The gig economy has been a hot topic of debate in recent years, with companies like Uber and Deliveroo facing scrutiny over the employment status of their workers. In a recent development, the European Union has taken a step towards improving the conditions for gig economy workers by ratifying rules that will help determine their employment status. This move is aimed at providing workers with labor rights such as paternity leave and holiday pay, but the industry has expressed concerns about the fragmented nature of the regulation.
The directive, which was ratified by ministers from the 27 EU countries, is a significant milestone for gig workers, according to Nicolas Schmit, commissioner for jobs and social rights. The rules will give platform workers more rights and protections without hindering the development of platforms. However, the gig economy industry feels that the directive falls short of creating harmonized rules across the bloc, leaving the regulation fragmented.
One of the key points of contention in the directive is the determination of employee status. The directive states that if a worker can show at a national level that a company has “control and decision” over their activities, they may be classified as an employee. This designation would grant them access to benefits such as social security and healthcare. The responsibility now falls on companies to prove that their workers are not employees.
Despite the positive implications for workers, gig economy companies have resisted EU-wide regulation imposed on them from Brussels. They fear that the rules will lead to higher costs, such as paying extra for healthcare coverage, and ultimately impact consumers with increased prices for services. Early estimates by the European Commission suggest that the regulations could raise prices for services from companies like Uber and Bolt by up to 40 percent.
The road to improving employment conditions for gig economy workers has been a long and contentious one, with individual member states and industry players pushing back against EU-wide regulation. While the directive represents progress in providing workers with essential labor rights, the fragmented nature of the regulation leaves room for further debate and negotiation. As member states have two years to sign the directive into law, the coming months will be crucial in determining the impact of these rules on the gig economy landscape in Europe. Stay informed with free updates by signing up to the Gig economy myFT Digest, delivered directly to your inbox.
