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A guide to the new EU proposals on digital platform workers

Written by
Claeys & Engels offers reassurance in the full range of human resources matters and fast, efficient and pragmatic legal advice.
Authors
Chris Engels
Chris Engels
Partner - Belgium
Claeys & Engels
Europe
06.01.22
6
On 9 December 2021, the European Commission launched a proposal for a set of measures, including a draft Directive, to improve the working conditions of platform workers.

Twenty-eight million people in the EU currently work through digital labour platforms. Nine out of ten platforms that are active in the EU (presumed to be around 500) classify their workers as being self-employed, It seems the European Commission is convinced that 1.72 to 4.1 million of these platform workers are wrongly labelled as self-employed. This would mean they lack the protection that traditional labour and employment law would grant them if correctly classified. The Commission anticipates that if reclassified, platform workers’ earnings may be increased by up to EUR 484 million per year. The increase in costs for the digital labour platforms could run to EUR 4.5 billion EUR per year – and Member States could benefit from up to EUR 4 billion in increased tax and social security protection contributions annually. What exactly these figures are based on and whether the potential beneficiaries want to be reclassified as employees remains unconfirmed.  What seems likely, though, is that this huge cost increase would be passed on to consumers.

The Draft Directive proposes measures on three axes:

  • the employment status of platform workers;
  • algorithmic management proposals for all platform workers; and
  • obligations for platforms to declare work to national authorities.
Employment status

All over the EU, courts and administrative authorities are confronted with cases dealing with the employment law status of platform workers. Courts struggle to fit most platform workers into one of the two types of status generally available in the different Member States: employees, or self-employed contractors.

The draft Directive recognises that platform work is not easy to categorise as either self-employed work or work as a ‘subordinate’ employee. The idea of a third category of worker with a legal status in-between the employed and the self-employed, as already exists in the UK, is not followed in the draft Directive. Trade unions and apparently also a number of national authorities were firmly against the idea of introducing such an intermediary status. As a result, the Directive proposes sticking to the traditional division between employed and self-employed.

Applying traditional criteria and focusing on ‘legal subordination’ as a criterion to make this distinction, results in many allegedly misclassified platform workers. The draft Directive stresses the fact that the correct determination of employment status should depend on the facts and not on the nature of the legal contract or relationship between the platform and the workers. When a digital labour platform ‘controls’ the work of the platform worker, the Directive would introduce a presumption that the platform worker is in an employment relationship. That presumption can be rebutted (overturned), however. The idea of establishing a presumption that cannot be challenged was ultimately not reflected in the Directive.

A platform is presumed to be controlling the performance of the work, the Directive states, when at least two of the following criteria or conditions are satisfied:

‘(a) effectively determining, or setting upper limits for the level of remuneration;

(b) requiring the person performing platform work to respect specific binding rules with regard to appearance, conduct towards the recipient of the service or performance of the work;

(c) supervising the performance of work or verifying the quality of the results of the work including by electronic means;

(d) effectively restricting the freedom, including through sanctions, to organise one’s work, in particular the discretion to choose one’s working hours or periods of absence, to accept or to refuse tasks or to use subcontractors or substitutes;

(e) effectively restricting the possibility to build a client base or to perform work for any third party.’

(Article 4.2)

The platform worker and the national authorities can invoke this presumption.  When dealing with an ongoing work relationship, the draft indicates that the presumption will not have any retroactive effect, but will only apply from the date the national implementing measures enter into force.

Any of the parties to the working relationship can try to rebut the presumption. This will most likely mean that in the event of doubt, when the platform is unable to prove the absence of a subordinate relationship, the platform worker will be considered to be an employee and hence protected by national legislation dealing with working time, holiday pay, occupational health and safety rules, protection against work accidents, unemployment, sickness and old age. In addition, minimum wage rules may come into play where they exist.

While the European Court of Justice has interpreted the European concept of ‘worker’ very widely, it has also always stressed the need for legal ‘subordination’ or control and direction over the worker. The criteria or conditions mentioned in the draft Directive and triggering the presumption are certainly not all signs of any form of legal subordination. In addition, most of the criteria seem to be rather vague and will lead to new discussions in court: when is one party ‘effectively restricting’ the other party? While the Commission stresses the fact that the Directive would bring legal certainty to digital platforms by reducing litigation, the opposite may well turn out to be the case. The legal certainty argument seems to be invoked as a last resort catch-all justification.

Finally, the ‘workers’ concept for this draft Directive remains a national concept, but ‘with consideration to the case law of the Court of Justice’. How the term ‘with consideration to…’ should be interpreted remains to be seen. This concept is not new, as it is also used in the Transparent working conditions Directive, but it has not been interpreted by the European Court of Justice to date.

Working conditions

Chapter II of the draft Directive aims at improving working conditions for all platform workers and not only of those with employed status. The Directive aims at introducing transparency on use of automated monitoring and decision-making systems. Platforms will have to inform platform workers of any automated systems used to monitor, supervise or evaluate work performance through electronic means. This also applies to automated decision-making systems used to take or support decisions that significantly affect platform workers’ working conditions, in particular their access to work assignments, earnings, occupational health and safety, working time, promotion and contractual status, including the restriction, suspension or termination of their account.

The information to be provided relates to the fact that these systems are in use or being introduced. With respect to automated decision-making, the platforms should inform platform workers on the categories of decisions that are taken this way, the main parameters that are taken into account and their relative importance. It should also inform platform workers on the grounds for decisions to restrict, suspend or terminate accounts and to refuse remuneration for work performed. The same information also needs to be provided to platform workers’ representatives, but it is unclear who these representatives would be when dealing with self-employed workers.

Platforms will also have to monitor and evaluate the impact of individual decisions taken or supported by automated systems. Platforms need to make sure there are sufficient human resources available for this monitoring.  Platforms will need to provide platform workers with an explanation for any decisions significantly affecting their working conditions. A contact person also needs to be provided. Significant decisions regarding access to accounts and refusal of remuneration require a written statement of reasons. A right to request a review of the decision is equally included in the proposal.  When working with employees, the platform will also be required to consult on any decisions likely to lead to the introduction of, or substantial changes in, systems used. In this context, the draft refers to the general framework Directive on information and consultation. Assistance from experts is foreseen in Article 9 of the draft Directive, which seems to apply to platform workers working as employees. However, it must be out of concern for legal certainty that the Commission did not include a definition of who can act as an expert. Any self-proclaimed trade union representative?

Other elements of the proposals

Platforms need to declare work performed in a Member State to the competent labour and social protection authorities of that Member State.

In addition, on 9 December 2021, the Commission launched draft guidelines on collective agreements of self-employed individuals. The idea is to ‘allow’ some sort of collective bargaining for solo self-employed workers. Self-evidently these solo self-employed would include quite a few platform workers. The Commission has invited comments on this draft by interested parties by 24 February 2022. A final version of its Guidelines is then expected for the second quarter of 2022. Some key questions need to be addressed: who will bargain on behalf of the solo self-employed? How would the result of the bargaining be enforced? On whom?

Conclusion

The legal status of platform work is quite a complex issue and poses new challenges to traditional labour and employment law. With these proposals, it seems that the Commission is trying to squeeze all these rather new forms of work into the old moulds of employees and self-employed. The general creation of a third status was considered but rejected. Admittedly, introducing a third category of worker may well have made things even more difficult, with not just one, but two status demarcation lines to consider.