European Union imposes new rules on the “gig-economy”

European Union imposes new rules on the “gig-economy”

10.05.2019  |  María Sáenz de Buruaga

As described by Maria Luz Rodriguez in her latest post, the rise of platform economy is having a significant impact on job creation all across Europe. More and more young workers are being employed in platforms such as PeoplePerHour, Uber or Deliveroo, supplementing their part-time jobs to earn additional income. However, given the strong association between platform work and precarity, new challenges are arising when it comes to ensure basic social protections. In this context, Marianne Thyssen, EU Commissioner for Employment, Social Affairs, Skills and Labour Mobility, proposed in December 2017 together with the launching of the European Pillar of Social Rights, a piece of legislation aimed at adjusting labour market conditions to the new digital reality. This initiative, entitled Directive on “Predictable and Transparent Working Conditions”, was based on a report published by the Joint Research Centre of the European Commission, and had the objective of updating and replacing the obsolete Written Statement Directive of 1991.

One year after starting negotiations, the European Parliament approved on the 16th of April the Directive, which was adopted with 466 favourable votes to 145 negative ones and 37 abstentions, and will apply to workers in casual or short-term employment, on-demand workers, intermittent workers, voucher-based workers, platform workers, paid trainees and apprentices, provided they work 3 hours per week and 12 hours per 4 weeks on average. According to the Spanish MEP in charge of processing the norm, Enrique Calvet Chambon (ALDE), “all workers who have been in a limbo will now be granted minimum rights and no employer will be able to abuse the flexibility in the labor market”.Indeed, the agreed law introduces three important novelties. First, it will strengthen transparency requirements, demanding employers to inform workers of the essential aspects of the employment relationship, such as the identities of the parties to the relationship and the place and the nature of work, the initial basic amount of remuneration and the amount of paid leave or the duration of the standard working day or week when the work pattern is predictable.

Moreover, when the work pattern is entirely or mostly unpredictable, employers will also have to inform workers on the reference hours and days within which they may be required to work, the minimum period of advance notice the workers shall receive before the start of the work and the amount of guaranteed paid hours. The second change brought forward by the directive refers to the recognition of further minimum rights for workers, including the rights to take up a job in parallel with another employer; to request after at least six months service with the same employer, an employment with more predictable and secure working conditions or to receive a compensation if the employer decides to cancel a work assignment after a specified reasonable time limit. And last but not least, the legal text imposes new obligations on employers regarding training and probationary period. While the latter will be limited to a maximum of 6 months, with longer periods allowed only given this is in the interest of the worker or is justified by the nature of the work, the training will be mandatory, counting as working time, free of charge.

The reached agreement is said to have a great impact on the EU labor market, affecting, according to the Commission, more than 200 million people across the Union. However, two categories of workers are excluded from the scope of the directive: on one hand, those employees than are hired for less than seven days and, on the other hand, self-employed people. The latter exclusion could make us think the directive will lack of effective applicability since most of the riders employed for platforms such as Uber or Deliveroo are still considered as self-employees. However, reality seems a little bit different now. In fact, there is a growing number of recent judgements (Deliveroo, Glovo) ruling against this assumption and recognizing “riders” as false self-employees. Therefore, if the judicial trend does not change, a big portion of platforms’ workers would fall under the scope of the directive. However, the effective application of the text will depend on Member States, which will have three years to put the rules into practice.

Meanwhile, in the maelstrom of Brexit, the impact of the directive is uncertain for the United Kingdom. According to the BBC, the country will only be obliged to implement the law if it is still a member state of the EU three years after the new directive enters into force. Reactions to the approval have turned out as expected. The Commission has welcomed the agreement, declaring this is a major milestone to make the European Pillar of Social Rights a reality for EU citizens. For their part, platforms have all argued for the same approach: they do not feel bound by the new rules since they claim their riders do not fall under the directive as they are genuinely self-employed.