Significant EU development on platform workers

Why should I read this?

The EU Platform Work Directive (EU Directive) has now been adopted by the European Parliament and will come into force shortly. Once in force, Member States will have two years to transpose it into national laws.

The EU Directive regulates the rights of individuals working via digital labour platforms (DLPs) for the first time, including a rebuttable presumption of employment status in certain circumstances. This is intended to address misclassification of ‘gig’ workers as non-employees, with impact on their rights and social security benefits.

The significance of the EU Directive is underscored by the rapid growth in this area of the economy. Although measuring the number of individuals working in this field is inherently difficult, a recent study by the World Bank Group estimates that “online gig work” accounts for “4.4 to 12.5 percent of the global labor force”.

What do I need to know?

In addition to providing platform workers (regardless of whether they perform work on location or purely remotely) with more clarity regarding their status and therefore their employment rights, the EU Directive seeks to strengthen controls and transparency over the algorithmic management that is often intrinsic to the organisation of work via DLPs. In addition, the EU Directive includes measures to encourage social dialogue and transparency around the introduction and use of automated monitoring or decision-making systems, as well as introducing new reporting obligations to authorities for DLPs.

Some of the key provisions include:

• an obligation on Member States to have “appropriate and effective procedures in place to verify and ensure the correct determination of the employment status of persons performing platform work”, including the creation of a rebuttable legal presumption of the existence of an employment relationship where facts indicate “control and direction, according to national law, collective agreements or practice in force in the Member States and with consideration to the case-law of the Court of Justice”;
• a ban on DLPs using automated monitoring or decision-making systems to predict the exercise of fundamental rights of those performing platform work or to process certain types of personal data;
• a requirement on DLPs to inform individuals undertaking platform work, in writing, when automated monitoring or decision-making (e.g. in work allocation based on acceptance or satisfaction rates) is taking place and to provide certain prescribed information about the systems and their features;
• a requirement to involve workforce representatives prior to introducing or making substantial changes to automated monitoring or decision-making systems and to pay for an expert to assist those representatives in certain circumstances;
• a duty on DLPs to ensure that decisions to restrict, suspend or terminate the contractual relationship or account of an individual undertaking platform work is taken by a human; and
• an obligation on DLPs to declare prescribed information to authorities.

These specific protections for individuals carrying out platform work build on the existing protections for individuals more generally as set out in the GDPR and the EU AI Act. 

What should I do next?

In preparation for the impact of the EU Directive, DLPs should:

• assess the potential effect of the presumption of an employment relationship on current people models and strategies;
• review current automated monitoring and decision-making systems, including the processing of personal data, human oversight and the availability of information to comply with transparency requirements. This would also be a good opportunity to consider whether such systems could fall within the remit of the EU AI Act;
• develop a strategy to ensure information is available to comply with the obligation to declare work performed by those undertaking platform work to authorities;
• monitor the progress of the transposition of the EU Directive into national laws, including new local guidance.

Further reading

For further information on the EU Directive, including a more in-depth analysis of its provisions, the steps DLPs should be taking now, how the EU Directive fits into the wider global picture and some key FAQs, see our more detailed briefing, available on request.

For further information on other employment-related Directives that are progressing at present, please see our Keeping up with EU Directives briefing.

How we can help

Our extensive global footprint means that we are well placed to support global employers in their current and future HR plans, wherever they have a presence. Our lawyers are not only thought leaders in the complexities of different laws, but also in the management of projects spanning jurisdictions and driving those projects to maximize the strategic aims and benefits.

Our teams have been supporting employers to get ready for the requirements of the EU Directive. Our teams can assist with all aspects of that preparation, including gap analysis against existing practices, advice on existing local laws, training and action plans. Please contact any of our global team should you require advice or assistance.