Workers – the drivers, delivery personnel, service providers, and other so-called ‘independent contractors’ – who form the backbone of the platform economy, are also among the worst affected by its actions. Platform workers face numerous challenges, including a lack of clarity on employment status, information asymmetry about their working conditions, unpredictable income and work schedules, poor working conditions, insufficient access or absence of adequate social protection, lack of occupational health and safety measures, no grievance redressal mechanisms, and a denial of collective rights and potential discrimination.
Platform companies, who purportedly are the intermediaries connecting customers to workers, are able to extract a disproportionate share of this labor value, as they largely function in a regulatory vacuum. Aside from the impact on workers, the absence of regulatory mechanisms for the platform economy has manifested in multifarious ways, including unchecked and unplanned growth – the impact of which was seen over the last year with massive layoffs to the tune of nearly 200,000 employees – or large-scale lobbying efforts with the intent to continue with business as usual; “ask for forgiveness, not permission” as seen in the case of the Uber Files revelations. As such, these structural issues have drawn different types of responses across governments to control not just the corporate power of platform companies, but also bring in decent work standards.
Recent years have seen an uptick in workers approaching the courts to mitigate the issues they face. Across various courts in the European Union (EU) (Spain, France, and Netherlands.) and in other countries like the UK and Australia, workers, like drivers and delivery personnel, have sought to be declared as employees to receive protections like wage guarantees, mandated leave, and social security, as well as newer considerations of data and information access rights. While there have been many successes, courts have not always decided in favor of workers. For instance, in March 2023, a Californian court overturned the decision of a lower court on the ballot measure, Proposition 22 – which cemented the position of app-based workers as independent contractors – as unconstitutional as it limited future legislation on defining their worker status. Even in the EU, which has historically held a better track record on worker rights, verdicts have gone against employment guarantees for platform workers.
The goals of the Directive are straightforward – “improve the working conditions in platform work and support the sustainable growth of digital labor platforms in the EU”.
With the judiciary throwing up a mixed bag and divergence of opinions across fora, clear and comprehensive legislation that defines the role of the worker in a concrete manner is a much-needed step in the right direction. This is where the EU’s Platform Work Directive comes into focus.
The goals of the Directive are straightforward – “improve the working conditions in platform work and support the sustainable growth of digital labor platforms in the EU”. The focus on worker rights will also ensure that platforms are held responsible for their actions and potential harms in the digital-first economy, especially given that the Directive seeks to provide workers with up-front recognition as employees of the platform algorithmic management and attempts to increase the transparency of platforms’ actions.
Historicizing the Platform Work Directive
The Directive is a historic first among current labor legislations, given that it includes a distinct focus on platform workers and their rights. It follows a longer series of attempts to evolve legal frameworks for worker rights within non-standard forms of work, a trend that is pre-digital and has been on the rise since the advent of globalization.
In the 1990s, the EU passed a number of Directives seeking to legitimize and govern non-standard forms of work that were mushrooming all over the continent. The main focus of these instruments was to ensure equality of treatment for temporary and permanent workers, as well as outsourced and in-house workers.
It is broadly recognized now that institutional processes required to protect workers in these non-standard forms of work were insufficient when compared to the benefits of flexibility that EU businesses obtained from non-standard work in their labor markets. Scholars have posited that what these laws ensured was labor market adaptability while simultaneously trying to use the existing rights framework to widen the social security net with varying degrees of success. This legitimization of non-standard work while attempting to extend some workplace rights has been described in many quarters as “best of a bad job”.
Recent legislation aimed at worker protection in the EU continues to be drafted in this manner. In June 2016, the non-binding EU communication on vulnerable workers focused on the primacy of facts in assessing worker classification status. The emphasis on non-standard work in the platform economy led up to the publication of the draft proposal to improve working conditions in platform work by the European Commission (EC) in December 2021, that is this Directive. It is important, then, to understand the rights that the Directive is able to guarantee, and where it falls short. It is also significant to note that the law is far from becoming a reality at this point of time, and currently faces significant challenges at the EU Council stage.
Rights Guaranteed within the Directive
The Directive outlines a number of rights for platform workers, both derived from existing labor law guarantees, as well as emerging rights in light of the digital economy.
Presumption of employment. The presumption of employment, which effectively shifts the burden of disproving employment onto the platform company, is one of the most important features of this Directive. Classification of workers has remained an enduring debate in labor protections, more so in the context of platform work, given the aggressive push by platforms to deem workers as independent contractors. Given this, the presumption is a big win for securing worker rights. This will provide employment and social security benefits to platform workers.
In line with earlier EU legislative instruments regulating non-standard/flexible work, the Directive mandates employment classification based on actual facts of control in the employment situation, including algorithmic control. In the recent amendments to this legislation, approved by the EU Parliament in February 2023, this test has been significantly strengthened by removing the five sub-parameters (of which two had to be fulfilled) of establishing an employment relationship in favor of a general presumption of employment. This is expected to significantly make the Directive a more accessible charter of platform work rights – as the onus is transferred more generally onto the platforms to establish their lack of control over workers to avoid a charge of misclassification, rather than have workers prove the converse.
Algorithmic management, automated decision-making, and guarantees. The Directive is, at present, one of the few pieces of legislation that expressly recognizes algorithmic management and automated decision-making and their impact on workers. At the outset, Article 6 of the Directive in its new form clarifies that platform workers, worker representatives, as well as the labor inspectorate should have access to information around automated monitoring (like supervising or evaluating work) and decision-making systems (like recruitment, work assignments, payment for individual assignments, etc.), paving the way for important data access rights. For monitoring systems, the right of information relates to both the introduction of automated monitoring and types of actions monitored. For decision-making systems, the workers are entitled by the Directive to obtain parameters of decision-making, and for decisions that directly affect rights such as access and payment. This information is also made available to worker representatives as well as regulators.
Article 6 of the Directive in its new form clarifies that platform workers, worker representatives, as well as the labor inspectorate should have access to information around automated monitoring (like supervising or evaluating work) and decision-making systems (like recruitment, work assignments, payment for individual assignments, etc.), paving the way for important data access rights.
The Directive further has an explicit moratorium on the processing of certain types of personal data (such as emotional state, health, or private conversations) as well as collection of data while off work. It also prohibits automated decision-making in relation to a change of terms of agreement, decisions regarding use of disciplinary actions, as well as termination of agreement. In terms of restrictions on algorithmic management, the Directive puts a duty on platforms to evaluate risk, put in safeguards, and also restricts automated decision-making systems from putting “undue pressure on platform workers” or endangering “the physical and mental health of platform workers”.
Informational rights and social security. The Directive has a strong base in informational rights and access to platform data to secure social security. There are explicit provisions under Article 6 for data sharing with regulators and worker representatives every six months. The data sharing mandate rests on two main thrusts: one, data related to the number and type of platform workers engaged on the platform and, two, on unilateral contractual terms that the platform has in place with its workers. This is in line with the EU’s underlying principles of effective social dialogue through consultation and availability of data about the workplace. Data has to be provided to workers and their representatives in machine-readable formats, and any information provided has to be in clear and easy language. This prevents unintelligible data dumps and complex legalese that can create information asymmetry.
Additionally, the new draft also imposes a responsibility on platforms to conduct Data Protection Impact Assessments, including through seeking views from their data subjects, in this case workers and customers, with regard to the data processing to be undertaken. This type of accountability measures can help prevent excessive data collection and surveillance of workers through their apps, something that the platforms have been accused of doing.
Right against reprisals and conducting legitimate trade union activity. Finally, the Directive also protects workers from reprisals for any activity aimed at operationalizing rights provided under the Directive. This goes to the extent of including a right specifically not to be dismissed on these grounds as well as access to protected channels of communication that are not subject to scrutiny (relating to both collection and protection of data) of workplace systems. Social dialogue through a model of collective bargaining that does not preclude statutory rights has been a core feature of most EU states nationally, and thus in this, the Directive holds to a certain pre-existing standard.
What the Directive Fails to Protect
While the Directive is a useful piece of legislation, it doesn’t go the distance in providing a well-rounded set of rights to platform workers.
The Platform Work Directive does not provide a minimum wage standard or cover a living wage guarantee. Neither does it account for computing waiting time as part of work done. These have been significant concerns for platform workers.
An area where the Directive falls short is around rights of workers to access platforms and also disconnect from work. A significant need of workers is the right of access to the platform on a day-to-day basis, without getting blocked, or deactivated as a disciplinary measure, which the Directive does not specify explicitly. Another common demand is the right of the worker to disconnect from the platform after a certain number of worked hours without undue penalties. This is significant in countries like India, where workers often have to work 12-hour days to meet the onerous incentive criteria set by platforms.
The Platform Work Directive also does not provide a minimum wage standard or cover a living wage guarantee. Neither does it account for computing waiting time as part of work done. These have been significant concerns for platform workers.
Additionally, the Directive remains at risk of political pressures at the EU Council stage, with member states at the helm invested in creating systems that work for them. In 2021, significant adverse concessions for workers were suggested in the Czech Republic presidency draft of the Council in the form of reversing the presumption of classification. Currently, the Council is under the presidency of Sweden. Spain’s presidency from July is expected to help the process of moving a strong text for the Directive.
Moving Forward with the Directive
While it remains to be seen what direction the EU Council takes with the Directive, it is a milestone in the fight for better working conditions for workers in the platform economy. It has the potential to lay down concrete steps recognizing essential rights for workers and build more equitable and secure structures for workers in these systems of work. It is an opportunity to cement platform worker rights and provide direction for similar regulation in other jurisdictions, much in the way the EU General Data Protection Regulation paved the way for personal data protection rights not just in the region but globally.
For instance, workers in the Global South, like in India, tend to be more susceptible to the challenges of platform work as it is often their primary source of income. It leads to further precarity for workers, and requires the state to step in. As a result, for policymakers in the Global South grappling with the regulatory challenges brought forth by platform work, the provisions outlined within the Directive provide significant directions and serve as a good starting point.