The "gig economy" has grown in recent years, notably since ride-sharing services, such as Uber or Le Cab, have gained a lot of popularity with consumers. However, the expansion of gig economy does not come without tension. At the heart of the issue is the question of legal and social status of workers in this new economic environment.
In France, a report dealing with employment and social protection issues relating to these new businesses was published in October 2016 by the General Inspection of social affairs. This report notably points out the risks of increasing inequalities: greater social and occupational isolation of workers, greater income volatility, less vocational training, less protection against social risks.
In this context, it is now common to see independent workers who were terminated by their principal to claim in Employment tribunals that their services contracts should be reclassified as employment contracts.
The stakes are high: in the event that the Employment tribunal consents to reclassification, the then-considered employee is entitled to employee-relating rights, including back pay for up to five years, compensation for overtime and for untaken paid holidays, and damages for unfair dismissal where the services contract was terminated.
Employees are not the only ones who can claim for reclassification of their services contracts into employment contracts. The social security contributions' collecting agency (URSSAF) can also claim for the payment of up to five year arrears of social contributions – where it can be demonstrated that the company intended to circumvent social security regulations.
In order to reverse the assumption of non-employee status and to reclassify services contracts into employment contracts governed by the protective French Labor Code, Courts rely on a body of cumulative evidence showing a subordination relationship between workers and companies. Central to the characterization of subordination relationship is the exclusivity imposed on workers and belonging to a structured organization that imposes its own rules on them.
On this, the Paris Employment Tribunal recently reclassified a VTC driver's services contract into an employment contract on the grounds that the latter was forbidden from looking for clients in the streets as taxi drivers do; and forbidden from working for one of his company's competitors.
In early 2016, the social security contributions' collecting agency also initiated proceedings against a taxi company, seeking to reclassify all its drivers' services contracts into employment contracts. As a result of proceedings like this, the entire business model is questioned, leading many intellectuals and politicians to ask for a clarification of the affiliation rules to a social protection scheme for gig workers.