is set to intensify.

For years, legislators in Brussels have been in discussions to determine the rights and employee status of gig economy workers. Earlier this month, member states reached an agreement on their negotiating position regarding regulations to protect these workers. However, this is only the beginning of a larger battle among parliamentarians, countries, and the European Commission.

Companies like Uber and Deliveroo are actively lobbying and shaping the rules that will come into effect next year. These companies argue that more regulations could have a significant impact on the gig economy and their business models. They believe that workers actually prefer more freedom over additional rights.

Nevertheless, EU regulators are taking steps to improve economic conditions for gig workers. Currently, most platform workers are considered self-employed, which means they do not have access to labor rights such as sick pay and minimum wages. The EU’s proposals aim to address this by reclassifying the definition of a worker.

Member states want to legally presume that workers are employees of a platform if they meet three of the seven criteria outlined in their negotiating position. However, some nations, including Spain and the Netherlands, find the proposals lacking ambition, highlighting divisions among countries. The European Parliament’s negotiating position is more radical, presuming that anyone working through a digital platform is a worker, potentially leading to millions of individuals being classified as such.

The distinction between workers and the self-employed is of great importance to the industry. Retaining full-time workers would result in higher costs for companies. Companies like Bolt and Uber would have to allocate additional funds for benefits like social security, parental leave, health insurance, and pension contributions.

The industry also argues that stricter regulations will limit flexibility for workers who may prefer to work fewer hours for digital platforms. This could lead to a decrease in the quality of service as there would be fewer drivers or delivery employees available, ultimately impacting business revenues.

A lobby group called MoveEU, consisting of Bolt and Uber, argues that ride-hailing platforms would reduce their fleet sizes by 58% if the regulations change, resulting in a loss of employment for 149,000 workers. MoveEU also predicts an increase in fixed costs, leading to higher ride prices, reduced demand, and further job losses. They even speculate that some platforms may cease operations in the EU altogether, resulting in even fewer job opportunities.

However, not all employers of gig economy workers in the EU share the same concerns. Sacha Michaud, the founder of Barcelona-based delivery start-up Glovo, believes that the gig economy is all about flexible working. Even without EU-wide regulation, his company introduced the “couriers’ pledge” to provide basic social benefits to couriers. The company faced setbacks when Spain’s supreme court ruled that Glovo riders were employees, not freelancers. Michaud calls on the EU to implement the right regulations, stating, “The EU has a responsibility to regulate. We believe in the free economy but also in the importance of social benefits.”

Senior EU officials are pushing back against the lobbying efforts of the gig economy sector. Nicolas Schmit, EU commissioner for jobs and social rights, dismisses the argument that the proposed regulations would be financially burdensome for companies. He points out that businesses operating offline already have to pay social security and comply with labor rules, and it’s about creating a level playing field and ensuring that all eligible workers receive their rights.

Dennis Radtke, a German MEP, acknowledges that a reversal of the “burden of proof” where gig workers are presumed to be employees rather than self-employed would impact companies. However, he argues that this won’t have a major negative impact on the economy. He clarifies, “I am fighting business models that deny workers minimum wages and social security.”

Email: [email protected]

FT survey: Calling all consultants – what is working life like for you?

Have you lost your job recently or have you been working longer and harder than ever before? Or perhaps work has been slow and you’re wondering what is next for your career? We want to hear from you. Tell us via a short survey.