Magazine ed*
ed* Nr. 01/2022

Concrete proposals of the European Commission – focus on determining the status

ed* Nr. 01/2022 – Chapter 4

In its proposal for a directive, the European Commission describes a series of minimum standards that are intended to provide both platform operators and workers with greater legal certainty. All platform workers working within the EU are to benefit from the new regulations, regardless of the respective location of the labour platform.

At the heart of the European regulations is the goal of strengthening the rights of platform workers. Determining their employee status plays a crucial role in this. To this end, the European Commission – based on the case law of the European Court of Justice (ECJ) – has laid down five control criteria that will in future help platforms and platform workers to determine whether their working relationship is an employer-employee relationship or whether it is rather a self-employed activity. They relate to the determination of the remuneration, binding regulations regarding appearance and behaviour, monitoring and review of work performance, restrictions on the independent organisation of work and the acceptance of orders, as well as restrictions on the development of the company’s own customer base. The actual work regulations and not the contractual agreements between platform workers and digital labour platforms should be decisive.

This is to be made on the basis of a legal presumption in order to allow quick determination of employment ­status. If two of the criteria established by the European Commission are actually present, it is presumed that an employment relationship exists. This would automatically entitle a platform worker to the social and labour rights of an employee.

However, it is possible for the digital labour platform to rebut this legal presumption in court or administrative proceedings, which would have the burden of proof. The proceedings shall not have suspensive effect on the application of the legal presumption. This is to ensure that access to labour and social protection is guaranteed at an early stage for platform workers who are genuinely in a sub/superordinate relationship in their work.

In particular, the European Commission’s proposals for determining status on the basis of a legal presumption using five criteria, the reversal of the burden of proof and the non-­suspensive effect of an objection to the status determination are the subject of controversial discussion.

With a limited number of fixed criteria, there is a risk that contracts between platform workers and digital labour platforms will be adjusted accordingly. Germany has already had negative experiences with the legal presumption based on five criteria for determining bogus self-employment.1 These have led to an adjustment of the contractual arrangements, according to which virtually no more bogus self-employment has been established. However, this has not been reflected in actual employment. In Social Code IV, the legal presumption was therefore replaced by reference to the actual employment relationship.

This risk also exists for platform workers if they are in a subordinate relationship. In this case, it can be assumed that the platform workers have only a minor influence on the form of the contract and that the actual form of the employment relationship may deviate from the contractual provisions. As a result, the five criteria for an employment relationship would not be met. The consequence would be that the legal presumption would not apply due to the formal fulfilment of the proposed criteria.

The European Parliament’s draft report on the proposed directive, presented by the correspondent of the Committee on Employment and Social Affairs, Elisabetta Gualmini, also criticises the primary reference to the five criteria, expands it to eleven criteria and moves it to the preamble. The idea behind this is that the criteria cannot be exhaustive as platform work is diverse and subject to constant change. The criteria listed are, therefore, intended to form a non-exhaustive list of elements that competent authorities may refer to when assessing employee status.2 The delivery service Wolt, on the other hand, criticises in its statement the five criteria of the proposed directive, which in its view are too vague and partly contradictory.3 Wolt suggests replacing them with simpler and clearer criteria, such as the four criteria laid down by the ECJ in the “Yodel” case.4 The German Bar Association advocates that the determination of employment status should be based on the actual employment relationship and welcomes the introduction of a legal presumption based on criteria that are as uniform as possible throughout the EU. However, a need for adjustment is seen in the criteria mentioned. These should be rechecked for their actual relation to the “control of work performance” and adjusted.5

The German social partners also see a need for improvement in the criteria mentioned. In addition, the Confederation of German Employers’ Associations (BDA) criticises the fact that the burden of proof for the non-existence of an employment relationship lies with the digital labour platform. Thus, the platform would have the burden of proof of a so-called negative fact. However, proving this negative fact will be difficult or almost impossible in most cases. In addition, the BDA fears that these regulations will artificially create a new employment status, namely that of the “platform worker”.6 The United Services Union (Ver.di), on the other hand, welcomes the fact that the burden of proof is to be borne by the digital labour platform, even if the platform workers do not classify themselves as employees. This would take into account the power asymmetry between platform and platform workers.7

Regulations on labour and social protection are structured very differently in Europe. This is pointed out by the Austrian Social Insurance in its opinion. Austria has the additional employment status of a person similar to a regular employee. This employee is independent, but economically dependent on a client without being integrated into the client’s operational organisation. Accordingly, the Austrian social security system calls for a more flexible approach, that is more respectful of national legislation and focuses on a qualitative assessment of the specific situation.8

The German Social Insurance system welcomes the proposed directive. It is essential that the legal presumption is based on the actual employment relationship. It is also important that the current and future case law of the ECJ must be taken into account in a binding manner. The aim of a European regulation must be to reduce differences in status determination between countries. The aim is to ensure that social protection for platform workers is as uniform as possible throughout the EU and to exploit the innovation and employment potential of digital labour platforms.

On European level it is discussed whether the criteria set out in the proposed directive are sufficient to reflect the actual employment relationship. This is because the national criteria, which are usually much more detailed, are also required for this purpose. Subject of the debate is also that in the event of an objection, the burden of proof is to be borne by the digital labour platform and that an objection does not have a suspensive effect on the application of the presumption. The aim of this regulation is to speed up the determination of employment status and to ensure rapid access to labour and social protection for platform workers.