CONSULTATION DOCUMENT - Second-phase consultation of social partners under Article 154 TFEU on possible action addressing the challenges related to working conditions in platform work

EN EN
EUROPEAN
COMMISSION
Brussels, 15.6.2021
C(2021) 4230 final
CONSULTATION DOCUMENT
Second-phase consultation of social partners under Article 154 TFEU on possible action
addressing the challenges related to working conditions in platform work
{SWD(2021) 143 final}
Europaudvalget 2021
C (2021) 4230 - SWD-dokument
Offentligt
1
1. Introduction
The world of work is in permanent change, brought about by both green and digital
transitions, and by demographic changes, globalisation, and the impact of COVID-19. New
forms of work organisation and employment relationships are emerging, bringing new
opportunities and challenges. Platform work is one of these new forms of work organisation,
enabled by fast-developing technology.
In her political guidelines, President von der Leyen stressed the need to improve the working
conditions of people working through platforms1
. The Commission is therefore gathering
evidence in preparation of an initiative2
, as reiterated in the European Pillar of Social Rights
Action Plan, which the Porto Social Summit of May 2021 endorsed as guidance for
implementing the Pillar3
.
The envisaged initiative on platform work would aim to ensure that people working through
platforms have decent working conditions - in line with the high standards guaranteed in the
EU - in terms of occupational safety and health, social protection, fair income, the protection
of personal data, transparency and predictability, and equal treatment. It would also aim to
create favourable conditions for sustainable growth of digital labour platforms in the EU.
Digital labour platforms4
are still a developing phenomenon. Over recent years, a growing
number of people in the European Union (EU) started to use digital labour platforms to earn
their living or complement their income. Given the job creation potential of digital labour
platforms in the EU, their sustainable growth could contribute to reaching the target of 78%
of the working age population being in employment by 20305
. The number of people working
to different extent through platforms represented around 11% (or 24 million people) of the
EU’s workforce in 2018. Out of these, 1.4% (3 million) do it as a main job.
In line with Article 154 of the Treaty on the Functioning of the European Union (TFEU), on
24 February 2021, the Commission launched the first-phase consultation of European social
partners to seek their views on the need for, and possible direction of, EU action to address
the challenges related to working conditions in platform work. This first-phase consultation
ended on 7 April 2021. Having considered the views expressed by social partners in that
consultation, the Commission has concluded that there is a need for EU action to address
these issues.
1 Political guidelines for the next European Commission 2019-2024: A Union that strives for more - My agenda
for Europe. Available online.
2
The 2021 Commission Work Programme announces a legislative initiative on ‘Improving the working
conditions of platform workers’ for Q4. Available online.
3
Action Plan available online here, the Porto Social Commitment here and Porto Declaration here.
4 Hereby defined as a private internet-based company which intermediates with a greater or lesser extent of
supervision on-demand services, requested by individual or corporate customers and provided directly or
indirectly by individuals, regardless of whether such services are performed on-location or online. For a full list
of terms used throughout the document, please refer to the glossary in the accompanying analytical document.
5 As part of the Action Plan to implement the principles of the European Pillar of Social Rights, the Commission
proposed three EU headline targets to be achieved by the end of the decade in the areas of employment, skills,
and social protection. The indicator for the employment target includes the self-employed. More information
available online.
2
Therefore, the Commission is now launching a second-phase consultation of European
social partners, in accordance with Article 154(3) TFEU. The goal of the second-phase
consultation is to discuss the possible content of, and relevant EU instruments for, the
envisaged Commission proposal, in view of the aims presented above. The consultation also
asks social partners whether they wish to enter into negotiations as provided for by Article
154(4) TFEU.
This second-phase consultation document brings together the main results of the first phase,
deepens the analysis of identified challenges, discusses the need for, and added value of, EU
action, and sets out potential avenues for such action. The accompanying analytical document
complements this consultation document with additional evidence6
.
The initiative may also pursue EU action to address platform work challenges for the self-
employed. Article 154(3) TFEU does not apply in this case. Therefore, on its own initiative,
the Commission also invites social partners to share their views on the possible measures
aiming to improve working conditions in platform work for the self-employed.
2. Consultation of social partners - first phase
Fourteen recognised social partners sent replies during the first-phase consultation.
Six trade unions contributed to the consultation: the European Trade Union Confederation
(ETUC); the Council of European Professional and Managerial Staff (Eurocadres); CEC
European Managers; the European Confederation of Independent Trade Unions (CESI); the
European Transport Workers’ Federation (ETF); and the European Cockpit Association
(ECA). Eight employer organisations sent replies: BusinessEurope; SGI Europe; SMEunited;
the Council of European Employers of the Metal, Engineering and Technology-Based
Industries (CEEMET); Association of Hotels, Restaurants, Bars and Cafés in Europe
(HOTREC); the World Employment Confederation-Europe (WEC-Europe); the European
Federation of Retail, Wholesale and International Traders (EuroCommerce); and the Airline
Coordination Platform.
Trade unions and employer organisations generally agree with the issues identified. Trade
unions note nonetheless that the Commission’s consultation document does not raise certain
issues of interest: for example, ETUC mentions that the Commission has not addressed the
status of platform companies as employers, (temporary work) agencies or intermediaries.
Trade unions are generally supportive of an EU initiative on platform work. They highlight
that employment status should be at the core of such action and they are in favour of a
binding EU instrument. Regarding personal scope, ETUC and Eurocadres would like to see
the initiative extended to all non-standard forms of work. CEC European Managers notes that
the enjoyment of rights should not depend on the distinction between employment and self-
employment. ETUC further notes that the level of rights for the self-employed needs to be
decided nationally in cooperation with social partners.
6
SWD(2021) 143. The accompanying Staff Working Document provides additional evidence on the problem
that EU action should address, analyses impacts of the potential measures under consideration and explores the
added value of EU action.
3
Employer organisations are generally sceptical of an EU initiative on platform work. They
argue that it is not appropriate to introduce one-size-fits-all rules. They recognise that there is
a need for action, but that this should generally be taken at national level and within the
framework of the various national systems for social and industrial relations. BusinessEurope
notes potential action should respect the diversity of needs and desires of those working
through platforms.
Regarding the types of platforms the possible initiative could cover, trade unions point out
that EU action should cover both online and on-location platforms. Employers point to the
diversity of platforms business models and the fact that platforms are not a distinct economic
sector, arguing therefore against a one-size-fits-all solution. BusinessEurope calls for the EU
to promote dialogue and facilitate exchanges of experience and best practice, which could
cover all types of digital platform work.
Social partners have diverging views on the material scope of an initiative. Regarding
employment status, trade unions would like to see the introduction of a rebuttable
presumption of employment status with a reversal of the burden of proof. For some trade
unions (ETUC, Eurocadres and ETF), the recognition of platforms as employers with sector-
specific obligations is just as important and necessary as the clarification of employment
status of people working through platforms.
Employer organisations note that the determination of status should be done on a case-by-
case basis at national level in order to respect the different Member State models.
BusinessEurope and SGI Europe in particular highlight the need to respect individual
decisions, and that a possible initiative should not force people working through digital
labour platforms into an undesired employment relationship.
Trade unions oppose the introduction of a third status for people working through platforms.
Among employers, EuroCommerce and WEC-Europe are also against a third category.
Regarding the proposed objective to ensure fair working conditions for all, trade unions
agree that a minimum level of protection should apply to all people working through
platforms irrespective of their employment status. CEC European Managers contend that the
level of protection afforded to those working through platforms should not depend on the
sector or activity. ETF recalls that people working through on-location platforms should have
rights related to wages and occupational safety and health. In particular, it proposes wages
based on an hourly rate that also accounts for waiting time, and suggests that platforms
provide safety instructions and equipment, and cover maintenance costs.
Employer organisations agree that all people should work under fair conditions, but note that
where people working through these platforms are classified as employees, existing labour
laws already apply. They do agree that there may be a need for platforms to provide, in a
transparent way, clear information to people working through them, for instance on how the
platform functions and its terms and conditions.
Trade unions recognise the need to facilitate access to social protection. ETUC and
Eurocadres reassert that the initiative should cover all non-standard workers. Employer
4
organisations agree that access to social protection is important, but note that EU instruments,
such as the Council Recommendation on access to social protection7
, already exist.
Trade unions agree that people working through platforms should enjoy certain rights when it
comes to automated decision-making and the use of algorithms. Employer organisations
refer to existing EU legislation and initiatives, such as the General Data Protection
Regulation (GDPR)8
and obligations to platforms in the Platforms to Business Regulation9
on
ensuring clear terms and references, as well as the recently proposed regulation laying down
harmonised rules on artificial intelligence (AI)10
.
Trade unions recognise the need to make access to collective bargaining and
representation easier. For their part, employer organisations also recognise the need to make
access to collective bargaining easier, but for this to be assessed on a case-by-case basis and
only for those classified as employees.
Similarly, trade unions are supportive of access to training for all people working through
platforms and on an equal footing with employees. ETUC and Eurocadres, in particular,
stress the importance of recognising platforms as employers when it comes to financing
access to training. Employer organisations, meanwhile, recognise the importance of training
but highlight that the EU should not determine how training is organised or financed.
Regarding cross-border dimensions, some trade unions highlighted the importance of
cooperation between Member States. ETUC specifies that the possibility to establish a
presumption of employment relationship should be made in the country where the worker
operates and in accordance with national legislation.
Employer organisations recognise the cross-border aspect of the platform economy. They
welcome initiatives that work towards a better digital infrastructure and a less burdensome
regulatory approach, which particularly affects smaller European platform providers.
BusinessEurope notes the need for a risk-based approach, while applying corrective measures
on markets only when this is necessary and so long as they are not disproportionate.
Neither side indicated willingness to enter negotiations at this stage of the consultation
process. Trade unions bring up the need for urgent action, the low chances of successful
negotiation among European social partners, and issues with collective representation in
platform work. Employer organisations note that implications for the self-employed from
platform work challenges preclude them from entering negotiations. Some mention the need
for more clarity on the measures the Commission intends to propose, and others bring up the
June 2020 framework agreement on digitalisation as explicitly applying to platform work11
.
7 Council Recommendation (2019/C 387/01) of 8 November 2019. Available online.
8
Regulation (EU) 2016/679. Available online.
9
Regulation (EU) 2019/1150. Available online.
10 COM(2021) 206 final. Available online.
11 The European Social Partners Framework Agreement on Digitalisation was signed by BusinessEurope,
ETUC, CEEP and SMEunited to support the successful digital transformation of Europe’s economy and to
manage its large implications for labour markets, the world of work and society at large. The agreement
supports the successful integration of digital technologies at the workplace, investment in digital skills, skills
updating and the continuous employability of the workforce. The agreement enables employers and unions to
introduce digital transformation strategies in partnership in a human oriented approach at national, sectoral,
5
3. The challenges
Platform work creates many opportunities. It can help people complement their revenue
from other jobs, expand their entrepreneurial activity and acquire new clients. The flexibility
in working hours that platform work often brings enables many people to combine work with
family or other care responsibilities or with studies. Platform work also often represents an
entry point for people who otherwise have difficulties accessing the labour market, for
example people of a migrant background12
.
Still, important challenges exist. Due to the specific features of platform work, many of the
people working through platforms face problems that are sometimes difficult to address
within existing legal frameworks. These challenges include: 1) employment status of the
person providing platform work and the resulting obligations of the platform; 2) issues
stemming from the algorithm-based business models of platforms; 3) issues related to the
cross-border nature of platform work; and 4) gaps in coverage of existing (and forthcoming)
legislation with regards to platform work challenges. As a result, some of the people working
through platforms face poor working conditions and inadequate access to social protection.
The challenges outlined in this consultation document and the accompanying analytical
document are not evolving in a vacuum. They are also affected by certain developments and
external drivers, such as globalisation, digital transformation and societal changes. These
developments and external drivers, which the accompanying analytical document further
explains, have an impact on the issues this initiative aims to tackle, but would not be directly
addressed through it.
The size of the digital labour platform economy in the EU has grown almost fivefold
from an estimated EUR 3 billion in 2016 to about EUR 14 billion in 2020. Three quarters of
all active digital labour platforms originate in the EU. On-location platform work represents
over 90% of intermediated services; around three quarters of EU platform economy revenues
originate from ride-hailing and delivery platforms. The top 25 platforms account for about
four fifths of the total earnings of people working through platforms in the EU13
.
The number of people working to a various extent through platforms grew from 9.5%
to around 11% (or 24 million people) of the EU’s workforce between 2017 and 201814
.
For the majority of them, this does not constitute full-time employment15
. A study estimates
company and workplace levels, including on the modalities of connecting and disconnecting and respect of
working time rules and appropriate measures to ensure compliance. Available online.
12 International Labour Office (2021), World Employment and Social Outlook 2021: The role of digital labour
platforms in transforming the world of work, particularly section 4.1.4. Available online.
13 Willem Pieter de Groen, Zachary Kilhoffer, Leonie Westhoff, Doina Postica and Farzaneh Shamsfakhr
(2021): Digital Labour Platforms in the EU: Mapping and Business Models. Study prepared by CEPS for DG
EMPL under service contact VC/2020/0360. Available online.
14
Based on a two-wave online survey by the Commission’s Joint Research Centre. First wave – JRC (2018):
Platform workers in Europe - Evidence from the COLLEEM survey. Publications Office of the European Union,
Luxembourg. Available online. Second wave - JRC (2020): New evidence on platform workers in Europe -
Results from the second COLLEEM survey. Publications Office of the European Union, Luxembourg. Available
online. It should be noted this is an estimation based on the specificities of the COLLEEM survey: 1) estimates
are based on 16 countries and 2) the survey is not representative of the working population.
15 COLLEEM I and II data on the total number of people working through platforms includes people who might
do so on a main, secondary, marginal or sporadic basis (for more on how these categories are defined, see
footnote in Section 2.3 of the accompanying analytical document).
6
the 2019 earnings of people working through platforms active in the EU at EUR 7 billion
(representing almost two thirds of the total size of the EU platform economy in 2019), having
more than doubled since 201616
, while the digital labour platform economy has increased
almost fivefold.
People working through digital labour platforms have diverse socio-economic
backgrounds. Their average age in 2018 was 33.9 years in platform work and 42.6 years in
traditional businesses17
. They might be more educated than the general population, but this
does not necessarily translate into higher-skilled work opportunities and career development.
Many of them have a migrant background.
Platform work can have particular effects on various groups of people. Among people
who started working regularly through platforms in 2020, half were women18
, but this does
not reflect a gender balance in platform work overall. Gender challenges remain. These
include a gender pay gap in some types of platform work, and inadequate access to social
protection because of the disproportionate burden of care responsibilities falling on women.
Limited social protection coverage also presents particular problems for other people in a
disadvantaged situation, such as persons with disabilities or migrants19
. Urban population
growth and the spread of related urban lifestyles drive the growing consumption of on-
demand services such as food delivery, ride-hailing and household/cleaning services2021
.
3.1. Challenges stemming from employment status22
The key challenge in platform work relates to employment status. It is a key determinant
of the access of people working through platforms to existing labour rights and protection.
Platforms most often classify the people working through them as self-employed.
However, with most platform work combining features of subordination and autonomy, and
pay levels often determined by the platforms, it is not always clear whether people should be
classified as workers or self-employed, and what obligations would fall on platforms as
employers or as contracting entities. Because of a lack of legal clarity, people working
through platforms have been overwhelmingly classified as self-employed, as digital labour
platforms often characterise those working through them as independent contractors, third-
party service providers, or freelancers. Nine out of ten digital labour platforms active in the
EU23
currently do so24
.
16 Willem Pieter de Groen, et al. (2021): Digital Labour Platforms in the EU: Mapping and Business Models.
Study prepared by CEPS for DG EMPL under service contact VC/2020/0360. Available online.
17
JRC (2020) report on COLLEEM 2nd wave survey (available online), based on 16 surveyed Member States.
18 EIGE (2021, forthcoming): Gender equality prospects in labour markets transformed by artificial intelligence
and platform work.
19 ILO (2021). The role of digital labour platforms in transforming the world of work. Available online.
20 JRC (2020). New evidence on platform workers in Europe. Results from the second COLLEEM survey.
Available here.
21
See also Section 2.3 of the accompanying SWD (2021) 143 analyses in further detail the diversity of people
working through platforms, while looks into the consequences arising from the challenges.
22
See also Section 3.6.1 of the accompanying SWD(2021) 143
23 Accounting for 93% of all earnings of people working through platforms active in the EU.
24 Willem Pieter de Groen et al. (2021): Digital Labour Platforms in the EU: Mapping and Business Models.
Study prepared by CEPS for DG EMPL under service contact VC/2020/0360. Available online.
7
There is also genuine self-employment in platform work, given the wide variety of digital
labour platforms and their business models. Highly qualified professionals - such as software
developers, graphic designers, translators, plumbers, electricians or lawyers - offer their
services via certain types of platforms, using them as a channel to acquire new clients.
Platform work is often a conscious choice for people who wish to enjoy the flexibility to
organise their work and a self-chosen work-life balance. Such entrepreneurial activity and
freedom is characterised by significant autonomy in setting the price for services offered and
rendered, and executing work without instructions from anyone other than the client.
Nevertheless, categorisation as self-employed does not always correspond to the type of
relationship that truly exists between the platform and the people performing work
through it. Various aspects of the provision of services through some platforms resemble
working conditions in an employment relationship. In fact, platforms may unilaterally
regulate conditions pertaining to pay, working time, dispute resolution and other issues
through their terms of service agreements, while simultaneously using technological means to
monitor and evaluate the work25
.
There is therefore a high risk of misclassification, with some people working through
platforms classified as self-employed despite not always enjoying the autonomy and freedom
that comes with such status, for instance to set their own rates. Most platforms allow the
freedom to decide whether to log in - and thus when to work - but determine the actual
organisation of work. This can result in false self-employment, depriving incorrectly
classified people from basic workers’ protection and often limiting their access to social
security schemes.
People working through platforms often do not have a choice but to accept the work
status proposed by platforms. The lack of any significant bargaining power in the pre-
contractual stage (and beyond) therefore often results in a platform’s terms and conditions
unilaterally determining the rights of people working through it. The possibility for genuine
contractual negotiations, on the other hand, is often associated with genuine self-employed
activity.
Grey zones between workers and self-employed people, as well as a blurred distinction
between employers and clients, might lead to uncertainty over applicable rules. Many people
working through platforms might fall between the cracks of labour and social protection. This
can also lead to a lack of equal treatment between those whose employment status is not
correctly classified and traditional workers, and a lack of a level playing field between
platforms and traditional companies. Despite often providing analogous services, some
platform companies do not have to meet sector-specific obligations that apply to traditional
companies. This could place traditional companies at a competitive disadvantage.
National responses to platform work are diverse and are developing unevenly across the
EU. Only very few Member States have adopted national legislation specifically targeting
improvement of working conditions and/or access to social protection in platform work.2627
25
ILO (2021), particularly Section 5.1.1.
26
See also Section 3.5.3 of the accompanying SWD (2021) 143
8
In other Member States, people working through platforms may be impacted by legislative
initiatives not specifically targeting platform work. In some Member States, platform work
and a possibility to introduce legislative changes is currently being debated.
Recent national legislation, which has directly or indirectly affected working conditions and
social protection of people working through platforms, varies in terms of adopted
approaches28
. In addition, national legislation has mostly been adopted in specific sectors,
notably in ride-hailing or food-delivery services.
Determining the employment status of people working through platforms is often done
on a case-by-case basis. Most Member States do not have specific provisions on platform
work, but rely on general labour law definitions to determine the employment status
(including, in some cases, legal presumptions). A few Member States have created a third
status – falling between worker and self-employed - to provide dependent or employee-like
self-employed people with more rights.29
People working through platforms often do not have a straightforward path to clarify
their employment status. In some cases, Member States offer a specific, extrajudicial
procedure to confirm the employment status of a person involved in a contractual
relationship.30
In other cases, labour inspectorates can provide guidance or support but the
resources of such administrative bodies are limited. The most frequent way for someone to
question the status laid down in the platform’s terms and conditions is through the courts. In
such cases, the individuals bear the burden to prove all elements that are constitutive of an
employment relationship, even if they often only have limited insight into how the work is
organised through the platform’s digital infrastructure.
Litigation has been on the increase. To date, more than 100 court decisions and
15 administrative decisions dealing with the employment status of people working through
platforms have been identified in nine Member States31
. Most of these cases concern ride-
hailing or food-delivery platforms, but some also cover other forms of on-location platform
work. Court rulings have gone in different directions, but most judges have decided in favour
of reclassifying nominally independent contractors as workers and platforms as employers. A
few have confirmed the self-employed status. All five cases that have reached courts of
highest instance resulted in the reclassification of employment status32
.
27
E.g. the Spanish ‘Riders law’ requires digital labour platforms in delivery sector to classify their couriers as
employees, rather than independent contractors. The law is also introducing the right of information on
algorithms.
28
It can address certain challenges in platform work either through defining the employment status; extending
the personal scope of application of national labour and social protection law; regulating the working conditions
and social protection for persons in non-standard employment; strengthening the rights and protection of the
self-employed and/or introducing a third category status with ad hoc rights and provisions. Study to gather
evidence on the working conditions of platform workers (CEPS, 2020), Available online.
29
Member States that have introduced some type of in-between or third category status applicable to platform
work: Austria, Germany, Spain, Italy and Slovenia. (ECE review, 2021).
30
E.g. Belgium, Italy, Malta.
31
Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Spain and Sweden.
32
Reclassification to worker status in Germany, Spain and France. The Italian Supreme Court decided to
reclassify the relationship from self-employed to ‘third status’ (it had not been asked to consider classification as
regular worker). Other cases have been decided at lower level or are awaiting appeal.
9
Courts are constantly developing their understanding of platform work. Judges have
increasingly come to consider, as key factors in assessing employment status, elements of
organisational integration into the platform’s business model and the absence of genuine
entrepreneurial independence of the people working through platforms, in addition to the
more traditional elements of direction and control. Increasingly, the role of algorithms in
managing and controlling work performance and the functioning of the platform market has
hit the spotlight, leading courts to reclassify the relationship between the platform and the
person working through it as an employment relationship.
Nonetheless, case law is far from consolidated. Not everywhere have courts reclassified the
employment status of the persons concerned. In some cases, courts have found that the
individual’s freedom to decide whether and when to work is a reason to reject the claim of an
employment relationship. Lower instance tribunals, in subsequent rulings, have not always
followed the jurisprudence of the higher instance. The diversity of approaches taken by
national courts, both within and between Member States, and the absence of case law in
many others, contributes to uncertainty for platforms and people working through them33
.
Legal uncertainty is compounded by the reluctance of platforms to apply rulings
consistently. Some platforms have applied court rulings only to the specific plaintiff’s
situation and have decided not to grant the same advantages to other people working through
the same platform34
. Sometimes they stress that they have made unilateral changes to their
business model or terms and conditions since the facts of the particular case arose, so that the
current situation is different from the one the court assessed. To prevent possible litigation on
employment status and misclassification, some platforms use complex legal set-ups between
subsidiary and parent companies, mandatory arbitration clauses, and clauses making disputes
subject to the law of another Member State or third country.
3.2. Challenges stemming from the algorithm-based business model
Platform work is by definition driven by algorithms. EU labour law does not tackle
algorithmic management challenges. Currently, the internal market acquis is developing in
this area (see below, in section 3.4), but without focusing specifically on the perspective of
people providing services via platforms. People working through platforms lack information
and are not consulted on how algorithms are used. There are insufficient means of redress and
unclear responsibility with regard to the use of algorithms. Those challenges are magnified by
information asymmetries and insufficient dialogue prevalent in platform work.
3.2.1. Lack of information, consultation and redress and unclear responsibilities in the use of
algorithmic tools
The digital transformation has enabled technological developments, such as more powerful
automated systems, the use of which is at the core of the platform economy. The extent
of this control could potentially surpass what is possible under human supervision, opening
33
Section 3.2 of the accompanying analytical document analyses relevant case law in further detail.
34
See examples and references in the accompanying analytical document.
10
the door for overarching surveillance of productivity or even private behaviour35
. AI can
create efficiencies by effectively managing a vast pool of data and by proposing user-friendly
solutions. It is being used generally for recruitment, surveillance, management, supervision
and control, or termination of work-related contractual relations.
Lack of transparency and the potential for discrimination are general issues inherent in the
nature of the technology enabling algorithmic management, and as such, are dealt with
through separate instruments36
. When applied in the world of work, however, the application
of algorithmic tools results in the distinct challenges below, which a platform work
initiative might still have to address.
Lack of sufficient information, consultation and redress underpins algorithmic
management in platform work. Algorithmic management may enable forms of oversight
and exercise levels of control that alter the traditional role of managers in workplaces (and
human supervision in general) or remove them further from the scene of work37
. At the same
time, people working through platforms may lack information and understanding on how
algorithms are applied, are used to reach certain decisions and thus impact their working
conditions, and may lack access to redress for such decisions. Algorithmic management
might also prevent the effective exercise of the right of workers and their representatives to
be informed about working conditions and procedures38
. Social dialogue and collective
representation might therefore be made more difficult due to the use of algorithms in
platform work.
It is not always clear who is responsible for decisions reached by algorithms. The use of
algorithmic management may further obscure the actual management functions performed by
platforms and thus allow companies to distance themselves from automated decisions,
thereby preventing the attribution of (potential) obligations. This can create a responsibility
gap due to the lack of a human ‘in the loop’ of an algorithmic decision. The proposed AI Act
sets new requirements on human oversight and transparency (see Section 3.4).
Human supervision and control of algorithmic decisions may be limited even when it is
in place. Algorithms can bring added value in managing efficiently the plethora of data and
the matching of supply and demand, thereby creating new business models. However, speeds
of data processing can ramp up the pressure to rubber-stamp what automated systems output,
due for instance to information asymmetries between the human validator and the system
itself39
. Humans responsible for overseeing algorithms might lack protection against undue
repercussions in case they ignore automated decisions affecting workers.
35
Private behavior is especially at risk when labour platforms require their users to install apps on their private
phones, see for example this article.
36
Most notably the proposed AI Act.
37
Katherine C. Kellog et al. (2020): Algorithms at work: the new contested terrain of control. Academy of
Management Annals 2020, Vol. 14, No. 1, 366–410. Available online.
38
The Directive establishing a general framework for informing and consulting employees requires information
and consultation on decisions likely to lead to substantial changes in work organisation or in contractual
relations in companies of a certain size. Available online.
39
The risk of automation bias is reflected in the proposed AI Act.
11
While the use of automated systems in the work context first gained prominence through its
applications in the platform economy, algorithmic management tools are spreading
beyond platforms to traditional workplaces.
At the same time, the extent to which the challenges potentially raised by the increasing use
of IT tools in the workplace, including in the context of platform work, translate into specific
regulatory failures should be assessed both from the perspective of EU labour law as well as
in the context of the overall internal market acquis (see Section 3.4).
National responses to challenges related to algorithms have been very limited. With the
exception of Spain’s recent ‘Riders Law’40
, no Member State has adopted labour legislation
specifically addressing algorithmic-related challenges in platform work. Without prejudice to
the internal market acquis (see Section 3.4), existing measures address more generally
algorithmic management at the workplace, for example by building on legislation on the
protection of personal data or anti-discrimination legislation. Such approaches might not be
able to tackle the full array of issues stemming from the use of algorithms in platform work
and beyond, for example when it comes to timely and justified human oversight of
algorithmic decisions or possibilities for redress for affected people.
3.2.2. Information asymmetries and insufficient dialogue in platform work
Information asymmetries and insufficient dialogue shape working conditions in
platform work. They are arguably fundamental to the ability of platforms to exert control
over the people working through them, even when classified as self-employed. A general lack
of clarity of information and consultation rights can affect the working conditions of people
working through platforms. This can make it difficult to maintain an overview of existing
rights and obligations due to the unclear or complex contractual terms and conditions of some
platforms, particularly in instances where existing regulations, such as the Platforms to
Business Regulation, do not apply41
. Constant monitoring, real-time evaluation and rational
control through algorithmic recommendations can further negatively affect the wellbeing of
people working through platforms42
.
They can cause an unbalanced power relationship, often a defining feature in platform
work43
. People working through platforms often accept terms and conditions without a clear
overview of the corresponding advantages and disadvantages, despite provisions in existing
instruments, such as the GDPR44
and the Platforms to Business Regulation45
. Moreover,
40
Royal Decree-Law 9/2021 of 11 May amending the consolidated text of the Workers’ Statute, approved by
Royal Legislative Decree 2/2015 of 23 October, to guarantee the labour rights of persons engaged in distribution
in the field of digital platforms. Available online.
41
The P2B Regulation only covers self-employed ‘business users’ engaged in direct transactions with
customers.
42
Katherine C. Kellog et al. (2020). Algorithms at work: the new contested terrain of control. Academic of
Management Annals 2020, Vol. 14, No. 1, 366–410 (373). Available online
43
The issue of unbalanced power relationship is addressed also by GDPR e.g in the context of consent (Article 6
GDPR). Recital 43 GDPR states that “in order to ensure that consent is freely given, consent should not provide
a valid legal ground for the processing of personal data in a specific case where there is a clear imbalance
between the data subject and the controller”. See also EDPB Guidelines 05/2020 on consent under Regulation
2016/679, p. 9.
44
GDPR aims to address information asymmetries by providing in Article 12 that the “controller shall take
appropriate measures to provide any information referred to in Articles 13 and 14 and any communication
under Articles 15 to 22 and 34 relating to processing to the data subject in a concise, transparent, intelligible
12
social dialogue and collective representation, which would otherwise counterbalance
information asymmetries, are not prevalent in platform work.
Platform work modalities limit opportunities for collective representation and
organisation. There is often no physical workplace involved, which means that people
working through platforms rarely interact with each other. They often might not even know
their peers on a given platform, or how to contact them. Moreover, platforms’ business
models, for instance those relying on a ranking system, may generate competition between
people working through them, rather than offering incentives for cooperation. Collective
organisation and representation are therefore currently difficult and fragmented46
.
Separate responses to these challenges are emerging. Some collective bargaining
agreements in platform work have been concluded, but these are still the exception rather
than the rule. Grassroots responses are also taking shape, aiming to set a minimum level of
job security, guaranteed working hours, decent payment, health benefits and parental leave or
full accident insurance coverage. Section 3.3.2 of the accompanying analytical document
examines in further detail existing collective bargaining agreements and grassroots responses.
3.3. Challenges stemming from cross-border platform work
Some of the challenges in platform work performed across borders relate to the unclear
employment status in platform work – highlighted above – while others relate to data gaps.
In situations where employment status is uncertain the cross-border character of some
platform work may pose challenges as regards determining the law applicable to
contractual obligations and the jurisdiction competent for resolving disputes relating to
such obligations. The Brussels Ia47
and Rome I48
Regulations set out, respectively, rules on
the responsible jurisdiction and the applicable law in cross-border disputes. In such disputes
between the employer and the worker, special provisions apply, derogating from the general
rules concerning contracts and providing certain safeguards, with the aim of protecting
workers as the weaker party to a contract. Such favourable provisions do not apply to self-
employed whose transactions are governed by the general rules.
Unclear employment status could also give rise to questions about social security
coverage in cross-border situations. The classification in national law of people working
through platforms bears consequences for social security coordination law and the
establishment of the competent Member State49
. For someone working in more than one
and easily accessible form, using clear and plain language”.
In addition, the controller is obliged to facilitate the
exercise of data subject rights under Articles 15 to 22.
45
The P2B Regulation only covers self-employed ‘business users’ engaged in direct transactions with
customers.
46
As regards solo self-employed people working through platforms, another obstacle to collective bargaining
arises from competition law, which will be addressed through a separate initiative. See more details here.
47
Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on
jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 351,
20.12.2012, p. 1. Available online.
48
Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law
applicable to contractual obligations (Rome I), OJ L 177, 4.7.2008, p. 6. Available online.
49
Strban et al (2020): Social security coordination and non-standard forms of employment and self-
employment: Interrelation, challenges and prospects, July 2020. Available online.
13
Member State, the determination of whether they are employed or in self-employment may
be the determining factor about which country’s social security system covers them.
National authorities do not have easy access to data on platform work and people
working through them, which is especially relevant where platforms operate in several
Member States. Data gaps regarding the latest terms and conditions of platforms, and the
number and employment status classification of people working through them, affect the
ability of relevant national authorities and stakeholders to bring about positive change. It is
not always clear where platform work is performed, which can lead to difficulties tracing and
addressing cross-border challenges. Insufficient data also has repercussions for taxation, and
extending social security coverage to people working through platforms.
National approaches vary, with some Member States50
having taken various legislative and
technical steps towards receiving data, directly from platform companies, on individuals’
earnings. Initiatives vary in scope and nature (voluntary or mandatory). Such variance can
have an impact on the platform economy by increasing the administrative costs for digital
labour platforms across Member States51
. It might also not bring the necessary clarity in
cross-border situations on where the work is performed.
3.4. Regulatory gaps at EU level
Existing EU-level legislation does not fully address challenges related to clarification of
employment status, algorithm-based business models and cross-border work.
Existing legislative instruments create a minimum floor of labour rights that apply
across all Member States. Relevant EU labour and social acquis notably includes the
following: Directive on transparent and predictable working conditions52
; Directive on work-
life balance for parents and carers53
; Working Time Directive54
; Directive on temporary
agency work55
; Directives on part-time work56
and on fixed-term work57
; the Occupational
Safety and Health (OSH) Framework Directive58
; and three Directives on anti-discrimination
and equal treatment in employment59
.
These legal instruments cover workers; self-employed people, including those working
through platforms, fall outside their scope. The Anti-Discrimination and Equal Treatment
Directives are an exception to this, as they also cover access to self-employment.
Non-legally binding instruments at EU level cover the self-employed and provide
guidance to Member States. While these do not confer directly enforceable rights on
50
Such as Denmark, Estonia or France.
51
Vili Lehdonvirta and Daisy Ogembo (2019): A Digital Single Window for Income Data from Platform Work.
Available online.
52
Directive (EU) 2019/1152. Available online.
53
Directive (EU) 2019/1158. Available online.
54
Directive 2003/88/EC. Available online.
55
Directive 2008/104/EC. Available online.
56
Directive 97/81/EC. Available online.
57
Directive 1999/70/EC. Available online.
58
Directive 89/391/EEC. Available online.
59
Directive 2006/54/EC. Available online, Directive 2000/43/EC. Available online, Directive 2000/78/EC.
Available online.
14
individuals, their implementation at national level should result in new rights being granted.
The Council Recommendation on improving the protection of the health and safety at work
of the self-employed60
and Council Recommendation on access to social protection for
workers and the self-employed61
both provide guidance to Member States on measures that
are particularly relevant for people working through platforms who do not have an
employment relationship (or who have a non-standard employment relationship, in the case
of the Recommendation on access to social protection).
The case-by-case approach to employment status developed through individual court
cases at EU and national level means access to rights is also decided on a case-by-case
basis. The EU labour and social acquis provides a minimum floor of labour rights and
protection to workers, in cases of doubt whether a person is a worker it is not clear whether
they can benefit from these rights.
EU labour law does not yet address algorithmic management challenges. Opaqueness
and lack of human accountability for algorithms used in the world of work to monitor,
manage and control people can obscure employer obligations. Algorithmic management can
therefore challenge the enjoyment of rights on transparency, non-discrimination, data
protection as well as the right to information, predictability of work, or health and safety at
work. However, some of these issues may be addressed by existing and proposed horizontal
legislation.
When adopted, the proposal for an AI Act62 will address risks linked to the use of
certain AI systems. The proposed regulation tackles issues related to the development,
deployment and use of AI systems. It lists certain AI systems used in employment, worker
management and access to self-employment that are to be considered as high risk. It puts
forward mandatory requirements that AI systems must comply with, as well as obligations for
providers and users of such systems. Among others, the proposal for an AI Act imposes
requirements to enable human oversight and extensive documentation on high-risk AI
systems, and requires transparency of information to users (e.g. platform companies) of high-
risk AI systems. The proposed AI Act foresees specific requirements on documentation,
logging and transparency, and will ensure that platforms as users of high-risk AI systems will
have access to the necessary information. In addition, the proposed AI Act addresses inherent
challenges in the development of AI, such as bias, notably by setting requirements for high-
quality datasets, helping to tackle the risk of bias and discrimination63
.
Nonetheless, specificities of employment relations might necessitate further action
beyond what is achievable with an internal market instrument. For example, provisions
and procedures for improved information could also benefit people in the labour market
60
Council Recommendation of 18 February 2003 (2003/134/EC). Available online.
61 Council Recommendation (2019/C 387/01) of 8 November 2019. Available online.
62 COM(2021) 206 final. Available online.
63 The recently proposed Digital Services Act (COM/2020/825 final) also sets out information obligations for
online intermediaries related to their terms and conditions as regards the use of information provided by the
recipients of the service, including algorithmic decision-making and human review, transparency reporting
obligations, risk assessment obligations and risk mitigation measures for very large online platforms as regards
the dissemination of illegal content and the negative effects for the prohibition of discrimination, as enshrined in
the Charter and secondary EU law. Available online.
15
affected by automated decisions when they are not the users of the system, or be useful to
their representatives. Such people could also benefit from the possibility to ask for
substantiated grounds for significant decisions or challenge them once they have been taken,
and also from the promotion of social dialogue and reinforced collective information and
consultation rights. Addressing specificities of employment relations when it comes to
algorithmic management might therefore be best tackled through the Treaty social chapter.
Any potential actions in the area of algorithmic management should be without
prejudice to the proposed AI Act.
The EU acquis mostly covers self-employed people in their capacity as business actors.
Under the General Data Protection Regulation (GDPR)64
, people working through platforms
are entitled to specific rights over their personal data irrespective of their employment status.
Such rights include the right of access to personal data, the right to rectification, the right to
data portability or the right not to be subject to a decision solely based on automated
processing. Many people remain unaware of such rights, which could negatively affect their
professional development and mobility in the case of data portability rights for example.
Some rights are available under the EU internal market acquis65
, with the overall goal of
ensuring the correct functioning of the EU’s internal market. The Platform-to-business
regulation provides, among others, the right to terms and conditions written and clear and
intelligible language. Importantly, the Regulation only covers genuinely self-employed
‘business users’ engaged in direct transactions with customers.
Recent instruments partly cover lack of sufficient data on platform work. These include
for example the amended Directive on administrative cooperation in tax matters66
. It
introduces an obligation on platforms to report tax-relevant information, including income
earned by sellers through their platform. It also provides for the exchange of information
between the Member State where reporting took place and Member States where the sellers
reside. Importantly, the Directive only concerns reporting, and consequently the exchange of
information, on self-employed business users. The proposed Digital Services Act also
provides that national authorities can order, on the basis of national or EU laws,
intermediaries to provide them information about the recipients of their services so that
authorities can assess compliance by such recipients of services with national or EU laws.
3.5. Consequences of identified challenges
The identified challenges present a number of issues for the people working through
platforms, for the platforms themselves, for markets and consumers, and for Member States.
This section summarises these consequences67
. It also looks in greater detail to what extent
the various challenges affect the different categories of people working through platforms.
For people working through platforms
64 Regulation (EU) 2016/679. Available online.
65
See a detailed overview of internal market acquis and its application to platform work in Section 3.5.2 of the
accompanying analytical document.
66 Council Directive (EU) 2021/514 of 22 March 2021 amending Directive 2011/16/EU on administrative
cooperation in the field of taxation, OJ L 104, 25.3.2021, p. 1–26. Available online.
67 See also Section 3.6 of the accompanying SWD 2021) 143
16
Platform work offers opportunities for flexible work arrangements and additional
income. It can help people complement their revenue from other jobs, expand their
entrepreneurial activity and combine work with care responsibilities or studies. Platform
work also provides opportunities for people who otherwise would have difficulties accessing
the labour market, for example migrants68
.
Nevertheless, it often results in precarious working conditions and inadequate access to
social protection. Despite a classification as self-employed, people often lack the autonomy
and ability to shape their own working conditions traditionally associated with a self-
employed status. Rights and protections normally available under labour law in cases of
subordination are also unavailable to them as self-employed. Limited social protection
coverage could exacerbate occupational safety and health challenges.
Automated decision-making in platform work could exacerbate these challenges.
Algorithms can offer opportunities to detect biases. However, algorithmic and data bias can
also reinforce inequalities or negatively affect the welfare of people working through
platforms. Algorithmically powered work evaluation and appraisal could also prevent people
who work through platforms from making full use of otherwise existing rights. The proposed
AI Act addresses inherent challenges in the development, deployment and use of AI,
including by setting requirements for high-quality datasets. People working through
platforms may also often be unaware of their rights under EU and national law, for example
their rights on personal data under the GDPR.
Legal action is currently the usual route for clarifying the employment status. For
individuals who wish to challenge their categorisation, this brings high associated costs.
For digital labour platforms
Digital labour platforms currently face a regulatory patchwork. They have to comply
with the EU’s social and labour acquis and with national labour regulations where national
law classifies the people working through platforms as workers. Platforms have to also
comply with existing rules for contracting self-employed people where the people working
through platforms are categorised as self-employed.
Internal market acquis does not fully address the uncertainty created by this regulatory
fragmentation. The heterogeneity of personal and material scopes of the platform-relevant
internal market acquis, which does not focus per se on labour law matters, means companies
still face regulatory uncertainty and compliance costs. This can create different incentives and
disincentives when choosing in which Member States to operate or focus growth efforts and
investment. This contributes to an uneven regulatory playing field with negative spillover
effects, including a possible race-to-the-bottom competition between platforms.
For markets and consumers
Existing regulatory fragmentation can be a serious challenge to the scaling-up of
platform SMEs and start-ups. The lack of EU regulation addressing working conditions in
platform work has repercussions on the functioning of markets and on consumers who
purchase services through digital labour platforms. It can entrench the market position of
68 ILO (2021), particularly Section 4.1.4.
17
incumbents, who are able to acquire a dominant or semi-dominant role in their sector of
activity.
Market concentration is particularly strong in the digital economy, thanks to economies
of scale and scope, data-driven ‘network effects’ and the control by platforms over data69
.
These create high barriers to entry for new and growing platforms as against well-established
ones70
. Incumbent digital labour platforms also gain market power by entering ‘adjacent
markets’ (i.e. markets that share some but not all features of a company’s market of origin)
and leveraging their initial pool of data to acquire even more data, leading to growth and
market entrenchment71
. The Commission’s proposed Digital Markets Act (DMA) aims at
making online markets fairer and more easily contestable. However, the DMA will only
cover so-called “gatekeeper” platforms, with many digital labour platforms arguably falling
outside its scope.
Lack of regulation can also negatively affect the competitiveness of traditional business
models in sectors with platform activity. For example, digital labour platforms are often
able to avoid sector-specific obligations by insisting that they are providing information
society services. However, this can create an uneven playing field between traditional
businesses and platforms competing for customers in a given economic sector. The Court of
Justice of the European Union has, on several occasions, pronounced on the legal
qualification of digital labour platforms. In a preliminary ruling addressing Uber, for
instance, the Court held that the service provided by the platform must be classified as a
service in the field of transport and therefore the provider must comply with sectoral rules in
that area72
. Given the potential for unfair competition vis-à-vis non-platform companies
operating in the same sector, some Member States have banned altogether the provision of
certain services, such as ride-hailing, through platforms73
.
Consumers might also be facing issues. Such problems can arise from the informal
production of services and the insufficient transparency of liability rules and resolution or
redress mechanisms. Given the uncertainty surrounding the employment status of people
working through platforms, it is also difficult for consumers to establish who is responsible if
the quality of a service is not up to standard or if a good is not delivered in the shape or form
promised by the seller74
.
For Member States
Challenges faced by Member States include defining the status of workers and companies
in the platform economy, enabling social dialogue, responding to different protection needs
69
Song, P. et al. (2018), The Ecosystem of Software Platform: A Study of Asymmetric Cross-Side Network
Effects and Platform Governance, MIS Quarterly (42:1), pp. 121–142. Available online.
70
Parker, G. et al. (2017), Platform Ecosystems: How Developers Invert the Firm, MIS Quarterly (41:1), pp.
255–266. Available online.
71
R. Picker (2018), Platforms and Adjacent Market Competition: a Look at Recent History, in Digital Platforms
and Concentration, University of Chicago Booth School of Business. Available online.
72
C-434/15, Asociación Profesional Elite Taxi (Uber Spain). Available here.
73
European Centre of Excellence (ECE) in the field of labour law, employment and labour market policies.
Thematic review 2021 on platform work (forthcoming).
74
Eurofound’s repository on the platform economy: consumer protection. Available online.
18
for the diverse types of platforms and for a variety of work arrangements (part-time, hybrid
income, etc.), and mitigating the risks of undeclared work, social dumping and gatekeeping
by platform companies. The misclassification of employment status of some people working
through platforms and the prevalence of undeclared work also negatively affect public
finances, including the financing base of social protection systems. If left unaddressed, the
potential “platformisation” or additional sectors could also present challenges for the
sustainability of public finances.
Enforcement of existing legislation is an issue. National labour inspectorates face
challenges in inspecting platform work as it becomes increasingly more difficult and
complex. The lack of clear rules on data reporting for digital labour platforms exacerbates
enforcement difficulties for Member State governments and courts. It can also have negative
implications for future policymaking initiatives.
In addition, the cross-border nature of some platform work may also create enforcement
difficulties for Member States. For instance, it can create difficulties in determining the law
applicable to the contractual obligations between the platform and the person working
through it, and in determining which courts have jurisdiction over disputes relating to such
obligations. Furthermore, the unclear employment status of people working through
platforms can also give rise to questions about their social security coverage in cross-border
situations. The classification of these people in national law bears consequences for social
security coordination law75
.
4. Need for EU action
Member States take different regulatory approaches to platform work challenges. The
legal protection and rights available to people working through platforms depend on their
employment status classification, so their position in the labour market differs from one
Member State to another. National courts have repeatedly reclassified - as workers - people
working through platforms where they are formally categorised by the platforms as self-
employed, but this trend is built on individual cases and is not developing consistently
throughout the EU. National approaches to the question of algorithmic management in
platform work and in the workplace more broadly are scarce and diverging.
One third of EU-based platform work is estimated to be performed across borders76
, for
instance with the platform operation or the client - or both - being established in another
country than that of the person offering work through the platform. This adds further
complexity to already complicated contractual relationships, in particular where the terms and
conditions of platforms make legal disputes subject to the law and/or jurisdiction of the
country where the platform is established or of yet another country77
.
Given the transnational character of platform work, and in the absence of EU minimum
standards, platforms operate in different Member States under different jurisdictions – with
75
Strban et al (2020), Social security coordination and non-standard forms of employment and self-employment:
Interrelation, challenges and prospects, July 2020. Available online.
76
Ad hoc calculations based on JRC (2018).
77
Study to gather evidence on the working conditions of platform workers (CEPS, 2020), p. 102-103. Available
online.
19
case law developing in potentially different directions. When working through a platform
established in a Member State other than the one where the work is performed, people may
encounter difficulties to ascertain their employment status and to enjoy the protection
afforded to workers under the Brussels Ia and Rome I Regulations.
Due to the flexibility and enhanced mobility of the platform economy, whose primary means
of production are algorithms, data and the cloud, and which is not tied to any fixed premises,
Member States on their own will face difficulty in maintaining a level playing field
among themselves. Without coordination or common rules it will also be challenging for
them to address unfair competition between platforms and traditional businesses arising from
the avoidance of labour market rules.
EU action is therefore desirable to ensure basic labour standards and rights to people
working through platforms. Existing EU labour law does not address algorithmic
management challenges. Only an EU initiative can ensure common minimum standards in
platform work that apply throughout the EU. Such action can create synergies with
recognised good practices in Member States and build a momentum for improved social
convergence.
In line with the proportionality and subsidiarity principles, EU action would not exceed
what is necessary to achieve its objectives and would respect the competences of Member
States and social partners with respect to working conditions. Such action would not unduly
increase the possible administrative burden for platforms, and it would, in particular, take into
account the impact on SMEs and start-ups.
5. Possible directions of EU action
5.1. Proposed objectives of an EU initiative
In light of the challenges identified above, the overall objectives of the initiative would be to
ensure that people working through platforms have decent working conditions, while
supporting the sustainable growth of digital labour platforms in the EU.
Decent working conditions in platform work are important to ensure the well-being and
dignity of people working through platforms. They can contribute to improved health and
safety, fairer income, and more predictable working opportunities. Decent working
conditions can also mitigate the weak bargaining power of some people in platform work vis-
à-vis the platform. Improving working conditions is an essential goal of the EU treaties and a
key objective of the European Pillar of Social Rights and its Action Plan.
Digital labour platforms play a key role in the digital transition of the European
economy. Many of them are innovative and fast-growing start-ups and small and medium-
sized businesses that contribute to job creation, promote the development of digital skills and
enhance the EU’s competitiveness. Digital labour platforms are currently facing different
regulatory frameworks, which increases their cost of doing business and contributes to
significant legal uncertainty for their future development and growth. Creating optimal
conditions for the sustainable growth of the platform economy, while preserving a level
playing field with traditional businesses, is therefore key to attaining the EU Treaty
objectives of achieving balanced economic growth, a highly competitive social market
economy and promoting scientific and technological advance.
20
In order to reach the general objectives stated above, the specific objectives of the EU
initiative would be as follows:
• Ensure that people working through platforms have – or can obtain – the correct
legal employment status in light of their relationship with the platform and gain
access to associated labour and social protection rights. Addressing
misclassification in platform work enables people who qualify for worker status to
claim key labour and social rights, and for them to be enforced where necessary.
Access to such rights would mean more predictable earnings, improved occupational
safety and health, clear rules on annual and family-related leave, better social
protection, and clearer avenues for redress, to name but a few. Genuinely self-
employed people will be able to fully benefit from the autonomy and freedom
associated with their status and also have access to certain forms of social protection,
in line with national rules. Clarifying employment status in platform work is therefore
key to achieving better working conditions and broader access to social protection.
• Ensure fairness, transparency and accountability in algorithmic management.
People working through platforms may lack information and understanding on how
algorithms are applied, are used to reach certain decisions and thus impact their
working conditions, and may lack access to redress for such decisions. The use of
algorithmic management may further obscure the actual management functions
performed by platforms and thus make it challenging to determine the attribution of
obligations where they might otherwise be due. Building on the GDPR and the
proposed AI Act, setting up procedures to improve the understanding of how such
systems work and their implications for the people involved can open up avenues for
prevention of and redress for unfair or discriminatory outcomes. It would therefore
contribute to better working conditions in platform work.
• Enhance knowledge of developments in platform work and provide clarity on
applicable rules for all people working through platforms operating across
borders. Data gaps affect the ability of relevant national authorities and stakeholders
to bring about positive change for platforms and the people working through them.
Enhancing knowledge on the extent of platform work, providing clarity on applicable
rules and supporting the traceability of cross-border work provided through platforms
would contribute to the enforcement of existing rules. It would, therefore, improve
working conditions in platform work and contribute to the sustainable growth of
digital labour platforms in the EU.
5.2. Avenues for EU action
A possible EU initiative would be designed in full respect of national competence, the
diversity of labour market traditions in Member States, and the autonomy of social
partners. This section presents possible options for an EU initiative on platform work,
providing an overview of the measures under consideration for addressing the problems and
meeting the objectives outlined above. All options should be complementary to existing (or
proposed) EU legislation, which is not focused per se on platform work but partly covers the
challenges set out above vis-à-vis digital labour platforms.
Several options could be envisaged for the personal scope of the EU initiative.
Depending on their design and objective, the measures could target all people working
through digital labour platforms, regardless of employment status, or be limited to workers
21
(including those people with a misclassified employment status). An EU initiative could
cover all digital labour platforms active in the EU, or focus on certain types of platform
work or certain types of platform business models.
These measures can form part of a package of binding and non-binding instruments.
They address different challenges in platform work and can be combined in various ways
since they are not mutually exclusive.
Any initiative on platform work should respect national concepts of employment status.
In their responses to the first-phase consultation, social partners agree that they do not wish to
open a discussion on an EU concept of ‘worker’. Member States have different approaches to
the delimitation between worker and self-employed status. For example, some have
introduced an intermediate category for dependent or ‘employee-like’ self-employed who can
access some social protection benefits on conditions similar to those for workers. Any EU-
level initiative on platform work should thus rely on definitions of the employment
relationship as laid down by national law, collective agreements or practice, while taking into
account the case law of the Court of Justice of the EU. For this reason also there is no
intention to create a ‘third’ employment status at EU level, while respecting the choice made
by some Member States to introduce it in their national legislation.
5.2.1. Addressing misclassification in employment status
Facilitating the correct classification would address many of the identified challenges
related to access to decent working conditions and social protection. The establishment of
an employment relationship remains a gateway to many existing rights and protections, both
at Member State and EU level. Only people who are classified as workers have access to the
full set of labour rights, such as on working time, paid annual leave, maternity, paternity and
parental leave, and occupational safety and health. Workers have easier access to social
protection, although gaps remain for non-standard workers. For example, when it comes to
coverage by insurance for accidents at work and occupational diseases, 10 Member States
have no accidents at work scheme for the self-employed, and in a further six Member States
self-employed only have access to voluntary or partial schemes78
. Workers are also better
protected in cross-border situations than the self-employed, in the case of disputes on
jurisdiction or applicable law (see Section 3.3).
The initiative could include tools to help platforms and people working through platforms to
correctly establish the classification of employment status in line with national definitions,
taking into account the imbalance of power between the platforms and the people working
through them.
• One option would be a rebuttable presumption of an employment relationship to
the effect that the underlying contract between the platform and the person working
through it is deemed an employment relationship. To counter that presumption,
platforms would have to establish in a legal procedure before a court that the person is
in fact self-employed. Such legal presumption could have the advantage of providing
a clear rule and strengthen the work of labour authorities or social security institutions
78 Avlijas (2020): Social Situation Monitor - Comparing Social Protection Schemes for the Self-employed across
EU-27. Available online.
22
to reclassify them as workers. In order to ensure that genuine self-employed remain
so, the scope of application of such a rebuttable presumption could be narrowed by
accompanying it by a number of criteria that would need to be met in order to trigger
the presumption, or by limiting it to situations where the work relationship has certain
stability.
• Another option would be a shift in the burden of proof or lowering the standard of
proof required for people engaged in platform work or for their representatives in
legal proceedings. The person working through the platform would not automatically
be considered to be in an employment relationship, but would have to establish very
few basic facts from which it can be presumed that an employment relationship exists
(prima facie evidence), in which case it would be for the platform operator to prove
that the person is in fact self-employed. The prima facie evidence could, for instance,
consist in the fact that the level of remuneration is determined by the platform, the
fact that the platform controls or restricts communication between the person and the
customer, or that it requires the worker to respect specific rules with regard to
appearance, conduct towards the customer, or performance of the work. Since people
working through platforms often do not have full access to information on how the
work is organised, and therefore might be in a difficult position to prove all elements
of an employment relationship, this option would help them challenge more easily
their contractual status if they wished to do so. It would, however, still require
individuals to start court proceedings, with the associated costs and risks.
• An administrative procedure to examine the employment status of people working
through platforms could spare them the cost and risk involved in legal proceedings
and thus lower the burden of reclassification action. It could be open to both parties of
the contractual relationship, and possibly other actors, for example worker
representatives, and would result in an administrative ruling79
. Decisions would have
precedent value for similar cases, without being legally binding (except for the
administration itself). Such administrative procedures would have the advantage of
being less costly and lengthy than court proceedings, and thereby more easily
accessible for individuals. They are, however, still open to a challenge in court. If one
of the parties refuses to comply with the administrative ruling, subsequent litigation
might still be necessary.
• Another out-of-court option would be the certification of work-related contracts,
carried out at the request of either party, by labour authorities or by independent
bodies. This means that persons engaged in platform work could, on their own or
represented by worker representatives, have their employment status ascertained by
an impartial institution. The same possibility would be open to platforms. The
certification would produce the presumption of a correct classification of the
employment relationship (as either worker, self-employed or a third status, in line
with national law) for labour, social protection and tax authorities, which only a court
could reverse80
. While the certification has a signalling effect and does not entail high
79
This possibility exists in Belgium since 2006 through the Administrative Commission for the regulation of the
employment relationship established by the federal government as part of the social security service.
80
Such a certification procedure of work-related contracts was introduced in Italy in 2003.
23
costs or risks, it cannot be directly enforced. In case of non-compliance by the
platform, a misclassification claim would need to be introduced before a court.
These different tools would pursue the same objective, but would produce different effects
and different degrees of efficacy, not only in terms of legal certainty and speed of procedures,
in balancing the asymmetry of bargaining power between the worker and the platform but
also in terms of level playing field within the internal market. Different options could also be
combined in different ways. Depending on the level of stringency of the tool envisaged, they
could apply either to all digital labour platforms or only to specific categories. For
instance, an administrative or certification procedure for all digital labour platforms could be
combined with a rule on the burden of proof for legal procedures. It would also be possible to
combine a rebuttable presumption for those sectors where misclassification is more prevalent,
such as platforms intermediating certain forms of on-location platform work, with a rule on
the burden of proof for all other digital labour platforms.
Criteria or indicators to clarify the employment status and assist in the correct classification
could further reinforce these procedural tools. They could narrow down the scope of a legal
presumption or define what kind of evidence could be sufficient to shift the burden of proof.
Such criteria or indicators should be specific to platform work and not interfere with national
definitions of general labour law. They could be either binding or indicative, exhaustive or
non-exhaustive. They can also promote a level playing field across the single market not
only between platforms but also between platforms and other businesses.
5.2.2. Introducing new rights related to algorithmic management
Algorithmic management presents distinct challenges in platform work, and is also
becoming more prevalent beyond the platform economy. It is a new phenomenon not yet
fully tackled in labour law at EU and national level. The Commission’s initiative could
therefore propose new rights in this area, building upon and in full consistency with existing
instruments (labour law, GDPR, P2B) and proposed ones (AI Act, DSA). These could
include:
• improved information for the people affected by algorithmic management and their
representatives on the way algorithms manage work;
• establishing internal procedures to guarantee timely and justified human oversight,
control and accountability of decisions with significant implications for affected
people;
• ensuring appropriate channels for redress (e.g. by setting up internal procedures or
mediation structures within companies);
• reinforcing information and consultation rights on algorithmic management systems,
ensuring full involvement of social partners;
• ensuring the right to privacy while off duty81
, as well as the effective application of
other relevant GDPR principles and requirements in the workplace;
• promoting ratings portability, in particular by increasing the effective use of the right
to data portability; and
81
Platforms often tap into the service provider’s smartphone gyroscope to detect driving patterns – sudden
braking, acceleration, etc.
24
• excluding automatic termination of work-related contractual relationships or practices
with equivalent effect.
An EU initiative introducing new rights and reinforcing the implementation of the existing
rights could be specific to platform work and apply to workers only or be extended to the
self-employed. It could also look at the world of work in general. If tailored to algorithmic
management challenges in platform work, the initiative could pave the way for a broader
approach to the use of artificial intelligence in the labour market in the near future.
5.2.3. Tackling cross-border challenges
National authorities face challenges when it comes to cross-border platform work. With
platform companies often operating in several Member States and offering services across
borders, verification of compliance with existing laws and their enforcement may be
challenging for national administrations, in particular those responsible for labour inspection,
social security and taxation.
• The initiative could consider either a register of, or transparency obligations for,
platforms, which could provide key information such as the active terms and
conditions, the number of people working through them and their employment status.
• To facilitate the tasks of authorities, platforms could be required to report certain
data regarding transactions they facilitate (i.e. task duration, pay per task, assignment
of the task to the workers, contacts between the workers and the platform, etc.)
Member States could ensure access to the reported information for relevant national
authorities for the purposes of enforcing rights and obligations and to build statistical
information on the digital labour market, needed for informed policies. Information
could also be exchanged between Member States when the provision of services has
taken place in a Member State other than that of the platform company’s (potential)
place of registration.
• To support the portability of social security rights and address challenges in the
identification of people working through platforms across borders or in two or
more Member States for social security coordination purposes, the relevance of
platform work could be taken into account in the pilot under the European Social
Security Pass, which was announced in the European Pillar of Social Rights Action
Plan.
The initiative should keep any new reporting obligations to a minimum in order not to create
excessive administrative burdens on platform companies, in particular small and medium-
sized businesses, or national administrations. Indeed, there are already several reporting and
data sharing obligations for online platforms under the internal market acquis and taxation
legislation.
People working through platforms in a cross-border context also need accurate
information on rules and obligations. The initiative could provide interpretation or
guidance regarding the application of existing EU legislation to people working through
platforms, including for instance rules on applicable law and jurisdiction or social security
coordination.
5.2.4. Strengthening enforcement, collective representation and social dialogue
25
Enforcement of rules and collective action are key, given the imbalance of power
between platforms and people working through them. This is particularly true for workers
who often face obstacles or risks to claim their rights in the absence of any support from trade
unions or other organisations. It is also true for certain self-employed who are sometimes in a
weak position to defend their rights and interests.
The initiative could introduce measures to ensure compliance with the new material and
procedural rights and obligations in platform work that the initiative will establish. Such rules
should be in line with national traditions and could take inspiration from other instruments in
labour and equal treatment law. They could cover access to effective and impartial dispute
resolution, procedures on behalf of or in support of workers (e.g. by trade unions), the right to
compensation, protection against adverse treatment or consequences for claiming rights,
access to evidence, and penalties. Another avenue to be considered is the promotion at
national level of ombudspersons responsible for resolving disputes between platforms and
people working through platforms.
Social partners have an important role to play in the management of platform work. To
support the representation of people working through platforms, and the platforms themselves
in Member State social dialogue practices, the EU could also encourage Member States and
social partners to stimulate social dialogue in platform work and to support capacity building
in this context. Trade unions also face difficulties in identifying and contacting people
working through platforms due to the absence of a common place of work. Communication
channels embedded in the digital infrastructure of platforms, allowing worker representatives
to provide people working through the platforms with information, could strengthen their
ability to effectively defend their rights.
Removing obstacles to collective bargaining might be necessary. Under competition law,
self-employed people are considered as ‘undertakings’ and any agreement between them
risks being prohibited as anticompetitive under Article 101 TFEU. A forthcoming separate
EU initiative aims to ensure that EU competition law does not stand in the way of collective
bargaining for self-employed who need it (while other aspects of competition law would
remain applicable to self-employed and platforms)82
.
Finally, clarity on rules and a broader data basis can contribute to better enforcement
and compliance. The initiative could encourage Member States to provide advice and
guidance to people on rights and obligations resulting from their platform activity in relation
to tax and social security matters. Data collection and exchange of best practices on platform
work and algorithmic management could also be a way forward.
5.3. Relevant EU instruments
The initiative on working conditions in platform work could take the form of a directive, a
Council recommendation, or a combination of the two. A policy communication could
possibly introduce any non-legislative elements of the initiative.
Directive
82
See more details here.
26
A directive would provide certainty about the mandatory requirements to be applied by
Member States. To this end, it could contain a set of minimum standards and procedural
obligations with which to comply.
Article 153(2) TFEU provides for the possibility of adopting a directive in the area of
working conditions involving minimum requirements for implementation by Member
States83
. This legal basis would enable the EU to set minimum standards regarding the
working conditions of people working through platforms, where they are in an employment
relationship and thus considered as workers (including false self-employed people), in line
with national traditions and practices.
A directive addressing the situation of genuine self-employed people working through
platforms as business actors could be based on an internal market legal basis. Possible
provisions in the TFEU include Article 53(1) – which empowers the EU to issue directives
coordinating national provisions concerning the uptake and pursuit of activities as self-
employed persons – or Article 114 allowing for the approximation of laws with regard to the
establishment and functioning of the internal market.
Article 352 TFEU allows the EU to act in order to attain one of its Treaty objectives in the
absence of a more specific legal basis. This legal basis could be used for a directive on the
working conditions of self-employed people engaged in platform work. This legal basis
would require unanimity in the Council.
Council recommendation
A recommendation could provide for policy guidance and a common policy framework at EU
level, while not setting specific mandatory requirements. Envisaged tools for monitoring
implementation of such a non-binding instrument might include the use of benchmarking
under the European Semester, the exchange of good practices, and joint work with Member
States and social partners on the development of appropriate monitoring tools.
Non-legislative measures
The initiative could entail non-legislative measures at EU level that would contribute to the
objectives set out above. For example, the Commission could facilitate a dialogue with
platform operators aimed at developing principles for good quality platform work by way of a
code of conduct or a charter, possibly accompanied by a voluntary label. Such a self-
regulatory tool could cover social benefits and training on digital labour platforms and
complementary aspects in relation to working conditions and algorithmic management.
As possible EU legislative action can only set minimum standards in the labour and social
affairs field and cannot ensure full harmonisation in the internal market, further action could
be taken to improve coordination and avoid fragmentation, such as organising exchanges of
experience and mutual learning among Member States on the issue of clarifying the
employment status of people working through platforms.
83
Art 153(2)(b) TFEU also states that ‘Such directives shall avoid imposing administrative, financial and legal
constraints in a way which would hold back the creation and development of small and medium-sized
undertakings.’
27
Other possible measures include: guidance regarding the application of existing legislation in
cross-border platform work, including for labour inspectorates; promoting social dialogue
and other social partner initiatives; and/or further monitoring and data collection by setting up
an EU-level observatory on platform work and algorithmic management. Such actions could
be promoted by means of funding, organisation of meetings and other forms of support.
6. Next steps
In accordance with Article 154(3) TFEU, the Commission must consult management and
labour on the content of the envisaged initiative. This initiative could address the challenges
related to working conditions in platform work. For this second phase of the consultation, the
Commission would welcome the views of social partners on the questions set out below.
EU action could also be pursued to address platform work challenges for the self-employed,
for which the procedure of Article 154(3) TFEU might not as such be applicable. It is
therefore on a voluntary basis that the Commission invites social partners to share their views
on the questions below also as regards the self-employed.
1. What are your views on the specific objectives of possible EU action set out in
Section 5.1?
2. What are your views on the possible avenues for EU action set out in Section 5.2 of
this document?
3. What are your views on the possible legal instruments presented in Section 5.3?
4. Are the European social partners willing to enter into negotiations with a view to
concluding an agreement under Article 155 TFEU with regard to any of the elements
set out in Section 5.1 of this document?
The Commission will take into account the results of this consultation for its further work on
an EU initiative to improve the working conditions in platform work. In particular, if the
social partners decide, as provided for under Article 154(4) TFEU, to negotiate between
themselves on these matters, the Commission will suspend its work.