The directive on improving working conditions in platform work: what’s new?
The directive on improving working conditions in platform work: what’s new?
In March 2023, we wrote an introductory article about the amendments to the European Commission’s Platform Worker Directive that were adopted by the European Parliament on February 2, 2023. Since then, there have been ongoing discussions and negotiations on the contents of the Directive. In the final version of the Directive several adjustments have been made. In this article the main changes are mentioned, but another reason for this article is to raise awareness among organisations falling under the scope of the Directive (Employers of Record/Agents of Record, self-employed contractors and gig workers in Europe engaged via staffing companies).
1. Legal presumption
The Directive introduces a so-called ‘legal presumption’ for determining the employment status of platform workers. In other words, a platform worker is assumed to be an employee, working on the basis of an employment contract if the conditions of this legal presumption are met. The person will then, in principle, be considered a worker/employee and not a self-employed person. The legal presumption simplifies the process of a platform worker to assert the employee status and places the responsibility of proving that no employment relationship exists on the platform. This aims to contribute to improving the platform workers’ working conditions.
In earlier draft versions of the Directive this legal presumption was formulated in a way that a platform worker would be considered an employee as soon as they claimed employee status or, in later versions, if a minimum number of specific indicators outlined in the Directive were met. These specific indicators related to the question whether the platform had "direction and control” over the performance of work.
The final version of the Directive has brought changes to the content of the legal presumption. As a result, EU Member States are now required to establish a legal presumption of employment in their own national legal systems. The activation of this legal presumption will depend on the question whether there are circumstances that indicate ‘direction and control’ over the performance of work. Each Member State must determine which facts can establish this in accordance with national laws and collective agreements or practice in force. The case-law of the Court of Justice has been taken into account as well. Individuals working for digital platforms, as well as their representatives or national authorities, may utilise this legal presumption and argue that they have been misclassified and claim employment status.
The platform may rebut the legal presumption that there is an employment at hand with evidence that there is no employment relationship in the aforementioned sense.
2. Supporting measures
Based on the final version of the EU Directive Member States need to take additional measures to help make sure the legal presumption is applied correctly. This will involve creating clear and practical instructions for digital platforms, platform workers, and others involved, so they understand and can act in accordance.
National authorities will also have guidance and procedures to address platforms that do not follow the rules.
3. Algorithmic management
To promote and regulate transparency, fairness, and accountability in the algorithmic management of platform work, the Directive introduces a set of rights and obligations. In the final version of the Directive additional rights and obligations in this regard are added.
For example, if platforms use automated monitoring systems and decision-making systems, platforms must provide information upon request to platform workers, their representatives and relevant authorities. This also applies to decisions made or supported by automated systems, if they affect individuals performing platform work, such as the way tasks are allocated among platform workers or the amount of work a platform worker can perform due to the visibility of their account online. These changes offer platform workers greater protection of their (legal) position when it comes to algorithmic management.
The objectives of the Directive
The objectives of the Directive have remained unchanged: to improve the working conditions of platform workers by:- ensuring that their employment status is correctly determined, and;
- promoting transparency, fairness, and accountability in the algorithmic management of platform work.
What’s new?
Several changes have been made to the content of the Directive that relate to the two main objectives of the Directive.1. Legal presumption
The Directive introduces a so-called ‘legal presumption’ for determining the employment status of platform workers. In other words, a platform worker is assumed to be an employee, working on the basis of an employment contract if the conditions of this legal presumption are met. The person will then, in principle, be considered a worker/employee and not a self-employed person. The legal presumption simplifies the process of a platform worker to assert the employee status and places the responsibility of proving that no employment relationship exists on the platform. This aims to contribute to improving the platform workers’ working conditions.
In earlier draft versions of the Directive this legal presumption was formulated in a way that a platform worker would be considered an employee as soon as they claimed employee status or, in later versions, if a minimum number of specific indicators outlined in the Directive were met. These specific indicators related to the question whether the platform had "direction and control” over the performance of work.
The final version of the Directive has brought changes to the content of the legal presumption. As a result, EU Member States are now required to establish a legal presumption of employment in their own national legal systems. The activation of this legal presumption will depend on the question whether there are circumstances that indicate ‘direction and control’ over the performance of work. Each Member State must determine which facts can establish this in accordance with national laws and collective agreements or practice in force. The case-law of the Court of Justice has been taken into account as well. Individuals working for digital platforms, as well as their representatives or national authorities, may utilise this legal presumption and argue that they have been misclassified and claim employment status.
The platform may rebut the legal presumption that there is an employment at hand with evidence that there is no employment relationship in the aforementioned sense.
2. Supporting measures
Based on the final version of the EU Directive Member States need to take additional measures to help make sure the legal presumption is applied correctly. This will involve creating clear and practical instructions for digital platforms, platform workers, and others involved, so they understand and can act in accordance.
National authorities will also have guidance and procedures to address platforms that do not follow the rules.
3. Algorithmic management
To promote and regulate transparency, fairness, and accountability in the algorithmic management of platform work, the Directive introduces a set of rights and obligations. In the final version of the Directive additional rights and obligations in this regard are added.
For example, if platforms use automated monitoring systems and decision-making systems, platforms must provide information upon request to platform workers, their representatives and relevant authorities. This also applies to decisions made or supported by automated systems, if they affect individuals performing platform work, such as the way tasks are allocated among platform workers or the amount of work a platform worker can perform due to the visibility of their account online. These changes offer platform workers greater protection of their (legal) position when it comes to algorithmic management.
What’s next?
On 23 October 2024, both the Council and the European Parliament signed. EU Member states will have until 2 December 2026 to implement the directive's provisions into their national legislation.How can BDO assist?
Given the relatively short timeline for the Directive implementation and the alterations that the implementation of the Directive will entail, it is important for companies to consider its implications as soon as possible. This may include making significant adjustments to business models and preparing for potential consequences. BDO can collaborate with your organisation to evaluate the extent of the Directive's impact and prepare for forthcoming changes. We can offer assistance in answering preliminary questions, such as:- Does your organisation align with the definition of a "digital labour platform"?
- Is there a potential risk for your organisation that workers may successfully claim the legal presumption and which financial, legal, and tax consequences will this have?
- What are the financial, legal, and tax outcomes for your organisation if the Directive is enforced?
- What changes can already be implemented in your organisation in order to prepare for the changes the Directive brings once it is implemented?