Platform-work directive: the clock is ticking

The ‘gig’-economy directive, a critical legacy of social rights from this EU term, is being held up by some member states.

After more than two years of intense negotiation and some dissonance, the fate of the European Union platform-work directive hangs in the balance. In December, a provisional agreement reached in the ‘trilogue’ negotiations among the main EU institutions became stuck, due to a strong blocking minority among member states in the Council of the EU.

This leaves Belgium with the difficult task of finding sufficient support for the adoption of the directive before the end of its presidency of the council in June. With the elections to the European Parliament also that month, the window of opportunity is closing.

Amid the stalemate, a likely outcome might be a further compromise of ambition. This ironically could constrain, rather than enhance, the scope for courts in some member states to confer employment-protection rights on platform workers.

The French government has been among the fiercest opponents of the existing text, reiterating the claim that workers would rather be ‘independent’—as if employment status and organisational flexibility could not be married. Besides such longstanding chauvinistic outliers and the effects of persistent corporate lobbying, the scarce consensus on the draft directive in the council can be attributed to the weight attached to one of its most important provisions—the legal presumption of employment—whose contours are still fuzzy. (The pathbreaking chapter on algorithmic management, a one-of-a-kind regulatory novelty, has attracted rather less opposition.)

Presumption of employment

The version of the employment presumption emerging from the abortive negotiations in December largely resembled the 2021 proposal from the European Commission. As we argue in a recent International Labour Organization working paper, the presumption means workers can assert the correct classification of their relationship to their employer by upholding the well-established legal principle of the primacy of facts, as mandated by ILO recommendation 198 of 2006 on the employment relationship.

The European Parliament estimates that a directive establishing such a legal presumption would lead to the reclassification of 5.5 million people engaged in platform work. That is a relatively small fraction of the growing population of ‘gig’ workers (expected to reach 43 million in 2025). The text temporarily agreed during the Spanish presidency in the second half of 2023 thus had at least the merit of challenging the rhetoric of ‘app-based entrepreneurialism’, in which platform work purportedly confers a new agency on workers and is misrepresented as a source of autonomy.

The effectiveness of the presumption however very much depends on how it is engineered. This includes how easy it is to activate—and whether it can be activated by social-security authorities and labour inspectorates too—as well as the implications of the reclassification for tax and social-security purposes. Regrettably, the Belgian presidency is reportedly moving closer to France’s demands, further watering down the content of the proposed directive.

Nor is the employment presumption a panacea, effortlessly resolving intricate tensions related to classification. This is merely a procedural device facilitating access to labour protection. National concepts and legal definitions of employment determine the actual individual scope of labour rights. These can be limiting and overly precise, often struggling to cover ‘everyone who works’.

The presumption included in the commission’s proposal is also conditional: it applies if and when certain factors are substantiated. And it is rebuttable by the platform, if it can show these elements are absent. In systems where the presumption comes into play only after the worker has demonstrated the existence of specific criteria, as we already see in Portugal or Croatia, this legal device functions as a mechanism for shifting the burden of proof: the claimant must establish facts and circumstances identified by the lawmaker as eminently indicative of ‘control of the performance of work’ and, indirectly, of an employment relationship.

Not automatic

Although the proposed directive paves the way to some form of procedural facilitation, the mechanism is not automatic. While it could ‘apply in all relevant administrative and legal proceedings’, the effectiveness of the presumption would largely depend on the breadth of national legal definitions (and judicial understanding) of concepts such as ‘worker’, ‘employment relationship’ and ‘employee’.

While procedural streamlining can benefit claimants, it will be up to judges and courts to decide whether the case at hand squarely fits into the national concept of who is a worker. The more restrictive the definition, the less likely it is for a judicial body to affirm that an individual operating within a relationship deviating from the standard is genuinely a worker or engaged in an employment relationship. Conversely, with a broader concept, it becomes more probable for adjudicators ultimately to acknowledge the applicability of the presumption.

As illustrated by the experiences of countries which have implemented a presumption, results may vary. Since it entered into force in 2023, the Belgian reform has barely tilted the playing field towards misclassified workers. By contrast, the Spanish ‘riders’ law’ has empowered labour inspectorates to sanction platform companies which fail to comply.

Root cause

The misunderstanding about how the presumption would operate is the root cause of the legislative impasse. Far from triggering a generalised reclassification of platform workers, the presumption proposed by the commission represents a (mild) first step to curb the precarity and vulnerability of platform workers.

Regardless of its form, the presumption will inevitably face the challenge of being legally tested, caught between national definitions of worker and the case law of the Court of Justice of the EU, whose restrictive conceptualisation is premised on the notion of subordination. Even those whose work performance is organised by platforms might still find it challenging to be recognised within the scope of the directive.

Other structural features of the platform business model are only tangentially addressed by the proposed text: unpredictability of schedules, meagre remuneration, lack of transparency, poor health and safety conditions, harsh competition and the danger of being terminated by an algorithm. Nor do certain traditional tools of the social acquis seem entirely fit for purpose in a casualised labour market. For this, the proposed directive, while a much-needed step forward, is not a giant leap.

Managing expectations

Policy-making can be a catalyst for effective social transformation. Much boils down to managing expectations. The legacy of EU institutions in this five-year term hinges on their capacity to approve a good version of the platform-work directive.

If a relatively moderate proposal, such as that advanced by the commission, struggles to become law, the outlook for non-standard work appears grim. It would be a missed opportunity for the EU to establish even the bare minimum—that digital labour platforms shall not evade employers’ obligations. The voices of worker representatives and responsible employers are in danger of being drowned out by a handful of companies that pledged to revolutionise business models but ended up merely disrupting labour regulation.

Indeed, these companies may be coming to see the directive (including a more permissive wording of the employment presumption) as an opportunity to undo at EU level all the gains achieved by unions and other claimants in national courts through strategic litigation, typically resulting in a finding of worker status for those employed in key sectors of the gig economy. That runs contrary to the constitutional purpose of EU social legislation, of harmonising standards while ‘improvement is being maintained’.

Given its commitment to ‘contribute to Europe’s social agenda’, the Belgian presidency carries a significant responsibility, while the parliament and the jobs and social-rights commissioner, Nicolas Schmit—now the flag-bearer of the Party of European Socialists in June—have the chance to claim a proud victory for Social Europe. The clock is ticking, but Brussels can still manage, even surpass, expectations.

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

Silvia Rainone is a senior researcher at the European Trade Union Institute and an affiliated member of the Institute for Labour Law at KU Leuven.

Nicola Countouris is professor of labour and European law at University College London.