New EU Rules For The Gig Economy Approved

Gig economy workers, rejoice! The European Parliament has approved new rules for the protection of workers in the gig economy, and these rules will apply to all member states of the European Union (EU).

Enrique Calvet Chambon, the MEP behind the passage of the law, said that it’s the first legislation of its kind in the EU that formally sets the rights and responsibilities of workers in 20 years. He added, “All workers who have been in limbo will now be granted minimum rights thanks to this directive.” He also said that from hereon, “no employer will be able to abuse the flexibility of the labor market.”

Under the law, minimum rights will be granted to gig workers including increased transparency for on-demand jobs, such as for ride-sharing services like Uber. Gig workers also have the right to more predictable working hours and compensation for cancelled or postponed work. The law also seeks to an end to what the European Parliament call as abusive practice related to casual contracts.

EU member states have three years, maximum, to implement the rules and regulations under the law.  The United Kingdom only has the obligation to implement the law if Brexit isn’t completed – or it’s still an EU member state – three years after the new regulation is in force. The United Kingdom, however, has already introduced similar rules at the national level. 

The new legislation applies to employees hired for non-standard jobs, atypical contracts, and zero-hour contracts. According to the European Parliament, these are the “most vulnerable employees” who deserve the protection that the new law gives. 

Of course, employees in the member states of the EU already have comprehensive rights, particularly in terms of worker protection for working hours, break times, and holiday entitlement.

The emergence of the gig economy, however, has presented lawmakers, employers and stakeholders with new regulatory challenges. Casual employees who work erratic hours, or work based on contracts, or work multiple jobs with flexible hours have fallen into a gray area. With them, both protection and regulation have unique challenges that lawmakers seek to address with the new legislation. 

Under the law, employers are required to inform their workers regardless of their status or contract about their employment’s essential aspects on the first day. These aspects include but aren’t limited to:

• Description of their functions, duties and deliverables
• Information about the starting date and salary
• Reference hours or the specific definition of a standard working day
• Right to compensation for the late cancellation of the agreed work
• Right to only a single probationary period, which should only last for six months, maximum
• Ban on exclusivity clauses thus workers can accept other work

The rules are applicable to workers who work three hours a week, minimum, said number of hours worked averaged over four weeks. These will also apply to apprentices and trainees who work under similar circumstances as gig workers.

But the rules aren’t applicable to “genuinely self-employed” people without employers and the like.

The number of gig workers in Europe are estimated to be three million people. With gig economy being more popular, especially with online job sites like Upwork, the number will likely rise in the coming years. The introduction of the new law is then welcome news for gig workers who previously have to look out for themselves in more ways than one.

The gig economy is a relatively new term used in connection with the prevalence of freelance work and/or short-term contracts among workers, but the concept itself has been around for several years. Workers in the gig economy don’t have permanent work and, thus, don’t have the legal protection that employers are required to provide to their permanent employees.

Depending on the viewpoint, gig workers have a greater flexibility in their employment hours or they are highly exploited with little workplace protection.

On one hand, gig workers can choose from the types of work they are willing to take on, as well as their preferred working hours and rate. The flexibility is definitely part of the attraction, especially when it’s difficult to find more permanent work and for other reasons. Gig workers, nonetheless, have to learn new skills and new ways to work. 

On the other hand, workers’ advocated and gig workers themselves say that the duties aren’t as flexible as they seem. Gig workers are often under pressure to work whenever their employers need them, and they aren’t entitled to paid benefits like sick or holiday pay. Studies suggest that many aren’t even making minimum wage. 

As a result, there have been plenty of employment disputes arising from the gig economy. For example, Pimlico Plumbers, a London-based company, recently lost an appeal filed with the Court of Appeal in a case that can set the tone for subsequent cases.

Pimlico Plumbers appealed a court decision that ruled that one of its long-time plumbers was considered a worker and, thus, entitled to basic employee rights including holiday compensation. The company asserted that said plumber was an independent contractor, not a worker, but the courts disagreed. 

There are other cases involving similar circumstances and conditions and these will likely be scrutinized based on these developments.