Currently the debate on the classification of workers in the gig and platform economy is mainly decided by national judges who determine the status of self-employed workers or employees. As mentioned in the IOE Publication on Industrial Relations and Independent Contractors of October 2019, after judicial intervention, some countries have re-categorised these workers as employees (eg. Japan), while other countries (eg. UK) classified them as ‘workers’ – a new category between employees and self-employed with a specific set of rights.
In Spain, local courts held different classification, ranging from the recognition of workers as employees, or as self-employed workers, or “economically dependent self-employed workers”. This last category was established through the Self-employed Workers’ Statute (Act 201 of 11 July 2017) and is a third category of workers in between employees and self-employed workers (“trabajadores autonónomos económicamente dependientes” (TRADE)).
On 25 September 2020, the Spanish Supreme Court (Judgement N. 805/2020) ruled that riders of the delivery company, Glovo, are employees and not self-employed workers or economic dependent self-employed workers.
Regarding the characteristics of the labour relationship, the ruling first pointed out that these classifications have been evolving, the characteristics of the relationship of dependence have become more flexible and that the existence of a new productive reality makes it necessary to adapt the classification of the worker to the actual reality.
The Court explained its rationale for the decision as follows: “In short, Glovo is not a mere intermediary in the contracting of services between businesses and riders. Glovo is not limited to providing an electronic intermediation service consisting of putting consumers (clients) and authentic self-employed workers in contact, but rather it carries out work of coordination and organization of its service. It is a company that provides delivery and courier services, setting the price and payment conditions for the service, as well as the essential conditions for the provision of said service. And it is the owner of the essential assets to carry out the activity. To do this, it uses distributors who do not have their own and autonomous business organization, who provide their services within the employer's organization of work, subject to the management and organization of the platform, as evidenced by the fact that Glovo establishes all aspects related to the form and price of the collection and delivery service of said products. That is, both the form of provision of the service, as well as its price and form of payment are established by Glovo. The company has established instructions that allow it to control the production process. [...]. The rider neither organizes the productive activity by himself, nor negotiates prices or conditions with the owners of the establishments he/she serves, nor does he receive his/her remuneration from the end customers. The claimant did not have a true capacity to organize his work provision, lacking autonomy to do so. It was subject to the organizational guidelines set by the company.
To provide these services, Glovo uses an application that assigns the services based on the assessment of each rider, which clearly impact the theoretical freedom to choose timetables and to reject orders. Furthermore, Glovo has the power to sanction its distributors for a plurality of different behaviours, which is a manifestation of the managerial power of the employer. Through the digital platform, Glovo carries out a real-time control of the provision of the service, without the delivery person being able to carry out his task unrelated to said platform. Due to this, the rider has a very limited autonomy that only covers secondary questions: what means of transport he/she uses and which route he/she follows when making the distribution [...]”.
This decision will have the immediate effect of transforming the contractual relationship between the riders and the company into employment relationship ab initio and will require the company to comply with the decision by signing the correct contract with the employees. It will also imply the payment of a fine to the national Social Security Institution for the unpaid contributions in the last four years.
In addition to this decision, the Spanish government started the process towards the adoption of a “Riders Law”. To this end, the national social partners, including CEOE, have been called to participate in the social dialogue process. This is in line with the wish of platform economy companies such as Glovo, that “firmly believe this regulation must be promoted based on dialogue between all actors involved”.
From the riders’ side, it is important to mention that not all riders aim at being recognised as employees. Recently the Autonomous Association of Riders (AAR), the Professional Association of Autonomous Riders (APRA) and the Spanish Association of delivery Riders (Asoriders) shared an open letter underlying the need to regulate the sector in order to improve riders’ conditions and reaffirm their autonomy. The letter emphasised the fact that the status of self-employed workers is also linked to the personal status of the riders, especially considering that some visa permits only to work as self-employed. The associations also recognise that such a decision has the potential to push platform companies out of business and consequently affect the riders. This is the main reason for explaining the need to start a process of social dialogue instead of regulating through a judicial decision.
During the first meeting on the “Riders Law”, trade unions proposed to extend the coverage of regulation to all platform companies. On the other hand, companies represented by Adigital proposed an alternative normative model used by the French special regulation for “microentrepreneurs”. A second meeting will follow in the weeks to come to continue the discussion and present some concrete governmental proposals.