international analysis and commentary

The Directive on platform work: the sunrise of a new paradigm in European labor law?

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On April 17, 2024, during the last plenary session, the European Parliament approved the agreement on the Platform Work Directive, with 554 votes in favor out of 634. This significant majority was reached after over two years of tumultuous negotiations, marked by intense lobbying. The process even saw member states blocking the trilogue agreement reached between the European Parliament and the Council of the EU on two occasions. Now, only the final ratification by the member states in the Council is awaited, with all except France and Germany already giving their approval at the EU summit of ministers on March 11th. It is, therefore, expected to be a mere formality.

Platform workers at a demonstration in Bordeaux, France

 

The legislative instrument regulates a phenomenon that has exploded in recent years and continues to grow: according to estimates by the European Commission, it will concern at least 43 million workers in Europe by 2025, from Bolt, Deliveroo and JustEat riders, to Uber drivers, Helpling cleaning professionals, caregivers and the entire world of ‘online’ platform work (including consultants and people working on microtasks, often assigned via crowdwork) – which is wide and poorly traced. These are among the most vulnerable and precarious workers, subjected to the control and opaque management of algorithms. They are also often misclassified as self-employment: more than 5.5 million in 2021, according to figures released by the European Commission.

This combination outlines a business model with alarming features. In the absence of clear rules, the risk is high that by letting the majority of big platforms misclassify their workers as independent contractors, soon enough we would see regular employers claiming all their workers are contractors too. As the New York Times reported in January, waiters, dishwashers and bartenders formally working as independent contractors are already a reality overseas. The platformisation of work[1] would jeopardize the European social model, and with it, the European economy. On one hand, this is because it undermines the protections of regular employment, while on the other, bogus self-employment poses a significant threat to the sustainability of social security systems and to fair competition between companies – which risks to slip towards undercutting labor protections.

Technology today allows for the use of artificial intelligence to organize and supervise work, but it is the responsibility of public authorities to ensure that this does not result in unpredictable working conditions, bent to opaque and arbitrary logics that veer towards exploitation. Furthermore, the use of algorithms in the world of work raises renewed urgency regarding the collection and use of personal data. A recent pamphlet by Antonio Aloisi and Valerio De Stefano, titled “‘Il tuo capo è un algoritmo. Contro il lavoro disumano” (“Your boss is an algorithm. Against inhuman work”), brings to light the major issues related to the undergoing transformation of the world of work due to technological developments, highlighting the dangerous lack of political intervention to guide the process. While there are no inherently good or bad technologies, there certainly exists a use of technology compatible with – and even supportive of – a cohesive society centered on the individual, as opposed to a use solely oriented toward immediate economic profit.

 

Read also: Intelligenza Artificiale, automazione e concentrazione di potere

 

The two main areas of intervention of the directive are the fight against bogus self-employment in the gig economy and a comprehensive set of rules for algorithmic management (the use of artificial intelligence replacing traditional management).

The directive introduces a mechanism of rebuttable legal presumption of subordination whenever facts indicating control or direction are found in the contractual relationship, thus placing the burden of proof regarding the qualification of the relationship on the platform. The underlying principle is that anyone de facto in a subordinate situation is entitled to all the protections that derive from this status.

This seemingly obvious concept was at the heart of the political dispute. On one side, there was the European Parliament, led by rapporteur Elisabetta Gualmini (of the Socialists&Democrats Group), and on the other side, French President Emmanuel Macron, the main opponent of the directive along with major digital labor platforms.[2] Macron, who – as suggested by the “Uber files” affair – has had close ties with Uber for years, sought European-level recognition of the so-called “third employment status” (all cases that classify a worker as self-employed but recognize the possibility of negotiating some form of ancillary protection). This would be a Trojan horse in the EU legal framework, with repercussions far beyond platform work. Such a choice would have not only crystallized and legitimized the peculiar form of bogus self-employment introduced by the French President within the digital platform work framework, but also opened the door to a continent-wide drift in a wild race to the bottom of workers’ protections.

This is nothing new, conceptually speaking. It is indeed an approach stemming from a concept of labor plus market transformations – originating from a liberal mindset but which has become hegemonic in Western society over the last thirty years in a “neoliberal” form – which portrays subordination and workers’ rights protection as obsolete tools unfit for a modern and dynamic society. The approved agreement tackles and overturns this paradigm. Furthermore, the directive tells us that even the (genuine) self-employed can be very vulnerable today and are at risk of poverty and social exclusion, thus requiring new protections. If the distinction between self-employed and employees is to be considered outdated, it is therefore in the opposite sense to what is proposed by supporters of “traditional” flexibility, which empirical evidence shows is actually experienced as precariousness.

The regulation of algorithm in the world of work is the second major issue addressed by the directive, and its most innovative aspect. The text lays down clear rules on the obligation of transparency on the functioning of algorithms (thus making them also subject to collective bargaining) and introduces new protections for all people performing platform work, whether employed or self-employed. These range from the obligation of human supervision over algorithms, to the prohibition of any use thereof that may endanger the mental or physical health of individuals, to the prohibition of taking decisions such as the termination of employment relationship or account closure/suspension through algorithms, and to the prohibition of the collection and processing of certain types of data – according to standards higher than those provided by the GDPR. This is the first regulatory instrument at global level to comprehensively address the issue and set clear boundaries for democratic use of artificial intelligence, placing the individual and his dignity back at the center.

 

Read also: Intervenire nel mercato del lavoro: tra effetti indesiderati ed esigenza di equità

 

From this perspective, the directive represents the first fundamental step toward extending the principle to all workers subject to algorithms. Both Commissioner for Jobs and Social Affairs, Nicolas Schmit, who presented the directive proposal, and Commission President Ursula von der Leyen have acknowledged the need for legislative intervention to regulate the use of AI in the world of work, which is hoped for the next mandate. Until then, it is not impossible that, should the opportunity arise, this extension may be effectively sanctioned by the EU Court of Justice through the non-discrimination principle.

In the meantime, the directive, which despite sabotage attempts carried out until the very last moment, has seen the light of day this year, can truly be considered a game changer – arguably even more than the directive on Minimum Wage, despite the much bigger media coverage it received, certainly also due to its undisputed symbolic value. It is worth noting that even in the aftermath of the approval of the agreement by the member states – with the resounding defeat of the alliance between the French government and the German liberals[3] – Uber attempted a coup de tail to try to influence the transposition of the act. Indeed, after having vehemently opposed it, it claimed that the approved text merely certifies the status quo. The recent decision of the Belgian Labor Relations Commission seems instead to certify, even before the final formal step of adoption of the directive, exactly the opposite.

 

 


Footnotes

[1] Conceptualised in a recent paper published by the European Commission’s Research Institute.

[2] With the exclusion of JustEat, which already hires its own workers as employees and which, in the figure of its founder and Dutch Chief Executive Jitse Groen, has instead always openly advocated the adoption of a directive that would effectively address and correct the widespread scourge of bogus self-employment.

[3] Holding the Scholz government in check – on this as on so many other dossiers in Europe over the past year and a half.