In December 2021, the European Commission disclosed the draft of a new legislation which was thought to be on the way by the gig economy companies, the European legislators and most of the gig workers.
The draft of the new legislation affirms the plans of the European Commision to legally protect the workers of the gig economy. With the possible new legislation, gig economy companies will be expected to pay their once independent contractors the minimum wage and to give them the rest of their employment rights such as holidays, job security and sick pay.
What is the Gig Economy?
Needless to say, the first thing that comes to our mind when we talk about the gig economy is some of the big names in the trade such as Uber and Deliveroo. With the increase of the number of smartphone applications, gig economy is a term that everyone started using more.
But what is the gig economy or to rephrase the question more precisely what does gig economy mean?
Gig economy is a new manner of working based on self-employed individuals doing one temporary ‘gig’ (which is mostly an hourly work) after another. In the freelance gig economy, workers are inclined to be a part of the independent workforce. As the definition of gig economy suggests, solo work is usually done on short-term contracts and freelance agreements.
As the gig economy starts occupying a larger place in the overall sharing economy, the authorities such as the EU Commission and the members of this new and agile workforce express their concerns about the working conditions and their rights.
Can freelancers, contractors, solo talents be considered gig workers?
We are aware that the question is a tricky one because there isn’t a day that goes by without hearing about a new term: platform economy, sharing economy, gig workers… it is natural that one might feel confused. So here we are, trying to clarify it for you:
Although the freelance economy existed before the gig economy, it is possible to say that solo talents such as freelancers along with contractors can be considered as gig workers depending on who they work with or who they work for.
Before we move on to the similarities and differences between gig economy and freelance economy you might want to read the next paragraph and see what makes a freelancer different from a contractor.
Freelancers vs Contractors
Contractors are employed by a company or an employer, often for a temporary period depending on the duration of the task that they are expected to complete. Most of the time, when contractors work under a contract for a company they are expected not to work for another company or an employer until the previous agreement comes to an end.
Freelancers are considered to be more flexible. They are recognized as self-employed workers and usually there is not a contract between a company and a freelancer that books the freelancer until the end of a given period. This means that freelancers can have multiple jobs or projects at the same time.
Gig Economy vs Freelancing
The difference between gig economy and freelance economy lies in the distinction between gig platforms and ordinary employers as well as clients. While a gig worker is a comprehensive term that may be used to define anyone whose work is described by flexibility and by working as a self-employed person, usually through an online platform, a freelancer does not necessarily have to get their job via an app or a platform such as Uber or Deliveroo.
Number of gig economy workers tripled over the past 5 years
Statistics about the freelance economy now show that since 2016 the number of gig economy workers grew three, or in some sectors even four times bigger. A recent study conducted by the University of Hertfordshire and the consultancy firm BritainThinks reveals that more than 4.000.000 people in the UK only are now employed in the gig economy. The five-year growth also sheds light on the gig economy trends of 2022.
According to the survey, over 20% of workers did gig jobs minimum once and the amount of people taking at least one gig job per week skyrocketed from 5.8% in 2016 to 14.7% in 2021. In particular, the biggest sectoral growth in the gig economy took place in delivery.
Ever since the beginning of the Covid-19 pandemic using online platforms for delivery services became a common behavior even among those who were not used to utilizing the platforms before. Then, the percentage of people who took at least one delivery job rose from roughly 2% in 2016 to almost 9% in 2021.
In the freelance economy growth, the delivery sector was not the only one that experienced a massive enlargement. Sectors regarding household services, office work and household repairs also grew.
With this unexpected growth and the lack of protective regulations guaranteeing the rights of workers of the gig economy, employees, trade unions and government officials started to raise concerns about the wellbeing of the platform workers. By addressing those concerns, the latest EU proposal is designed to grant employee rights to the workers of the gig economy.
Gig economy workers to get employee rights under EU proposals
In early December by releasing the draft legislation which was awaited for a long time, the EU Commission stated that the responsibilities about proving employment status will no longer belong to the individuals that work for the gig economy companies but rather the companies themselves.
Until recently, the workers had to start a court procedure in order to secure their basic employment rights and to prove that they are employees. By benefiting from the gray areas of the employment regulations, in order to be free from legal and economic burden, the companies pretend that the workers are actually self-employed. The latest draft legislation is planned to put an end to this practice too.
Further, the EU Commission wants to ensure that workers obtain rights over mathematical algorithms. Having the upper ground against algorithms will signify ending the situations in which employees are not given certain jobs, not given certain hours and sometimes fired based on the decisions of computers.
As a substitute, the employees will have the right to get an explanation for such decisions and to have an objection. Meanwhile the companies will be required to guarantee contacting an actual human being in such compelling cases.
Insurance for remote workers
In sectors such as delivery and household repairs occupational safety and health is another issue that is at the forefront of the proposed legislation. In all of the member states of the EU, over five million gig workers are wrongly classified as self-employed whereas they need to be treated as regular employees with protections like accident insurance. The recent groundbreaking court rule in Germany may be the first one of its successors' down the line.
During the pandemic, a court in Germany ruled that a man who slipped and fell while walking from his bed to the desk he worked at home was entitled to insurance that covered workplace accidents.
The draft legislation is in the pursuit of providing a solid legal ground for this new and highly unregulated field. Until now the European courts were asked to settle close to 100 disputes related to gig economy companies. Although some countries like Greece, Portugal, Italy, Spain and France went for stricter domestic regulations the politicians of the Union believe that the problem is far from being fully addressed and solved.
Improving working conditions in platform work
On December 9th, it was officially communicated that the new regulations, once in action, will make sure that employees working on digital platforms will be able to benefit from employment rights that they are entitled to. Additionally, they will be given protection against the gig algorithms. So far the headlines of the new draft are the ones below.
- Management of algorithms
- Employment status
- Basic rights
- Responsibilities of the companies
When the new regulations are in effect they are aimed to cover the entire EU region - all 27 of the member states and to be the overarching regulations that protect the rights of the gig workers regardless of the country they are based at.
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