Who will be covered by an EU instrument on platform work?

A broad definition of the ‘worker’ will be essential to avoid platform companies sustaining false self-employment claims.

The European Commission’s legislative initiative on platform workers, due to be presented at the end of this year, is rightly attracting attention. It was heralded by the commission president, Ursula von der Leyen—promising to ‘improve the labour conditions of platform workers’—at the outset of her mandate two years ago. Together with the possible instrument on adequate minimum wages, it is by far the most important social and labour development stemming from this commission.

Many crucial issues need to be tackled by the proposal. These include how to ensure platform workers receive fair, reliable and predictable remuneration, considering their often erratic and unstable working hours. The effective coverage of such workers by existing and tailored health-and-safety standards, their collective labour rights and scrutiny by workers’ representatives and public authorities of the forms of algorithmic management to which they are subject also need to be addressed.

But the fundamental question the commission must deal with is the personal scope of this initiative. Who are the workers who will be covered? This is a crucial concern for all labour legislation but it is vital for an instrument on platform work.

False self-employment

Platform workers are almost invariably nominally classified as self-employed persons by the platforms. This precludes their access to most employment and labour protection in almost every legal system—excluding them, legally or in practice, from meaningful access to collective-bargaining rights, health-and-safety protection, non-discrimination laws and social-security schemes. The unilateral setting of terms and conditions often results in misclassification and false self-employment, as acknowledged by the commission in the document launching the second-phase consultation of social partners.

The employment status of platform workers and their coverage under existing labour and employment standards have been hotly discussed in courts all over the world. While the outcomes of this litigation have been varied, the numerous decisions of supreme and higher courts in many European countries finding in favour of including platform workers in the scope of labour and employment regulation cannot be overlooked by the commission.

Even if platform workers have managed to pursue effective litigation of their employment status in European courts, however, litigation is a costly, unpredictable and protracted way to ensure employment rights apply. Worse still, existing standards leave too much room for arbitrage and circumvention.

First, without denying the significance of judicial precedents, decisions determining the employment status of people working through platforms are issued on a case-by-case basis and often bind only the parties to the relevant legal action. Secondly, in several jurisdictions, platform companies have reacted to negative outcomes by tweaking contractual terms or, more radically, refusing to comply under threat of leaving a local market. Other ruses have been to establish legal set-ups between parent and subsidiary companies, distancing the former from the latter, and to impose questionably enforceable waivers or substitution clauses and mandatory arbitration on workers.

‘Primacy of facts’

To address adequately the challenges linked to the ‘gigification’ of the European Union labour market, the principle of ‘primacy of facts’, already sanctioned by the International Labour Organization as well as the EU, is essential. The preamble to the EU directive on transparent and predictable working conditions affirms that ‘the determination of the existence of an employment relationship should be guided by the facts relating to the actual performance of the work and not by the parties’ description of the relationship’.

This requires disregard of the contractual ‘label’ when an overall assessment of the facts defeats its formal assertion. Although unevenly, courts have refined the toolkit used to establish the existence of an employment relationship, interpreting in a modern way the classical criteria: employer’s direction, organisational flexibility, business integration, ownership of equipment and commercial risk.

The Court of Justice of the EU (CJEU) has also progressively adopted a notion of ‘worker’ which will probably be the starting point for the commission’s reflection on the scope of the instrument on platform work. Particularly if coupled with reference to the definitions of employment relationships adopted at national level, however, this notion risks being inadequate for platform work. Sticking to traditional notions of worker and employment relationships may end up leaving outside the scope of protection legions of platform workers who will still be ostensibly classified as self-employed and will have to rely en masse on litigation to win access to protection—perpetuating the complications discussed above.

The new instrument should instead opt for a future-proof scope. A report commissioned by the workers’ group of the European Economic and Social Committee puts forward a bold proposal in this respect. The notion of worker is built on both the definition established in CJEU case law—broadened to include new forms of algorithmic management—and the concept of ‘personal work relation’. According to the latter formula, all workers who provide predominantly personal labour shallfall with the scope of labour protection unless they are genuinely operating a business on their own account.

‘Predominantly personal work’

The report shows how it is possible to combine the acquis of the CJEU with a more encompassing scope. A definition of the scope of the instrument does not actually need to refer to the case law of the court—particularly the element of ‘direction of another person’ which is especially at risk of being construed narrowly by national courts. The ‘predominantly personal work’ formula, while surely encompassing all the persons who fall in the traditional notion of workers ‘under the direction of someone else’, is much less open to circumvention and arbitrage on the side of the platform companies. It would also provide a personal scope ensuring access to protection for all platform workers in need of it.

Importantly, this proposal does not only concern the notion of worker to be covered by labour and employment protection. It also advocates a legal presumption of such coverage: workers will be presumed to be providing predominantly personal work, and be protected by the full extent of employment and labour laws, unless the other party meets a high-level burden of proof that that such workers genuinely operate a business on their own account. A broad definition of ‘employment entities’ is also included, so that businesses, including platforms, cannot use subcontracting and other ‘contractual distancing’ schemes to avoid regulation.

Reorienting labour regulation is a rather ambitious task, which goes beyond the boundaries of platform work. Non-standard work is here to stay and has long been disrupting legal frameworks designed for a ‘binary’ world of work, based on a clear-cut distinction between employment and self-employment no longer adequate to today’s economies (if it ever was). Streamlining the notion of worker would also have a positive ripple effect on access to significant areas of the EU social acquis, in terms of decent working conditions and social protection for all workers who are not genuinely independent.

With momentum behind the European Pillar of Social Rights and without affecting domestic definitions, modelling the commission’s platform-work initiative on the concept of predominantly personal work could help overcome current and future obstacles to this landmark advance in EU social law.

Valerio De Stefano

Valerio De Stefano is a law professor at Osgoode Hall School, York University, Toronto.

Antonio Aloisi

Antonio Aloisi is Marie Skłodowska-Curie fellow and assistant professor of European and comparative labour law at IE Law School, IE University, Madrid.