The term « gig economy » has come into use to describe segmented jobs governed by “apps”. Drivers, riders, cleaners rely on a “digital platform” to be put in contact with clients and their jobs do not seem to fall precisely within the parameters of laws designed to deal with the traditional subordination relationship of employee to employer, for example because they are free to accept or decline a request for work and because it is often a side job conducted at the same time as another activity.
In France, the business model of such platform relies on the individual being self-employed (no social security is paid by the platform as the self-employed individual carries the cost of his or her own social protection and does not benefit from the rights traditionally enjoyed by employees). However, some unions and individuals working for such platforms have queried whether the status of self-employed is adapted to such individuals given the constraints placed on them by some platforms.
This distinction between employees and self-employed persons is one of the main problems from a legal perspective and often gives rise to cause for dispute. Under French law, the distinction is important in particular with regard to the application of the strict employment law rules such as working time rules and the protection given in case of termination of the employment contract as well as the employer’s liability for social security contributions (employers must make these payments only for employees but not for self-employed) and entitlement to unemployment benefits.
There have been some litigation over the recent years before the labour courts with drivers or riders who claimed to be employees but it ended with mixed results both before the courts of first instance and at the court of appeal level.
A new law was passed in 2017 granting some very minimal rights for the individuals subscribing to the platform such as the obligation by the platform to pay for a work accident cover, some sparse obligations to cover financial cost of professional training, and right to strike and to constitute a union association. However the parliament decided not to qualify the status of such individuals as the point made during the debates was that it was up to the labour courts to apply the usual criteria of case law to determine whether such individuals were employees or not.
This is exactly what the supreme court did on 28th November 2018 for a rider for Take Eat Easy, (which had in the meantime gone into liquidation in 2016). The rider asked for the qualification of his relationship as an employment contract before the labour court and the case went up to the supreme court.
The supreme court began by recalling that a subordination link (which is the determining factor under French law in assessing whether the relationship is an employment contract) is characterized by the performance of work under the authority of an employer which has the power to give orders and instructions, to control the performance and to sanction the failure of a subordinate.
Therefore, the supreme court decided that a rider is bound by an employment contract to a company which has recourse to a web platform and an application in order to connect partner restaurants, customers ordering meals through the platform and riders, on the basis that the application used a geo-location system enabling the monitoring in real time of the rider’s position and the recording of the total number of kilometers travelled and that the company had the power to sanction the rider by a system of penalties which could even lead to the exclusion of the rider.
The supreme court outlined the control over the rider’s activity and the capacity for the platform to sanction the individual by refusing to work any longer with him which are the two main aspects which can allow a court to requalify a self-employed relationship into an employment contract.
It will be interesting to see how this case law develops and in particular the position of the courts of appeal across France which until now have seemed mostly to consider that self-employment was the applicable relationship. This landmark decision of the supreme court may also prompt the legislator to intervene to try to secure the digital platform business and perhaps grant an intermediary protective status to such individuals.
