EU Platform Workers Directive – more changes as political agreement reached

We covered the somewhat tortuous progress of this new law in our previous article EU Platform Workers Directive – a further step forward. In a final meeting that is reported to have lasted for some 11 hours, the European Parliament and EU Member States have now reached political agreement on the wording of the draft Directive.

With over 28 million people working on digital platforms across the EU, a model commonly known as the “gig economy”, the European Commission first drafted legislation on platform working in 2021. The Directive focuses on the employment status of platform workers and proposed new rights for individuals whose work involves the use of algorithmic technology.

Although much of the draft text that we wrote about previously remains the same, the process of reaching political agreement has resulted in some significant changes. The revised agreed text has not yet been published (and may not be for some weeks), but the following information can be taken from EU press releases.

The presumption of employment

This has proved to be one of the most controversial elements of the Directive. It is a key provision because it determines the rules for deciding whether an individual is presumed to be an employee rather than self-employed.

The Commission’s original draft provided that individuals working through platforms would be presumed to be employees if two out of five criteria – which it felt were factors indicating employment status - were met. The European Parliament wanted to go further and suggested that the presumption of employment status should apply automatically to anyone working through a platform. The previous draft, as addressed in our article above, provided that the presumption of employment status would only apply if the platform “exerts control and direction” over the performance of work, judged by whether three out of seven criteria are met.

The latest iteration has changed the definition yet again – lowering the threshold at which the presumption will apply. The draft Directive now says that there will be a presumption of an employment relationship when two out of a list of five “indicators” of control or direction are present. These indicators are:

• upper limits on the amount of money workers can receive
• supervision of their performance, including by electronic means
• control over the distribution or allocation of tasks
• control over working conditions and restrictions on choosing working hours
• restrictions on their freedom to organise their work and rules on their appearance or conduct

Member States may add further indicators to this list under national law. It is not yet clear whether it will also be permissible to require more than two indicators to be met if the list is expanded in this way.

This legal presumption does not mean that an individual who meets two of the indicators will automatically be classified as an employee. However, where the presumption applies, it will be up to the platform to prove that there is no employment relationship.

Automated decision making

From the information that we have so far in the draft press releases, it does not seem that any significant changes have been made to the provisions on automated decision making. The position will be clearer once the draft agreed text has been published.

What next?

The next step is the formal approval of the agreement by the European Parliament and the Council. Member States will then have two years to incorporate the EU Directive into national law. Assuming the process can be concluded before the terms of the current Commission and Parliament end in spring 2024, the usual two-year implementation period for Directives would mean that the Member States have until spring 2026 to make the necessary changes to their domestic law.