Gig economy: Europe tells companies to negotiate with workers or face new laws

February 24, 2021, 12:02 PM UTC

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Europe’s lawmakers have a message for “gig-economy” companies—get negotiating with unions and other workers’ representatives, or face new EU-wide legislation.

On Wednesday, the European Commission launched an initial consultation on improving working conditions for people who provide services through digital platforms such as Uber and Deliveroo. It said the COVID-19 pandemic had highlighted both the value of such services and the “vulnerable situation” of those offering them, putting the health and safety of delivery people, for instance, at risk.

This six-week consultation is meant for what the Commission calls “social partners,” or representatives of labor and management. The EU’s executive body would like these representatives to offer their views on the “need and direction” of possible EU legislation.

If these social partners don’t then start negotiations among themselves on issues such as employment status, benefits, and automated management, the Commission will consult with them again on the content of a new law. And if that doesn’t get them to the table, the Commission will formally propose the law by the end of the year.

“The digital age opens up great opportunities for businesses, consumers, and citizens. Platforms can help people to find new jobs and explore new business ideas,” said Margrethe Vestager, the Commission’s digital chief, in a statement. “At the same time we must ensure that our European values are well integrated in the digital economy. We need to make sure that these new forms of work remain sustainable and fair.”

Millions affected

Around 11% of the EU’s workforce—so, 24 million people—is estimated to have provided services through digital platforms at least once. Of those, 3 million do so for their primary source of income, 9 million for their secondary source, and nearly 7 million as an occasional income source.

An EU-wide law could simplify what is currently a very fragmented regulatory situation, with different countries taking different stances. For example, many EU member states continue to classify platform workers as contractors, but Spain and the Netherlands are considering introducing rules that would assume a platform worker is employed by the platform.

On the issue of earnings—who gets to set rates, and whether workers get the minimum wage—the Commission noted that little progress was being made, and that most initiatives in EU countries were the result of bottom-up activism such as the establishment of collectives, and unions starting to accept gig workers in countries such as Sweden and Germany.

“In the midst of the digital transition, we cannot lose sight of the basic principles of our European social model,” said Employment Commissioner Nicolas Schmit. “We should make the most of the job-creating potential that comes with digital labor platforms, while ensuring dignity, respect, and protection for the people that work through them. Social partners’ views on this will be key in finding a balanced initiative for platform work in the EU.”

Uber, notably, has already tried to lobby EU legislators on the topic. Early last week, it released a white paper arguing for a similar regulatory approach to that taken in California, where voters last November backed a ballot initiative cementing independent contractor status for Uber’s and Lyft’s drivers.

However, that argument was undermined within days by the U.K.’s Supreme Court, which unanimously ruled that Uber’s drivers are in fact workers rather than independent contractors, and therefore deserve the minimum wage and annual paid leave.

The U.K. is no longer a member of the EU, but the argumentation of that ruling—that Uber tightly controls fares, work flexibility, and other elements of its working conditions, thereby making its drivers anything but independent—will surely resonate across the English Channel.

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