The EU Commission first published a proposal for a directive on the regulation of working conditions regarding platform work on December 9th, 2021. More than three years later, on March 11th, 2024, the EU ministers for employment and social affairs finally confirmed the provisional agreement on the "Directive on improving working conditions in platform work".

The EU has become the first legislator in the world to regulate digital labor platforms. The Directive determines the status of digital platform workers and regulates the use of algorithmic systems in the workplace for the first time within the EU.

Platform work

Platform work has increased rapidly during the COVID-19 pandemic. Today, over 28 million people in the EU work on digital labor platforms. By 2025, the number is expected to rise to 43 million. The growth of digital labor platforms brings many benefits to businesses and consumers but has led to the development of a gray area for many workers in terms of their employment status.

According to Article 2 of the Directive, the term "platform work" covers any work organized through a digital labor platform and performed in the EU on the basis of a contractual relationship between the digital labor platform and the platform worker, regardless of a contractual relationship between the platform worker and the recipient of the service.

Platform workers: employees or self-employed?

The majority of platform workers in the EU - including employees of cab companies and food delivery services - are self-employed on paper. However, more often than not they are subject to the same rules and restrictions as employees. This is an indication that they are actually in an employment relationship and therefore entitled to the same rights as employees as well. 

The Directive addresses the incorrect status of platform workers. According to Article 4, the core of the Directive is the presumption of an employment relationship. This makes it easier for platform workers to exercise rights employees are entitled to.

The following criteria must be met for the presumption of an employment relationship: (i) there are upper limits to the salary of the platform workers; (ii) their work performance is monitored, including by electronic means; (iii) the platform controls the assignment of work tasks as well as (iv) the working conditions; (v) the working hours are predetermined; and (vi) the platform workers can organize their work independently from the platform only to a limited extent. Member States may introduce further criteria under national law.

However, in court proceedings the platform provider is given the opportunity to prove there is in fact no employment relationship and that the presumption is wrong and not applicable to the individual case.

Use of algorithms in the workplace

The Directive stipulates that employees must be informed regarding the use of automated monitoring and decision-making systems. Furthermore, digital labor platforms must not process certain types of personal data, such as personal data on the emotional or mental state of platform workers, data on private conversations, data predicting actual or potential trade union activities and data inferring an employee's racial or ethnic origin, migration status, political opinions, religious beliefs or health status.

The Directive also ensures that automated decisions are made under human supervision and assessment, while guaranteeing the right of employees to an explanation and review of the decision.

Notification of platform work

Article 11 of the Directive provides for an obligation for digital labor platforms as employers to notify the competent labor and social protection authorities of the Member State in which the work is performed and to provide them with certain data. This is a first step towards ensuring the transparency of platform work.

Protection against wrongful termination

Article 18 of the Directive stipulates that platform providers must provide reasonable grounds for terminations and justify a termination upon request by the platform worker. Platform workers therefore have an increased protection against wrongful termination.

Outlook

Following the formal adoption of the Directive by the European Parliament and the Council, the Member States have two years to transpose the EU Directive into national law. 

However, the scope and impact of the Directive will depend on the respective transpositions into the national law of the Member States.