EU edges closer to protecting rights of 'gig economy' workers

EU ministers review definition of employee status for food delivery and other digital platform workers; taxi dispatch workers seek to retain their self-employed status

European Union discussions on the proposed Platform Workers Directive are likely to redefine millions of EU-based 'gig economy' workers as employees rather than self-employed in a bid to give them added labour rights.

Workers on digital platforms will soon be entitled to the same labour and social rights granted to employees under EU law.

The European Union is supporting a proposal that will protect the labour rights of any workers registered for work with digital platforms, but currently classified as self-employed.

The legislation will be general, but the examples cited in EU debates on the EU Platform Workers Directive include home food delivery and taxi services wherein many workers register with digital platforms but effectively operate as self-employed services.

Along with redefining employment status for these workers, the discussions are also focused on protecting the data of these workers. Thus, the proposal establishes the first EU rules on the use of artificial intelligence (AI) in the workplace. 

The changes could come into effect in spring 2024. That would give the EU’s 27 member states until spring 2026 to make the necessary changes to their domestic law to comply with EU law.

According to the European Commission, around 5.5 million workers currently classified as self-employed are in a de facto employment relationship with digital platforms. The EU believes these workers should be entitled to the same labour and social rights granted to employees under EU law.

The platform economy — or ‘gig’ economy — saw accelerated growth during the pandemic years, with the sector’s revenues increasing from an estimated €3bn in 2016 to around €14bn in 2020. The number of platform workers is expected to reach 43 million by 2025.

The European Commission has been challenged by taxi services and delivery platforms in particular since December 2021, when the EU first began its review of the labour rights of gig economy workers. Currently, the EU has 28 million platform workers.

Once the legislation is passed, it is believed that it will initially reclassify five million EU-based platform workers as fully-fledged employees.

The push to develop and implement the new legislation has gained pace under the Czech presidency of the European Council of Ministers in 2022, and again under the Swedish presidency this year.

Paulina Brandberg, Swedish Minister for Gender Equality and Working Life, has been prominent in the debates among ministers in EU member states around the nature of the protections being developed for this group of workers.

Paulina Brandberg, Swedish Minister for Gender Equality and Working Life.

“The gig economy has brought many benefits to our lives, but this must not come at the expense of workers’ rights. The Council’s approach strikes a good balance between protecting workers and providing legal certainty for the platforms that employ them,” Paulina Brandberg said.

In June, Ms Brandberg co-chaired the European Council’s Employment and Social Policy meeting with Johan Pehrson, Sweden’s Minister for Employment and Integration. The ministers attending the meeting agree on a general approach on the platform work directive. Since then, progress is being made in wording the directive.

In examining gig economy worker status, the Council has set EU-wide criteria for the legal presumption of employment and reclassification as an employee.

The Council sets at least three out of seven specified criteria, including setting remuneration, work supervision, and restrictions on working hours, which have to be met to establish an employment relationship.

The IRU, a global bus, coach, truck and taxi representative body, notes that the EU Council’s newly endorsed general approach to the Platform Workers Directive, limiting what constitutes a “digital labour platform”, does not explicitly exclude taxi dispatch centres from the directive’s scope.

Raluca Marian, director of EU Advocacy with the global transport sector body IRU.

Raluca Marian, the IRU’s director of EU Advocacy, said: “IRU has long been calling for the re-introduction of an EU-wide criteria, as they provide legal certainty and enable a fair and standardised approach, departing from the European Parliament’s confusing position. The Parliament’s version includes an automatic presumption of employment, which sets a heavy burden of proof on transport operators.” 

 The European Council’s position introduces algorithmic monitoring and decision-making systems as additional layers to the definition of “digital labour platforms”, mitigating the risk of the scope being extended to cover the entire brick-and-mortar economy.

The IRU has described this move as a step in the right direction, but adds that there is still a risk that taxi dispatch centres can fall under the scope of the legislation.

The IRU argues that the Council should have explicitly excluded taxi dispatch centres and preserved the right to work of self-employed taxi drivers.

Raluca Marian said: “The directive should target false self-employment and pure digital platforms without inadvertently burdening traditional transport operators in full compliance with EU laws and labour systems. Transport companies, including taxi dispatch centres, have long contributed to national budgets and social security schemes.

“We welcome the Council’s determination to bring more clarity to the Platform Workers Directive and focus only on where the problem lies, the pure platform economy. But the final text should clarify that taxi dispatch centres fall outside its scope,” she added.

As stated in the European Parliament’s text, taxi dispatch services can be distinguished from ride-hailing digital labour platforms, as they are merely an “add-on” to a pre-existing service and connect only genuine self-employed licenced taxi drivers with their customers, Raluca Marian added.