Is precarious work becoming the new norm?

“The greatest danger is that precarious working contracts are becoming legitimised, which means those who refuse to accept such jobs risk loosing their social benefits,” warns the British labour law expert Jeremias Prassl from the University of Oxford.

He took part in a two day conference hosted by the Stockholm University’s Institute for Social Private Law in cooperation with a six year long research programme called ReMarkLab which is now drawing to a close.

The conference sought to explore whether precarious working conditions have become the new norm, and how labour legislation should adapt to this development.

“Don’t believe those who try to make it sound as if app based services like Uber are only there for people to get some extra income. No, this is about a massive change in the relationship between employee and employer,” says Jeremias Prassl.

The speed of the change is partly hidden because statistics covering the area has not yet been processed, said Claire La Hovary from the University of Glasgow.

“It has long been an aim for the International Labour Organisation to gradually bring people who work in the informal sector, i.e. those with no proper job contracts, into the formal part of the labour market,” she said.

The problem is that even if those who work in the informal sector are being classified as belonging to the ordinary labour market, they earn too little to benefit from it.

“The ordinary labour market is no longer what it used to be,” said Claire La Hovary. 

Precarious working conditions often form a triangle where a company links customers with workers via an app. The company will often claim that all they are doing is facilitating contact and that the people who carry out the services cannot be considered to be employees. 

“But what Uber’s legal team says is different to what the marketing department says. Because the marketers constantly talk about how many new jobs are being created,” says Jeremias Prassl.

The new jobs lack fundamental rights, however, like work safety and regular working hours. 

Professor César Rosado Marzon form the Chicago-Kent College of Law talked a story in the New York Times about a woman working for Starbucks which made customers so upset that they started to boycott the coffee chain. She was forced to get up at five in the morning in order to open a Starbucks café at six. But since there were few customers between nine and noon, she was not allowed to work during those hours. Since her home was far away, she had to spend three hours in a local park before she could return and finish her ten hour working day.

“This has led to campaigns for fair working hours in the USA,” said César Rosado Marzán.

This is where labour law can determine that an agreement between a company and what is called independent employees stil can be classified as employment.

“The development of precarious working conditions is in fact not a particularly difficult issue for labour law. Business models can be tricky, but it is relatively easy to determine whether the person who carries out the work really is allowed to decide over her or his own situation, or whether they are being punished if they for instance work for a competitor when the regular company doesn’t offer any work.”

Professor Eberhard Eichenhofer from the Friedrich Schiller University in Germany brought up another aspect. When an employer organises work in a way which means independent ‘micro entrepreneurs’ are performing the services, it also twists competition. 

“Companies that still have staff and that pay 40 percent employer’s fees end up being hopelessly undermined,” he said.

At the same time the entire social safety system is being undermined, since taxes fall below what is needed when the number of people on precarious employment conditions rises.

One of the characteristics of the sharing economy is that customers can rate the person providing the service. 

“This means that customers’ at times unconscious prejudices are amplified through algorithms. A black person renting out his home through Airbnb makes on average 12 percent less than a white person renting out his home,” says Jeremias Prassl.