The Evolution of Gig Work in the EU: Analysing the Proposed Directive on Platform Workers

Introduction

The surge in the number of platform workers in 2020 prompted the European Commission to scrutinise their contractual status and alignment with the nature of their work. Platform workers use an online platform to access other organisations or individuals to solve specific problems, or to provide specific services in exchange for payment. Currently, the majority of the European Union’s (EU) 28 million platform workers find themselves formally self-employed, encompassing diverse roles such as taxi drivers, domestic workers,[1][2]

Understanding the Directive

In December 2021, the Commission proposed a draft directive, which, a year and a half later, was finally approved by the majority of member states in mid-2023. In total, 22 member states approved the directive at the Employment and Social Affairs Council in Luxembourg. Only five – Estonia, Germany, Greece, Latvia, and Spain – abstained.[3] The directive seeks to establish criteria for distinguishing between self-employed and employed platform workers, thereby addressing misclassification and laying the groundwork for improved working conditions and social rights. Additionally, the directive introduces the first set of EU rules governing the use of artificial intelligence in the workplace.[4]

The Council’s objective, as outlined in the directive, is to rectify misclassifications of employment status. According to the Council, a digital platform’s worker will be legally presumed as being an employee if their relationship with the platform fulfills , and rules governing conduct.[5]

Moreover, digital platforms deploy algorithms for human resource management. This obscures decision-making processes and the use of personal data for platform workers. Recognising this issue, the directive emphasises the importance of transparency and aims to ensure that workers are informed about automated monitoring and decision-making systems. The proposed rules mandate for these systems to be monitored by qualified personnel. This will provide platform workers with specialised protection against adverse treatment. Additionally, a commitment to human oversight is established, particularly for pivotal decisions such as the suspension of accounts, thereby reinforcing accountability in human resources management.[6]

At the final phase of the legislative procedure known as ‘trilogues,’ the EU Council, Parliament, and Commission, [7] have adopted divergent stances concerning the directive. [8] The Council and Commission align on the legal status of platform workers. Whereas, the Parliament advocates for a broader approach, pushing for the removal of criteria altogether, where subordination to platforms could have the presumption of employment triggered. [9]

Implications for the Gig Work Economy

Platform work is praised for its potential to boost productivity, labour flexibility, and job opportunities for marginalised groups. However, it is marred by a lack of social protections, as noted by the United Nations International Labour Organisation. [10] Platform workers, distinct from traditional employees covered by social insurance, often bear heightened personal risks. They have limited access to employee benefits, disability coverage, and workers' compensation, compounded by a lack of insurance for business-related claims. [11]

Some European trade unions see potential in the directive to increase the social protection of platform work. However, they believe that platform workers should be presumed employees by default rather than only presumed employees after three out of seven criteria are fulfilled.

The fear is that a rebuttable presumption might incentivise platforms to circumvent the law through shortcuts.[12]

Corporate Perspectives and Economic Impact

Companies like Uber and Deliveroo foresee potential drawbacks from the new rules, anticipating job losses, diminished rights to flexible working, and increased litigation over the employment status of workers.[13] EU officials estimate a potential 40% increase in Uber’s service prices if the directive is enacted.[14] Anabel Diaz, head of Uber's mobility division in Europe, forewarns that to manage the increase in costs of employment, Uber would need to consolidate working hours across fewer employees. This could lead to a drastic reduction of 50-70% in work opportunities and Uber’s operational cessation in numerous EU cities.

Nicolas Schmit, the EU's commissioner for jobs and social rights, rebuts these corporate concerns, dismissing them as scaremongering tactics aimed at threatening legislators. Schmit emphasises that better worker protection does not equate to dismantling the gig work economy model; rather, it calls for an adjustment.[15]

Trade Union Advocacy and Industry Opposition

Delivery Platforms Europe, a lobby group representing major courier and food delivery firms, rejects the directive, claiming it neglects the preferences of millions actively choosing independent work. The group asserts that the directive risks undermining legal self-employment and introducing increased legal uncertainty.[16]

Contrary to this perspective, Italian member of European Parliament, Elisabetta Gualmini refuted claims that the impending rules would spell an end to flexible working arrangements for self-employed individuals. Gualmini’s statement underscores the diverse opinions circulating within the legislative arena.[17]

Varied court decisions on the legal status of platform workers add complexity to the political discourse. Notably, Spain's Supreme Court, in September 2020, took a decisive stance by ruling that Glovo riders, should be considered employees under specific conditions. A similar sentiment echoed in the Palermo court in Italy just two months later.[18] However, in Belgium, a contrasting decision emerged, with a court siding with Uber in a dispute over a driver's employment status towards the end of 2022.[19]

This legal ambiguity is acknowledged by Schmit who notes the lack of clarity in the current landscape and contends that the directive, if implemented, would introduce much-needed clarity on the status of platform workers. The transposition of the directive into national law would not only provide legal certainty but also substantially diminish the number of cases related to the legal status of employees brought before the court.

Potential Exploitation

The fear of potential exploitation of the legislation is echoed by experts such as Alessio Bertolini, a platform work researcher at the Oxford Internet Institute.[20] There are concerns that companies might manipulate the criteria to ensure workers do not meet the conditions for employee classification. This sentiment is resonated in a joint letter signed by seven major trade unions advocating for platform workers. The collective opinion expressed in the letter emphasises that, should the criteria primarily serve to activate the presumption of employment rather than merely rebut it, there exists a significant risk of companies perpetuating the malpractice of sham self-employment.[21]

Conclusion

At this stage, it is uncertain whether the EU’s new rules will be the “holy grail compromise” between employment rights and economic growth.[22] While the gig work economy undeniably brings opportunities for flexibility and job creation, it countervails these benefits by posing formidable challenges in terms of social protections for workers.

The directive stands as an improvement in addressing these challenges, yet the divergent perspectives, corporate apprehensions, and potential loopholes indicate the nuanced path policymakers must tread. Achieving a harmonious balance between employment rights and economic growth remains an ongoing endeavour, and as the directive nears its finalisation, its impact on the gig work economy will undoubtedly shape the future of work in the European Union.

[2] 'Rights for platform workers: Council agrees its position' (Council of the European Union, 12 June 2023) <https://www.consilium.europa.eu/en/press/press-releases/2023/06/12/rights-for-platform-workers-council-agrees-its-position/> accessed 23 November 2023

[3] Théo Bourgery-gonse, 'The Brief — Short-lived gig-gles?' (Euractiv, 13 June 2023) <https://www.euractiv.com/section/gig-economy/opinion/the-brief-short-lived-gig-gles/> accessed 23 November 2023

[4]'Digital platform workers: EU rules one step closer' (Think Tank European Parliament , 21 June 2023) <https://www.europarl.europa.eu/thinktank/en/document/EPRS_ATA(2023)749794#:~:text=A%20proposed%20EU%20directive%20seeks,artificial%20intelligence%20in%20the%20workplace.> accessed 24 November 2023

[5] n. 1

[6] Ibid

[7] n. 2

[8] Théo Bourgery-gonse, 'EU policymakers brace for clash in thorny debate over platform workers’ status' (Euractiv, 31 October 2023) <https://www.euractiv.com/section/gig-economy/news/eu-policymakers-brace-for-clash-in-thorny-debate-over-platform-workers-status/> accessed 23 November 2023

[9] Ibid

[10] Joanna Gill, 'Can new EU rules make gig work fairer?' (Context News , 12 June 2023) <https://www.context.news/big-tech/can-new-eu-rules-make-gig-work-fairer> accessed 24 November 2023

[11] 'Gig Economy Work: Mind the protection gaps' (The Geneva Association , March 2022) <https://www.genevaassociation.org/publication/socio-economic-resilience/gig-economy-work-mind-protection-gaps> accessed 25 November 2023

[12] F, 'Gig Economy Project: Open letter – EU labour ministers: Will you work for us or for Uber?' (Brave New Europe , 8 May 2023) <https://braveneweurope.com/open-letter-eu-labour-ministers-will-you-work-for-us-or-for-uber> accessed 25 November 2023

[13] n. 9

[14] Javier Espinoza, 'EU jobs official says consumers happy to pay more to protect workers’ rights' (Financail Times , 26 November 2023) <https://www.ft.com/content/c152e245-53be-4a85-9983-fbe28dbf10ee> accessed 26 November 2023

[15] Ibid

[16] n. 9

[17] Ibid

[18] Marco Veruggio, 'Platform work: Bosses don’t like the EU Directive' (Internationalist Standpoint , 28 March 2023) <https://www.internationaliststandpoint.org/platform-work-bosses-dont-like-the-eu-directive/> accessed 23 November 2023

[19] n. 9

[20] Ibid

[21] F, 'Joint letter for an effective Directive on improving conditions in platform work' (European Trade Union Confederation , 25 October 2022) <https://www.etuc.org/en/document/joint-letter-effective-directive-improving-conditions-platform-work> accessed 24 November 2023

[22] n. 9