The Council has announced its readiness to commence negotiations with the European Parliament regarding a new legislation that aims to extend employment rights to millions of gig workers. Today, ministers responsible for employment and social affairs have reached a consensus on the Council’s overall approach to a proposed directive aimed at enhancing working conditions for platform workers. This proposal encompasses two fundamental improvements: establishing guidelines for accurately determining the employment status of individuals working for digital platforms and introducing the European Union’s first-ever regulations on the use of artificial intelligence (AI) in the workplace.
While the gig economy has undeniably brought numerous benefits to our lives, it is crucial to ensure that these advantages are not achieved at the expense of workers’ rights. The Council’s approach strikes a harmonious balance between safeguarding the rights of workers and providing legal certainty for the platforms that engage them. In the words of Paulina Brandberg, the Swedish Minister for Gender Equality and Working Life, “The gig economy has brought many benefits to our lives, but this must not come at the expense of workers’ rights. The Council’s approach strikes a good balance between protecting workers and providing legal certainty for the platforms that employ them.”
Infographic – Spotlight on digital platform workers in the EU
One of the primary objectives of the Council is to address instances of misclassification of self-employed workers. Presently, a significant portion of the European Union’s 28 million platform workers, including taxi drivers, domestic workers, and food delivery drivers, are officially classified as self-employed. However, many of them must adhere to the same rules and restrictions as employed workers, indicating that they are indeed in an employment relationship. Therefore, these workers should be entitled to labor rights and social protection under both national and EU laws.
The Council aims to rectify these misclassification cases and streamline the process for reclassifying such workers as employees. According to the Council’s general approach, workers will be presumed to be employees of a digital platform, rather than self-employed, if their relationship with the platform meets at least three out of seven criteria outlined in the directive. These criteria include factors such as upper limits on earnings, restrictions on work refusal, and regulations governing appearance or conduct. In cases where the legal presumption applies, it will be the responsibility of the digital platform to demonstrate that no employment relationship exists, based on national law and practices.
Another significant aspect of the proposal addresses the need for greater transparency in the use of algorithms by digital labor platforms. These platforms frequently employ algorithms for human resources management, resulting in a lack of transparency regarding decision-making processes and the utilization of personal data. The Council aims to ensure that platform workers are well-informed about the implementation of automated monitoring and decision-making systems. Under the new regulations, these systems will be supervised by qualified personnel, who will enjoy special protection against unfavorable treatment. Human oversight will also be guaranteed for certain critical decisions, such as account suspension.
Moving forward, the Council will initiate negotiations with the European Parliament based on the agreed general approach, with the objective of reaching a provisional agreement.
In recent years, the platform economy has experienced exponential growth, with revenues skyrocketing from an estimated €3 billion to around €14 billion between 2016 and 2020. Furthermore, the number of platform workers is projected to reach 43 million by 2025. While the expansion of digital platforms has benefited businesses and consumers alike, it has also created a gray area regarding the employment status of many platform workers. According to the European Commission, approximately 5.5 million workers who are currently classified as self-employed are, in fact, engaged in a de facto employment relationship with digital platforms. Hence, they should be entitled to the same labor and social rights granted to employees under EU law.
Moreover, the use of algorithms in platform work has raised concerns about data processing, as well as the transparency and accountability of decision-making processes. The Commission’s proposal for a directive was published on December 9, 2021, and aims to achieve several objectives. Firstly, it seeks to ensure that individuals working through platforms possess, or can obtain, the correct employment status based on their actual relationship with the digital labor platform, thereby granting them access to relevant labor and social protection rights. Secondly, it strives to establish fairness, transparency, and accountability in algorithmic management within the context of platform work. Lastly, it aims to enhance transparency, traceability, and awareness of developments in platform work, while also improving the enforcement of relevant rules for all individuals engaged in platform work, including those operating across borders.
Prior to the current agreement, employment and social affairs ministers made an initial attempt to establish the Council’s general approach on the platform workers directive during their meeting on December 8, 2022.