Glovo, an on-demand delivery app from Spain, The end of last year Germany’s Delivery Hero, majority-owned, was fined €79 million (about $79 million) for labor law violations related to the employment classification of couriers, local news outlets said yesterday. reported.
El Pais The company’s record sanctions have resulted in the start-up having 10,614 employees “Autonomous” (aka self-employed) in Barcelona and Valencia after the labor ministry found that the couriers had an employment relationship with the company.
Labor Minister Yolanda Diaz accused Glovo of violating workers’ rights and obstructing labor ministry inspections. El Pais report. A small portion of the fines was issued for this obstruction — the majority (€63.2 million) went to misclassified couriers working in Barcelona (more than 8,300 riders mistakenly self-employed). A smaller portion (€15.7M) was issued to nearly 2,300 misclassified riders in Valencia.
The total amount of penalties was worth more than 13% of Glovo’s 2021 revenue, according to the paper.
Glovo has previously received smaller sanctions for similar labor violations following inspections in other parts of Spain, including Tarragona, Girona, Lleida and Seville.
The self-employed classification means that the rider cannot receive the full benefits offered to employees. Autonomous You also typically have to make payments to the state to contribute to Social Security coverage. If those tens of thousands of riders were classified as employees, Glovo would have had to pay otherwise.
Spain has seen regular protests against “precarious” work since platforms like Glovo began operating in the country.When last year, the government has passed labor law reforms that apply specifically to delivery couriers on the platform. This is the Rider Act, which allows couriers as employees to combat the false classification of self-employed.
However, according to Glovo, the violations for which Glovo is now being sanctioned were before that law came into force.
A company spokesperson confirmed their intention to appeal the penalty by sending the following statement:
Globo has been notified of a Spanish labor inspection proposal seeking retroactive social security payments and fines of up to €79 million annually from 2018 to 2021. GloboThe passenger employment model during this period did not comply with the law.
Because these tests were conducted before the introduction of the Spanish rider law, Globo We intend to challenge the proposal and expect a ruling only within the next few years. Globo is committed to complying with Spanish labor regulations and the new rider law.
A Glovo spokesperson said the penalty relates to inspections conducted between May 2018 and August 11, 2021.
It also argued that the amount of the fines quoted was not final, saying it took into account “potential social security contributions” and penalties, and that all (or some) of these riders could be held in court. If it’s not misclassified, we can probably reduce the size of the penalty.
However, Glovo has met a mixed fate in courts defending its model against challenges to pre-labor law reform labor classification.
of September 2020Spain’s Supreme Court refused to classify delivery couriers as self-employed and found them to be in working relationship with the platform. I don’t know yet.
We reached out to the Department of Labor to ask for more information about the penalties, but did not receive a response at the time of writing.
Spanish government bullish on labor reforms – with Diaz Recent Rebuttal The far-right Vox party has told parliament that there are more workers in the country than ever before with stable, permanent contracts.
But since the Passenger Law came into force, Glovo has continued to operate with self-employed couriers rather than turning all its passengers into employees.That stance initially led to complaints from rival Uber Eats, which switched to a subcontracting model, but last month it report Seeking a revised self-employed model. (Deliveroo has completely withdrawn from the Spanish market last year. )
Inspecting compliance with treaty laws is obviously time consuming — so it could be years before such a “revised” self-employment model is found to be in violation (or otherwise). Yes, during which the platform can operate freely (threat of future fines).
Therefore, riders’ rights groups are calling for stronger language in the law to prevent platforms from reaching self-serving interpretations and starting a new cycle of multi-year lawsuits over employment classification decisions.
At the same time, the European Union drafting a bill Establish a pan-EU framework aimed at tackling fake self-employment on digital platforms by introducing a rebuttable presumption of employment. Free-riding gig platforms appear to be using borrowed time in the EU.
Meanwhile, Glovo and its parent company, Delivery Hero, have also had another problem after being the target of an antitrust investigation by the European Union. this summer.
It is not clear whether the preliminary antitrust investigation will lead to a full-scale investigation.