In brief

Today, more than 28 million people in the EU work through digital platforms in a wide variety of sectors. Their number is expected to reach 43 million by 2025. In the European Commission’s (“Commission“) view around 5.5 million people in the EU providing services via platforms are wrongfully treated as self-employed and are at risk of poor working conditions and insufficient access to social protection.

With the aim of improving the working conditions of these platform workers, the Commission published a proposal for a Directive on 9 December 2021. According to the Commission, the proposed Directive should ensure greater protection of platform workers. If the Directive is adopted, European member states will have two years to adapt their national legislation accordingly.

Content of the Directive

The aim of the Directive is to improve the working conditions and social rights of platform workers. More specifically, it addresses – in short – the following specific objectives:

• proper classification of the employment status of platform workers;
• fairness, transparency and accountability in algorithmic management; and
• improving enforcement, transparency, traceability and awareness of developments in platform work.

Classification of employment status

Classification of the employment status should primarily be guided by the actual performance of the work and not by how the employment relationship is described in the contract. Under the proposal, platform workers will be presumed to be employees if the platform operator controls certain aspects of the performance of the work. However, if a party disagrees with the presumption, the presumption can be rebutted by the platform operator or the platform worker. The presumption has the effect of changing the burden of proof, as the parties will have to demonstrate that there is no employment agreement to avoid employment status instead of, as is currently the case, workers having to prove that there is an employment agreement.

If a platform meets at least two of the criteria listed below, it will be deemed that the platform operator controls the performance of work:

• the platform operator determines the amount of remuneration or the maximum of remuneration;
• the platform worker is required to adhere to specific rules with regard to appearance or conduct;
• the platform operator supervises the performance of work or controls the quality of the results of the work including by electronic means;
• the platform operator restricts, also by means of sanctions, the freedom of the platform worker to organise one’s work. In particular, the freedom to arrange one’s working hours or substitution; and
• the platform operator restricts the platform worker’s ability to build up a client base or to perform work for any third party.

Algorithmic management

The proposal also aims to ensure platform workers are granted additional and more specific rights related to transparency regarding the use and functioning of automated monitoring and decision-making systems. Furthermore, it requires human monitoring of the impact on working conditions of such automated systems and it will be mandatory to establish systems to have these decisions reviewed.

In addition, it must be possible for platform workers to see how supervision, monitoring or evaluation of work performance takes place. Workers must be able to see how remuneration and division of labour are determined and have access to information on occupational safety and health, working time and contractual status. In principle, these provisions apply to all platform workers, including the genuine self-employed who arrange work through the platform. 

Transparency, traceability and enforcement

Finally, specific measures are proposed to improve the transparency and traceability of platform work to support enforcement by competent authorities. Impacted platform operators will be required to register with competent authorities and provide information. Competent authorities’ knowledge of platforms will be improved by giving them access to relevant basic information, such as the number of platform workers, their employment status and the terms and conditions applicable to them. These measures will help authorities monitor compliance with labour and social security rights.

Implications

At this stage of the legislative process, it is still too early to go into detail about the possible consequences of implementation of the proposed Directive. It does seem evident, however, that many platform workers currently treated as self-employed will be regarded as employees under the new Directive, which, in addition to the employment law consequences, may also have tax and social security implications.