European Union adopts law to protect gig workers

Such conditions include free mandatory training and limits on working hours and the length of the probationary period. The threshold for the protection of workers in casual or short-term employment, on-demand workers, intermittent workers, voucher-based workers, platform workers, as well as paid trainees and apprentices, is three hours per week and 12 hours per four weeks on average.

Although the new rules provide protections only to workers in the European Union, which may or may not include the United Kingdom later this year, any company outside Europe that has had to apply the EU’s General Data Protection Regulation (GDPR) to customers outside the European Union because it also operates within that area will understand the potential global implications of these new gig worker protections.

“This directive is the first big step towards implementation of the European Pillar of Social Rights, affecting all EU workers. All workers who have been in limbo will now be granted minimum rights thanks to this directive, and the European Court of Justice rulings, from now on no employer will be able to abuse the flexibility in the labour market.”

Enrique Calvet Chambon, Spanish MEP

Nick Woodward, CEO of ETZ Payments, says: “The rules, which will apply to everyone who works at least three hours a week, are intended as a baseline, with member states able to raise standards to higher levels. The U.K. could end up following EU rules at this point if the Brexit transition period is extended, meaning the rights could apply to workers in the U.K. However, if the U.K. leaves the EU earlier, employees will not benefit from the rules.”

The rules also stop employers from preventing a worker from taking up another job outside working hours and “require that all new employees get key information on their responsibilities and working conditions within a week.” This key information is substantial and comprehensive, comprising some 19 elements from duration of probation periods to amount of paid leave to reference hours and days for workers to minimum notice periods for a worker to be informed that they are required to work. Employers are also required to provide mandatory training, which will count as working time, free of charge, which should, wherever possible, be completed within working hours.

Also specified are minimum conditions such as the fact that any probationary period must be limited to a maximum of six months or be proportionate to the expected duration of the contract in the case of fixed-term employment. A renewed contract for the same function will not result in a new probationary period. The remaining protections provided by the new law are summarised below.

The protections are specifically aimed, said the press release announcing their adoption, at “workers with on-demand, voucher-based or platform jobs, like Uber or Deliveroo.” Said Woodward: “The issue of employment rights for casualised workers has come into focus in recent years with the growth of a new generation of service companies styling themselves as tech firms. Laws will need to adapt and mould to reflect the changing nature of the workforce that it seeks to protect. There should always be a baseline of rights that protects individuals.” 

“There should be a recognised definition between a dependent contractor, for example an Uber or Deliveroo driver, and the truly self-employed as well as the traditional definition of an employee to reflect the different statuses of individuals.”

Nick Woodward, CEO, ETZ Payments

While there are likely to be challenges to which workers are covered, case law of the European Court of Justice states a worker is employed if they perform “services for a certain time for and under the direction of another person in return for remuneration.” The law takes special aim at what it calls “bogus self-employment,” which it defines as when a worker fulfils the conditions typical of an employment relationship but is defined as self-employed in order for employers “to avoid certain legal or fiscal obligations.” As the law states: “The determination of the existence of an employment relationship should be guided by the facts relating to the actual performance of the work and not by the parties’ description of the relationship.”

EU ministers must approve the rules before they can enter into force, but after that, EU member states will have up to three years to introduce national legislation that is in line with the directive. Woodward added: “The U.K. will only be obliged to implement the law if it is still a member state of the EU three years after the new regulation enters into force, but Britain has already introduced similar legislation at a national level.”

The law also directs member states to introduce measures to prevent the spread of the gig economy without stifling entrepreneurship. These could take the form of limitations to the use and duration of on-demand contracts or the expectation that an employment contract with a guaranteed amount of paid hours will be offered to gig workers, thus promoting a “transition to more secure forms of employment.”

Decisions as to whether an employer has complied with these regulations will contain a favourable presumption toward the employee and will include penalties for non-compliance that include administrative and financial penalties, such as fines or the payment of compensation.

Workers exercising the rights guaranteed in the Directive will be protected from dismissal or equivalent, such as no longer being assigned work, simply because they have exercised their rights. The burden of proving dismissal has not resulted from the worker exercising his or her rights will lie with the employer.

Other rights and protections are that gig workers:

• must benefit from a minimum level of predictability, such as predetermined reference hours and/or days;
• may refuse, without consequences, an assignment outside predetermined hours;
• must be compensated if an assignment was not cancelled in time;
• will be protected if they are on on-demand contracts regardless of the number of hours they actually work;
• should receive information about arrangements, if any, for travel between the workplaces if they do not have a fixed or main place of work;
• must be provided with information on breaks, daily and weekly rest periods, and the amount of paid leave;
• should be informed how their working time is to be established, including the time slots in which they may be called to work, if they do not have a fixed work schedule;
• must have a minimum “notice period,” defined as the minimum time between being informed of a job and the start time of that job;
• should benefit from a minimum level of predictability;
• may refuse work if it is outside of reference hours and days, or if they are notified of it without the minimum notice period, without suffering adverse consequences for this refusal; and
• must be protected against loss of income resulting from the late cancellation of an agreed work assignment with adequate compensation.