The past few years have seen increasing interest from policy makers in the rapidly expanding forms of work that are done through platforms. But in many countries, the rise of the gig economy hasn’t always sat easily within existing regulatory regimes. The employment status of gig workers in particular has been frequently contested in the courts and the EU is now proposing to introduce legislative and non-legislative tools to clarify the issue. Despite the UK’s withdrawal from the bloc, these policy developments may have implications for platforms and gig workers here as well.

Platform work in the UK

In 2019, an estimated 9% of people of all ages in the UK (around 5 million) did some form of gig work, such as online tasks, food delivery, or personal transportation. The pandemic has seen the sector grow, with some food delivery platforms indicating their activities had doubled. Most of those who work through platforms are considered self-employed or independent contractors, and as such they do not have access to sick pay, redundancy pay, maternity pay or employment protection. The insecurity in terms of hours and pay that some of these workers experience may have wider impacts on their health and wellbeing and their longer-term career prospects.

Designating employment status is usually based on a legal test, such as whether someone is able to provide a substitute for their own tasks or job. However, as the Taylor Review of Modern Working Practices proposed in 2017, increasingly, courts refuse to accept substitution as a condition of being an independent contractor. In October 2021, a Stuart delivery rider was granted worker status, shifting emphasis away from the substitution test towards the degree to which the employer controls the work that is done. This ruling by the Court of Appeal is likely to set a precedent in the forthcoming group claim IWGB and law firm Leigh Day are building against Stuart for over 150 Stuart couriers.

Earlier in February 2021, the UK Supreme Court effectively ruled that Uber drivers were entitled to worker status and rights. Worker status is a ‘third’ or intermediary employment status, situated between ‘employee’ and ‘self-employed’, in which people enjoy some protections, such as against unlawful discrimination and are entitled to the National Minimum Wage, but do not have all the benefits and protections that are afforded to employees. For example, those who are classed as workers have no protection against dismissal. This ruling also affects other ride-hailing apps operating in the UK. Although representing a tentative win for drivers, platforms rapidly adapt and may seek to tweak their business model in ways to ensure legal tests around employment status tilt the balance towards self-employment. Furthermore, there remain concerns around working conditions, particularly unpaid waiting time and algorithmic management. Algorithmic management comprises the ways in which the platform’s algorithm collects information and makes decisions about drivers, which is often invisible to workers and difficult to appeal.

New proposals by the EU Commission to introduce presumption of employee status for platform workers

Over the past five years, the EU Parliament and Commission have actively tracked the proliferation of new platforms and services across the EU, with policy activity focussing on working conditions, rights and issues around social protection. Two consecutive consultations have culminated in a response from the EU Commission with proposals covering:

• the potential for an EU Directive that clarifies the employment status of platform workers and facilitates workers’ access to labour rights and social protections
• improving workers’ access to information that concerns them and avenues of redress, particularly around the use of algorithmic management
• making clear which rules apply to people working for platforms which operate across borders
• strengthening enforcement and collective representation

Perhaps most importantly, these proposals will introduce a presumption that all gig workers are employees, regardless of how their contract describes the relationship, with the burden of proof on the platform if it wants to consider their workers as self-employed. Bloomberg has calculated that this may result in as many as 4.1 million European delivery and ride-hailing app workers being re-classified as employees, and an additional 3.8 million likely to be confirmed as being self-employed. Platforms are pushing back by saying this will be hugely costly for them. However, both workers and the state stand to benefit from this large-scale shift, with member states expected to recoup approximately £4 billion in taxes and social security contributions annually.

What are the potential impacts of these EU changes for workers in the UK?

Previous Work Foundation research indicated how future UK employment legislation might diverge from the EU, either by going beyond EU minimum standards, or in the event the EU accepts new or additional standards that the UK does not align itself with. Although these new proposals by the EU Commission must first gain support from member states and EU Parliament in order to take effect, the proposal for a new EU Directive sends a strong signal and the UK may feel the effect from these developments in a number of ways.

Firstly, UK courts still have the option to follow judgments from the Court of Justice of the EU, though they are not required to do so. This means a shift in the way legal tests around employment status are considered at the EU level may filter through to UK courts.

Further, platforms operate across borders. In particular, changes in workers’ access to information, review and appeal decisions made by algorithmic management are likely to benefit gig workers of the platforms subject to these EU rules, including those working in the UK.

Policy makers in the UK should take note of these EU developments. Working conditions in platform work are as much a concern in the UK as they are on the continent, as evidenced by the Taylor Review and Government’s response to this in the Good Work Plan. To date, policy change in this area has been incremental, and as a result, workers have had to rely on costly and lengthy employment tribunals and court cases to access their rights. Government should revive the delayed Employment Bill and update the UK’s labour standards to meet the needs of this growing proportion of the workforce.

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