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Impact of EU changes to gig economy workers

By Philip Mahboobani


Recently, the EU has drafted legislation where gig economy workers would receive normal employee rights, which includes access to holiday leave as well as minimum age requirements. This would give more power to gig economy workers who no longer have the burden of proof to demonstrate to courts that they are employees; this now falls on companies.

Why did this occur?

With this, the EU has reacted to the rise of internet platforms that have utilised “grey zones” in legislation to improve their business models and deny these individuals basic labour rights. Although these new rules do not apply to individual contractors, companies that exercise control over gig workers by limiting them to work for only one company could be forced to classify these individuals as employees.

EU legislators were intent on improving the traceability of platform work, as well as driving algorithmic accountability and fairness now that digital labour platforms are employing increasing amounts of individuals. This allows for more safeguards in an economy that is becoming increasingly digitalised.

Consequences of this decision

The impact of this cannot be understated. It will affect at least 5.5 million individuals in 27 member states who are estimated to be misclassified, although they should receive basic employee rights. This follows the UK’s earlier decision in 2016 to classify Uber drivers as employees who should be paid minimum wage. Further to this, Just Eat Takeaway announced in 2020 that gig workers would be classified as employees. However, this does not fully resolve the problem: experts argue that this will cost the jobs of many independent workers who rely on the traditional business model format. Moreover, companies are still able to alter their business model to allow workers to be classified as self-employed for profitability reasons, as well as moving their business to profitable areas. As stated by George Maier, a specialist on digital technology, companies are “realising their model is not profitable”, and there is “a big question over what change they can do”.


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