Proposal of EU-Directive on improving working conditions in platform work sets out new requirements to digital platforms

In December 2021, the European Commission issued a proposal for a new directive regarding platform work[1] with specific focus on the people working within this industry. Due to the rapidly growing digital transformation especially with the platform economy, EU see a high need for a wider protection of workers within this economy to ensure that the fundamental rights for workers stated in Charter of Fundamental Rights of the European Union is fulfilled.

The 3 main objectives of the Directive are:

1. to ensure that people working through platforms have – or can obtain – the correct employment status in light of their actual relationship with the digital labour platform and gain access to the applicable labour and social protection rights.
2. to ensure fairness, transparency and accountability in algorithmic management in the platform work context; and
3. to enhance transparency, traceability, and awareness of developments in platform work and improve enforcement of the applicable rules for all people working through platforms, including those operating across borders.

Employment status

One of the biggest challenges within the platform industry is the assessment of whether the person working may be considered as a self-employed or as an employee. Only workers who fall under the personal scope of such legal instruments benefit from the protection. Self-employed people, including those working through platforms, fall outside the scope and typically do not enjoy these rights, making the worker status a gateway to the EU labour laws. According to the European Commission, because of actions to address the risk of misclassification, between 1.72 million and 4.1 million people are expected to be reclassified as workers.

The proposed rules re. employment status is stated in Chapter II (Article 3 – 5) of the Directive.

Article 3 requires Member States to have appropriate procedures in place to verify and ensure the correct determination of the employment status of persons performing platform work, and to allow persons that are possibly misclassified as self-employed (or any other status) to ascertain whether they should be considered to be in an employment relationship – in line with national definitions – and, if so, to be reclassified as workers.

Article 4 states that the contractual relationship between a digital labour platform that controls the performance of work and a person performing platform work through that platform shall be legally presumed to be an employment relationship. Member States shall establish a framework of measures, in accordance with their national legal and judicial systems. Article 4 (2) further state a number of criteria to consider in the assessment of whether the platform “controls” the worker.

The determination of the existence of an employment relationship shall be guided primarily by the facts relating to the actual performance of work, taking into account the use of algorithms in the organisation of platform work, irrespective of how the relationship is classified in any contract that may have been agreed between the parties involved.
In relation to this, Article 5 states that where the digital labour platform argues that the contractual relationship in question is not an employment relationship (as defined by the law, collective agreements or practice in force in the Member State, with consideration to the case-law of the Court of Justice), the burden of proof shall be on the digital labour platform, i.e. a reversal of the burden of proof is established with the Directive.

Ensuring fairness, transparency, and accountability in algorithmic management

“Algorithmic management” means that the digital platforms use automated systems to assign tasks, to monitor, evaluate and take decisions for the people working through them. The Directive introduces new material rights for people performing platform work and who are thus subject to “algorithmic management”.

These new material rights are stated in Chapter III (Article 6– 10) of the Directive and are considered as supplement to Directive 2019/1152 on transparent and predictable working conditions. First, a digital platform is required to inform platform workers of a) automated monitoring systems[2] and b) automated decision-making systems[3] (Article 6). The worker must receive the information in the form of a document at the latest on the first working day as well as in the event of substantial changes and at any time upon the platform workers’ request (the document may be in a electronic format). The information must be concise, transparent, intelligible and in an easily accessible form, using clear and plain language.

Under Article 7, digital labour platforms must regularly monitor and evaluate the impact of individual decisions taken or supported by automated monitoring and decision-making systems.

Thus, sufficient human resources for monitoring the impact of individual decisions taken or supported by automated monitoring and decision-making systems must be assured.

Under Article 8, platform workers have the right to obtain an explanation from the digital labour platform for any decision taken or supported by an automated decision-making system that significantly affects the platform worker’s working conditions. Therefore, digital labour platforms must provide platform workers with access to a contact person designated to discuss and to clarify the facts, circumstances and reasons having led to the decision. Digital labour platforms shall ensure that such contact persons have the necessary competence, training and authority to exercise that function.

Finally, under Article 9, the digital platform must provide information and consultation of platform workers’ representatives or, where there are no such representatives, of the platform workers concerned by digital labour platforms, on decisions likely to lead to the introduction of or substantial changes in the use of automated monitoring and decision-making systems.

Transparency of platform work and enforcement of applicable rules

Finally, concrete measures are proposed to achieve the third objective of enhancing transparency and traceability of platform work with a view to supporting competent authorities in enforcing existing rights and obligations in relation to working conditions and social protection. This is regulated in Chapter IV (Article 11-12).

The Directive’s Article 11 and 12 state that 1) digital platform must declare work performed by platform workers to the competent labour and social protection authorities and to share relevant data with those authorities and 2) that the relevant authorities have access to relevant basic information on the number of people working through digital labour platforms, their employment status and their standard terms and conditions.

To ensure enforcement of the rules, the Directive also proposes various ways for the authorities and the workers to ensure the material rights of the workers. These are listed in Chapter V (Article 13-19). Among others is Article 15 whereby digital labour platforms must create the possibility for persons performing platform work to contact and communicate with each other, and to be contacted by representatives of persons performing platform work. The contact must happen through the digital labour platforms’ digital infrastructure or similarly effective means.

Under Article 17 and 18, the workers are protected against adverse treatment or consequences and from dismissal on the grounds that they have exercised the rights provided for in the Directive.

[1] Proposal for a Directive of the European Parliament and of the council on improving working conditions in platform work 2021/0414 (COD) (the “Directive”)

[2] which are used to monitor, supervise or evaluate the work performance of platform workers through electronic means

[3] which are used to take or support decisions that significantly affect those platform workers’ working conditions, in particular their access to work assignments, their earnings, their occupational safety and health, their working time, their promotion and their contractual status, including the restriction, suspension or termination of their account.