ECONOMY & BUSINESS

Spain’s Labor Inspectorate forces Amazon to give 4,000 false freelancers work contracts

The online retail giant will also have to pay €6.16 million in Social Security contributions that were not paid while the staff were providing delivery services to the multinational

One of Amazon’s warehouses in Madrid.
One of Amazon’s warehouses in Madrid.Álvaro García

Spain’s Labor Inspectorate has forced Amazon to give contracts to 4,056 delivery drivers that the online retail giant had working in Madrid and Barcelona as false freelancers, according to sources familiar with the investigation and from the UGT labor union. The Spanish authorities are also demanding €6.16 million to cover the Social Security contributions that were not paid while the staff were providing services for the American multinational in what is commonly known as the “gig economy.”

The battle against self-employed workers being used by companies for positions that should involve a regular work contract and the corresponding conditions has become one of the most important elements of the work being carried out by the Labor Inspectorate in recent years. The most high-profile of these investigations involved food-delivery services Deliveroo and Glovo, which, like Amazon, have resorted to this model in many Spanish cities.

“We disagree entirely with the ruling and will present an appeal,” the company told EL PAÍS. “We are also fully cooperating with the labor authorities' investigation. ”From Amazon, we are proud to be able to offer a wide variety of opportunities in all of Spain in our distribution network, including a small percentage of freelancers who collaborate with us delivering packages on an independent basis, with the option and the flexibility to make deliveries in the time frames that best suit them and as such obtain additional income.”

The Labor Inspectorate has been cracking down on companies that use self-employed workers for positions that should involve a regular work contract and the corresponding conditions

The Labor Inspectorate’s investigations date from the end of 2017, and continued until the outset of this year. They are divided into three probes that affect two of Amazon’s subsidiaries: Amazon Spain Fulfillment and Amazon Road Transport. In the case of the former, 3,261 false freelancers were detected by the inspectors in Madrid and Barcelona, for whom €5.16 million is being demanded. For the latter, the investigation was limited to Barcelona, with 805 workers affected, and the amount demanded just under a million euros.

The decision comes just weeks after the Spanish Supreme Court ruled on a case involving a Glovo delivery rider, with judges deciding that the company “was not limited to offering an electronic intermediary service that consists of putting consumers (the clients) and genuine self-employed workers, but that rather carries out tasks of coordinating and organizing the productive service.” This affirmation has prompted lawyers to affirm that this ruling goes beyond just the specific case involving Glovo.

The UGT labor union had also filed lawsuits against Amazon in Valencia, Madrid, Barcelona, Bilbao and Zaragoza. The general secretary of the union, Pepe Álvarez, has called for “an end to the non-compliance with said regulations” and a guarantee that the collective agreements that correspond to the activity of the companies involved be applied.

In order to limit firms’ use of self-employed workers in this way, the Spanish Labor Ministry has announced new regulations that will clarify the limits between both types of workers, in particular when it comes to those working for digital platforms.

UGT, however, has stated that it deems such a framework to be unnecessary, arguing that “the current legislation is sufficient” to avoid labor fraud, and that new regulations “would only allow for the platforms to influence the legislative power in order to secure the necessary modifications to consolidate a model that lacks labor rights and contributes nothing to the Social Security system.”

English version by Simon Hunter.

More information