On April 24, 2024, the European Parliament adopted a resolution for a directive aimed at improving working conditions on platforms. This is a significant step towards addressing the needs of platform workers, such as 'Bolt' and 'Wolt' couriers, throughout the European Union.
The main goal of this directive is to introduce a presumption of employment for platform workers, clarifying their employment status and granting them rights and social guarantees arising from employment relationships. This is crucial, as the employment status of these individuals remains unclear. The forthcoming directive also focuses heavily on regulating the use of algorithms by digital labor platforms, ensuring that decisions affecting the employment of individuals working through these platforms are fair and transparent.
Key Provisions of the Directive
The European Parliament approved several key conditions: algorithms used on platforms must be transparent to ensure fair decisions regarding task assignments, worker performance evaluations, and compensation; platform workers have the right to request a human review of decisions made by automated systems, especially when disputes arise over task distribution or evaluation; the directive mandates the protection of personal data and privacy, requiring platform companies to comply with the EU General Data Protection Regulation (GDPR) and ensure lawful and transparent data processing.
EU member states must amend or adopt new national laws to meet the directive's criteria, helping to determine when platform workers should be considered employees. For instance, it is necessary to clearly indicate when a platform worker is regarded as an employee and when as a service provider. This includes the level of personal control, the exclusivity of the work relationship, and the significance of the worker’s role in the core business activities.
Aim - A Safer and More Reliable Working Environment
The resolution reflects the European Union's commitment to modernizing labor law to keep pace with digital transformations and the changing nature of work. It aims to create a safer and more reliable working environment for all platform workers, ensuring they can benefit from social protection and work-related benefits typical of traditional jobs. However, considering current court practices in Lithuania, where if these characteristics are present: first - the person performs a work function rather than focusing on the result, second - the person is paid a salary for performing the work function; third - the person is subordinate to the employer, and other specified circumstances, the relationship is recognized as employment. Therefore, when transposing the directive's provisions into national law, it is important to consider both court-established practices and the uniqueness of the activities of individuals operating on platforms.
This change is seen as a potential shift that could improve working conditions for individuals working in the so-called "gig" economy. It also aligns with the broader EU objectives to ensure fair working conditions and social protection within the common market.
The "Gig" Economy - A Rapidly Growing Labor Market Segment
In 2023, the platform (or "gig") economy grew significantly worldwide and now constitutes about 12% of the global labor market. Men make up 31% of platform workers, women 18%. The largest age group is 25-34-year-old workers, with an average hourly wage of $19. Workers aged 55-64 earn the most, at $36 per hour. The United States has about 76.4 million freelancers, with annual earnings reaching $1.3 trillion. Currently, the majority of freelancers are in the US and India.
By Ruta Globyte, Attorney at Law, Associate Partner at WIDEN Law Firm
