New Rules for Platform Workers – What Does the Commission’s Proposal Entail?
The Commission has now presented its proposal for measures to improve the working conditions in platform work. Through these new rules, the Commission strives to make sure that platform workers who should be classified as employees will get access to statutory labour rights and social security benefits.
In its statement, the Commission put forward a communication where it sets out the EU approach and measures on platform work, a proposal for a Directive to improve the working conditions in platform work, and Draft Guidelines to clarify the application of EU competition law. Through this common set of rules, the Commission will increase the legal certainty for digital labour platforms and platform workers and more transparency around platforms.
Should workers be classified as employees or as self-employed?
The Commission presents five criteria to help the Member States determine whether a worker within a digital platform should hold an employee or self-employment status. If at least two of these criteria are fulfilled, the working relationship in question is in fact an employee relationship.
- Does the company set the level of remuneration it pays to workers or does it set a cap on it?
- Does the company monitor work performance through digital means?
- Does the company restrict the workers’ freedom to decide their own work hours or holidays, to refuse work or to use subcontractors?
- Does the company set strict rules on the appearance or work performance of the workers?
- Does the company limit the workers’ chances to form their own regular clientele or work for another employer?
What does the proposal mean in practice?
The Commission’s starting point is the presumption of an employment, which both the company and the workers then can challenge. However, if they do challenge this presumption, they have to be able to prove that the workers are in fact self-employed.
The distinction between an employee relationship and self-employment is an important one, and the Commission’s proposal means significant changes for both the companies and the workers within digital platforms. As employees, workers have, for instance, a statutory right to annual holiday, family leave, health protection and insurances for employees. A self-employed worker has, for instance, the right to decide their own hours and holidays, and exercise freedom in their work.
Platform work in the EU
Platform work in the EU is growing rapidly and the digital platform economy is expanding. Over 28 million people in the EU work through digital labour platforms, as, for instance, couriers and chauffeurs, and that number is expected to grow to 43 million people by the year 2025.
According to the Commission, 90 percent of those working within digital platforms in the EU are classified as self-employed by those same digital platforms. The Commission believes that 5.5 million of these workers are misclassified as self-employed, while in reality they are employees. Problems may arise if workers are claimed to be self-employed, while in reality they lack the freedom that comes with self-employment, as the workers then lose their statutory labour rights.
What happens next?
The Commission’s proposal for a new directive will next proceed to the European Parliament and the Council for consideration. Once adopted, the Member States will have two years to implement the directive.
Our team will monitor any developments as the proposal proceeds towards implementation. If you have any questions regarding this matter, please feel free to contact any of Borenius’ attorneys listed in this alert or those with whom you usually work.