On 9 December 2021, the European Commission submitted an eagerly awaited proposal for a directive to improve the working conditions of people working through digital labour platforms. The proposal comprises three targets: combatting false self-employment, creating more transparency and fairness as well as introducing comprehensive information duties.
Because of their precarious situation, workers’ representations have been demanding an EU legal framework for online platform workers for years. On 9 December 2021, the European Commission presented a pleasantly concrete Directive proposal.
European Commission is taking action against precarious work and false self-employment
One of the major problems of the platform economy is that platforms regularly try to bypass labour laws. People working for platforms often are wrongly classified as freelance service providers or as self-employed. However, from a legally correct point of view, many would have to be categorized as employees. In recent years, numerous courts in the Member States have corrected false self-employment; however, platforms were extremely hesitant to actually implement these – for them – unfavourable court decisions.
That is why the proposal provides for Member States to be obliged to assume an employment relationship between digital working platform and platform workers, if at least two of five criteria regarding the presence of sufficient performance control by the platform are fulfilled. Performance control exists, for example, if the platform monitors the execution of the work electronically and determines the amount of remuneration. The term "digital work platform" is understood broadly in the draft directive: it covers platforms on which services are provided by persons who are organized via the platform and individually requested by customers. In concrete terms, this would affect platforms for passenger transportation such as Uber and ordering platforms such as Delivery Hero.
AK EUROPA had already demanded such a regulation in a Policy Brief; therefore, as it significantly facilitates the implementation of the correct legal status of platform workers, it can be regarded as a genuine legal policy success. However, the restriction to only five criteria and the condition that only two of these have to be fulfilled, appears too limiting.
The second core topic addressed by the Directive proposal concerns “Algorithmic management“: regarding this form of workforce organisation, many, if not all important decisions are based on data collection and automated decision-making. Digital working platforms have to inform platform workers of surveillance systems and automated decisions, if these are “significant” for the people concerned. This concerns, among other things, information regarding the awarding of contracts as well as the evaluation of the work performed, whereby a minimum content of this information will be required. Apart from that, this information has to be provided on the first workday as well as at a later stage at the request of employees, their representatives and labour authorities. Digital working platforms must also regularly assess the effects of these automated systems and evaluate their risks.
Transparency of platform work
Digital working platforms have to inform Member States’ competent labour and social security authorities of the of platform work, based on which services are rendered. Apart from that, digital working platforms have to make certain information available to authorities and platform workers’ representatives. This concerns the number of platform workers, their contractual classification as well as general contract terms. Even if this does not provide all relevant data, such as the extent of employment and remuneration, it does improve the data situation for platform work to a certain extent and enables a factual political discussion on the need for further regulation.
Negotiations must not water down Commission proposal!
From AK’s point of view, the Directive proposal has to be regarded as positive. However, from the employees’ perspective, it could have gone further, as it significantly accommodates digital working platforms. The criteria method for determining an employment relationship is less ambitious than expected, while the extended scope regarding the transparency and fairness of algorithms is very welcome. In any case, the European Commission has shown itself to be extremely aware of the problem in the present proposal and has found thoroughly original, interest-balancing solutions. However, first the Council’s national heads of state and government have to be persuaded to adopt the Directive, which even at this stage appears to be very balanced. It is essential not to water down the proposed text any further. Otherwise, only a largely ineffective tool would remain, which sounds better than it performs.