ETF Talks – Digital & Social Disruption: Are the gig economy & fair work compatible?

18 Nov 2020

In light of Digital Transport Days, it’s only fitting that this second episode of ETF Talks focusses on an ever-growing mobility challenge: the gig economy and the precarious work it brings.

Is the gig economy compatible with fair work? To answer this burning question, we’ve brought together MEP Johan Danielsson, ETF Vice President, Jan Villadsen; ETUI’s Director of Research Department, Nicola Countouris; and ETF’s General Secretary, Livia Spera as moderator.

ETF Talks’ panellists explore the legal and political vacuum through which these platforms developed, how they structured their business models around the weaknesses in legislation and lack of enforcement and the effects of platform work on working conditions. Through this, we address how to regulate platforms and how collective bargaining and trade unions are and can continue to play a key role in protecting platform workers.

Platform work has disrupted transport and those behind them are savvy at lobbying and have seemingly won the public opinion – this much is clear. But, this doesn’t mean that we have to accept the unfair working conditions that stem from it. Platforms deny their roles as employers meaning they don’t pay social security contributions or taxes and their workers classified which they insist are “self-employed” are left without a social security net. This makes platforms a breeding ground for precarious work.

What’s clear is that there will be a long battle ahead before we can bring fair work and gig economy together, but trade unions are determined: “We have a duty to fight for platforms workers, to organise them and to deliver” as put by ETF General Secretary, Livia Spera.

Watch below as we discuss how to tack the issue from a trade union, EU and national regulation and political point of view. For key highlights and quotes from the discussion, scroll down below to read an in-depth summary of our talks.

Digital & Social Disruption: Are the gig economy & fair work compatible?

As Jan Villadsen, ETF Vice President puts it: ‘They can and will disrupt a part of the transport sector. We buy a smart solution to get from A to B or to get furniture, clothes or today’s meal straight to our home address. We do not think about or who the person doing the job is, a lot of businesses have already been disrupted’.

The question he says is, ‘What do we want? Which society do we want? How can we manage the new market situation and how can we create space for innovation instead of disruption?’ For him, it won’t be easy, but, that is why we have unions, political arenas and organisations.

‘There is an ongoing debate in Europe on how we should regulate platforms, not only under labour law but also taxation and competition law,’ says Livia Spera.

MEP Johan Danielsson weighs in on the political debate taking place in Europe, highlighting that digital platforms are here to stay, “we won’t be able to run away from technological change, but we should not exaggerate the change. Just because today you can sit at home with your iPhone doesn’t make it a transformative change that we should accept. People’s working conditions should still be in the first room for us.” For him, there are positive national developments where parts of UK, Spain and France to some extent have made sure that platform companies need to treat their workers as employees. These workers should have the same rights as other works in the country. Weighing in on the issue on European level, he adds that the issue will become even more topical as a consequence of the pandemic where we see that e-commerce, delivery of food and all these sectors are growing. Next year will bring an initiative from the European Commission to improve the working conditions of platform workers which will lead to a development s in EU regulation, but he highlights:

“We need to aim at regulations at three levels: we need to have basic EU regulation because we have one internal market, we need to have basic common rules on the internal market but then we need to have manouevre for national legislators, but also in the end for trade unions to agree on collective agreements with these companies, because I think in the collective agreements you will have the biggest flexibility to adapt to change.”

“Indeed, collective bargaining and freedom to organise are one of the issues on which trade unions have been working on the most because these platforms deny that they are employers so they don’t want to be treated as employers”, adds Livia Spera before asking Nicola Countouris to weigh in on how these platforms have managed to use EU and national legislation to their advantage and what we can do from a legal point of view to stop this process.

As put by ETUI’s Research Director, “These platforms are very savvy at doing three things really well.” First, they’re clever at navigating legal categories to their advantage, they’ve understood the weaknesses that exist. For instance, in the legal definition of employee or employer, opportunities arise from different laws and regulation is slightly lagging, it’s behind the curve. These platforms have structured their business practices around these weaknesses and that is the crucial issue. They are not outliers. Second, what they also do is emphasise the contributions they make to consumers, to the labour market, especially the labour market entry and in that respect to workers or at least certain groups of workers. They are politically savvy, they’re effective at lobbying, but not just that, they’re good at lobbying the general public. Third; they rely on the general lack of enforcement which is partly linked to their clever use of the legal process, but they’re also capable of moving goalposts all the time. They are good at tweaking with a political process, at tweaking with the contracts they issue.

He cites three main trends emerging from the jurisprudence in Europe:

The first big trend emerging in some legal systems, not all: Courts, in general, are starting to classify platform workers as normal, subordinate employees, typically they do that because they recognise that the level of control and direction that platforms exert on the workers through algorithmic control, through the algorithms that they own is certainly comparable and at times evens superior to the level of control that traditional employers exercise on the workforce in traditional workplaces. The second trend emerging more broadly, is an ongoing dialogue, an ongoing battle, a sort of game of cat and mouse where platform employers learn from their occasional defeats in the judicial arena and tweak with their contractual arrangements in order to circumvent prior court decisions. The third trend that is emerging which is linked to the second is that we are seeing some platform companies willing to compromise, that are willing to compromise in respect of some rights. This happened during the pandemic with some companies issuing sick benefits and sick leave for instance to their workers, but as long and this is something that is emerging also from some collective agreements, as long as the red line of employment status is not being crossed. “The redline of employer status appears to be insurmountable. Platform companies will invest as the Prop 22 referendum in California suggests, they will invest any resource in order to defend that red line and that is also an important trend.”

Trade unions are at the forefront of the battle against digital platforms and their unwillingness to cross that redline, Jan Villadsen mentions Danish union 3F’s uber campaign:

“Uber came to Denmark in 2014, and operated here for three years, and finally, when we managed to kick out Uber, our tax authorities had discovered that 99% of Uber drivers paid no tax at all. It was an illegal business practice, it was unfair competition, they had distraught decent jobs here.”

For him, there are many issues to be tackled, not just tax avoidance and black economy, but also insurance, both for the customers and for the workers, and clear rules for guarantee for products, rules, education, and license. And not the least, rules for clean and healthy deliverance and contracts, especially in this period with the pandemic.

“The good thing now is that people and the politicians are getting more and more aware about this – aware about the issues and about the kind of jobs that could spread if they spread. More and more people think that it’s your job today, but it could be my job tomorrow. People seem to agree about this, and we need stricter, better rules and regulations, and the market will not create these rules without help”.

He underlines that in his trade union, they’ve had contact with some of the platforms who always say that it’s not workers, it’s self-employed people.

“They say we can make agreements, perhaps, but it’s not an agreement that we can sign, because they want very low agreements, they want agreements without a lot of rights that we have fought for  more than 100 years. They’re open to talk to us, most of them, but it’s just so they can tell people that they’ve talked with us, but we can’t agree about anything”. 

For Nicola Countouris, an expert on labour law, there is an emerging trend that goes beyond the transport sector and traditional sectors affected by gig work in recent years. For him, gig work is trying to establish itself as a credible paradigm for the provision of work outside the traditional sectors where it has recently developed.

We can see how it could be tempting for employers or some employers in various sectors of the economy to do what at the moment the platforms are doing, which is exclusively taking responsibility for their workers during those minutes and increasingly fragmented periods of time during which personal work is actually performed and accepting no liability whatsoever for other aspects of employment relationship that at the moment are irrelevant for the purposes of working time, social security, continuity, tax. I think we need to be aware that there is a bid being made here for gig work to be normalised as a paradigm beyond the traditional sectors in which it has developed.

For him, this also touches upon the way we organise welfare state:

These companies rely on the welfare state in two ways – first of all, by not contributing to it, this is clear, they don’t contribute their share of taxation, and that gig workers don’t contribute their fair share of taxation, because they’re classified as self-employed for tax purposes as well. And that is part of the business model, so they don’t contribute. On the other hand, they rely on the welfare state, because the reality for many gig workers, not all of them, but many who work for platforms, is that they can only make ends meet by relying on the welfare state provisions and social security hand outs to which their employers have not contributed. And this is also important in the context of the pandemic. The idea of the small state, just forget about it. For the next few years, it’s going to be big state – but big state needs big money, and we need to contribute to that. And it’s either going to happen through fair taxation, or, I’m afraid, it’s going to happen through cuts. So it’s really important that we start thinking about the disruptive effect that this business model has beyond working conditions. 

Livia Spera agrees: “These platforms trying to offload their social responsibilities on the society at large and on the welfare state”.

For MEP Johan Danielsson, these issues need to be addressed with policies in different areas. There is a question on establishment:

“We have an internal market, companies are free to provide services wherever they want within the EU, but we need to make sure that these platform companies that they are forced to actually establish themselves, to have a branch in the countries where these services then are performed. Because otherwise, we’d have small or little chance to make sure that working conditions, social contributions, taxes, actually are paid. And I think this is a big loophole that they are using at the moment.” 

“Just a month ago in Sweden, the Swedish work environment authority tried to look into the health and safety conditions of drivers at Uber and it was practically not possible. Because the point where they established this platform in Europe was the Netherlands, and they found no practical way to look into conditions of these Uber drivers.”

For him, we need to push for these platforms to establish themselves with a branch. But, it’s also a question of winning the public debate:

“I think people need to feel that “tomorrow, it’s your job”. Because if we are going to be honest with ourselves, that we have a segmented labour market, that in practice mostly means that it’s newly-arrived migrants, on bicycles, delivering food for nothing, it makes it possible for a large part of the society to disconnect.”

“You have to have demand for a service, at a price at which you can still pay the workers enough, you can contribute taxes, social benefit payment, and so. And then there’s a services that benefits a society. And then there’s a place for it in a society, and then it’s politically acceptable.”

Livia Spera points out that these platforms clearly have a negative effect on society –

“They don’t pay taxes, they don’t respect labour law. In case of public transport, they also create pollution, there are many studies on this. So, they have been exposed in many respects, yet, they are still very successful with customers.” The same goes for low-cost airlines, flights cost 10,99 euros because workers are underpaid, but yet customers still continue to fly with these airlines. It’s clear that certain services shouldn’t be used because they’re not sustainable and because there’s not fair price behind it.

The labour movement has a role play in winning the political debate, Jan Villadsen underlines that there was the same issue with climate change a few years ago, but people are now willing to play for climate change – “That’s something I don’t think was possible just five years ago.”

“If we really believe that we have a good chance to win, and I believe we have a good chance to win and create a better future. A future with a room for platforms, platforms working for all of us, not just for Amazon, Uber, or AirBnB. I think platforms are there to stay, it’s about using what we’ve always been good on, make collective agreements, define what’s workers and what’s not workers and then let’s make agreements with them. I’m very optimistic, I think we’re very strong federation in ETF, in Europe, so I think we can do it.”

Livia Spera adds that the battle is still very long, but trade unions have a duty to fight for platform workers, to organise them and to deliver.

“We will need to fight politically and industrially, with the labour movement we will need the support of the politicians, but we will also need to support them, to give them strength, and we will of course need to fight legally as well, because we saw that there are so many legal loopholes that those new companies are taking advantage of. And of course the battle is global, we are working on this together with ITF, because these are global companies and we can’t just look at our own countries, we need to take the global battle there.”

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