Legal complaint comes after the government changed the Penal Code last year to make false-self employment a criminal offence.
THE first attempt to criminally prosecute the bosses of a food delivery platform for false-self employment was launched in Spain on Wednesday [20 September].
The Observatory of Work, Algorithms and Society (TAS) has filed the legal complaint in collaboration with worker-organised campaign groups RidersXDerechos (‘Riders for Rights’) and Taxi Project 2.0, and said in in a press statement that the move was “intended to be a first step and open the door to criminal proceedings”.
The Spanish Government reformed the Penal Code last year so that false self-employment can be treated as a criminal offence. Company executives can face prison terms of six months to six years as well as fines if they “impose illegal conditions on their workers by hiring them under formulas unrelated to the employment contract, or maintain them against a requirement or administrative sanction”.
TAS’ legal complaint is the first time the reformed Penal Code will be tested in practise.
Glovo’s refusal to employ its riders
Whether riders are employees or independent contractors has been a major conflict between government and gig economy platforms for years now. Employing riders comes with additional costs for platforms, including paying workers for their whole time at work, paying social security tax contributions as well as employee benefits like sick leave and holiday pay.
Glovo, headquartered in Barcelona, is Spain’s largest food delivery platform and has racked up over €200 million in fines from the Spanish Government’s Labour Inspectorate for falsely hiring its riders on a self-employed basis. The Supreme Court ruled in 2020 that Glovo’s riders were employees, with over 50 more court cases in Spain coming to the same conclusion.
In 2021, the Spanish Government passed the ‘Stop Fake Autonomous Law’, more commonly known as the Rider Law, which put the findings of the Supreme Court onto a legislative footing.
In response, Glovo, which has been owned since 2021 by German multinational Delivery Hero, tweaked its labour model, but continued to hire its restaurant delivery riders on a self-employed basis.
The company claims the new model is compliant with the Rider Law, but labour law experts have rejected this, with University of Valencia labour law professor Adrián Todolí stating that “the wording of the Riders Law” leaves “very little scope for anything other than the employment of the riders.” Nonetheless, Glovo was joined by Uber Eats, which switched back from a sub-contractor model of employing riders after the Rider Law was introduced to a mixed-model of subcontracting and self-employment in August 2022, claiming that the lack of enforcement of the Rider Law had left them at a competitive disadvantage.
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Since then, Labour Minister Yolanda Díaz has sought to step up the pressure on the company, making changes to the Labour Inspectorate in March of this year so that fines were larger and imposed faster. With Labour inspections ongoing for the period since the Rider Law entered into force, Delivery Hero is now preparing to pay fines totalling up to €400 million, almost half of Glovo’s purchase price.
Following the July General Election, in which in a surprise result the left coalition government of PSOE and Sumar appears to have done enough to stay in power, the Secretary of State for Employment Joaquín Pérez Rey said that the food delivery platforms had been put on notice that the government would be acting on the change to the Penal Code.
“We have formally required these companies to comply with the law so that they are aware that if they do not, it is no longer just a problem of economic sanctions, but also a problem of criminal sanctions,” Rey said.
In a tacit criticism of the speed of government enforcement of the laws, TAS, which is a coalition of anti-Uber taxi union Elité Taxi Barcelona and RidersXDerechos which aims to defend the interests of workers in the platform economy, said that they do not believe the responsibility to pursue this criminal case should “have fallen on the Observatory and the collaborating entities; that is to say, on the workers”.
The specifics of the legal complaint are three-fold:
- For “fraud against the Treasury” due to false and incomplete tax contributions, which includes “forcing employees to issue an invoice that is false”, “defrauding VAT”, and “defrauding the Social Security.”
- For hiring workers on a “false-self employed” basis, which has incurred “serious damage to their working conditions and social security”.
- For “imposing legal and social security conditions on the workers to their detriment”, which has “led them to carry out financial transfers by means of deception”.
Núria Soto, a member of RidersXDerechos and a rider in the ‘Mensakas’ food delivery co-operative in Barcelona, said that the breach of labour laws “long merited criminal proceedings” as “these companies take advantage of the needs of workers and play with their lives”
“Furthermore, if we want to continue ensuring a framework of acquired labour rights and public rights, we cannot allow such fraud against Social Security and the Treasury to continue occurring,” she added.
Tito Álvarez, leader of Elité Taxi Barcelona, said that the legal complaint was “pioneering in Spain and we are convinced that the courts will see sufficient evidence to charge all the alleged crimes that are very evident on the part of Glovo.”
Felipe Corredor, also a member of RidersXDerechos who was sacked as a rider from Deliveroo, said: “It cannot be that workers are forced to skip self-employment quotas or tax responsibilities out of pure necessity and the administration punishes them relentlessly, without taking into account their conditions of vulnerability; and yet these companies commit fraud with impunity for years and years.”
A Glovo spokesperson said that they could not respond to the specifics of TAS’ legal complaint because they had not yet been notified, but reiterated their position that they “are confident that our operating model launched in Spain in August 2021 meets all regulatory requirements.”
In April last year, two former managing directors of Deliveroo France were sentenced to a 12 month suspended prison-sentence, a €30,000 fine each and a five year suspended ban on running a company for fake self-employment. A third executive was found to be an accomplice and given a four-month suspended sentence, and a €10,000 fine.
The French case, which was also brought forward by a coalition of trade unions and rider collectives, was the first time platform executives have been held criminally responsible for fake self-employment in Europe. While the majority of courts have found that riders are employees, platforms have responded to these court rulings by paying fines and continuing with the same labour model.
The European Parliament and Council of the EU is currently involved in crunch talks over the Platform Work Directive, which could see platform workers legally presumed to be employees across all 27 member states of the European Union.
Uber issued its latest warning on Wednesday [20 September] that an employment status in the Directive would lead to rising unemployment and higher prices for customers. Anabel Díaz, head of Uber’s mobility division in Europe, was reported in the FT as stating: “If Brussels forces Uber to reclassify drivers and couriers across the EU, we could expect to see a 50-70 per cent reduction in the number of work opportunities.”
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