In the wake of the pandemic, digital labour platforms have become an increasingly important element of the newly emerging social and economic landscape. They have continued expanding in size and it is estimated that in the EU, revenues from these platforms have grown by around 500% in the last five years.
How many people in Europe find work through digital platforms?
Today, over 28 million people in the EU work through digital labour platforms. By 2025, their number is expected to reach 43 million. Digital labour platforms are present in a variety of economic sectors. Some offer services ‘on location, such as ride-hailing, delivery of goods, cleaning or care services. Others operate solely online with services such as data encoding, translation or design. Platform work varies in terms of the level of skills required, as well as the way the work is organised and controlled by the platforms.
Are people working through digital platforms classified as self-employed?
Nine out of ten platforms active in the EU currently, are estimated to classify people working through them as self-employed. Most of those people are genuinely autonomous in their work and can use platform work as a way to develop their own entrepreneurial activities. Such genuine self-employment is making a positive contribution to job creation, business development, innovation, accessibility of services, and digitalisation in the EU.
What are the risks associated with working through digital platforms?
There are also many people who experience subordination to varying degrees of control by the digital labour platforms they operate through in relation to such factors as pay levels or working conditions. According to one estimate, over 5 million people working through digital labour platforms could be at risk of employment status misclassification. These people are especially likely to experience poor working conditions and inadequate access to social protection. As a result of the misclassification, they cannot enjoy the rights and protections to which they are entitled as workers. These rights include the right to a minimum wage, working time regulations, occupational safety and health protection, equal pay between men and women and the right to paid leave, as well as improved access to social protection against work accidents, unemployment, sickness and old age.
How does the European Commission propose to improve the working conditions of people finding work through digital labour platforms?
On 9 December 2021, the European Commission proposed a set of measures to improve the working conditions of this group of people. The proposed Directive seeks to ensure that people working through digital labour platforms are granted the legal employment status that corresponds to their actual work arrangements. It provides a list of control criteria to determine whether the platform is an “employer”. If the platform meets at least two of those criteria, it is legally presumed to be an employer. The people working through them would therefore enjoy the labour and social rights that come with the status of “worker”.
What are the rights of workers?
For those who are reclassified as workers, this would mean the right to: –
- A minimum wage where it exists;
- Collective bargaining;
- Working time and health protection;
- Paid leave;
- Contributory old-age pensions;
- Improved access to unemployment and sickness benefits; and
- Better protection against work accidents.
Platforms will have the right to contest or “rebut” this classification, with the burden of proving that there is no employment relationship resting on them. The clear criteria the Commission proposes to bring to the platforms will help facilitate increased legal certainty, reduced litigation costs and improved business planning.
The Directive also increases transparency in the use of algorithms by digital labour platforms, ensures human monitoring in respect of working conditions, and gives the right to contest automated decisions. These new rights will be granted to both workers and those who are genuinely self-employed.
How will the European Commission proposals bring more transparency to digital labour platforms?
National authorities often struggle to access data on platforms and the people working through them. This is even more difficult when platforms operate in several member states, making it unclear where platform work is performed and by whom. The Commission’s proposal will bring more transparency to platforms by clarifying existing obligations to declare work to national authorities and asking platforms to make key information about their activities and the people who work through them available to national authorities.
A common set of EU rules will provide increased legal certainty, therefore enabling digital labour platforms to benefit fully from the economic potential of the single market and a level playing field. Although this EU Directive will not affect the online platforms operating in the UK, it will affect the online platforms operating in the EU.
This group of employers may eventually have to reclassify some of their self-employed workers as employees if new EU proposals are adopted. Feel free to contact us for legal advice if you also work through a digital platform and are unsure about your employment rights in the UK.
Farideh Moallemi is an employment solicitor. She has over 11 years of experience in advising employees and employers on employment law matters. Farideh has represented clients in the employment tribunal and County Courts. Farideh is a member of The Law Society. To contact Farideh, visit the Contact Us page. For media enquiries: info@dphlegal.com