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"End of solo self-employment" - Associations fear that entire professions will be wiped out

The guest for the hearing was carefully selected.

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"End of solo self-employment" - Associations fear that entire professions will be wiped out

The guest for the hearing was carefully selected. In late October, whistleblower Mark MacGann denounced Uber's business practices and lobbying before the European Parliament's Employment Committee. McGann, himself a former leading European Uber lobbyist, described how the company was not afraid to present itself as more employee-friendly than it actually was.

Researchers on behalf of the company worked with questionable figures. "Earnings appeared to be at or near minimum wage because the data didn't account for the time between trips," MacGann said. MPs applauded after his speech.

MacGann triggered the scandal surrounding the so-called Uber files, which document the tech company's lobbying practices and show how the ride-hailing service provider tried to influence governments in Europe to enforce its business model.

For months, parliamentarians have been negotiating a new directive that is intended to provide better protection for so-called platform workers. A legislative proposal by the European Commission provides that authorities should in future use a list of control criteria to check whether a platform is de facto an employer.

If platforms were classified as employers, previously freelance employees of delivery services or travel agencies would be considered employees. Those affected would then suddenly be entitled to employee rights such as the minimum wage, collective bargaining, regulated working hours, paid vacation or access to statutory pension insurance.

Commission Vice-President Margrethe Vestager, responsible for digital affairs, assumes that 5.5 million platform workers in the EU are wrongly classified as self-employed. According to a French study, it is primarily travel agents such as Uber and delivery services such as Deliveroo, Wolt or Lieferando's parent company, Delivery Hero, that are fighting the planned regulations in Brussels.

But other employers also fear that EU policy and especially Parliament will overshoot the mark with this project. The nervousness is obviously great. Leading employers' associations are now warning of the planned rules in a joint letter. It's an unusual step.

“As business associations, we strongly support the Directive's objective of ensuring correct employment statute determination. In our opinion, the current proposal for a directive clearly overshoots the target, it ignores existing and established solutions in the member states without serving the interests of those involved," says the previously unpublished letter, which is available to WELT.

It was signed by the Confederation of Employers' Associations (BDA), by Gesamtmetall, the Entrepreneurs' Association of German Crafts and the employers' associations of private banks, aviation companies, insurance companies and the chemical industry.

They criticize that the Commission proposal with a Europe-wide uniform definition of employees interferes too much with the autonomy of the member states. "We see this as an interference with the definition of employees set by the Member States themselves," write the associations.

“German labor law offers effective procedures to take action against bogus self-employment. A European list of criteria, which ultimately reflects a European concept of worker, impairs the validity of the German concept of worker and thus violates the European competence structure.

Employers are particularly alarmed by deliberations in Parliament, where the Commission's draft law could be further tightened. The associations were startled by the first draft of the report by the Social Democratic MP Elisabetta Gualmini, who is responsible for the bill in Parliament. Your proposal, which is currently being discussed among the parliamentary groups, provides that the use of computer programs for the placement, monitoring or organization of work should be sufficient to define companies as digital work platforms.

"The entire economy would fall under the directive," the authors warn. And further: “If these demands were to prevail, self-employment would hardly continue to exist as part of free entrepreneurial activity in the EU. That would be the end of solo self-employment in Europe. Entrepreneurs who are self-employed would be pushed into employment, even if this is not in their own interest. A refutation of their employment relationship would rarely be decided positively.”

The project area, for example, is characterized by highly specialized individual entrepreneurs. Employers are also opposed to the plan to oblige digital work platforms to comply with the collective agreements applicable in the respective field of activity. The associations warn that this would amount to a "collective bargaining obligation". “Collective bargaining must remain voluntary. A compulsory bond would take away any incentive for both employees and employers to join a union or to get involved in collective bargaining associations.”

In the EU Parliament, the employers only met with limited understanding for their unusual initiative. CDU MEP Dennis Radtke said his Christian Democratic EPP group wants to protect employees but preserve their independence. “Those who are vulnerable, such as Uber drivers or delivery drivers who are deprived of certain rights or the minimum wage, should be given justice. But highly qualified solo self-employed people such as engineers or consultants should be able to continue doing their business without being forced into employment relationships that do not belong to them.”

Radtke also criticizes the employers: "Some representatives of employers' associations act as if it were not necessary to regulate platform work. However, they overlook the fact that it is not just about basic employee protection rights, but also about rules for fair competition.”

The SPD, which has campaigned for legislation, is dismayed at the employers' initiative. "It is very unusual for employers to write such a letter full of allegations when the compromise process in Parliament is still in flux," says Gabriele Bischoff, the responsible SPD MP. "In principle, it is correct when employers formulate their concerns, which also helps the negotiators to find their positions." It is still far too early to say which demands Parliament will commit itself to.

The Employment Committee wants to agree on a common position at the end of November. “We hope that we can agree on a common position in the Labor and Social Affairs Committee at the end of November, with broad support in Parliament. So that we can go into negotiations with the member states with a strong mandate.” The member states are also still arguing about a common position. Only when both positions are in place will the final regulations be negotiated.

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