European Union: The European platform deal

Finally clarity for platform workers?

In brief

On 12 June 2023, after lengthy negotiations, the Council of the EU agreed on the proposal for a directive that aims to better protect platform workers. This opens the door to negotiations between the Council and the European Parliament on the final directive. The directive aims to ensure that platform workers have or can obtain the appropriate employment status through the introduction of a legal presumption. In addition, the directive provides for rules regarding the transparency of the use of algorithms within the platform economy.


The legal presumption

The directive introduces a presumption of law, under which platform workers are presumed to be employees if the relationship between platform and platform worker meets at least three of the following seven limitative criteria:

1. The platform sets upper limits on the worker's remuneration
2. The platform sets requirements for the worker regarding appearance, conduct towards the recipient of the service or performance of the work
3. The platform monitors the performance of work, including by electronic means
4. The platform effectively limits, including through sanctions, the freedom of the worker to organize their work, regarding the choice of working time
5. The platform limits, including through sanctions, the freedom of the worker to organize their work, regarding accepting or refusing jobs
6. The platform restricts, including through sanctions, the freedom of the worker to organize their work, regarding the use of subcontractors or substitutes
7.  The platform restricts the ability of the worker to build a client base, or to perform work for third parties.

In practice, this may result in many platform workers being classified as employees, unless proven otherwise under the rules of the applicable national law.

Algorithmic monitoring

In addition to the legal presumption, the directive grants new rights in respect of algorithms. These rights are mainly about transparency for platform workers, who are entitled to understand how jobs are assigned and how the assessment of work is made. It also attaches greater value on the human touch, by giving platform workers the right to a review of an algorithmic decision that affects working conditions or access to the platform.

Impact of the directive

Although the final content has yet to be negotiated with the European Parliament, the directive appears to have a major impact on the platform economy. A platform wishing to make use of self-employed workers will have to be able to refute the legal presumption, by proving that, in practice, work is carried out on the basis of a contract for services. From the outset, this does not seem to be an easy test to pass.

Please contact any one of us if you have any questions about the potential impact of the directive.

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