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Two years after the entry into force of the 'rider law' in Spain to prosecute bogus self-employed workers, food delivery Glovo has changed its recruitment strategy, yielding to government pressure and the avalanche of fines it has accumulated. Now the company will contract all its workers, some 15,000, as salaried employees, giving them better working conditions and wages such as the right to holidays or sick leave, among others.
The Catalan food delivery service company announced this decision a day before its founder and CEO, Óscar Pierre, testified this Tuesday as a defendant in criminal proceedings before a judge. The company is accused of a crime against workers' rights for keeping them falsely labelled as self-employed despite the 'rider law' and the ruling of the Supreme Court, which banned this hiring model as early as 2020. Glovo's CEO, who has racked up fines and penalties totalling over 200 million euros, could face up to six years in prison.
But Glovo's legal problems are getting worse. Its competitor, Just Eat, announced last Monday that it had filed a lawsuit against Glovo in the commercial courts of Barcelona, accusing it of unfair competition for violating regulations and falsely hiring people as freelancers. The lawsuit is claiming a total of 295 million euros in damages.
Just Eat argues in its statement that numerous rulings have condemned Glovo for falsely hiring delivery drivers as freelancers, violating labour law regulations. They argue that this situation puts Just Eat at a competitive disadvantage since they do hire delivery drivers as employees, incurring high additional costs, in accordance with the regulations.
Glovo operates in over 900 cities
However, this Spanish home delivery company avoids talking about these lawsuits and fines and focuses on talking about "promoting a new employment model in Spain that will allow operations to run with contracted delivery drivers", arguing that "this decision and commitment comes as part of its firm commitment to Spain and to the promotion of the digital economy in the country", according to a press release.
This change of model will include all the cities and towns in which Glovo operates, currently over 900, and will be applied to all the app's verticals, which means that some 15,000 freelancers who currently provide their services to the company will be hired, employed by Glovo. The company stresses that the new model will at all times maintain the user experience and that of the restaurants and other businesses that collaborate with the app throughout the country.
"Democracy has won"
Deputy prime minister and minister of Labour and Social Economy, Yolanda Díaz, welcomed the platform's decision as a victory for "democracy" because "finally this company will comply with the law and fulfil its obligations", which, she pointed out, will mean the most change in a company's recruitment policy in the history of employment law in Spain, and which, in turn, will allow 267 million euros to be collected in taxes and social security in addition to the cost of the sanctions. "No company, no matter how big it is, no matter how much power it has, no big technology company can impose itself on democracy. Today democracy has won in our country. Finally, the company Glovo is going to make things right for more than 60,000 delivery drivers," she commented upon her arrival at an EU meeting on employment in Brussels.
"Glovo is prepared for the service to carry on as it has been until now, maintaining relevant metrics such as delivery times or the availability of delivery drivers at any time of the day, among others", stated the company. Similarly, this delivery business will open a dialogue with social partners, trade unions and employers, to provide all the guarantees for the change process and ensure that the change in their operations is developed with the consensus of all interested parties. This forum will be open to other operators in the sector so that they can carry out similar transition processes and join the agreements reached.
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