No agreement in the European Council yet

VS – 02/2023

The discussions on the European Commission's December 2021 Proposal for a directive to improve working conditions in platform work are entering their decisive phase. Following the failure of the Member States under the previous Czech Council Presidency to adopt a common position, the current Swedish Council Presidency is aiming for an agreement in the European Council by June 2023. In the European Parliament's lead Committee on Employment and Social Affairs (EMPL), a compromise has been reached despite major differences between the political factions at the onset. On this basis, the plenary of the European Parliament adopted its position on 2 February.

There are two opposing camps in the Council of the Europen Union

In the Council of the Europen Union, positions on the application of the legal presumption in determining employment status remain far apart. The Czech Council Presidency's compromise text, pending adoption, provided for increasing the criteria for determining the status of the employment relationship from five to seven – the European Commission had initially called for five criteria in its proposal for a directive. Dependent employment is said to exist if three of the seven criteria are met. In contrast, according to the European Commission proposal, the legal presumption should already be pronounced if two criteria are met.

A clause has also been introduced according to which it is left to the Member States to decide whether an objection has a suspensive effect against the pronounced presumption. By including these amendments in its compromise proposal, the Member State holding the Council Presidency has met the demands of Central and Eastern European Member States. This is opposed by a group including Portugal, the Netherlands and Spain, which calls for a return to the European Commission's text proposal. Germany abstained from the vote.

Legal presumption without binding European criteria

In the lead EMPL Committee in the European Parliament, a compromise text capable of securing a majority was reached despite major differences between the political factions at the onset. In deviation from the original European Commission proposal, it does not base the legal presumption for determining dependent employment on EU-wide binding criteria, but only lists eight non-mandatory criteria. Furthermore, it is ensured that the legal presumption does not lead to an automatic reclassification of the employment relationship of all platform workers. Central aspects of the European Commission's draft, such as the non-suspensive effect of an appeal against the pronounced presumption or the burden of proof of the digital labour platform, have been retained. This compromise text significantly expands the Member States' scope for decision-making on status determination, while retaining essential aspects of the European Commission's proposal.

Algorithmic management

Both the European Parliament and the Council of the Europen Union agree that more importance must be given to algorithmic management in the directive. The rejected compromise text of the Member State holding the Council Presidency restricts the processing of personal data and emphasises the obligation to inform and consult in the case of changes to automated monitoring or decision-making systems. The European Parliament has also included more transparency and information obligations in the compromise text adopted with regard to the use of automated tools and their impact on the employment relationship.

It’s the Swedish Council Presidency’s turn now

The Swedish Presidency of the Council wants to work out a new compromise proposal together with the Member States. This is to be agreed by June 2023 at the latest, so that the trialogue procedure can be concluded under the Spanish Presidency of the Council.