Spain’s home-ordering app Glovo – which has been majority-owned by the German delivery giant since late last year – has been fined €79 million (~$79 million) for violating labor laws related to the hiring of couriers. The local press reported yesterday.
The country The company’s record sanctions came after the startup found that 10,614 workers had been falsely classified.Independent” (self-employed) in Barcelona and Valencia, after the Department of Labor discovered that the couriers were in an employment relationship with the company.
Labor Minister Yolanda Diaz accused Glovo of undermining workers’ rights and obstructing the department’s investigation. The country He reported. One-minute fines for this breach were allocated in bulk (€63.2M) to misclassified couriers working in Barcelona (more than 8,300 drivers were found to be falsely classified as self-employed) and a smaller chunk (€15.7M) to nearly 2,300 misclassified drivers in Valencia. .
The total amount of the fine was equivalent to more than 13% of Glovo’s 2021 revenue, according to the newspaper.
Glovo has already been fined for similar labor violations following inspections in other regions of Spain, including Tarragona, Girona, Lleida and Seville.
Self-employment classification means drivers do not receive the full benefits available to employees. Independent They are also forced to make payments to the state to contribute to social security coverage – which Glovo would have to pay if these tens of thousands of riders were classified as workers.
Spain has seen regular protests against ‘difficult’ jobs on platforms like Glovo since it started operating in the country. And last year, the government amended labor laws that specifically apply to platform senders that recognize couriers as workers to combat false classifications in self-employment.
However, the violations were approved before the law, Glovo said, is now in effect.
A spokesperson for the company confirmed its intention to appeal the fine and sent the following statement.
Globo Spanish labor inspection proposal for notification of intent and fines for the years 2018 to 2021 GloboDuring this time frame, the driver employment model was not legally respected.
These inspections occurred before the Spanish Cavalry Act, which is why. Globo He intends to oppose the idea and wait for judgment only in the coming years. Globo It is fully committed to complying with Spanish labor regulations and the new drivers law.
A Glovo spokesperson said the fines relate to inspections carried out between May 2018 and August 11, 2021.
He also stated that the amount of the fine mentioned is not final – “possible social security contributions” and also fines – which, if he can successfully challenge the assessment of the department by convincing the court that all (or some) ) of these A drivers are not wrongly distributed, possibly, the amount of the fine can be reduced.
However, Glovo had mixed fortunes in the courts defending its model against labor class challenges prior to the labor law reform.
In September 2020, Spain’s Supreme Court rejected the classification of delivery couriers as self-employed – in a laboratory relationship with the platform. So it remains to be seen how successful he will be in trying to lift the government’s sanctions through the courts.
We reached out to the Department of Labor for more details on the fine, but it did not respond at the time of writing.
The Spanish government is stubborn about the labor reforms – with Diaz Recent criticism From the far-right Vox party in parliament, the country now has more stable permanent contract workers than ever before.
However, since the rider law came into effect, Glovo has continued to work with privately employed couriers instead of converting all drivers to employees – tweaking the model to ensure compliance. The move has prompted complaints from rival Uber Eats, which initially switched to a subcontractor model – but last month was said to be exploring an improved self-employment model. (Delivero exited the Spanish market entirely last year.)
Inspections for compliance with the rider law will obviously take time – so it may be years (if at all) before platforms are free to operate until such ‘improved’ self-service models are found to be in violation (or otherwise). risk of future fines).
As such, there have been calls by driver advocacy organizations to tighten the law’s wording to prevent forums from reaching out for personal gain and easily triggering multi-year litigation cycles over employment assignment decisions.
At the same time, the EU is scrapping agreement on a draft law to establish an EU-wide framework aimed at tackling fake self-employment on digital platforms. So their models seem to work when free-riding gig platforms based on implicit worker rights are borrowed in the EU.
Glovo and its parent company, Delivery Hero, have a separate case against them after being targeted in EU antitrust inspections this summer.
It is not clear whether preliminary antitrust inspections lead to full inspections or not.