Platform work: deal on new rules on employment status

First ever EU-rules on algorithmic management in the workplace

Presumption of an employment relationship triggered by two out of five indicators

Workers cannot be dismissed by automated systems

Negotiators from Parliament and Council reached a provisional agreement on Wednesday morning on a bill to improve the working conditions of persons performing platform work.

The Platform Work Directive aims to ensure the correct classification of the employment status of people performing platform work and to introduce the first ever EU-rules on algorithmic management and the use of artificial intelligence in the workplace.

Employee or self-employed

Currently, at least 5.5 million persons performing platform work may be wrongly classified as self-employed (known as bogus self-employment) and are missing out on important labour and social protection rights.

The new rules introduce a presumption of an employment relationship that is triggered when two out of a list of five indicators of control or direction are present. This list can be expanded by member states. The presumption can be triggered by the worker, by their representatives, and by the competent authorities on their own initiative. This presumption can be rebutted if the platform proofs that the contractual relationship is not an employment relationship.

Transparency

Currently, persons performing platform work do not have access to information on how the algorithms work and how their behaviour affects decisions taken by automated systems. With the new rules, platforms will provide this information to workers and their representatives.

More human oversight for automated decision-making and monitoring systems

With the new rules, platforms will be prohibited from taking certain important decisions, such as dismissals and decisions to suspend an account, without human oversight. The text also ensures more human oversight on the decisions of systems that directly affect the persons performing platform work.

Platforms will be also obliged to assess the impact of decisions taken or supported by automated monitoring and decision-making systems on working conditions, health and safety and fundamental rights.

Use and processing of personal data

The new rules will forbid platforms from processing certain types of personal data, such as personal beliefs, private exchanges with colleagues, or when a worker is not at work, and the Directive introduces more protective rules for platform work in the field of data protection.

Platforms will also have to transmit information on self-employed workers in their employ to the competent national authorities and to representatives of persons performing platform work, such as trade unions.

Use of intermediaries

Under the new law, it will not be possible for a platform to circumvent the rules by using intermediaries, i.e. when workers have a direct contractual relationship with a party other than the relevant digital platform. Member states will have to make sure that persons performing platform work working through intermediaries enjoy the same level of protection as those with a direct contractual relationship.

Quote

Rapporteur Elisabetta Gualmini (S&D, IT), said: “This is a revolutionary agreement and the first legislative framework for digital platform workers. We have transparency and accountability for algorithms, we have better rights for the least protected workers in the world and we have fair competition for platforms. Today, we can say to 40 million platform workers that Europe is there for them, also for the most precarious workers. I am honoured to have been in charge of this revolutionary change. What a beautiful night it has been and what a beautiful future we will have.”

Next steps

The agreed text will now have to be formally adopted by both Parliament and Council to enter into force.

Background

European Commission analysis from 2021 found that there are more than 500 digital labour platforms active and the sector employs more than 28 million people - a figure expected to reach 43 million by 2025. Digital labour platforms are present in a variety of economic sectors, be it “on location”, such as ride-hailing and food delivery drivers, or online with services such as data encoding and translation.

While most platform workers are formally self-employed, about 5.5 million people may be wrongly classified as self-employed. More than 100 court judgments in EU countries have already dealt with platform workers' employment status, mostly reclassifying independent contractors as workers and 'gig' platforms as employers.