EU deal to reclassify gig workers as ’employees’ falls apart at the last minute

The law, which took months to negotiate, is immediately thrown into disarray, raising serious doubts it will survive before the next elections to the European Parliament.

Under the proposed directive, self-employed workers of digital platforms like Uber and Deliveroo could be re-classified as formal employees – and therefore granted access to basic labour and social rights – if they meet two of five economic indicators.

The change of status could affect up to 5.5 million of the 28 million gig workers currently active across the bloc, according to the European Commission’s estimates.

The provisional agreement on the directive was reached last week between the  Parliament and the Council, which represents member states. Spain, the current holder of the Council’s rotating presidency, was tasked with speaking on behalf of the other 26 countries and defending their collective interests. 

Ambassadors were supposed to simply ratify the text that emerged from the negotiations. But during the behind-the-scenes meeting on Friday, a majority of countries, described as “solid” by a diplomatic source, made it clear they would not support the outcome of the institutional talks, making it impossible to move it forward.

The legal presumption of an employment relationship (as opposed to self-employment) and the administrative burden were cited as two of the main reasons for the opposition.

“We have reached the conclusion that we do not have the necessary qualified majority to reach an agreement on this important file,” said a spokesperson of the Spanish presidency, confirming the news.

“We have therefore decided not to submit the text to formal vote at COREPER (the ambassadors’ meeting) today and pass it to the upcoming Belgian Presidency to continue the negotiations, on which we wish them the best of luck.”

The collapse took place the last day before Brussels grinds to a halt for the winter break, which means a fresh push to amend the text and gather the necessary votes is not likely to happen until mid-January, at the earliest.

If the changes demanded by the rebellious countries are too significant, the Council will be forced to re-open negotiations with the Parliament, further prolonging the process. The co-legislators have only until February to conclude all their negotiations due to the cut-off deadline imposed by the next EU elections, scheduled for early June.

A rejection at this stage of the legislative process is extremely rare and spells bad news for the directive. The move drew comparisons with Germany’s last-minute demands to include an exemption for e-fuels in a gradual ban on the sales of fossil fuel cars.

This time, however, the reasons behind the opposition are described as much broader and entrenched, touching on different aspects of the law.

The directive, presented by the European Commission in December 2021, has from the outset been the target of intense scrutiny from the media and the private sector.

A report released last year by Corporate Europe Observatory found that companies like Uber, Deliveroo, Bolt and Wolt had rapidly increased their spending in Brussels to influence the shape of the law. These firms face the prospect of ballooning costs if the millions of gig workers using their platforms are re-classified as “employees” and given access to labour and social rights such as minimum wage, collective bargaining, working-time limits, health insurance, sick leave, unemployment benefits and old-age pensions.

Additionally, the directive, as agreed upon by the Council and the Parliament, would introduce rules on the use of algorithms for human resource management. It would also prevent platforms from processing certain kinds of personal data, such as the emotional state of gig workers, their private conversations and their union activity.

This article has been updated with more information.