The European Commission’s plans to protect people in precarious jobs in the gig economy could be the most ambitious extension of workers’ rights from Brussels since Britain left the EU.
If adopted, the plans would mean that gig economy companies, such as Uber and Deliveroo, would have to treat workers as employees with minimum wages (where they exist), sick pay, holidays and better accident insurance, unless they could prove that drivers and couriers were genuinely self-employed.
Workers would also get greater protection against management by algorithm, which would mean they cannot be denied work or fired by a machine whose code is wrapped in secrecy.
The British government will have no hand in making these rules, nor any obligation to apply them. That, after all, was the point of Brexit. Yet British policymakers and firms operating in the UK may find it hard to avoid the gravitational pull from Brussels.
EU law applies only to 450 million people in 27 member states, but its effects can be felt far more widely, as global companies adopt EU rules across their business to cut costs or avoid complexity. The so-called Brussels effect can be seen in the reach of the EU’s data protection rules, as well as standards on chemicals, cars and food safety.
Nicolas Schmit, the EU commissioner for jobs, suggested the same effect could apply with the latest gig economy plan. “This standard will influence not only the 27 member states and the platforms operating in the 27 member states, this will probably also become some kind of a standard which will apply to other countries or even parts in the world,” he told the Guardian.
That judgement might be too soon to call. An estimated 500 gig economy companies are active in the EU. They will probably respond in different ways to the EU legislation, which still has to be agreed in complex, months-long negotiations between EU ministers and MEPs.
Some firms could choose to treat gig workers as employees, as Dutch company Just Eat does, or follow Danish cleaning company Hilfr, which offers employee status to those who have worked more than 100 hours on its platform. Others may seek to adapt their business model, or quit a country altogether if they see no way to be profitable.
In the UK gig economy, companies are having to respond to rulings from courts rather than new legislation. A landmark ruling from the supreme court earlier this year defined Uber drivers as workers who are entitled to the minimum wage and holiday pay. The category of “worker”, as distinct from employee and the self-employed, was set out in the 1996 Employment Rights Act.
George Maier, an expert on the gig economy at the London School of Economics, said companies had sought to take advantage of ambiguities in a law written for the pre-internet age. “At the moment it feels like gig workers, often coming from some of the most disadvantaged backgrounds, have been left to bear the costs associated with fighting for their basic rights in court. This shouldn’t have to happen.”
Boris Johnson was elected in 2019 on a manifesto promise to introduce “measures to protect those in low-paid work and the gig economy”, an idea expanded in the Queen’s speech that year with a pledge to bring forward an employment bill that would “protect and enhance workers’ rights as the UK leaves the EU, making Britain the best place in the world to work”.
Nearly two years after that speech, no employment bill has been published by the government.
While the pandemic has knocked many plans off course, there is also an unsettled debate about what Brexit really means. When trying to get his EU withdrawal bill through the Commons in October 2019, the prime minister voiced his commitment to “the highest possible standards” on workers’ rights, saying “whatever the EU comes up with, we can match it and pass it into the law of this country”.
The sentiment he voiced on that day is far from shared across the government. In a little-noticed speech to the Centre for Policy Studies last month, the Brexit minister, David Frost, threw his weight behind a low-tax, light-touch regulation economy on a different path from the EU. “If after Brexit all we do is import the European social model, we will not succeed,” he said.
The latest EU proposal will add pressure on the government to meet its promise for stronger employment rights, following a pandemic that exposed dependency on low-paid workers in care homes, supermarkets, in delivery vans and on bikes.
The EU proposals “will undoubtedly help to inform and inspire” unions in the UK, said Tim Sharp at the Trades Union Congress. “This is a government that came to office following Brexit saying they would protect and enhance workers’ rights. I think if workers in the European Union are seen to be gaining rights and having power, then workers here would expect the same.”
A spokesperson at the Department for Business, Energy and Industrial strategy said: “The UK has one of the best records on workers’ rights in the world – going further than the EU in many areas – and we believe the UK’s current employment status framework strikes the right balance between the flexibility our economy needs and protections for workers.”