Gig economy firms like Uber, Deliveroo, Glovo, Wolt or Cabify face tougher rules under new European Commission proposals presented on Thursday that could see millions of workers reclassified as employees rather than as freelancers.
"Platform workers deserve the same level of protection as everyone in the European Union under our social model," commission Vice President Valdis Dombrovksis said at a press conference in Brussels.
The changes would introduce new criteria assessing whether the some 28 million people working for digital labour platforms in the bloc are self-employed, the commission said in a press release.
The EU executive branch estimates that between 1.7 and 4.1 million workers would be newly recognized as employees under the proposed regulations, which needs the backing of the 27 member states and the European Parliament to be implemented.
These people would then be entitled to a minimum wage, paid holiday and rest, pensions provisions, parental leave, and health and safety protection in line with EU law.
Many more people who are genuine freelancers would also get greater independence from the platforms for which they work, the commission said.
The package also foresees greater safeguards and transparency on the use of algorithms that make management decisions on such platforms, including a right to contest them and or get information about them.
With more than 500 labour platforms now active in the single market, according to the commission, concern has grown in recent years about the precarious status of many workers.
For example, ride-hailing app Uber was subject to heavy criticism as many drivers lost work when the pandemic hit Europe last year.
In recent years, there have been more than 1,000 rulings from member states' courts dealing with platform work, and many more are pending, Dombrovskis said. This regulatory package would therefore bring much needed clarity, he told reporters.
The five criteria used to determine if someone is an employee are whether the platform determines pay rates; whether workers are supervised by the company; whether they have restrictions on when they can take leave; whether they must conform to a certain appearance - for example with a branded uniform - and whether they are free to build up their own clients.
If at least two of these are met, the worker is presumed to be an employee.
Crucially, platform firms will have the right to contest this automatic classification in line with national member state law.
Numerous labour organizations welcomed the proposals. The European Trade Union Confederation (ETUC) said the "free ride for Uber, Deliveroo and Amazon and their cronies is finally coming to an end."
"For too long platform companies have made huge profits by dodging their most basic obligations as employers at the expense of workers, responsible employers and underfunded public services," ETUC secretary Ludovic Voet said in a written statement.
UNI europa, the European Services Workers’ Union, described the presumption of employment status and the reversal of the burden of proof were "vital points" in the proposal. "Until now, workers who have been forced into bogus self-employment have had to take lengthy and expensive court action on a case-by-case basis to claw back rights," regional director Oliver Roethig said in a press release.
Uber, meanwhile, warned that the EU executive was "putting thousands of jobs at risk, crippling small businesses in the wake of the pandemic and damaging vital services that consumers across Europe rely on."
Business Europe, an employers' lobby, said in a statement that "the proposed presumption of employment is likely to have a chilling effect on the opportunities for individuals to conduct business as self-employed and have a negative impact on provision of services."
The proposals could take several years to negotiate before coming into force, and may well undergo significant changes during that process.