Proposed EU directive may classify most gig workers and contractors as employees

Will some staffing platforms cease to be commercially viable, and will traditional contractor and consultancy arrangements in the EU be affected?

Many would agree that low-paid workers operating regularly via apps and digital labour platforms and working under some degree of control should have basic employment rights (to the extent they do not under existing laws). However, the latest plans of the EU to address this go a lot further than hitting obvious ’employment’ situations relating to low-paid platform workers. Potentially, a wide range of staffing and consultancy arrangements will also be affected, damaging the cost-efficiency and convenience of existing contingent workforce and platform worker arrangements.

The main issue with the proposed directive may be that it contains a very tight employment status test, capturing many contractors who most would otherwise consider self-employed. Another potential issue is that the definition of ‘digital labour platform’ is so wide (in order to prevent loop-holes) that it may catch many contractors working through traditional staffing companies. Additionally, the draft directive may mean that platforms and staffing companies that operate outside the EU (based in the US or UK, for example) and organise work for individuals in the EU will need to establish and pay tax (including VAT) in each EU country the workers are based in—pushing up their operating costs and tax liabilities significantly.

Pro Employment Law

Formed in 2017, following significant legislative changes designed to increase competition within the legal services marketplace, Pro Employment Law is a progressive set of barristers’ chambers, consisting only of experienced employment law barristers, offering a full range of specialist advisory, case management, and advocacy services directly to the public through the Public Access scheme. We supply our legal services exclusively in the area of Employment Law to clients located across England & Wales. All of the legal services we supply are covered by professional indemnity insurance with Bar Mutual.