Uber's Spanish food delivery platform to pay severance to 4,400 riders

MADRID, Dec 13 (Reuters) - Uber's food delivery platform in Spain has agreed in court to pay severance to 4,400 riders it had fired in 2021, local union UGT said on Tuesday.

The riders lost their jobs following the introduction of a new law in Spain forcing food delivery companies to hire their couriers as staff instead of self-employed contractors.

Uber's platform - Portier Eats Spain - acknowledged the delivery riders were collectively dismissed in violation of Spanish law and will pay each of them the equivalent to 45 days' salary per year they worked for the company, the union said in a statement.

"This is a historic agreement, as it marks the first time a collective dismissal of delivery workers has been recognised in court," UGT said.

"This agreement with worker unions in Spain aims at compensating couriers who were not able to access our app following the introduction of the Rider Law in 2021," an Uber spokesperson told Reuters.

"We have since then launched a new model in full compliance with the new local regulatory framework and remain open to dialogue," he added.

The change in the law in Spain came amid a debate in Europe about the legal status of the thousands of delivery riders who criss-cross city centres with branded backpacks, and who generally do not have access to traditional employee benefits such as minimum wage, paid holidays and pension rights.

The law's critics said it could jeopardise the platforms' business model and lead to labour shortages, while some riders complained about losing the flexibility associated to the gig economy.

Trade unions had taken legal action against Uber's Spanish food delivery platform last year before the country's High Court to challenge what they described as mass lay-offs.

The court initially ruled the unions' lawsuit lacked standing.

But in July, the Supreme Court overturned the High Court's decision and mandated a retrial, scheduled for Tuesday, which has now been settled with Uber's agreement to pay the severance.

(This story has been corrected to change the phrasing to show that the riders were "collectively dismissed in violation of Spanish law", not that they were "actually employed", in the third paragraph.)

Reporting by Emma Pinedo, Inti Landauro and David Latona; Editing by Jane Merriman and David Goodman

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