Landmark ruling | EU poised to revolutionise gig economy with increased worker rights

EU poised to revolutionise gig economy with increased worker rights

Brussels has taken a significant step toward enhancing employment conditions for millions of gig workers across the European Union, signalling a potential shift in the landscape of labour rights within the gig economy.

The Council of the EU announced on Monday that ministers from all 27 member states have ratified rules aimed at determining the employment status of approximately 28 million gig economy workers.

These rules would enable gig workers to access labour rights such as paternity leave and holiday pay.

Despite the approval of these rules, the gig economy industry expressed dissatisfaction, arguing that the directive falls short of creating harmonised regulations across the EU.

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Uber, a prominent player in the gig economy, voiced its concerns, stating that the regulation would maintain the current fragmented status quo, with worker status being determined on a country-by-country basis.

The directive, first drafted by the European Commission in 2021, faced hurdles and compromises throughout the negotiation process.

Initially, the Commission proposed EU-level criteria to ascertain an online company's role as an employer. However, this proposal was scrapped due to pushback from certain member states.

Under the ratified rules, gig workers could be classified as employees if they can demonstrate at a national level that the company exerts "control and decision" over their activities.

This classification would grant workers access to benefits like social security and healthcare.

The burden of proof now falls on companies to demonstrate that their gig workers are not employees. This shift marks a potential departure from the current practice, where national laws, collective agreements and case law determine employment status.

Gig economy companies have long resisted EU-wide regulation, fearing increased costs and potential impacts on consumer prices.

Early estimates by the European Commission suggest that the regulations could lead to a 40% increase in prices for services from companies like Uber and Bolt.

The European Parliament is expected to vote on the agreement in April, signalling a crucial step in the ongoing evolution of gig worker rights within the EU.

Despite some compromises, the endorsement of the Platform Work Directive by the Council of the EU represents a significant milestone in the quest for greater protections for gig workers across Europe.

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