031 August 2022

Employees or freelancers? The European Union seeks to regulate hiring on digital platforms

Faced with the growing rise of digital delivery platforms, the European Commission wants hiring models like those already implemented in Spain or the United Kingdom to work for the entire 27-nation EU community bloc.

The Commission has launched a proposal along these lines, according to a draft document published by Reuters, which clarifies that the essence of the initiative is to classify those who work for these platforms as employees and not freelancers.

The document estimates that some 15 companies would be involved in the measure, which must pass through the legislative process in the European Parliament and which the authorities do not see as real before 2025.

The new rules would establish five criteria for determining when a worker on a digital platform is considered an employee. For example, whether the company determines their pay, sets standards of conduct and appearance, monitors work performance through electronic means, restricts their ability to choose their working hours or tasks and prevents them from working for third parties.

According to the paper, companies would be considered employers if they meet two of these criteria.

The European Trade Union Confederation Institute (ETUI) has already denounced the “amount of unpaid work” it says employees on digital platforms, such as home-delivery apps, are doing.

Some countries have already taken the lead

In a series of setbacks for online platforms, Britain’s Supreme Court ruled in February that Uber drivers are entitled to be paid a minimum wage, while a Spanish court said last year that delivery drivers for food delivery app Glovo were employees rather than self-employed.

The new proposal comes as several countries and European courts attempt to address this industry’s shortcomings. Judges, in most cases, back the premise that their workers have the same labour rights as those who work in a factory.

The exception is Belgium. On 11 December, a labour court ruled that Deliveroo delivery drivers cannot be reclassified as employees with contracts representing company tax and social security obligations.

In relation to the possible new regulation, Bolt, an Estonian ride-sharing and food delivery company, said that “one in two drivers will lose their job, which is equivalent to at least 140,000 people across the European Union”.

Deliveroo expressed the same concerns. “These proposals will increase uncertainty and will be better for lawyers than for self-employed platform workers,” a spokesperson for the company said.

Sources: Reuters and EFE