Catherine Jacqueson, Professor of EU law and Alberto Barrio, postdoctoral researcher on the WorkWel-project, Law Faculty, University of Copenhagen

Photo credit: conceptphoto.info, via Flickr 

On April 24th, the European Parliament officially approved the directive designed to protect platform workers. Although formal endorsement from the Council is still pending, this is largely a formality. The directive’s passage, despite the challenges and last-minute negotiations, signifies a victory. Initially, the Council presented resistance, making its unexpected adoption of the compromise agreement on March 11th surprising. This followed prior rejections of the same text. The shift in support came from Greece and Estonia, who moved from abstention to voting in favor, thus dissolving the blocking minority. Germany, however, maintained its abstention due to internal disagreements, while France, a major critic of the directive, seemed to soften its stance.

This Council approval marks a significant stride toward enhancing platform workers’ rights in labor law and social security. It also underscores the EU’s social agenda, building upon the 2017 Gothenburg summit and the introduction of the European Pillar of Social Rights. The Commission has, once again, delivered. However, compromises reached during negotiations resulted in the weakening of several provisions compared to the initial proposal. This is particularly true for provisions related to the rebuttable presumption of an employment relationship. More crucially, the compromise excluded many of the European Parliament’s suggestions aimed at bolstering platform worker protections found in its common position.

Weakened Presumption of Employment

The final proposal is significantly diluted, especially concerning its key provision: establishing a presumption of employment for individuals working on platforms like Deliveroo, Uber, and Bolt. Allowing Member States to determine the criteria for applying this presumption undermines efforts to create a level playing field for states, markets, businesses, and providers. This “loose” presumption could potentially create more challenges than solutions. Moreover, Member States are explicitly not mandated to apply this presumption within the domains of social security and tax law, possibly hindering anticipated increases in public revenue, projected to be up to EUR 3.98 billion. Despite Member States’ inability to agree on a directive mandating a spillover effect impacting other national legal areas, individual states retain the freedom to implement such measures. This is likely influenced by the sensitive issue of the EU’s jurisdiction. However, even a diluted version compels EU states to incorporate this presumption, which could be challenged in national courts and eventually reach the European Court of Justice (ECJ). It’s important to note that EU law safeguards and ECJ case law limit national discretion. Critically, the directive emphasizes that this presumption must be based on factual indicators of control and subordination, not on alleged agreements between parties. Member States have flexibility in interpreting these criteria within the evolving digital labor market. The directive mandates that states establish procedures to uphold this legal presumption of employment. This positions the directive as more procedural than substantive. Once again, Member States have the autonomy to design these procedures, provided they ensure it is “effectively easy” for platform workers to benefit from this presumption (recital 32). A concern is that this could trigger more legal disputes regarding employment status, shifting the focus from the status itself to the presumption. Notably, the presumption doesn’t automatically reclassify workers as employees. Only time will reveal the presumption’s efficacy and the countries where it’s most impactful.

Remaining Provisions

Conversely, the comprehensive chapter on algorithm management could offer genuine value, at least theoretically. This represents the EU’s first attempt to regulate work-related algorithms. Unlike the AI Act, formally adopted by the European Parliament, which depends on self-regulation, this directive imposes concrete obligations and restrictions on platforms. The directive is ambitious and, notably, applies many of its provisions to self-employed individuals, taking a holistic approach. The Commission’s draft remained largely unchanged until January, when a few modifications were introduced. This directive expands upon the GDPR by prohibiting the processing of specific personal data and the use of biometric data for predicting future behavior, aligning with fundamental rights concerns such as potential pregnancy discrimination. It surpasses the GDPR by compelling platforms to provide transparency into their design and functionality. Similarly, human oversight is mandated not only for platform-made decisions but also for data monitoring, for instance.

Moreover, the directive brings about improvements in platform transparency and accountability. The agreed-upon version requires platforms to provide reports and disclose information to pertinent authorities. This includes declaring platform work engagement and the number of individuals regularly engaged in such work. The objective is twofold: to gather data and to monitor platforms, ultimately aiming to enhance the enforcement of applicable rules in both domestic and cross-border scenarios. This aspect remains largely consistent with the Commission’s initial draft, with only minor removals of reporting criteria.

In conclusion, the directive sends a clear message that platform work and algorithmic management should not remain unregulated. It represents a legal framework with inherent flexibility. Its success in safeguarding those working on labor platforms hinges significantly on its implementation and enforcement within each nation, which is expected to differ across the EU and its internal market.