In order to outsource costs and risks, several platforms compel employees to become self-employed. The European Union (EU) wishes to put a stop to this practice as of today.
 |
| [A food delivery worker cycling in the street of German capital Berlin] |
For more than a decade, digital work platforms in Europe have generated enormous profits via a business model based on strong labor price competition as well as the outsourcing of social costs and risks to third-party providers. By requiring workers to describe themselves as self-employed when, in reality, there is a clear employment relationship, the platforms are able to avoid paying minimum wages, complying with sectoral collective agreements, and making social security contributions, to name a few of their core responsibilities as employers. They are able to provide reduced costs for their services as a result of such "innovation."
These trends have had a detrimental influence on European society, not only in terms of the worsening of working conditions and the quality of life for women employees, but also in terms of the negative ramifications on conventional industries and public revenues as a result of these developments. This methodology is currently being applied to a growing number of new industries and areas. Because of its unfair competition, it has a significant influence on the long-term sustainability of conventional enterprises in the marketplace.
The European Commission proposed a new EU regulation to protect workers' rights in the digital economy on December 9, 2021, which was approved by the European Parliament. To put it simply, it is an ambitious effort to govern a business model that has so far prospered on digital platforms by shirking its fundamental duties as employers — at the cost of workers, conventional businesses, and a severely underfunded public sector.
The Commission's proposal is especially encouraging since it represents a significant step forward from 2016, when the Commission originally suggested a "European strategy for the collaborative economy." Although the Commission accepted the narrative that these businesses were "forming" a new sector, generating employment, and providing more flexibility six years ago, this seems to have been under the influence and pressure of lobbyists from the main digital platforms. The European Union has urged member states that have expressed concern about working conditions not to rush to regulate too soon. It is important not to "destroy the economy," after all.
With its intended order, the Commission, in the meanwhile, is taking the side of the workers in this dispute. She wants to establish a presumption of an employment connection between workers and platforms, which would transfer the burden of evidence away from employees and onto employers. To put it another way, a digital platform should always be regarded as a traditional employer — until and until the platform can demonstrate otherwise.
It is necessary to push digital platforms that are resistant to the employer assumption to disprove the presumption in order for this to be successful. Afterwards, these labor platforms would be required to publish their algorithms in order to demonstrate that they do not in fact employ women but rather deal with freelancers. Those platforms that deal with "genuine" freelancers would not be affected by this, and freelancers would have complete clarity about which platforms they may work with in an acceptable manner as a result.
Guaranteed employment contracts and respect for workers' rights, while still allowing for real self-employment, have been at the core of our commitment as a European trade union movement over the last two years. A rule of this kind is necessary because things simply cannot continue as they have been: All workers on digital work platforms are now treated as self-employed if the platform wants them to be treated in this manner. So long, workers and their unions have had to go to court in order to establish their de facto status as employees against their employers. This is a pricey, time-consuming, and labor-intensive process that only a select few can afford.
In addition, such legal processes do not result in a change in the economic model of the platform, much alone an improvement in the working conditions of the other platform employees. As a general rule, the plaintiff is only entitled to a one-time payment of compensation equivalent to the minimum wage. The platform continues to gain from the outsourcing of all risks, at the price of employee safety, over this time period, however. It is vital to address this earlier loophole, and the assumption presently suggested by the EU that there is always an employee-employer connection serves this purpose.
In accordance with the proposed legislation, algorithms used for job allocation and human resource management would no longer be considered a "black box": platforms would be required to explain their algorithms to employees and their unions, and they would also be required to participate in collective bargaining. It would be necessary to develop universal guidelines, in collaboration with the labor unions, for how the algorithm influences the design of work and working conditions.
In this regard, the Commission's proposal for a directive is an encouraging first step. The European Parliament and the European Council, on the other hand, must continue to work on improving it. One of the most significant weaknesses of the bill is the lack of clarity in the criteria used to determine whether or not there is an employment connection. According to the existing legislation, a digital platform must satisfy two requirements in order to be eligible for this presumption. The corporations' responsibility to rebut would be rendered essentially ineffective, and a scenario similar to the one that existed previously would be perpetuated: one in which employees are still responsible for ensuring that their rights are upheld by the government. Furthermore, the anticipated criteria are rigid and become reality, with the result that the platforms' hiring practices are not equitable. With the existing phrasing and requirements, digital work platforms might easily alter their specific terms and conditions such that they are no longer subject to this legislation.
More crucially, it is difficult for EU member states to accurately record genuine employment connections if the algorithm does not adequately evaluate how the labor is organized. If the principle of shifting the burden of proof from the employee to the employer becomes widely accepted, then the actual assessment of the employment relationship will only be possible during the course of the companies' objection proceedings against the employment relationship. If digital work platforms aim to disprove the existence of an employment connection with its workers, they should be required to make their algorithm accessible to the appropriate regulatory or judicial authorities for examination.
With the current proposal for an EU directive, the trade union movement as a whole can voice its concerns while also attempting to improve the working conditions of those who work on platforms. However, it is not yet ideal and, as a result, the European Parliament and the Council should work together to make it better. This will only be achieved through concerted efforts by the European trade union movement to protect the rights and interests of women workers, as well as a strong opposition to the lobbying tactics of the platforms that wish to maintain their current unsustainable business model.