The Gig Economy and the New EU Directive

There’s no doubt that the gig economy represents huge business in the UK, with the size of this entity having more than doubled since 2016 following an influx of people in search of a viable secondary income.

Unsurprisingly, this market is even larger in the EU, with the single bloc’s gig economy expected to peak at 43 million by 2025. This is being driven by a significant rise in platform workers, with a growing number of people seeking out income by working flexibly for firms such as Deliveroo or alternative couriers.

This has created challenges in terms of classification, however, with both the EU and the UK looking to introduce legislation to protect workers’ rights. We’ll explore this further below, while asking what we can expect in the future in the gig economy.

The Issue with Being Self-Employed in the Gig Economy

As a general rule, the term ‘self-employed’ refers to someone who doesn’t work for a specific employer who pays them a consistent salary.

Instead, they derive their income through contracting their services to one or more employers, creating the type of flexibility and earning potential that makes self-employment so appealing to citizens.

While delivery firms and couriers such as Hermes and Amazon offer self-employed roles, however, such individuals aren’t eligible to receive holiday pay or minimum wage remuneration, while in most cases they’ll also have to provide their own insurance cover.

These issues compound the universal challenge that self-employed workers are completely dependent on demand, meaning that they have little security for assurance in the global workplace.

Interestingly, this has raised concerns over workers’ rights in Europe and the UK, with June of 2021 seeing a British court rule that all Uber drivers are to be categorised as ‘workers’. This means that Uber will be required to pay their drivers minimum wage and provide basic holiday pay, while another ruling determined that Deliveroo riders should remain classed as self-employed going forward.

What is the EU Proposing?

The current number of platform workers in the EU is 28 million, but as we say, this is projected to rise to 43 million by 2025.

While a percentage of this number of miscategorised as being self-employed, a recent proposal from the European Commission aims to recognise platform workers’ employment status as default with a new direction to regulate associated working arrangements.

Heralded by many as being the single most pro-worker reform to emerge from the EU for years, this will require many self-employed individuals to be treated as direct employees who are entitled to standard labour rights and a new set of rights pertaining to the algorithmic management of workloads.

Ultimately, this will strengthen and standardise platform workers’ rights, while ensuring that such individuals are working under the schedules and terms produced by algorithmic management (most likely via an app).

This is expected to come into effect across all 27 EU member states at some point in 2022, while many in the UK will hope that a similar rule can be applied within these shores in the near-term too.

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan