On 9 December 2021, the European Commission (EC) released its long-awaited proposal (“the Directive”) with guidelines to strengthen the working environment of platform workers (“gig workers”) and promote the European Union’s (EU) long-term expansion of digital work platforms. The Directive aims to address three primary issues: (i) building more transparency and fairness in the algorithmic framework; (ii) ensuring correct employment and avoiding misclassification; and (iii) improving the enforcement of applicable rules.
Employee organisations have been advocating for an EU legal framework for digital gig workers for years and called attention to the vulnerable condition of the workers. With the dawn of a new legislative session, the EC addressed the concern and proceeded to explore solutions. The European social partners were called to engage in legislative measures to enhance platform employees' working conditions in spring 2021. Regrettably, no agreement was reached then. On 16 September 2021, the European Parliament passed a resolution requesting the EC to submit the proposal, which it did in December 2021.
THE SCOPE OF THE DIRECTIVE
The Directive aims to encompass all gig workers in the EU such as inter alia food-delivery drivers and ride-hailing gig drivers. Further, the Directive also includes domestic workers whose employment is directed through apps and, most importantly, those who work entirely for online platforms like Amazon Mechanical Turk and Upwork. Article 1/3 of the Directive stipulates that it “applies to digital work platforms organizing platform work performed in the Union, irrespective of their place of establishment and irrespective of the law otherwise applicable”. Article 2/1 of the Directive defines the term “digital work platform” as any individual providing a commercial service that is provided, at least in part, at a distance through electronic means, such as a website or a mobile application at the request of a recipient of the service and involves, as a necessary and essential component, the organization of work performed by individuals, irrespective of whether that work is performed online or in a certain location.
This deliberately wide scope is fundamental for communicating with long avoidance measures. All individuals who have, or may be considered to have, an employment agreement or employment relations as recognised by the legislation, collective agreements, or practice in effect in states, with relation to the case law of the Court of Justice of the EU are included in the text. Furthermore, articles 6 and 7 of the Directive extend to all platform workers, especially those who do not have a formal job relationship under article 10. And article 40 also extends to the working people, regardless of their status, to be impacted by automated systems in the same approach.
THE EMPLOYMENT RELATIONSHIP
The “primacy of fact doctrine,” upon which the Directive is premised, is significant to this. This doctrine was recognised in FNV Kunsten Informatie en Media v Staat der Nederlanden, International Labour Organization’s Employment Relationship Recommendation, 2006 (No. 198), a working paper for the German Friedrich-Ebert-Stiftung in 2018, and later in a working framework in 2020, which can be considered a true legal political breakthrough.
Moreover, article 3 of the Directive stipulates that “the presence of an employment relationship” must be determined principally by facts referring to the “proper efficiency of work,” while also “considering the use of algorithms in the institution of platform work, regardless of how the relationship is categorized” by the parties. The purpose of these provisions is to address circumstances when the individual conducting platform work's employment status is questionable so that such employees can benefit from the Directive's protections.
Chapter II of the Directive addresses the employment misclassification through a “presumption of employment,” i.e. when a platform exercises control over work and this would principally emerge from a rebuttable legal presumption of employment status for platform workers. The Directive states that such presumption could be achieved if two conditions articulated in article 4/2 are met. Moreover, this presumption can be challenged, but the platform has the burden of proof, and the proceedings cannot overrule the legal presumption in article 4. While rebuttable, the presumption is a step in the right direction. Yet, considering national procedural autonomy, it is unrealistic to anticipate how it will operate in other legal jurisdictions.
The prerequisites for initiating the presumption of employment condition encompass essential jurisprudence from several European countries, where courts have questioned platform workers' self-employment status and re-categorised them as full-fledged employees. This includes the supreme courts of France, Germany, the UK, and Spain. Therefore, many national authorities are acquainted with the presumption of employment and the primacy of fact doctrine, which should make obtaining a political agreement and implementing the Directive easier.
ALGORITHMIC DETERMINATIONS
The Directive further aims to foster “transparency, fairness, and accountability in algorithmic management in platform work”. The genesis of automated management systems is itself part of the gig economy. Gig workers' working environments are highly influenced by algorithmic determinations concerning their income, ranking, and potential to get further work. Article 66 of the Directive stipulates that digital work platforms must notify platform employees about monitoring mechanisms as well as automated decision-making if this is "important" for individuals concerned.
The minimal contents of this information are conveyed, as well as the notion that it must be delivered on the first working day and thereafter upon request by gig workers and their representatives. The information will comprise a description of actions that are monitored, regulated, and evaluated (including by clients via ratings) as well as the primary parameters that such systems could incorporate. Digital work platforms must also review the risks and impacts of these automated systems on a regular basis under article 7.
The Directive further contributes to and enhances the General Data Protection Regulation’s (GDPR) standard. It expressly recognises the right to an explanation for a decision made, even if only partially accompanied by automated systems, that has a considerable influence on working environments, such as access to tasks, profits, workplace safety, work schedules, promotion, constraint, withdrawal, or termination.
All decisional approaches enabled by data-driven instruments would have to be represented in a user-friendly format so that workers could question them. This dismisses numerous fallacies about “algorithmic impenetrability,” in which transparency is sometimes used as a rationale to weaken clarity and contestability, and protects a right to be informed of the consequences of particular actions before they happen.
OTHER LABOUR RIGHTS
The Directive under article 9 also supports longstanding EU law's right to collective bargaining. The social acquis, which establishes threshold norms in working conditions and labour rights across the union, would apply to platform workers without qualification. Notwithstanding, EU antitrust law could prevent some vulnerable platform workers from participating in collective bargaining if they do not satisfy the Directive's “employee” standard. The Directive is silent on this. This falls short of international law's mandate of collective bargaining rights for all workers, irrespective of their employment status. Even if some key principles concerning algorithm transparency are stretched to the self-employed, the absence of collective agency and representation for these workers may impede their impact.
The Directive under article 11 read with article 12 stipulates that, at the very least, when engaging with public entities, digital labour platforms must become substantially more transparent. It will enable states to meet their obligations to provide effective redress under article 13, especially when used in connection with Chapter V's numerous enforcement formats. For instance, representative legal actions and the establishment of in-platform channels of communication for labour organising. The Directive under articles 17 and 18 also ensures that employees are protected against discrimination and punitive dismissals.
CONCLUSIONS
The Directive is a significant development for enhancing the workplace environment in the gig economy. While it covers the subjects expected, their application is impressively detailed and far-reaching. The somewhat constrained conditions for invoking the legal presumption is less assertive than was anticipated, but the broadened scope of implementation for algorithm transparency and fairness across platform employees in an employment relationship is key.
The Directive communicates a strong message about the platform's standard stance on employment status, breaking through the circle of complexities fostered by the platforms' advocates. This also transcends outside political discussions to address a major fundamental issue: protecting against the negatives of algorithmic management, such as intrusive monitoring and algorithmic discrimination. Unlike the proposed Artificial Intelligence (AI) Act's employment requirements, Chapter III of the Directive has the opportunity to offer sophisticated, context-sensitive protection while still providing room for more domestic regulatory innovation.
Lastly, the Directive demonstrates the EU's intention to carry on the Social Pillar by rigorously weaving in with recent Union law and directive proposals, as well as broader trends improving the effective implementation of the social acquis.