Finance

New rules for gig economy workers can stop ‘distortions’, says Brussels


New rules to give gig economy workers the same rights as those in full employment can stop “distortions” in other emerging parts of the digital economy, according to Brussels’ top official for jobs.

Nicolas Schmit, the EU’s commissioner for jobs and social rights, told the Financial Times that companies such as Uber and Deliveroo must be constrained by tougher rules and that this would also rein in future “platform” employment models.

The European Commission is due to publish draft legislation on Thursday that will place the onus on digital platforms to prove that those working using the platform — such as drivers — are self-employed. At present, these types of workers have to go to court to try to obtain workers’ rights.

Speaking to the FT, Schmit said: “If we leave this business outside the normal standards and create distortions, I fear that finally this platform model will develop in many other areas.”

If other sectors in the digital economy see that they can “escape social contributions”, said Schmit, they will “reflect on how I can build a platform model not to hire, not to pay all the social contributions”.

Under the new draft proposals if a person meets at least two criteria, including whether a platform determines their level of pay or supervises their work, then they will be automatically classified as workers.

The EU estimates that more than 500 digital platforms employ a combined 28m people across the union. The number of people employed in the gig economy is expected to rise to 43m by 2025. Currently, nine out 10 platforms classify people as self-employed.

Separately, Brussels will also open a consultation on guidelines to allow self-employed people to bargain collectively for pay and working conditions. At present, self-employed workers found to be doing this would be deemed to be engaging in cartel-like behaviour and breaking competition laws.

Campaigners on behalf of the platforms have argued that new legislation could lead to legal uncertainty and thousands of job losses, and that workers want the flexibility of being self-employed.

Move EU, a trade body representing Bolt, Free Now and Uber, said: “The vast majority of drivers do not want to be employed and surveys across Europe consistently show that they do not want to lose the flexibility and additional revenue they get from being able to work for multiple platforms simultaneously.

“Reclassification of drivers will not necessarily increase wages or secure earning opportunities . . . over 149,000 drivers could lose access to work and consumers will see services that they have come to rely on badly damaged.”

Schmit pushed back on lobbying efforts and said people can have both a clear employment status and flexibility. He said: “Big social reforms were always contested by people directly affected. When in the UK in the 19th century people started to say ‘It’s unfair to occupy children in coal mines’, the reaction was very much, well this is the end of our industry.”

But he added: “There is a life after changing the rules.”

As for consumers having to pay more if platforms pass on increased costs as a result of new rules forcing them to boost their workers’ rights, he said: “If this means that my pizza costs €2 extra, then I have to live with that.”



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