RAPPI: Case Law Creates a Space For a Future Union

The substitute judge in charge of Lower Labor Court No. 37, which is presided over by Judge Stella Maris Vulcano, has upheld the injunction (Section 195 of the Civil and Commercial Code of Procedure) and ordered the Company to stop any anti-union action and reinstate the three RAPPI workers by activating the app that allows them to continue working as usual, as a preventative measure in a context where the Claimants have proved that they have started the procedure to form a union that will group similar workers under these atypical and special contractual terms. (National Lower Labor Court No. 37. Case File No. 46618/2018, “Rojas, Luis Roger Miguel et al v RAPPI ARG SAS on injunction”- Interlocutory decision No. 1141, Buenos Aires, March 19, 2019).

Published in El Cronista on March 26, 2019
This decision is grounded on Act No. 23592, which is a general law, and not a labor law, providing protection against any form of discrimination, whereby the Court is authorized to issue the abovementioned injunction. The Court has left Unions Act No. 23551 aside, which only allows for the existence of representative unions in the interests of workers under employer-employee relationship, and presumes the application of the Employment Contract Act [Ley de Contrato de Trabajo] when service providers may be characterized as freelancers or entrepreneurs governed by the Civil and Commercial Code of Argentina.

As you will recall, new forms of legal relationship have emerged as a result of the use of applications that belong to the so-called sharing economy. These computer tools match service providers with customers. It is efficient, eliminates unnecessary middlemen, creates a bond between customers and service providers with a personalized experience, and proves to be rapid, cost-effective and trustworthy.

Customers pay for the service, and service providers get customers’ pay in its entirety. The employer-employee relationship and the concept of subordinated work are disrupted by a new relationship that in my opinion poses the challenge of finding a new legal classification with a special treatment.

While the debate is held without any precedents, this case is brought seeking an injunction.

As a matter of fact, three service providers have come before a Labor Judge in their capacity as founders and members of the Executive Committee of the Association of Platform Personnel [APP, for its acronym in Spanish], a union that is still being formed at the National Board of Unions [Dirección Nacional de Asociaciones Sindicales] dependent of the National Secretary of Labor [Secretaría de Trabajo de la Nación].

First off, the Claimants recognize the particular features of the system that binds them to customers through an app that provides the geographical location of service providers and users to arrange for transportation of small packages, in general food. They also explain that the Company has the power of business organization because it can unilaterally change the app. Then they report breaches of labor laws, in particular, by the Company on repeated occasions. At some point they were blocked on the platform and they could not work as usual, which virtually accounted for their separation from RAPPI.

The acting judge ultimately ruled that the Company should immediately stop any anti-union action, activate the app so the claimants can go back to work as usual and impose a daily penalty for non-compliance.

To some extent, this injunction implies prejudgment because the relationship between service providers and RAPPI is not the typical relationship under the Employment Contract Act and does not meet the requirement of subordination of any employee-employer relationship.

This Court also assumes that their Union will be officially approved. It is called Association of Platform Personnel, whose acronym is “app” precisely. The software application gives plenty of leeway, does not establish a scheme of working hours or rest periods, and there is no employer who exercises the power of direction or business organization, control mechanisms, ius variandi or disciplinary actions.

The injunction sparks off the debate where the aim is to disentangle the legal nature of on-demand service providers through apps that are today a source of employment that should be preserved with legislation that ensures the parties’ rights in a context of reasonable feasibility.

By Julian A. de Diego
Director of the postgraduate course on Human Resources at the School of Business at UCA.