The proposed EU Directive on improving working conditions in platform work

News

 On the 9th of December, the European Commission published an overdue set of measures intended to improve the labour standards for those who work for a digital labour platform in the EU. The plans have been approved by the European Council, and Member States now have 3 years to enact their own domestic laws in accordance with the Directive.

Background: Race to the Bottom for Labour Rights

As is often the case, the European Commission’s involvement was spurred by Member States starting to consider or pass national legislation. For example, Spain has taken steps to recognise delivery platform couriers as employees rather than contractors, and Portugal is set to implement similar standards to order platforms such as Uber and Glovo to employ their drivers.  There has also been notable litigation throughout the EU. In the Netherlands, separate court cases against Deliveroo and Uber both confirmed that there is a traditional employment relationship with those active in platform work. However, in Belgium, there was a ruling in favour of Deliveroo on the matter whether the relationship between Deliveroo couriers and the platform itself was an employment contract. Such discrepancies across Member States might cause a race to the bottom across the EU as regards labour rights.

The Directive

The legislative framework proposed by the Commission cracks down on fake self-employment by platform workers. Rather, platforms will now have the responsibility to prove that their workers are indeed self-employed and are not considered employees under the Directive. To this end, the Commission has specified 5 control criteria to determine whether a platform worker is an employee. If at least 2 of the 5 criteria are met, the worker is legally considered to be an employee.

The criteria set by the Commission are:

  1. The platform determining the worker’s wage
  2. The platform setting rules on conduct and appearance
  3. The platform supervising the performance and quality of the work, albeit electronically
  4. The platform limiting the worker’s freedom by setting working hours, limiting time off, or preventing the worker from working with a subcontractor
  5. The platform preventing the worker from building a client base or requiring exclusivity

Having an Algorithm as Your Employer

Under the Directive, the power algorithms have over platform workers will also be constrained. Whereas previously workers were denied jobs or were removed from services as a result of an automated decision, workers now have the right to increased human monitoring and to contest the decision. This will apply to those categorised as employees as well as self-employed individuals.

Algorithmic management is inherent to digital labour platforms’ business models. From a machine perspective, using an algorithm is efficient to match supply to demand in any market. From a human perspective however, algorithms are often flawed, and may increase gender bias and discrimination. Having to depend on an opaque, legally unregulated machine for decisions that directly impact your basic income amounts to substandard working conditions. This is highlighted by Margrethe Vestager, the executive vice president of Europe Fit for the Digital Age: “This is an important step towards a more social digital economy”.

Trends in the UK

Although the United Kingdom is no longer required to implement legislative proposals put forward by the European Commission, the trends in continental Europe are reflected within the UK as well. Earlier this year, the supreme court upheld a 2016 ruling stating that Uber drivers are not self-employed and should be paid the minimum wage. More recently, on the 6th of December, a high court in London ruled that the business model that claims that Uber is a platform that merely facilitates the contract between a driver and passenger is incompatible with London’s transportation laws. This implies that Uber must carry much more responsibility in the relationship between a driver and a passenger, thereby underscoring that drivers are workers with rights, not independent contractors.