Labour regulation (Driving force)

The research project ‘Future scenarios of platform work’ explores the economic, labour market and societal impacts of two types of platform work – platform-determined routine work and worker-initiated moderately skilled platform work – by 2030. The project identified eight key driving forces deemed to substantially influence the development of these two types of platform work. These driving forces and associated hypotheses were used to derive potential platform work scenarios, and, from these, pointers were developed on what policy could do to make a desirable future happen and to avoid an undesirable one. This is the definition of one of the eight key driving forces identified.

 

Labour regulation covers a range of mechanisms for worker empowerment, including collective agreements, and extends to compliance and enforcement through, for example, the rulings of labour courts and inspectorates.

EU labour law sets the minimum requirements across the EU in terms of working conditions, while the definition and regulation of the employment relationship is primarily a national concern. National labour law defines the rights and obligations of workers and employers; traditionally, it seeks to address the unequal power relationship between the employer and the subordinate employee. 

National labour law provides the legal definition of employee and self-employed, and partly intermediate statuses (like dependent or employee-like self-employed).

Employment status is key as it determines: 

  • the level of social protection and social security
  • training entitlements
  • coverage by legislation on working conditions (working time, leave entitlements, minimum wages, health and safety, and protection against unfair dismissal)
  • access to collective representation 

These legal definitions are, however, sometimes not sufficiently clear. In practice, this opens up the possibility of misclassification of the employment status, which is not necessarily intentional but due to difficulties in the demarcations between statuses. This can be brought to the courts for clarification. Even if it is clear that the worker is an employee, the triangular relationship in platform work gives rise to the question who the employer is – whether it is the platform or the client.

Trends 

Regulatory issues surrounding platform work have received increasing attention from national and supranational authorities and in the academic literature, particularly focusing on the applicability of the legal concept of the traditional employment relationship (Eurofound, 2018a, 2018b and 2019).

Employment status

Despite being one of the main topics in the debate on platform work, the employment status of platform workers generally remains uncertain from a regulatory perspective. Platform work is blurring the boundaries between traditional employment statuses and, in particular, between employees and self-employed workers. For this reason, it is not always easy to determine the status of a platform worker.

As of mid-2020, no Member State has clear regulations specifying the employment status of platform workers. As a result, any employment status that is recognised within existing regulatory frameworks is possible for platform workers, which typically make a distinction between employees and self-employed workers.

In some countries, one or more additional categories or subcategories of these two worker statuses (employee and self-employed) exist, such as the ‘micro-entrepreneur’ status in France, the ‘employee-like’ status in Austria and Germany, the ‘quasi-subordinate worker’ in Italy, ‘student work’ in Belgium and Slovenia, and ‘contract for services’ in Croatia. In a few countries, there is an ongoing debate on introducing such a third status explicitly for platform workers.

Voices in favour of establishing a third legal category of workers claim that such a status would take on qualities of both employee and self-employed and that it could serve to protect platform workers without unduly harming the potential of the platform economy. Critics of the proposal to create a third category of employment status suggest that as neither of the two existing categories apply well, a third is unlikely to solve the problem.

In practice, the terms and conditions of the platform determine the employment status, and in most cases, this means that platform workers are considered self-employed. 

Self-employed workers fall outside the scope of EU labour law and are in many countries not, or only partially, covered by the Written Statement Directive (91/533/EEC). The directive has existed since 1991 and gives employees starting a new job the right to be notified in writing of the essential aspects of their employment relationship. In 2017, within the framework of the European Pillar of Social Rights, the European Commission proposed an important revision of the Written Statement Directive – that is, the EU Directive on Transparent and Predictable Working Conditions (Directive 2019/1152). The directive aims to set new rights for all workers in all forms of work, particularly addressing insufficient protection for workers in more precarious jobs, while limiting burdens on employers and maintaining labour market adaptability. In principle, platform workers are covered by this directive to the extent to which the criteria used for the definition of ‘worker’ are fulfilled (‘a natural person who performs services, for and under the direction of another person, in return for remuneration’ – accordingly more relevant for the on-location platform-determined than for the on-location worker-initiated type of platform work). Following negotiations, a political agreement between the Council, the Parliament and the Commission was reached in February 2019. The Council adopted the directive in June 2019.

Collective agreements and contracts

In a few countries, certain platform workers are covered by collective agreements if platforms are recognised as belonging to a specific sector. In Italy, for example, delivery riders can be covered by the national collective agreement in the logistics and transport sector, under which ‘rider’ (irrespective of whether they are matched through a platform or assigned the task through any other means) is a contractual position for which working conditions can be negotiated (CCNL Logistica, 2018). While this arrangement is more relevant for the platform-determined type, there are also some examples that relate to the worker-initiated type. For example, platform workers employed in the sectors covered by the IG BAU trade union in Germany (construction and engineering, building materials, building cleaning, facility management, gardening, forestry and agriculture) are included in collective agreements. Another approach is to conclude specific collective agreements with individual platforms. In Denmark, a country with a long-standing collective bargaining tradition, the first collective agreement of this kind was signed in April 2018 between 3F (United Federation of Danish Workers), the largest trade union, and the cleaning-services platform Hilfr. 

There are also a few examples of platforms offering workers an employment contract (for example, Foodora in Germany and Yougenio in Italy). However, even if a platform offers employment contracts, this is not necessarily done for all affiliated workers. Furthermore, platforms sometimes change the employment status of the affiliated workers over time (from employee to self-employed or vice versa).

Regulatory frameworks and the courts

In most of Member States, the debates on regulating platform work have not led to a specific framework that determines employment status. In Germany and Italy, discussions have focused on extending the current framework rather than setting up a dedicated framework for platform workers. In contrast, in Poland and Sweden, policymakers seem to agree that the current regulatory framework for self-employed workers is sufficient to cover platform work. The only known example of labour law referring explicitly to platform work is France. However, rather than addressing the issue of employment status, Law 2016-1088 of 9 August 2016 provides a legal definition of ‘electronic platforms’ and extends individual and collective rights to affiliated workers.

The ambiguity of the employment status of platform workers has been the subject of court cases in several countries, which can be considered a means of law enforcement. The European Commission’s (2016a) Agenda for the Collaborative Economy sets out the following criteria that can be used across European countries and jurisprudence to determine on a case-by-case basis the factual employment relationship of the platform worker to the platform or client: 

  • the existence of a subordination link
  • the nature of the work
  • the presence of remuneration 

Rulings are made on a case-by-case basis, with the courts considering the specific circumstances. The courts are not bound by the formal agreement between the parties but investigate the implementation of the agreement. This suggests that the courts could arrive at different conclusions for workers active on the same platform and in the same sector or country.

In the UK, for example, in October 2016, the Employment Tribunal ruled that Uber drivers were workers for the purpose of statutory employment rights, with access to the national minimum wage and holiday pay. This decision was upheld by the Employment Appeal Tribunal in November 2017. The company appealed against the decision to the Court of Appeal, which confirmed the ruling that Uber drivers are workers, not self-employed. The situation at the time of writing was that Uber had been granted permission to appeal to the Supreme Court.

In Italy, the Labour Tribunal of Turin in April 2018 rejected the claim by six Foodora couriers that they should be reclassified as employees, with the argument that the workers are free to decide when to work and to disregard previously agreed shifts.

In contrast, in Spain, the labour inspectorate of the autonomous community of Valencia concluded in December 2017 that Deliveroo riders are employees and not self-employed, as the platform claims. As a result, the platform was obliged to pay around €161,000 in unpaid social security contributions. As of spring 2018, this ruling was not final because the platform could appeal the decision in court.

Social and labour protections

The clarification of the employment status of platform workers is relevant as it influences their employment rights, including social protection, as well as access to collective representation.

As platform workers are generally considered self-employed, they are often covered by the social insurance systems of self-employed workers, which tend to be less favourable as regards coverage of different risks. Furthermore, while the social protection contributions of employees are shared between the employee and the employer, self-employed are responsible for the full contribution. Some national regimes set minimum eligibility thresholds that might be difficult to reach for platform workers who work on a part-time or occasional basis.

As a result, many platform workers are not covered by a range of social protections, including unemployment insurance, as many social protection strands are often not accessible to workers who are considered self-employed. For example, social protection under the French ‘micro-entrepreneur’ scheme – a subcategory of self-employment that is often applied in platform work – means that healthcare cash benefits and retirement pensions are much less favourable than in the general scheme applicable to employees, and workers are not insured for accidents at work or occupational diseases. However, the above-mentioned 2016 regulation stipulates that platform workers can join a social insurance scheme for accidents at work and occupational diseases funded by the platforms.

Similarly, the consideration of platform workers as self-employed results in a situation in which employment and labour protection regulations may not apply. An example is working time regulation, with the potential consequence of unpredictable working time schedules, long and unsocial working hours, and the absence of breaks.

Other issues regarding platform workers’ employment rights, like occupational health and safety, have not yet gained much attention in public and policy debates. Accordingly, no specific provisions for platform workers are in place across Europe. Of note here too is the fact that health and safety provisions are normally tied to employment status, and often apply only to employees. These include the provision of insurance, rights to receive relevant information and the implementation of preventive measures.

The limited or absent coverage of platform workers by labour regulation becomes particularly challenging in times of crisis. The COVID-19 pandemic that spread throughout the world in early 2020, for example, has resulted in at least some types of platform workers having a lack of work and hence income. In combination with limited access to social protection this puts these workers in precarious situations. Some initiatives, for example, driven by trade unions or platforms, have emerged to support platform workers in spite of the unclear regulatory framework.

Already before the COVID-19 crisis, and as part of the implementation of the European Pillar of Social Rights, the European Commission adopted a proposal for a Council Recommendation on access to social protection for workers and the self-employed. The objective is to support people in non-standard forms of employment and self-employment who, due to their employment status, are not sufficiently covered by social security schemes and thus are exposed to greater economic uncertainty.

Soft law

Next to regulation through legislation, collective agreements and court rulings, there are soft law approaches. In Italy, a ‘Charter of fundamental rights of digital work in an urban context’ was signed by some trade unions, the Bologna city council and the local food-delivery platform Sgnam-MyMenu in 2018. This is a voluntary framework on minimum standards for pay, working time and insurance coverage. Broader forms of this approach have also been taken that apply beyond a specific platform. In Denmark, Germany, Ireland, and the UK, for example, associations made up of platforms have established standards for responsible practices in the platform economy, related to improving working conditions and fair treatment of platform workers. 

Some cross-national cooperation is in evidence too. For instance, worker representatives from Austria, Denmark, Germany and Sweden drafted the ‘Frankfurt declaration on platform-based work’. It outlines the conditions for fair platform work, including minimum income, working hours and access to social protection. Similarly, the Fairwork Foundation has set standards for fair work in the platform economy and evaluates whether platforms meet these standards. It plans to create a certification scheme for platforms following these standards.

Hypotheses

The project applied a foresight methodology to derive possible future scenarios. As part of this, at least two realistic and mutually exclusive hypotheses were drafted for each of the key drivers to depict their potential future development.

Four hypotheses were identified for this driver. 

1. Common approach, minimum standards for all

There is a common European approach establishing minimum standards applicable to every employment relationship and preventing abuse. This means minimum standards for self-employed workers and any employment status different from standard employment (for example, unemployment insurance, healthcare benefits, working time limits and minimum price levels/fees). These standards might be lower or offer less protection than minimum standards for standard employment. The employment status of platform workers is not clarified.

2. Common approach for platform employment status according to platform work type

There is a common European approach clearly defining the employment status of platform workers: employee in the case of platform-determined and self-employed in the case of worker-initiated platform work. The international nature of platform work necessitates a common definition according to platform processes and rules.

3. No common approach, various clear definitions in Member States

There is no common European approach, but Member States clearly define the employment status of platform workers, with resulting differences across the Member States: either self-employed, employed or a third status, or protection though sectoral collective agreement (which also serves to avoid disruption of regular companies by platform work).

4. No common approach, no clear definition in Member States

There is neither a common European approach to workers’ rights, entitlements and protections nor a clear definition of the employment status of platform workers in the Member States (an ‘as is’ situation). National courts decide on a case-by-case basis when conflicts arise.

Information sources

  • CCNL Logistica (2018), ‘National collective agreement in the logistics and transport sector (PDF)’, Rome.
  • Eurofound (2018a), Employment and working conditions of selected types of platform work, Publications Office of the European Union, Luxembourg.
  • Eurofound (2018b), Platform work: Types and implications for work and employment – Literature review, Publications Office of the European Union, Luxembourg.
  • Eurofound (2019), Platform work: Maximising the potential while safeguarding standards?, Publications Office of the European Union, Luxembourg.
  • European Commission (2017), Proposed EU Directive on transparent and predictable working conditions, COM(2017) 797 final, Brussels.
  • European Commission (2018), Council Recommendation on access to social protection for workers and the self-employed, COM(2018) 132 final, Brussels.
     
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