Roselyn Sands - Follow on LinkedIn Joost van Ladesteijn - Follow on LinkedIn
One can easily argue that Covid-19 has changed the world radically. Years of routines were outdated in a matter of weeks. Covid-19 has noticeably catalyzed the active transition from physical to virtual, where the latter is an extension of the first as well as the message itself as McLuhan already stated in 1964. These times are a litmus test for mankind on how to behave in view of the relevant and urgent matters Covid-19 transported and further unveiled.
Covid-19 affects all ways of life. Also, business life. Companies are thriving or surviving. More than ever, profit follows value, value follows purpose, purpose follows people. Covid-19 has accelerated the so-called Fourth Industrial revolution of big data, machine to machine communication and internet of things by further enabling new ways of working, such as platform working and working from anywhere (WFA). This impacts current practices, such as global mobility and challenges the future fitness of existing laws and regulations, including, but not limited to key historical definitions of “worker”, “employment” and “supervision”. The recent Dutch Deliveroo and UK Uber cases are just two case law precedents of more to follow.
Government response
Governments, also at e.g. an EU level, are responding slowly, but steadily with especially improved enforcement by embracing technology, enhanced resources and stiffer penalties. But also a “buyer’s market” is, since employee and customer experience are key drivers for a company’s reputation and brand. This makes it paramount for companies to fundamentally rethink their people strategy and more specifically their workforce configuration and deployment.
Law alerts
In recent years new laws and regulations, jurisprudence and case law have followed in rapid succession to deal with changing working relationships in the French and Dutch labor market and economy, empowered by a fast-paced digital age of access for all.
For France, the new works council (the “comité social & économique” (CSE)), the collective mutual termination tool (“rupture collective conventionnelle”, (RCC)), the increased flexibility in employment afforded through union collective bargaining, are examples of some of the new rules in France designed to inject increased flexibility in managing the French workforce.
For the Netherlands, the Dutch Work and Security Act, The Dutch Balanced Labor Market Act, the Boot-commission, the Borstlap-Commission, X/Gemeente Amsterdam-case and the Deliveroo-case of a week ago are merely some examples of many hereof.
Contract qualification
Industry 4.0 increases the visibility of the duality between flexibility and certainty of any modern labor market. One of the main challenges in a globalizing world is to uniformly implement, apply and enforce a common framework that promotes fair competition between service providers and respects appropriate levels of equal worker rights. Platform workers and more specially the UK Uber-case and Dutch Deliveroo-case on contract qualification are the latest phenomenon, or better: “noumenon”, hereof in a gig economy.
In March 2020, the French Cour de cassation ruled that an Uber driver was not an independent free lancer, but an “employee” of Uber. Its decision was not groundbreaking; it relied on established principles of the classic definition of an employee-employer relationship: the employer monitoring of the performance of the employee and ability to sanction poor performance. In this case, the Court found these elements to exist, and therefore deemed the Uber driver to be an employee. This continues preexisting case law, such as the 1996 Take it Easy case. For the moment, the platform model is still alive and well and living in France.
Under current Dutch law, it must be assessed under the agreed rights and obligation whether the elements “work”, “wages”, “employed” and “for a certain period of time” have been met. Just a week ago the Amsterdam court of appeal held that the existence of an employment contract is more likely than not for Deliveroo’s delivery drivers. Appeal has already been announced by Deliveroo.
Companies response
Companies indicate that due to the nature of disruptive developments, surviving the now has been main priority, primarily occupied by an expansion of the issues of the day. Also, rather tired of all legislative law changes and unable to oversee immediate consequences thereof, companies have not given people strategy the attention it should have. For many companies, the game changer is that the consequences are real(time) now.
For the Netherlands, Temper is considered by the Dutch inspectorate SZW a temporary working agency. Deliveroo’s drivers are employees under Dutch law.
In France, while risks continue to exist under both social security law and employment law, the notion of independent workers continues, yet platform owners should be cautious not to give the driver instruction, nor sanction him.
So, the kick-start is there, as these consequences have double digit financial impact and are M&A dealbreakers. Earning models are under scrutiny. Action now is required to safeguard the future.
Call to action
We strongly recommend companies performing a people strategy audit with a focus on workforce configuration and deployment.
The different types of populations per relevant organization level must be categorized, analyzed and qualified to determine first the implications thereof and subsequently the need to strategically configure and deploy differently in line with business objectives.
This due diligence provides actionable insights on the Strengths, Weaknesses, Opportunities and Threats of different scenarios by balancing standardizations versus customization as well as compliance versus risk management and innovation.
People strategy involves exploring fundamental questions to unify and motivate and formulate collective business objectives. The proposed workforce review provides required oversight with respect to a variety of underlying subject matters of pivotal questions, such as:
Global mobility: How does my expat population qualify under applicable legislation and collective (bargaining) agreements, what is the impact hereof and what to change in configuration and deployment?
Health and safety: Do I comply with H&S requirements, especially with Covid-19 contamination risk, observing current people categories, also in view of differences in personal and organizational scope of application in legislation and collective (bargaining) agreements? How to avoid costly over-compliance?
Contingent workforce: What is the ideal workforce configuration, observing the rationale and impact of the Dutch Balanced Labor Market Act, representative business cycles in supply and demand and minimum workforce requirements as a result thereof, reputation and know how perseverance impact of using a variety of payroll providers.
Remote work: How does the employer secure a risk free remote workplace for employees working out of their homes.
Equal pay: How do employers ensure they are not running afoul of the equal pay legislation and thus avoiding damage to brand and reputation.
Covid-19 has acted as a magnifying glass for better and worse. It has made opportunities strengths and threats weaknesses. The time might be Shakespearean out of joint, but a futureproof set it right is still feasible, if bridges are built instead of trenches dug. Whilst fighting headwinds in a rapidly commodifying world with according eroding margins, companies have to analyze, act and monitor by humanized purpose and nod to predictive data (see for more details the people strategy of Vertex Legal). This revaluing time is an opportunity for companies to redefine playing fields and reshape to a holistic value proposition by a compelling purpose that clarifies what a company stands for, provides an impetus for action and is aspirational. So, the genie may be out of the bottle, but the message in it offers companies the golden ticket to rearchitect blueprints for value and impact and charter new horizons. Agility and resilience in every single way, but especially in mind, will be decisive to empower positive change. Think alternatively to shape the future now, as “dasein” is design.
