On Thursday 9 December 2021, the European Commission published draft legislation confirming its intention to provide more protection to “gig economy” workers in the European Union (EU). Gig economy workers tend to be on zero-hour, short-term or freelance contracts where they are paid for each “gig” (job) they complete rather than for the number of hours they have worked. They have, until recently, usually been classified as “self-employed”, meaning that they are not entitled to certain benefits such as holiday or sick pay or the statutory protections given to employees or workers in the UK.
However, as has been the subject of media attention in the last few years, gig economy workers have started to challenge their self-employed status. The Supreme Court has clarified that, in the UK, this question should be determined on a case-by-case basis, taking into consideration the particular facts of the case along with a number of other factors such as the degree of control the customer/employer has over the worker. Therefore, in order to be afforded basic employment law rights, gig economy workers generally have to initiate legal proceedings against their employers and show that they are employees or at least workers.
The draft legislation published by the European Commission last week takes a more radical approach. Under the proposals, if prescribed criteria apply, there would be a legal presumption that an employment relationship exists between the digital labour platform and the gig economy worker. This would mean that the relevant employment rights would apply and should be provided by the employer.
Employers could, of course, still seek to contract on a basis which falls outside the proposed criteria. However, if they do so and the worker decides to challenge the employer’s position, the proposed legislation also changes the burden of proof. This means that the employer would have to prove that the worker is genuinely self-employed. It cannot sit back and deny everything until the workers prove that they are employed.
The legislation is intended to target digital platforms that exercise a certain level of control over their workers and would therefore not apply to genuinely independent contractors. Furthermore, the draft legislation also offers both workers and genuinely self-employed contractors greater protection if they are denied jobs or hours as a result of the use of machine-learning algorithms.
The EU’s proposed approach may be attractive to the majority of gig economy workers and is estimated to impact around 5.5 million workers across the EU’s 27 member states. However, gig economy workers in the UK might be wondering how the draft EU legislation will affect them, given that Brexit means the UK government no longer has any obligation to follow EU laws. Despite this, EU legislation, whilst technically only applying to EU member states, has a history of having a much more global application. The “Brussels effect” means that global companies tend to adopt EU rules across their businesses in order to avoid complexity. Furthermore, the prime minister committed to “protect[ing] those in low-paid work and the gig economy” in his 2019 manifesto and has since promised to match and pass “whatever the EU comes up with” into UK law. Therefore, if the EU draft legislation is passed, there will undoubtedly be pressure on the UK government to introduce similar (if not better) protection for gig economy workers.
Of course, what approach the UK government will take in response to the EU’s draft legislation remains to be seen but, in the meantime, it appears further changes may be coming to the gig economy.
