Labour law in the digital age

Introduction

The digital economy was built on a promise: flexibility for those who work and efficiency for those who hire.

Yet that promise often clashes with existing labor standards and regulations, giving rise to a crucial legal question:

Is there an employment relationship (with salary, paid leave, and social security), or is it an independent service?

Today, that question is being debated in courts and legislatures across the world. From Europe to Latin America, governments are trying to give structure to a model that was born without borders — with “delivery” platforms like Uber, Glovo, Rappi, PedidosYa, and any app that intermediates labor through an algorithm leading the way.

Regulatory Models in Play

European Union

The new Platform Work Directive (Directive (EU) 2024/283) introduces a presumption of employment: if the app controls prices, schedules, or performance, the relationship is presumed to be employment unless proven otherwise. It also sets limits on algorithmic management and requires transparency on how workers are assigned or deactivated.

Spain: The Glovo Case

The most relevant precedent. Spain’s Supreme Court and National Court ruled that Glovo’s couriers were employees, not self-employed contractors. The reasoning: the company set prices, assigned orders, evaluated performance, and imposed sanctions through the app. Outcome: Glovo was fined over €15 million and forced to change its model in Spain, directly hiring its riders. A case that marked a before-and-after in Europe — and a warning for Latin America.

United Kingdom: The Hybrid Model

The Uber v. Aslam (2021) case created the “worker” category — neither fully employed nor fully independent, but entitled to basic rights such as minimum wage and paid leave.

United States: The Californian Paradox

Proposition 22, reaffirmed in 2024, allows drivers to remain independent contractors but with limited benefits (insurance, breaks, etc.). Each state applies different tests, creating a complex regulatory mosaic.

Mexico: A Model Under Review

A reform to the Federal Labor Law is underway, adding specific chapters for digital platforms. It prohibits the use of civil or commercial contracts to disguise employment relationships and requires formal employment contracts when labor conditions fit the legal criteria. Proposals also state that any platform worker earning at least the monthly minimum wage must be treated as an employee and receive benefits.

🇵🇦 Panama: Legal Subordination and Economic Dependence

Panama has no specific law for digital platforms. Therefore, disputes are analyzed based on the principles of the Labor Code, particularly legal subordination and economic dependence.

Legal Subordination

Occurs when the worker is under the employer’s direction, control, or disciplinary power. In digital platforms, this can be seen when:

• The app defines prices or routes.
• It penalizes order rejections or disconnections.
• It monitors performance through algorithms.
• It can “deactivate” a rider unilaterally.

Even without a visible boss, the algorithm can act as a digital supervisor, creating real subordination.

Economic Dependence

Arises when a person earns most of their income from a single source, limiting their economic autonomy. A rider earning nearly all income through one app may be considered economically dependent, even if labeled as “independent.”

🚴‍♂️ What if a Rider Works for Several Apps at Once?

This is a key question in Panama. If a rider:

• Works simultaneously with Uber Eats, Asap, and PedidosYa,
• Chooses when and where to log in,
• Has no exclusivity and assumes all operating costs (fuel, maintenance, phone),

Then, legal subordination weakens and economic dependence fades, making their contractor status more defensible.

However, if an app imposes incentives or penalties that limit autonomy, requires continuous availability, or restricts access to other platforms, it could constitute a disguised employment relationship, even without a formal contract.

Panamanian jurisprudence, like in other countries, would apply the principle of primacy of reality (Article 63 of the Labor Code):

“What happens in practice prevails over what is written on paper.”

Global Trends Reaching Panama

• Extraterritorial effect: Platforms with European users must comply with the EU presumption of employment, even when operating from Latin America.
• Algorithmic transparency: Obligation to disclose how algorithms assign or block workers.
• Greater enforcement: The cases of Spain and the UK set precedents likely to inspire similar actions in the region.

Conclusion

As seen, calling someone an “independent contractor” is no longer enough to make it true.

In Panama, the analysis will hinge on legal subordination and economic dependence, not on the contract’s label. The line between employee and contractor is increasingly blurred — and in a world managed by algorithms, clarity of contract and absolute autonomy are the only factual defenses.

The Fine Print doesn’t tell you who to hire… but it does tell you how to do it without ending up in labor court.