The European Union copies the Spanish socialist model for platforms

Essays - January 17, 2023

Platform work, a new economic model successfully merging flexibility with technology, is widely used in a variety of sectors already, such as transport, food delivery and many other professional activities, including caregivers, teachers, researchers, or translators alike.

In May 2021, the Spanish socialist and communist government decided to regulate platform workers in a typically interventionist way.  It passed a decree during Covid vaccination, later converted into a law, which would generally consider transport platform workers (so-called “riders”) as employees of platforms.

The excuse for this overregulation was to allegedly increase the social protection of such workers, since self-employed enjoy less legal benefits than employees.  The underlying suspicion is that entrepreneurs lie and simulate a self-employed relationship for their workers (“bogus self-employed”), when in fact they are employees and should be formally recognised as such.

The problem is that not only entrepreneurs, but many workers as well, prefer to be self-employed, as this guarantees important advantages to them, including flexibility of timetable and ownership over customers and extra income.

As the Spanish government was warned by different sector representatives, an intrusive approach would provoke -and indeed has provoked- two unwanted effects:  business has been harmed, with some platform companies establishing themselves in territories with a less aggressive and legally risky context; and the coercive nature of the Spanish measure has been side-lined by creating intermediaries between the platforms and their former workers, so that in the end the margin of the latter is diminished – precisely the contrary to the defence of same that the regulation purported to achieve.

Furthermore, all of these unfortunate measures and effects are particularly untimely during the current crisis and inflation, where business trust is needed more than ever.

Now the European Commission has decided to copy and enlarge the Spanish model to all platform workers in the European Union, with a similar proposal.  And the European Parliament, in a report decided on 12 December by its committee of Employment and Social Affairs, seems to be taking the same view.  On the contrary, it would seem much more sensible to increase the protection of the self-employed across Member States, but without reclassifying many of them into employees.

In theory, the Commission proposal foresaw to protect 5 million bogus self-employed working through platforms.  But actually it will impact 28 million workers, regardless of whether they wish to be self-employed or not.  Left-wing ideologists claim that platform companies are actually manipulating the will and opinion expressed by those self-employed, though obviously this constitutes a rather paternalistic way of considering the state of affairs.

Fortunately, a group of cross-party members of the European Parliament have decided that at least the plenary of the House should have a say before interinstitutional negotiations start; that this cannot be cooked solely by one committee, where the Socialist rapporteur Mrs. Elisabetta Gualmini has surprisingly broken their “cordon sanitaire” to seek support within the ID group.  Mrs. Anna Zalewska, of the ECR Group, has advised other conservatives to back the democratic initiative and let the whole of the co-legislator take a stance on the matter.

Therefore, next 19 January an important vote will be held in Strasbourg, where members will decide whether they want to scrutinize the Commission and Gualmini strategy, or else give them a full mandate to go ahead and negotiate with the Council without the intervention of all 705 parliamentary representatives.  Interestingly enough, a protectionist minority of the EPP Group, led by Mr. Dennis Radtke, a German former trade union leader, supports the consensus with the Socialist rapporteur.  So far, also the Meloni coalition as well as the French Rassemblement National have backed the same philosophy instead of a more market-led approach.

Source of image:  Dennis-Radtke.eu