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Regulating the Romanian Gig Economy

Regulating the Romanian Gig Economy

Romania
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Digitalization and technology have seen incredible evolutions over the past years worldwide. This development has fostered the perfect environment for the gig economy to be able to sustain incredible growth. Short-term working agreements between companies and workers, which are paid after every undertaken task, are at the foundation of the gig economy and they seem to be more popular with every passing day. The COVID-19 pandemic has proven to have been yet another factor that allowed this market sector to reach new heights, with more and more people turning to online platforms as an additional source of income. These people are generally labeled as ‘platform workers.’

The Gig Economy in Romania

While Romania, with its top-notch internet, is a perfect place for the gig economy to thrive, the lack of legislation in this specific area can be discouraging. However, lack of legislation is a common denominator among European countries.

When talking about Romanian platform workers, two categories are easily distinguishable. First, there are those individuals whose tasks are still performed online. They identify projects through online platforms, and they carry them out in front of their computers. The legislation concerning them only offers two choices: (1) they can either choose to register as an authorized person or (2) follow the path of a limited liability company.

The second category of platform workers consists of those we see on the street, carrying branded backpacks, delivering groceries, or driving people from one place to another. This is the category of workers who perform their tasks offline. For them, the situation is quite different. So far, only workers carrying out their activity in the field of transport are covered by existing Romanian legislation.

Furthermore, said legislation only covers their obligations and not their rights. Thus, these workers may only carry out their activity after priorly licensing each used automobile with the Romanian Road Authority. Therefore, their activity may be regulated, but their protection is not. Romanian drivers may opt for two ways to collaborate with online platforms: (1) registering as an authorized person with the Romanian Trade Registry or (2) finding work within a fleet.

While choosing the first option will lead to qualifying drivers as self-employed, when opting for the collaboration with a fleet they could also benefit from signing contracts as actual employees. Thus, the perks of platform work will be rounded out with the protection that characterizes traditional employment. However, this is not without downsides. Additional charges such as commissions and possible limitations in terms of flexibility may follow suit, limiting some of the popular perks of the gig economy.

Detrimentally, choosing self-employment will leave drivers without the sought after, extensive, and straightforward protection originating in labor contracts. One can only hope that the legislator will manage to find a common ground for the much-needed legislation.

European Forecast

On December 11, 2021, the European Commission published a set of measures meant to improve and support both the working conditions and the sustainable growth of online platforms throughout the Union. These measures include a communication, a proposal for a directive, as well as draft guidelines and they come as a direct consequence of the lack of unified regulations regarding this specific field. As such, the proposed directive strives towards shedding light on the legal employment status of people turning to digital platforms to find labor, while also introducing a number of criteria in order to more clearly determine if an online platform can be qualified as an employer or not. Additionally, the proposed directive also aims for better transparency when it comes to the algorithms used by online platforms, as well as the traceability of online platforms.

Conclusions

The set of measures originating at a European level has been long awaited, with the European Parliament greenlighting it back in March 2021. All that remains to be seen is how and when the directive is adopted and how the Romanian legislator will transpose it.

By Alexandra Rimbu, Partner, and Sonia Benga, Associate, MPR Partners

This Article was originally published in Issue 8.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Romanian Knowledge Partner

Țuca Zbârcea & Asociații is a full-service independent law firm, employing cross-disciplinary teams of lawyers, insolvency practitioners, tax consultants, IP counsellors, economists and staff members. It also operates a secondary law office in Cluj-Napoca (Romania), and has a ‘best-friend’ agreement with a leading law firm in the Republic of Moldova. In addition, thanks to the firm’s dedicated Foreign Desks, the team provides the full range of services to international investors seeking to gain a foothold or expand their existing operations in Romania. Since 2019, the firm and its tax arm are collaborating with Andersen Global in Romania.

Țuca Zbârcea & Asociaţii is providing legal services in every aspect of business, covering all major areas of practice: corporate and M&A; litigation and international arbitration; corporate tax; public procurement; TMT; employment; insurance; banking and finance; capital markets; competition; healthcare and pharmaceutical; energy and natural resources; environmental; intellectual property; real estate; regulatory legal services.

Țuca Zbârcea & Asociaţii is a First-Tier law firm in all international legal directories and a multiple award-winning law firm both locally and internationally. It received the CEE Deal of the Year Award (DOTY Awards 2021) and the Law Firm of the Year Award: Romania (IFLR Europe Awards 2021). 

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