A new era of employment. What will the directive on improving working conditions in platform work change?

What will the directive on improving working conditions in platform work change? On 8 February 2024, the European Union is shaping a new regulatory framework for the labor market in platform work.

Advanced work is currently underway on a directive aimed at improving the conditions of people employed through such platforms.

This is an important change that may affect the way business is conducted by, among others, the so-called settlement partners who employ couriers and drivers earning through platforms such as Uber, Glovo, or Wolt.

We outline the most significant changes introduced by the new EU regulation.

The modern labor market is evolving at a pace that not so long ago seemed impossible.

A result of the post-pandemic reality is its rapid growth in the online space.

Platform work is gaining increasing popularity, yet only a small group of people working this way can count on being employed under an employment relationship.

This situation results from the difficulties associated with verifying the circumstances in which these people carry out their daily duties.

The European Union has taken steps toward regulating this area by preparing a draft directive on improving working conditions in platform work 1 .

It is worth paying attention already today to the upcoming changes and considering how they will affect the working conditions of this group of workers and the operations of employers.

Stage of work on the directive. Work on the directive is currently at an advanced stage.

The draft has already gone through several key stages, including public consultations and discussions within various EU institutions.

It is currently being processed by the Council of the European Union.

At the EU level, talks have been initiated that aim to finalize work on the directive before the end of the current parliamentary term, that is, by mid-2024.

The precise date on which the directive will take effect has not yet been determined.

From the moment the directive enters into force, member states will have 2 years to bring national legislation into line with the new standards.

There is a probability that, if a member state exceeds the deadline for implementing the directive, its provisions may, in certain circumstances, produce the so-called vertical direct effect.

This means that interested individuals will be able to seek compensation if they suffer harm resulting from the state's breach of its obligation to implement the directive.

Vertical direct effect, however, means that an individual may invoke European norms only in a dispute with the state.

Therefore, before the directive is implemented into the national legal order, it will not be possible to invoke its provisions in a dispute with another individual (for example, in relations between an employer and an employee).

A digital labor platform, but what exactly is that?

At the outset, it is worth noting that the directive's regulations will cover only work that is performed within a digital labor platform.

A digital labor platform means any natural or legal person providing a commercial service that meets all of the following requirements: it is made available, at least in part, at a distance through electronic means, such as a website or mobile application; it is provided at the request of the service recipient; it involves the organization of work performed by natural persons, regardless of whether that work is performed online or in a specified location.

According to the criteria above, apps used to match drivers with passengers (so-called ride-hailing apps) such as Uber, Bolt, or Freenow can therefore be considered digital labor platforms, because (1) these platforms are made available through mobile applications, (2) the services are provided at the request of passengers, (3) the drivers' work is organized through the application.

Key changes introduced by the directive. The directive on improving working conditions in platform work introduces a number of key changes aimed at strengthening worker protection.

Above all, it imposes on member states an obligation to establish adequate procedures for verifying and determining the actual legal relationship between persons performing work within such a platform and the employing entity.

One of the most significant issues that will be introduced by the directive in question is the so-called legal presumption of the existence of an employment relationship between a person performing work through a digital labor platform and that platform.

Adopting such an assumption will be possible if the circumstances of the cooperation indicate the employer's control over the performance of work by the employed person.

For the presumption to be adopted, at least two of the five criteria set out in the directive should be met.

These criteria are: the employer effectively determining or setting upper limits on the level of remuneration; obliging the person performing platform work to comply with specific rules regarding appearance, conduct toward the service recipient, or the performance of work; supervising the performance of work or verifying the quality of work results, including by electronic means; effectively restricting, including through sanctions, the freedom to organize work, in particular the freedom to choose working hours or periods of absence, to accept and decline tasks, and to use subcontractors or substitutes; effectively restricting the ability to build a client base or to perform work for third parties.

So, for example, if an employer offering work on an online platform restricts the choice of working hours or periods of absence and also sets upper limits on remuneration, then in light of the upcoming changes it will be possible to conclude that the legal relationship connecting the employer with the worker is precisely an employment relationship.

The directive imposes on member states an obligation to introduce appropriate procedures in order to verify and ensure the correct determination of the employment status of persons performing platform work.

Because this matter is regulated in this way, it is currently impossible to determine how and when such a relationship will be recognized as an employment relationship and, consequently, from what point employers should fulfill the obligations arising from its establishment, for example registering employees with ZUS.

An employer will not be able to determine on its own that the presumption of an employment relationship does not apply to a specific relationship with a worker performing platform work.

The directive provides that the presumption of an employment relationship will be rebuttable in the course of court proceedings.

Therefore, should such a situation arise, the employer will have to initiate court proceedings, which usually entails incurring significant costs.

Importantly, the presumption will still apply during the court proceedings.

It should be emphasized, however, that the legal presumption will not have retroactive force, meaning that with respect to contracts concluded before the deadline for implementing the directive into the national legal order, the presumption will apply only to the period beginning after it enters into force.

Automation, yes, but lack of information, no. Work performed in the virtual space is inseparably linked to the development of new technologies, including automation, among others.

In this respect as well, the directive imposes additional obligations on employers toward persons performing work through a digital platform.

Employers will be required to provide information about: automated monitoring systems used to track, supervise, or evaluate the work results of workers using online platforms by electronic means, as well as automated decision-making systems used to make or support decisions that significantly affect their workers' working conditions, such as access to tasks, earnings, occupational health and safety, working time, promotion, and their contractual status, including any restriction, suspension, or removal of an account.

The above requirements will make it necessary to include additional information in the content of the information obligations provided to workers.

As a result, meeting the directive's requirements will entail the need to update such information obligations.

A step into the digital future of the labor market. For people performing platform work, the directive will mean a significant improvement in employment conditions.

Introducing the presumption of an employment relationship places them in a stronger position, giving them access to social benefits, health protection, and other advantages enjoyed by traditional employees.

On the other hand, employers will once again face the challenge of having to adapt their operations to the new requirements.

Despite this, it should be recognized that the directive on improving working conditions in platform work represents a step toward a fairer and more balanced labor market.

The changes will contribute to creating a more equitable environment for online workers, opening new prospects for the development of this dynamic sector of the economy.

Reference: DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on improving working conditions in platform work, of 9 December 2021.

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