Blocking the sign of the times: a first analysis of the new Spanish Riders’ Law
The Spanish Minister of Labour, Yolanda Diaz, gave a surreal press conference yesterday to present the new Riders’ Law. Here is a summary. While comparing herself to U.S. President Biden, the minister literally said that this is “a major rule that is going to change the sign of the times.” It is particularly ironic that she presents the new law in this way because, if the minister and her law aspire to anything, it is to block the sign of the times. Times are changing and the Government, instead of adapting the Law to the reality of these changes, is trying to block them.
Let us see, in any case, how we got here, what the Law says and what can be done about it.
How did we get here?
Let us remember, first of all, that Ms. Diaz is a politician linked to the radical left-wing party United Podemos and has been designated by the former Vice President Pablo Iglesias as his natural successor. Mrs. Diaz has been a member of the Communist Party of Spain since 1986 and has strong family ties (as she herself often underlines) to the Comisiones Obreras (CCOO) trade union in Galicia. The “Riders’ Law” cannot be understood, therefore, outside a political context of affirmation of a rising communist leader who wants to present her ideological credentials to lead the minority partner of the Government.
The process to approve the Law has been haphazard. The Law is the result of an agreement reached by the Government, the trade unions UGT and CCOO and the employers’ associations CEOE and CEPYME on March 10. This agreement was reached against the opinion of the companies in the sector and also against the delivery companies’ worker associations. All this led Glovo to leave the CEOE in April, considering that the employers’ association had turned its back on its interests. And in March, up to 2,000 delivery drivers demonstrated throughout Spain to demand that the law allow them to work as self-employed. Something is wrong with the social dialogue when the agreements reached by the Government and the social partners do not represent the interests of the parties directly affected.
Spanish courts, undoubtedly, had made it necessary to regulate the figure of the riders. Different court rulings had contradicted each other on whether riders should have an employment or commercial contract with the platform that hires them. Finally, the Supreme Court had to intervene. It ruled in September 2020 that the contracts of delivery drivers with delivery companies should be labor contracts.
What does the new law say?
The new Law, published today, takes the form of a Royal Decree Law (RDL 9/2021, of May 11, amending the revised text of the Workers’ Statute Law, approved by Royal Legislative Decree 2/2015, of October 23, to guarantee the labor rights of persons engaged in delivery within the scope of digital platforms). This is relevant because Congress is robbed of its legislative power for a matter that in no way can be said to have an “extraordinary and urgent need” (as so required for RDLs). The Government is imposing its will by force. The Royal Decree Law will have to be validated by the Congress, but, in any case, it is expected to enter into force three months after its publication in the BOE, that is, on August 12.
The Government, in assuming the role of legislator, had basically two options: it could offer the necessary flexibility so that whoever wanted to be self-employed could be so and whoever aspired to an employment contract could obtain it; or it could impose a labour model for the estimated 30,000 delivery drivers in Spain. Clearly, it has opted for the second option.
And it does so in the most forceful way possible: it “presumes” that any delivery rider of a delivery company is, by the mere fact of being one, its employee. RDL 9/2021, in effect, introduces this presumption into the Workers’ Statute (the main labour legislation in Spain). And that’s it: you are a delivery person, so you have an employment contract. You don’t want to and you would prefer to be self-employed? Tough luck. That’s what the Law says.
The Law includes another important point, this one concerning the algorithms of the company. Indeed, it states that the workers’ council will have the right to be informed by the company of “the parameters, rules and instructions on which algorithms or artificial intelligence systems are based that affect decision-making that may impact working conditions, access to and maintenance of employment, including profiling.” Very important: this affects ALL companies and not just digital platforms. In other words, the workers’ council is given access to the intellectual “crown jewel” of the company. This right clashes head-on with the company’s right to protect its algorithms as trade secrets. This precept will undoubtedly end up in the courts.
What is to be done?
Is it inevitable that RDL 9/2021 will apply as of August 12 as published? Not necessarily. Here are some points to be considered:
- The RDL could be rejected by Congress. Unlikely, but it already happened in September 2020. Alliances in the current Congress are fluid and there is no assured vote for the Government today (even less so after the electoral setback in Madrid).
- The RDL could be processed as a bill in Congress. Even if the RDL were validated, Article 151.4 of the Rules of Procedure of the Congress foresees that an RDL could be processed as a bill. In order to do so, a majority in Congress would be required. It may be that the majority that is not reached to overturn the RDL could be reached to process it as a bill. This would allow, in particular, to introduce amendments to the text. The Government could still slow down the processing of the bill, but, even so, this option would be better than approving the RDL as it is.
- Appeal the RDL before the courts. It is very doubtful that the assumption of extraordinary and urgent necessity for RDL 9/2021 to be passed by Royal Decree Law and not as a bill will actually be met. The abuse of this Government with RDLs must be stopped in the courts. In addition, there is the issue of access to the company’s algorithms by the workers’ council which clashes head-on with the right to company secrecy. Only a court of law will be able to decide on this issue.
In conclusion, the government’s knee-jerk reaction should not be accepted out of hand. Disruptive companies must be able to be disruptive without the government trying to crush their disruption. And riders must be able to decide for themselves what is in their best interest without the government deciding for them.This being said, the most important part of the law may have nothing to do with riders. They may be a mere decoy to conceal the fact that digital platforms (all of them, I insist, and not only delivery platforms) must share their algorithms with the workers’ council. That may be the real Trojan horse of the Act.