In focus: determination of employment status and algorithmic management

VS – 06/2022

On 6 May, the correspondent of the Committee on Employment and Social Affairs (EMPL), Elisabetta Gualmini, presented the draft report on the European Commission's proposal for a directive on platform work. Initial discussions on this have also taken place in the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO). The discussion focused on the provisions for determining the employment status of platform workers and algorithmic management.

For the status determination, the European Commission has specified a list of five criteria in its proposal for a directive, based on the case law of the European Court of Justice (ECJ). This is to be made on the basis of a statutory presumption in order to allow quick status determination. According to this, a dependent employment relationship is presumed if two of the five criteria are met.

Correspondent's draft report is controversial in the EP

In the draft report of the social democrats correspondent Gualmini, the primary reference to the five criteria is criticised in the status determination. Instead, it is to be extended to eleven criteria which are also to be moved to the preamble. In this way, the criteria listed are intended to form a non-exhaustive list of elements that competent authorities may refer when assessing employment status.

Another central demand of the draft report is that the regulatory framework for the design of algorithmic management in the directive be given the same importance as the status determination.

The proposal on status determination is criticised by the shadow correspondent of the European People's Party, Denis Radtke, and the shadow correspondent of Renew, Lucia Ďuriš Nicholsonová. Both oppose the extension of the list of criteria and stress that the statutory presumption should not automatically make platform workers to employees. Therefore, meeting three instead of two criteria should be a prerequisite for classification as a employee.

Also, according to the EPP MEPs, voluntary benefits such as benefits in case of accidents at work or further training opportunities should not be taken into account in the classification, so that these benefits do not lead to a classification as employees. This was originally foreseen in the Commission's proposal to determine the employment status, but was deleted in Gualmini's draft report.

Council Presidency presents first progress report in EPSCO

At the EPSCO meeting on 16 June, the French Council Presidency of the European Union presented a first progress report on the state of the discussion on the European Commission's proposal for a directive on platform work. In contrast to the draft report of the European Parliament, it supports the Commission's proposal to base the status determination on two of the five criteria. In contrast to the proposal for a directive, the statutory presumption for determining employment status should not only be based on the review of work performance. Instead, it should refer to any "restriction on the freedom to organise work and to check its execution". However, several Member States have voiced reservation against the progress report and the statements made there on status determination.

Statements by the Council Presidency also suggest that the demand in Gualmini's draft report to give algorithmic management the same importance in the directive as the determination of employment status is supported.

Belgium wants to implement the proposal for a directive on status determination in advance

On 17 June, the Belgian government agreed on the draft law of the labour market reform package presented in February. Part of the reform package includes new requirements for determining the employment status of platform workers and their occupational health and safety.

Although Belgium follows the European Commission in the status determination, it still wants to add three more criteria. Accordingly, a presumption of dependent employment is made if three of the eight criteria or two of the five criteria last mentioned are met. Who decides on the statutory presumption remains disputed. The agreement provides that the Commission is responsible for regulating the employment relationship. In contrast, the employers' side and the Liberals advocated that the competence should lie with the labour courts and that the Commission should only have an advisory function.

Furthermore, it is envisaged that platform workers will be insured against accidents at work, regardless of their employee status. Whereby the insurance cover must be paid by the digital work platform.

This is how it continues

At the EPSCO meeting on 16 June, the upcoming Czech Council Presidency presented its planning for the second half of 2022. It then aims to adopt a Council position on the proposed directive on 8 December. In the European Parliament, negotiations between the political groups, led by the correspondents, will start on 5 July. The vote in the Committee on Employment and Social Affairs is scheduled for October and in the plenary of the European Parliament for November or December this year. In Belgium, the bill will be presented to the parliament.