The German Social Insurance welcomes the European Commission's proposal for a Directive on Improvement of Working Conditions of Platform Workers.

VS – 02/2022

The Directive proposal is part of a comprehensive Package of measures on platform employment that the European Commission presented on 9 December 2021 (see also News December 2021). For this purpose, the European Commission had initiated a feedback procedure, in which DSV participated by passing an opinion on 10 February 2022.

Determination of employment status - new approach of the European Commission

Platform work poses a variety of challenges for social security systems. This applies, in particular, to the determination of the actual employment status. Thus, platform workers who are in a de facto dependent employment relationship but are classified as self-employed face the risk of poor working conditions and missing or limited access to adequate social and labour protection. This is accompanied by the risks of unfair competition, undeclared work, fragmented and unpredictable incomes and working hours, a lack of opportunities for qualification, and a lack of measures for health and safety at work.

Accordingly, the proposed directive focuses on the issue of employment status determination. Accordingly, the actual employment relationship and not the contractual agreement is to be decisive for the determination of employment status. The European Commission is breaking new ground at the European level by proposing that this should be done on the basis of a legal presumption. In doing so, the assessment is to be carried out on the basis of five criteria set out in the proposed directive.

The problem with a limited number of fixed criteria is that corresponding adjustments could be made to contracts between platform workers and digital labour platforms to avoid reporting the employee status. This is especially true when platform workers have little influence on drafting of the contract. The consequence of the legal presumption would be that the employee status would be based on the formal fulfilment of the proposed criteria and not on the actual employment relationship.

The proposal that digital labour platforms should be able to refute the presumption in judicial or administrative proceedings is also far-reaching. The burden of proof should lie with them in this regard. Also, the proceedings should not have a suspensive effect on the application of the legal presumption.

Transparency in the use of algorithms

The proposed directive also regulates the use of algorithms by digital working platforms. Key aspects here are increased transparency in their application and the right to challenge automated decisions. These rights apply to all platform employees, regardless of their employee status.

In addition, digital labour platforms that are employers are to be obliged to report the work performed by platform workers and to communicate "relevant data" to the competent labour and social protection authorities of the Member State.

Specified reporting requirements

The proposed directive also clarifies the existing obligations to notify the national authorities about the work. Thus, EU-wide uniform information to be notified will be listed. It is also intended to give labour and social protection authorities the right to request additional clarifications and details about the data provided.