Taking Labour Law for a Ride

“Decent work in the platform economy” is one of the items the ILO will discuss during its upcoming 113^th International Labour Conference from 2 to 13 June 2025 – a first in the ILO’s history. In deciding to put the item on the agenda 2 years ago, the ILO Governing Body noted that “[p]roper classification of the employment relationship was fundamental to the application of fundamental rights and other standards, as platform workers who were misclassified were deprived of the most basic labour protections.” This was a critical point of contention among countries, employers and workers at the ILO, and thus brought the item on this year’s agenda. Proper classification of employment relationships remains a challenge, not just for the ILO. So, what exactly is the problem and how can we solve it?

The context

The consequences of classification are serious. In a report published this May called the “Gig Trap”, Human Rights Watch highlighted that the gig economy is “a labor model that traps people in poverty”. The gig economy offers a specious choice: you may either have the freedom to work on your own terms – whenever you want, however you want – or security of labour protections. Consider Deliveroo, for example, which is a food delivery company (like Thuisbezorgd in The Netherlands, DoorDash in the US, and Swiggy in India). It listed its stock on the London Stock Exchange in 2021, for which it published its prospectus outlining to (potential) investors what the risks to its business are. The section on ‘Riders’ highlights this Faustian bargain between flexibility and precarity.

The first sentence of the section starts with the fundamental promise of the gig economy: “Riders partner with us for the freedom to work when, where and how frequently they want.” This is the essence of this modern construction of work: that people may accept or deny specific task-based services on a platform app which lets them retain control over how much they work and on what. The platform, in return charges a fee from the rider (and usually also the customer and the restaurant) for connecting them for the transaction. On the face of it, this model gives immense power to the worker over their work. However, since this is a purely transactional arrangement, riders are usually not employees but independent contractors. This last point is a critical feature of the construction of the gig economy through creative contracting. The novelty of the gig model “creates a veneer of legitimacy and shields them from government scrutiny, while portraying their business model as ‘innovative’ rather than exploitative”, Human Rights Watch explains in their Gig Trap report. They go on to say that “the misclassification of workers as independent contractors rather than employees, is at the heart of the problem.”

The same page of the Deliveroo prospectus that outlines rider freedom, ends with the following sentence in bold: “Our business would be adversely affected if our rider model or approach to rider status and our operating practices were successfully challenged or if changes in law require us to reclassify our riders as employees.” Why would classifying riders as employees be a threat? Deliveroo notes that in Italy, for example, a determination that riders are quasi-employees means that they may be “entitle[d] […] to receive the same benefits as employees, including the minimum wage for time worked, paid holidays, paid sick leave and severance entitlements” which “could have a material impact on [Deliveroo’s] business.” This material impact does not arise only from benefits that riders would get upon countries reclassifying them as employees but because Deliveroo may also be subject to “government penalties for non-compliance with applicable law, including health and safety standards.” Deliveroo thus promises to investors in the prospectus that, “we will continue challenging or appealing any unfavourable decisions taken by governmental agencies”. However, they may not be successful in doing so all the time. This may not be surprising since most of these entitlements are human rights outlined in the ICESCR.

The question

The fundamental challenge to grapple with at the ILO Conference would be that the rider freedom that underpins the gig model thus takes away with one hand what it gives in another. This contractual creativity creates a paradox: riders gain nominal freedom but lose social security; riders are deemed essential workers, and yet are unable to reap the benefits of their critical work for society. Many gig companies perform quite poorly on fair working metrics (including zero scores for some like DoorDash, Lyft and Uber in the US). This begs the question: how does this business model implicate the law? The ILO seems to look at “workers” without regard to their employment status in context of the upcoming platform economy standard-setting discussion. Should the standards be a minimum floor of protection for any labour relationship no matter how it is structured (e.g., as an independent contractor or an employee relationship)?

Contrasting the gig economy construction to tax law provides us with an interesting insight. Tax law has what is called “general anti-avoidance rules” which allows tax authorities to deny tax benefits if a corporate organisation or transaction is structured to avoid tax through creative accounting within the boundaries of law. Should creative contracting within the bounds of law be subject to similar principles in case it avoids labour obligations? My task here is not to outline a detailed proposal for such labour anti-avoidance rules but to raise the question: why not? Whereas general anti-avoidance rules in tax law preserve tax base integrity for countries, general labour anti-avoidance rules would preserve the integrity of labour rights for people.

The idea

Fundamentally, contracting must have some minimum floor, no matter how creatively it can enable avoiding legal obligations. We can debate about what that minimum floor is, but a good starting point is the universal standard of the ICESCR which includes, among others, fair wages and safe and healthy working conditions (art. 7), social security (art. 9) etc. or the ILO Fundamental Principles and Rights at Work. Can contract law empower companies to work around labour law and human rights standards? Both international human rights law and the core jurisprudential ethos of private law aim towards respect for people – the protection of human dignity – the former in the state-citizen relationship and the latter in the interpersonal relationship. As such, contract law should have a minimum floor below which this interpersonal respect, founded on a universal commitment to human rights across polities, cannot exist. Human rights, as a result, outline the limits of contract law. It implicates the kind of contracts that define the work relationship in the gig economy. What the precise contours of these limits are require not only academic analysis but also democratic deliberation. Does it include social security? Does it include minimum wages? Does it include paid holidays? Whatever the case may be, it is hard to defend a position that contract law contains no limits, especially when it structures a work relationship in ways that have a material impact on human rights otherwise protected both by international law and national public law.

Labour anti-avoidance rules may be a counter-creative approach to creative contracting designed to avoid labour compliance and obligations, as an effectuation of the limits of contract law powers conferred upon private parties. Such a catch-all rule could give wide protections to workers in the gig economy while also allowing contractual freedom to construct relationships the way companies may want other than to avoid complying with labour rights. To be clear: I base my justification of labour anti-avoidance rules on contract law’s endogenous requirements to respect human rights interpersonally, not on human rights treaty law. The jurisprudential argument I outlined in this piece is abstracted out of national legal systems, leaving the precise translation mechanism from state-centric human rights into doctrinal contract law prescriptions for particular legal systems for another day. In essence, the underlying basis remains that “the freedom to work when, where and how frequently [people] want”, as Deliveroo put it, must lead to empowerment, not servitude. This is what any global labour standard should strive for.