Redefining the Gig Economy: Lessons from the Deliveroo Case in Spain

The Deliveroo case in Spain represents a pivotal moment in the ongoing dialogue about worker rights and classifications within the gig economy. WhiteFin, experts in Spanish tax law, are keen to explore this case more thoroughly. Our goal is to extract valuable insights and lessons that could benefit recruitment agencies and clients operating in similar domains. This in-depth analysis aims to enhance understanding of the legal and ethical implications surrounding gig economy workers, fostering more informed and compliant practices in this evolving sector.

The Valencia Court Ruling

• Initial Case: In Valencia, a court ruled that a Deliveroo rider should have been treated as an employee, not as a self-employed contractor. This decision came after a rider, who had worked for Deliveroo since October 2016, was fired for “lack of availability”​​.
• Ruling Details: The court ordered either the reinstatement of the rider or compensation of 705.13 euros. Deliveroo, in response, noted that the case referred to an older contract and claimed that its newer contracts had been validated as self-employed status across Europe. However, the Intersindical Valenciana union, supporting the rider, welcomed the ruling, aligning with a Labour Inspectorate of Valencia report calling for Deliveroo riders to be considered employees​​.

The Barcelona Court Ruling

• Wider Implications: In January 2021, the Barcelona Court ruled Deliveroo riders should be classified as employees, not independent contractors. This decision affected 741 riders, leading to Deliveroo being fined €1.3 million for unpaid social security contributions. This followed a 2019 ruling by the Madrid Court, affecting about 500 workers, which also classified Deliveroo riders as employees​​.

Spain’s Legislative Response

• New Legislation: Spain introduced legislation to protect the rights of freelance workers, giving companies 90 days to comply. This law was one of the first in Europe addressing the rights of gig economy workers and required companies like Deliveroo, Uber Eats, and Glovo to hire an estimated 17,000 freelancers as employees​​.
• Algorithm Transparency: The law also mandated companies to be transparent about how their workload-sharing algorithms affect labour, ensuring fair labour relations​​.
• Addressing Freelance Worker Issues: The legislation aimed to address issues around freelance workers lacking benefits associated with long-term job contracts, while these workers were still paying social security fees to the government​​.
• Mixed Reactions: The implementation of these laws received mixed reactions. While Spain’s Labour Minister emphasized the need for labour rights in the face of technological change, companies like Uber criticized the regulations, fearing they would hurt couriers who prefer flexible working arrangements​​​​.
• Adaptation by Companies: Despite some opposition, most delivery companies began preparing for the change and exploring new business models​​.
• Just Eat’s Support: Unlike Uber, Just Eat praised the legislation, noting it positioned Spain as a European leader in developing a sustainable digital economy​​.

Conclusion

To conclude, the landmark Deliveroo case in Spain marks a pivotal moment in the evolution of the gig economy, especially in Europe. This case underscores the growing recognition of the importance of labour rights and benefits for gig economy workers, who have traditionally navigated a landscape of flexibility but with minimal job security. This significant shift sets a vital precedent, aligning with global conversations about the nature and protection of workers in the digital era. For businesses navigating these changes, WhiteFin offers expert guidance and support. We specialize in accurately classifying your workers and, if necessary, can manage their employment on your behalf. For assistance with this or any other payroll needs, contact us at WhiteFin at +44 20 8036 3010 or info@whitefinsolutions.com. This proactive approach ensures your business remains compliant and your workforce is supported, reflecting the evolving dynamics of today’s workforce.