Shireen Shaikh

Senior Counsel – Knowledge

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Yasmin Miriam Patora

Knowledge Lawyer

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Shireen Shaikh

Senior Counsel – Knowledge

Read More

Yasmin Miriam Patora

Knowledge Lawyer

Read More

20 September 2023

Future of work: Platform Workers' Directive

  • In-depth analysis
What is the Platform Workers' Directive and why is there a need for a new law?

Platform work, or work through an online platform, has become an established way of working but to date there has been very little attempt to regulate it. As global businesses increasingly rely on platform workers in various jurisdictions, it is important to understand what is meant by platform work and platform workers.

The EU has proposed a Platform Workers' Directive which has three broad policy aims: to create a rebuttable presumption of employment status; to afford minimum protections to platform workers and to ensure transparency and fairness where platform workers are managed by algorithm.

When will it come into force?

The proposal for a Platform Workers' Directive was adopted by the European Council in June 2023 and needs to be negotiated by the European Parliament before it becomes law. Once formally passed, Member states are likely to have [two years] to implement it. Although this seems some time off in the future, business models will need adapting in time to take account of its impact.

What is platform work and what is a platform worker?

Platform workers tend to be atomized, often across jurisdictions, so the old-fashioned concept of a coherent employer may not apply. Those working as online platform workers may not think of themselves as employed by anyone or owed any rights; they may regard themselves as self-employed.

The preamble to the Directive points out that, "digital platforms are present in a variety of economic sectors. Some offer services 'on-location', such as ride-hailing, delivery of goods, cleaning or care services. Others operate solely online with services such as data encoding, translation or design. Platform work varies in terms of level of skills required as well as the way the work is organised and controlled by the platforms".

What is a digital labour platform?

The Directive applies to all “digital labour platforms”. A digital labour platform can be a natural or a legal person that provides a service and meets the following requirements: 

  • it is provided, at least in part, at a distance through electronic means (website or mobile application) 
  • it is provided at the request of a recipient of the service 
  • it involves, as a necessary and essential component, the organisation of work 
  • with the use of automated monitoring or decision-making systems
Is the application limited to triangular relationships?

Yes, there must be a triangular relationship (platform provider, person performing platform work and recipient). Purely internal company platforms that organize the work of their own workforce ("internal crowd working") are not subject to the Directive.

How much organisation by the platform provider leads to the application of the Directive?

The platform has to play an “important role” in matching demand for service with the labour supply of platform worker and thereby influencing service delivery. It must provide structuring services by matching supply and demand. This can manifest in a variety of ways. It can include pre-structuring the work process, determining the price, controlling execution, or handling payment transactions.

Are specific platforms excluded?

Yes, online platforms which merely act like a "bulletin board", whose primary purpose is to announce and bring together offer and request. If they do not organize the work of the individual person performing platform work then they will fall outside the scope of the Directive.

Which sectors are most affected?

A wide variety of services and platforms are likely to be affected. Most platforms in the fields of passenger and goods transport as well as cleaning and care services will have to adapt to the regulations. In addition, platforms that offer online services for crowd workers are also affected. In these areas, it can be assumed that the platform operators exert more than marginal organizational influence with the help of algorithmic systems.

Will only employers based in EU Member States be affected?

The Directive will affect any digital labour platform using people who carry out platform work in a Member State, regardless of where the organisation operates from or is established and regardless of whether it 'employs' people in the traditional sense.

Can a business which uses 'self-employed' people in Member States effectively ignore the Directive?

Global businesses whose model depends on the use of platform workers in Member States, including the self-employed, need to know about the Directive. Business models may need to be revisited, and contingency finds put aside to cater for the possibility that platform workers previously characterised as self-employed are in fact platform workers protected by the Directive.

Employment status

The Directive will create a rebuttable presumption that an employment relationship exists between a digital platform controlling the performance of work by a platform worker and the platform worker. The label which the parties choose to put on the arrangement, or the absence of any such label, will not be determinative. Regard will be had to the definition of 'employee' used in each member state, as well as principles of EU law. Over time we may see the emergence of a definition of employment status that has overarching applicability across member states.

Control will be present if (based on current proposal) three out of seven indicate of control are met, broadly: 

  • Setting remuneration levels 
  • Requiring compliance with rules of conduct or appearance towards the recipient 
  • Supervising the performance of work 
  • Restrictions on freedom to control working hours or time off 
  • Restriction on freedom to accept or refuse tasks. 
  • Restriction on freedom to use substitutes 
  • Restricting a person's ability to access client base
Minimum floor of rights

Minimum rights will apply to platform workers with regard to certain areas, including working time and the right to paid leave, minimum wages, health and safety, equal pay, collective bargaining. Platform workers will also be entitled to benefit from transparent and predictable working conditions, and pay transparency, by virtue of other forthcoming Directives. Being a platform worker will be a 'gateway' to other EU-derived rights.

Transparency, fairness and accountability of algorithmic management

The Directive sets down requirements for digital labour platforms to be transparent and let platform workers (even self-employed) know when and how they use algorithms to manage work and workers. It will give platform workers the right to challenge automated decisions or decisions supported by automated systems which affect them and ensure that there is human oversight for significant decisions affecting them, such as suspension of a work account. So in addition to obligations under the GDPR – which only regulates automated decisions – the Directive provides for additional obligations, which apply in the context of platform work.

Our experts

Please contact Anne Förster or Paul Callaghan if your think your business may be affected by the forthcoming Directive and you would like to discuss further.

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