EU Commission presents proposal for a Directive to improve working conditions in platform work

Platform-based work has become indispensable in the working world and in our everyday lives. More and more jobs are being created by digital labour platforms, which is why working conditions must be established for all those who derive their income from this type of work, according to the Executive Vice-President of the European Commission, Margrethe Verstager. Against this backdrop, the Commission published a proposal for a Directive on improving working conditions in platform work on 9 December 2021. The Commission suggests a series of measures to improve working conditions in platform work and support the sustainable growth of digital labour platforms within the EU. This article provides an initial overview of the most important aspects of the proposed Directive.

Employment status criteria

The proposed Directive contains a list of criteria that Member State authorities may use to determine whether the platform is an employer. If the platform meets at least two of the criteria, there is a presumption that an employment relationship exists. Criteria include setting pay, monitoring and controlling work performance and hours and restricting the possibility of performing work for third parties.

People working through the platform are granted employment status. This entitles them to corresponding employee rights and social rights, such as entitlement to the minimum wage, regulated working hours, paid vacation and unemployment and sickness benefits. The platform can rebut this statutory presumption in administrative or court proceedings, i.e., it must then prove that the contractual relationship in question does not actually constitute an "employment relationship".

More transparency for algorithms

The algorithmic management of a platform (i.e., automated systems that support or replace managerial tasks in the workplace) is crucial for organising the work of digital labour platforms. Nearly all decisions essential to platform employees are made through data collection and automated decision-making. This includes, in particular, allocating tasks, pricing and performance evaluation. According to the proposed Directive, digital labour platforms must inform platform employees about monitoring systems and automated decision-making. This is intended to provide workers with comprehensible information on how tasks are assigned and evaluated. Furthermore, platform employees should have the right to be informed of the rationale behind a decision made based on the platform's "algorithmic management."

Duties to provide information for platform work

In addition, the proposed Directive imposes an obligation on platforms to report existing employment relationships to the occupational health and safety authorities of the Member States and to provide necessary information about their activities and the persons working through them. This should enable the employee status to be verified at all times.

Next steps

The Commission's proposal for a Directive on improving working conditions in platform work is now being discussed by the European Parliament and the Council. Following the adoption of the proposal, which is expected in the ordinary legislative procedure in about one and a half years, the Member States have two years to transpose the Directive into national law.

Achim Braner

Achim Braner
Frankfurt a.M.
+49 69 27229 23839

Nadine Ceruti

Nadine Ceruti
Frankfurt a.M.
+49 69 27229 24795