Changes from report parliamentary committee draft to plenary report

Platform work is one of the key transformations that digital technologies are bringing to labour markets across the world. Several sectors are shifting to the labour platform economy, from transportation to proximity services to creative industries. The Covid-19 pandemic accelerated this trend, promoting sectors that were already moving towards platform work such as food delivery. Data reflects such a trend: according to the Commission estimates, over 28 million people in the EU are involved in platform work, and by 2025 this number will rise to 43 million.

The flexibility and exponential growth of platform work however risk, without proper regulation of the phenomenon, to bring about precarious working conditions, at the expenses of the people performing that work. Evidence across the EU shows that people performing platform work often do not enjoy the same rights as workers in the traditional economy, as they are even not recognised as such, even if facts would prove it and, because of the conditions raising for platform work organisation, involving algorithmic management, are particularly subject to exploitation. Therefore, this Directive aims at ensuring that developments brought about by new technologies do not hamper the rights that workers in the EU rightly obtained over the past decades.

Employment status

First of all, the employment status of people performing platform work too often does not match their working conditions. The misclassification of the employment relationship has been a major driver of Court cases across the EU, trying to determine the appropriate employment status of workers on the basis of their tasks and the degree of control and supervision that the platform exercises on them. Most Courts found that the workers under trial were bogus self-employed, meaning that they signed a self-employment contract with the labour platform, but they - as a matter of fact - were proven to have the working conditions of an employment relationship. Facts were therefore telling a different story from the formal relationship between them and the platform. Bogus self-employment combines the worst of both worlds, as those people do not enjoy the independence of self-employment in determining their clients, pay and work organisation, but still carry the business risk of the labour platform while not enjoying the rights and protection assigned to workers in an employment relation. The issue of misclassification is a concern as well for the level-playing field in the Single Market, as platforms making use of bogus self-employment incur in lower labour costs than their competitors, using a legal vacuum in the regulation of platform work. It is important to note that platform work is a complex phenomenon, and many people performing platform work, especially among the high skilled ones, are correctly classified as self-employed. The purpose of the first part of this directive and draft report is therefore to avoid misclassification of the employment status of people performing platform work. In light of that risk, introducing a rebuttable legal presumption of the employment relation is the best way to address the issue in order to protect workers’ rights and provide them with the appropriate employment status, while not touching at the genuine self-employed. At the same time, this will ensure the respect on behalf of the platforms of fiscal duties and social security schemes in case they are recognized as employers, while providing for fair competition in the Union. In order not to introduce discrimination among comparable businesses and to ensure that the Directive reaches its objectives and is properly enforced, it is essential that the definition of digital labour platform mirrors the effective reality and variety of platforms.

Bogus self-employment in the platform economy leads to precariousness, low pay, security risks, and the denial of all the rights stemming from the employment status, social protection included. Often workers taking up these jobs come from vulnerable backgrounds and absolutely need the extra income because their first job does not pay enough, and they do not even dare questioning their employment status.

Authorities applying the legal presumption will receive appropriate guidance and Member States will establish procedures in order to identify swift and smooth processes, reduce litigation while avoiding capturing the genuine self-employed. Labour inspectorates or organisations enforcing labour law will receive adequate trainings in the relevant technological field, allowing them to effectively fulfil their duties. The possibility to rebut the legal presumption will always be assured to platforms challenging it and the burden of the proof will consequently be on them. The final judgement will be based on facts and not on formalities. This procedure is the most effective and fair because the worker is the weakest side in the litigation, and the full knowledge of the business model and the functioning of the algorithm is in the hands of the platforms.

Algorithmic management

While across the EU collective bargaining or labour regulations set the labour standards in the traditional economy, people performing platform work accept working conditions unilaterally set by platforms through automated and semi-automated monitoring and decision-making systems, and are sometimes not even in the situation to recognise an abuse. Indeed, they are not aware of the functioning of the algorithm and the decisions it takes regarding their working time, the clients they are assigned, the evaluation of their performance, their health and security guarantees and even access to work. As of today, the majority of platforms employ little human oversight of the decisions taken by their algorithm and there are no uniform and clear provisions determining control on compliance of those systems neither with data protection regulations, nor with respect to their impact on health and safety. Moreover, algorithmic management is not an issue regarding exclusively digital labour platforms, as more and more employers today adopt algorithmic tools to supervise, monitor and control workers. That is the reason why a rich chapter of the Report is dedicated to establish a set of rules protecting all workers from abusive algorithmic management practices throughout the Union.

It appears immediately clear how this chapter is highly relevant not only for people performing platform work (independently of their employment status) but for every worker whose working conditions are affected by those systems. Indeed, the pandemic has even accelerated the so called phenomenon of “platformisation” of the economy, which refers to the increasing use of those systems in order to organise and control work also far beyond platform business. The provisions introduced in this section applies therefore to all workers affected by automated or semi-automated monitoring and decision-making systems information. Workers dealing with algorithmic management and their representatives have to be informed in advance of all elements affecting working conditions and health and security at work, so as to give them the opportunity to understand the functioning of the algorithm and to collectively bargain on it. All decisions impacting on those terms are to be taken by human beings, and, in parallel, human oversights on decisions taken by the algorithm has to be granted. At the same time, platforms have to guarantee that the protection of data of people performing platform is fully respected and that the algorithm does not access or collect data which are not primarily linked to the performance of work.

Transparency and remedies concerning platform work

The sparse nature of platform work makes it difficult for platform workers to come together and act collectively to improve their situation. Unionising has been actively discouraged by some labour platforms who depend on bogus self-employment for their business model.

Platform work is then a very difficult phenomenon to capture as there is no evident workplace and very often persons working for the same platform are not aware of each other. This constitutes an issue not only for those people but also for national authorities, especially tax and social protection public institutions. Once the employment relationship is recognised as subordinate employment, the platform will be recognised as undertaking and therefore all applicable legislation and provisions stemming from collective agreements linked to the sector of activity will apply. Indeed, the last part of the draft Report is focused on transparency in platform work and remedies, which are needed in light of the above-mentioned nature of platform work.