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EU Proposed Directive to Overhaul Digital Labour Platforms

A new directive intended to improve the working conditions of individuals involved in platform work is being proposed. The proposal aims to address the ever-speeding digital transition within the European Union’s economy and labour markets. The digital labour platform economy is estimated to have increased by 500% in the last five years. Although this is positive and welcomed news, it has also led to certain instances of abuse.

The new directive thus aims to address the fact that nine out of ten of EU active platforms classify the persons working through them as ‘self-employed’, and while there are genuine instances of self-employment among such individuals, there are also people who experience subordination. The classification of employees as self-employed deprives them of the rights and protections which they would be entitled to if they were deemed to be employed (such as minimum wage, work time regulations, paid leave etc). Through the changes being proposed in this directive, it is expected that between 1.72 million – 4.1 million people will be reclassified as employed workers.

What are Platform Workers?

Platform work is defined as “any work organised through a digital labour platform and performed in the EU by an individual on the basis of a contractual relationship between the digital labour platform and the individual, irrespective of whether a contractual relationship exists between the individual and the recipient of the service”.

Platform workers on the other hands are those persons performing platform work who have an employment contract or employment relationship as defined by law, collective agreements or practice in force in the Member States with consideration to the case-law of the Court of Justice.

It is also worth mentioning that since this directive aims at tackling misclassified of workers, it also includes a definition of ‘persons performing platform work’ as “any individual performing platform work, irrespective of the contractual designation of the relationship between that individual and the digital labour platform by the parties involved”. This is to avoid any loopholes through contractual means.

This directive applies to digital labour platforms that are natural/legal persons providing a commercial service meeting all of these requirements:

  1. It is provided, at least in part, at a distance through electronic means (website or mobile application)
  2. It is provided at the request of the service
  3. It involves, as a necessary and essential component, the organisation of work performed by individuals, irrespective of whether that work is performed online or in certain locations.

Therefore, it is limited to those who provide a service whereby the organization of work performed by the employees is a key component of the structure.

What is being proposed?

While the ultimate aim of this directive is that employees’ status is correctly classified, it aims to address a number of ancillary matters.

The directive thus focuses on the new concept of Algorithmic Management within these digital platforms. An effort must be made to understand the algorithm’s decision-making capabilities and improve transparency, especially since it could decide important factors such as the termination of workers’ accounts. Therefore, the directive aims:

  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

Member States will be required to establish procedures to ensure the correct determination of the employment status of persons performing flatform work based on the current employment relationship, collective agreements and case law. The main determining factors should be the factual actual performance of the work irrelevant to how the relationship is actually contractually classified.

The directive also sets a legal presumption that a contractual relationship between a Digital Labour Platform (DLP) that controls the performance of work and a person performing platform work through that platform shall be legally presumed to be an employment relationship. “Controlling the performance of work” is further understood as fulfilling at least two of the following circumstances:

  1. effectively determining, or setting upper limits for the level of remuneration;
  2. 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;
  3. supervising the performance of work or verifying the quality of the results of the work including by electronic means;
  4. 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;
  5. effectively restricting the possibility to build a client base or to perform work for any third party.

Once at least two of these situations are present, the relationship is defined as an employment relationship. This presumption is rebuttable by the DLP (with the burden of proof being placed on them).

DLPs are also not allowed to process any personal data of platform workers that is not intrinsically connected to their performance, specifically:

  1. processing any data on their emotional or psychological state
  2. processing data on their health
  3. processing data on private conversations
  4. collecting any personal data while they are not offering/performing platform work.

DLPs must make sure that there is a human monitoring system to ensure that the automated monitoring and decision-making systems are working properly. Furthermore, there must be a human review of significant decisions taken by the automated decision-making system which significantly affected the platform worker’s working conditions. A written statement of the reason behind the decision is to be provided to the worker, and if not satisfied with the explanation, the worker can request the DLP to review such decision. If it is deemed to infringe the worker’s rights, the DLP must rectify the decision or provide adequate compensation.

Furthermore, in a bid for further transparency, Member States must ensure that DLPs report work performed by workers to the competent labour and social protection authorities.

Specifically, such authorities must be provided with:

  1. the number of persons performing platform work through the platform on a regular basis and their contractual/employment status.
  2. General terms and conditions applying to those relationships.

Member states are also to ensure that they are empowered to order the DLP to disclose any relevant evidence which lies in their control which national courts deem relevant to the claim.

This directive is simply the minimum protection level and shall not constitute as grounds for reducing the general level of protection already afforded within Member State national laws.

The proposed directive will now be discussed at EU level, and once adopted, must be transposed by each individual Member State within two years.

This article was written by Dr Cherise Abela Grech and Legal Trainee Ms Jodie Arpa.

For more information, please contact Dr Robert Tufigno or Dr Cherise Abela Grech

Disclaimer: This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.