- 12 May 2021
The Riders’ law recognises food delivery riders working for digital platforms as employees rather than independent contractors under specific circumstances. It is the result of a tripartite collective bargaining agreement reached on 10 March 2021, between trade union CCOO (Workers’ Commission) and UGT (General Workers’ Confederation), employer organisation CEOE (Spanish Confederation of Business Organisations) and CEPYME (Spanish Confederation of Small and Medium Enterprises), and the Spanish government.
On 12 May 2021, the Riders’ law was published in the Official State Gazette (BOE). The law is the result of a tripartite collective bargaining agreement reached on 10 March 2021, between representative social partners at national level – trade union CCOO (Workers’ Commission) and UGT (General Workers’ Confederation), as well as employer organisation CEOE (Spanish Confederation of Business Organisations) and CEPYME (Spanish Confederation of Small and Medium Enterprises) – and the Spanish government.
A newly adopted royal decree (Real law decree n. 9/2021, 11 May 2021) recognises food delivery riders working for digital platforms as employees rather than independent contractors. In this regard, the new legislation adds two main provisions to the Workers Statute stating that riders, under specific circumstances, are considered employees.
The first provision relates to the presumption of employment status, which follows the Spanish Supreme Court decision (see further details below) for the case of Glovo (STS 805/2020, 25 September 2020). It is applied ‘for the activities of distribution of any type of product or merchandise, when the employer exercises its faculty of organisation, direction and control, directly, indirectly, or implicitly, through the algorithm management of the service or working conditions, via a digital platform’. The personal scope of the legislation excludes from the application those workers (riders) who provide transport services under administrative authorisation.
This legislation is a pioneering regulation in Europe adopted within the framework of consultation of social partners under Article 154 of the Treaty on the Functioning of the European Union (TFEU). The framework is promoted by the European Commission on possible action addressing the challenges related to working conditions in platform work.
The second provision requires all concerned platforms to disclose relevant information to their riders, including how algorithms and artificial intelligence impact on working conditions, hiring decisions and layoffs, as well as the elaboration of workers’ profiles. The new Article 64.4 of the Workers Statute establishes that workers’ representatives must be informed of the ‘parameters, rules and instructions’ that determine the work of the algorithm. This provision applies to all companies using algorithmic management and not only the platform companies operating in the food delivery sector. An expert committee will be established to study and assess ‘the good use of artificial intelligence and algorithms in employment relations’.
The published law will come into force on 12 August 2021. During the three-month transition period, platforms should be ready to fully apply it and to adopt the necessary measures, such as registering all delivery riders in the General Social Security Regime and paying monthly social security contributions for their riders. This is estimated to affect approximately 17,000 riders who are currently working without an employment contract, as identified by the Ministry of Labour.
The negotiation on Riders’ law began in September 2020, after the Spanish Supreme Court ruled that the relationship between a rider and the Glovo platform is of a labour nature. The ruling concluded that Glovo is not a mere intermediary in contracting services but provides ‘delivery and courier services, setting the essential conditions for the provision of such service’. The ruling has had an immediate impact in terms of transforming the contractual relationship between riders and the platform into an employment relationship and required the company to comply with the decision by signing the correct contract with the employees. Meanwhile, the digital platforms are obliged to pay the social contributions of their riders in the last four years, in addition to a 20% surcharge and any applicable financial penalty, once an employment relationship is recognised between the platform and their riders. Glovo was therefore required to pay a fine to General Social Security Regime for the unpaid social security contribution of their riders. By October 2020, out of the 17,950 bogus self-employed who have been registered with the General Social Security Regime, more than 11,000 worked for Glovo.
However, already before the above Supreme Court ruling which recognised the former rider of Glovo as an employee, the Ministry of Labour had started to prepare legislation. It opened a public consultation in June 2020 to prepare a draft law aiming at the amendment of the RD-Leg 2/2015, of 23 October (Workers’ statute) and Law 20/2007, on certain aspects of the provision for self-employed and platform workers.
At the beginning of negotiations, which involved the government, trade unions and employer organisations, the Ministry of Labour intended to shape the new regulation of riders to make progress on the idea that the riders of digital platforms would no longer be false self-employed. However, employer organisations involved in the negotiations had divergent positions. There were growing tensions within the employer organisation CEOE and between Adigital (which organises digital platforms) and the logistics business organisations, with the main contention point referring to what constitutes ‘fair competition’. Other ‘traditional’ delivery companies, such as Seur, Nacex, DHL and Correos Express, have been calling on Glovo to stick to ‘the law’ while also adding that fair competition should prevail in the sector with the same rules for everyone. According to the local newspaper Spain’s News, Glovo, which joined CEOE in 2019, continued to recruit its riders under the same false self-employed scheme and stated that the debate on the employment status of food delivery riders is still open. Glovo argued that there are several previous lower-level court cases which validate their current model of hiring riders as self-employed.
In June 2020, the Autonomous Association of Riders (AAR), the Professional Association of Autonomous Riders (APRA) and the Spanish Association of Delivery Riders (Asoriders) shared an open letter, stressing that they are in favour of remaining self-employed and reject that the only spokespersons for riders are Riders x Derechos, since, in their opinion, Riders x Derechos represent a very small percentage of the riders. Riders x Derechos point out that these organisations are supported by platform companies.
In December 2020, the Ministry of Labour presented a new proposal regulating only riders, an approach that has been stressed from the outset by the Ministry of Economy as discarding the broader social and economic relevance of (false) self-employment. Furthermore, this later proposal does not include the creation of a register of digital platforms covering also information on the algorithms they use. The UGT and CCOO trade unions, as well as the rider union Riders x Derechos strongly reject this novel proposal due to its limited scope, insisting that the law should cover ‘all digital platforms that evade labour regulations, regardless of their activity’.
On 10 February 2021, a pre-agreement has been reached between the Ministry of Labour, the CEOE employer organisation as well as the UGT and CCOO trade unions on the ‘labour nature’ of the riders’ employment relationship. For the first time, employers seem to have accepted the issue of the ‘labour nature’. However, the proposal again concerns only riders and not other platform workers, and thus has a rather limited scope.
Unions, employers and collectives issued contrasting statements regarding Riders’ law. The law was welcomed by Just Eat Takeaway, the parent company of Just Eat, who stated that the law would provide riders with more security. By contrast, Uber (including Uber Eats) and Deliveroo strongly criticised the new law, arguing that the new law has ignored the riders’ wishes to remain self-employed and will directly hurt riders who rely on these digital platforms for the much-needed flexible earnings. On 30 July 2021, Deliveroo announced its plan to cease its operation in Spain in October 2021. Although the company stated that Riders’ law was not the determining factor, it revealed that the law led to an earlier withdrawal from the Spanish market.
APS (Asociación de Plataformas de Servicios bajo demanda), the employer organisation representing Deliveroo, Stuart, Glovo and Uber Eats, has strongly criticised the mandatory requirement for the platforms to make their algorithm more transparent and has warned that the decree could endanger the development of the food delivery sector. Furthermore, APS criticised that the law was passed as a royal decree without parliamentary approval (still pending to be ratified, as of August 2021) and without consulting small groups representing the interests of the food delivery platforms, such as restaurants and the delivery riders.
Unions such as UGT, Riders x Derechos and AAR, argued that the new law is not a suitable instrument for solving the complex issues generated by employment in the platform economy. Though UGT has celebrated the law, it considers the three-month transition period to be too long which may allow platforms to take advantage of their riders. CCOO has shared similar opinions and stated that the law should go further and be able to regularise more extensive working realities.
Meanwhile, AAR, together with Asoriders, ARU (Asociación Riders Unidos) and ARP (Asociación Riders Profesionales), has sent an open letter to the EU Commissioner for Jobs and Social Rights to ask for the Commission’s intervention to stop the regulation from coming into force, on the grounds that the law will remove their right to remain autonomous should they choose to do so. At the beginning of March 2021, over 2,000 delivery riders were demonstrating against the Riders’ law across the country, demanding to maintain their right to choose between remaining self-employed or becoming employees.
Although the law only applies to delivery riders, it may serve as a reference to regularise other platforms where the algorithms are used to manage the tasks, as indicated by the Minister of Labour. The Riders’ law is likely to be seen as a test case by other Member States for how lawmakers respond to the issue of food delivery companies and the debate of the employment relationship – and in parallel, the growing lobbying power of delivery apps.
autonomy and control,
representation, industrial relations, social dialogue,
Transportation and storage