BRUSSELS: The European Union took aim at the business model of gig economy companies like Uber and Deliveroo yesterday with plans that could force them to reclassify their workers as fully-fledged employees. The plan is an effort to sort out once and for all the employment status of millions of drivers and delivery people that the major platforms insist are self-employed.
The debate has clogged up courts across Europe for almost a decade, with judges handing out more than a hundred decisions across the bloc's 27 member states, with hundreds more still pending. Those decisions can vary markedly, with Belgium on Wednesday denying a small group of Deliveroo workers the designation of employees, while Uber lost in court in non-EU Britain over its service in London.
"With more and more jobs created by digital labour platforms, we need to ensure decent working conditions for all those deriving their income from such work," EU executive vice president Margrethe Vestager said. The proposal from the European Commission, the EU's executive arm, "will help (the) false self-employed working for platforms to correctly determine their employment status and enjoy all the social rights that come with that," she added.
The potential for an EU-wide redesignation of platform workers sent the share prices of Deliveroo and other platforms plummeting in recent days over fears that their business model was under threat. If passed, the EU said its legislation could help reclassify about five million platform workers in the 27 member states as fully-fledged employees. This will be because they met two of the EU's five criteria for redesignation, forcing some platforms to treat workers as if they were bricks and mortar firms with labor laws to obey.
The criteria include whether an app determines pay levels for workers, makes demands on appearance such as the use of uniforms and equipment or restricts a worker's ability to refuse jobs. The designation would however be rebuttable by the platforms, with companies given a chance to prove the self-employment status of their workers, with national laws the final arbiter. Platform firms broadly criticized the plan, saying it would cut work for those who prefer the flexibilty of self-employment.
Uber said the commission's proposal would put "thousands of jobs at risk, crippling small businesses in the wake of the pandemic and damaging vital services that consumers across Europe rely on". Delivery Platform Europe, which represents Uber Eats and Deliveroo among others, said the rules would bring "negative outcomes for couriers themselves as well as for restaurants and customers".
'Dire consequences'
The EU has little power over work-related policy in its member states and right now platforms face a wide array of national rules on their professional ties to workers. In Spain, all workers who deliver food must be recognized as employees by the apps they use to work, a situation that pushed Deliveroo to abandon the market. In other countries, courts have ordered apps to enter collective bargaining agreements even if the workers remain self-employed, a model that some platforms, including Uber, would prefer.
The tech companies lobbied hard against any EU-wide reclassification, citing a survey by Copenhagen Economics that 250,000 people would be forced out of delivery work if the decision applied for all. They also worry that the criteria will be too vague, with different interpretations bringing on even more court cases instead of legal certainty. -AFP