EU Nixes Provisional Agreement on Reclassification of Gig Workers

European Union (EU) member states have rejected a provisional deal aimed at reclassifying millions of gig workers as employees.

Officials from Spain, the current holder of the EU’s rotating presidency, sent the issue back for further negotiations with the European Parliament after deciding the current deal did not have sufficient backing, Bloomberg reported Friday (Dec. 22).

The provisional agreement, which was reached last week, would have required ride-hailing and food-delivery platforms such as Uber and Deliveroo to grant full employment status to around 5.5 million workers who are currently classified as self-employed, according to the report.

However, concerns about the potential economic impact of the deal led EU member states to reject it, estimating it could cost the gig economy industry billions of euros annually, the report said.

Spain remains committed to defending an ambitious directive that improves the situation of digital platform workers, an official said, per the report.

The European Trade Union Confederation has called for a new deal to be concluded within the next six months, according to the report.

The gig economy has been a subject of debate and scrutiny, with concerns raised about the employment status and rights of workers in this sector, the report said. The European Commission proposed these rules in 2021 to provide gig workers with stronger protections associated with employment contracts.

The European Commission estimated that the gig economy industry would have incurred additional costs totaling €4.5 billion ($5 billion) per year based on the number of eligible workers at the time, per the report.

Earlier this week, before the agreement was rejected, Uber, Bolt and Freenow said they would raise the minimum wage they pay drivers in France, according to the report.

While platform work and the associated concept of the gig economy have spread throughout the European Union, countries have diverged greatly on how gig-style employment fits within existing labor laws, PYMNTS reported in January.

At the heart of the issue is whether platform workers are self-employed or should be considered employees and thus entitled to certain legal protections and benefits from their employer.

In September, Uber said the proposed European gig worker law could trigger price hikes, service shutdowns and “significantly longer wait times” for customers.