On December 13, the European Parliament and the Council agreed on a new directive to enhance working conditions for individuals involved in the platform economy, potentially granting millions of them access to employment rights.

Pending formal adoption procedures, the directive will introduce two main enhancements: it will streamline the correct classification of people working for platforms and it will establish transparency rules for algorithm systems used by the platforms.

The first improvement involves facilitating the proper classification of such individuals by establishing a legal presumption of employment relationship. Based on this, a platform will be considered an employer, if it meets at least two out of the following five indicators:

-Maximum caps on employees’ earnings
-Monitoring of their work performance, including through electronic methods
-Authority over task distribution and allocation
-Influence on working conditions and limitations on selecting working hours
Constraints on their autonomy to organise work and rules on their appearance or behaviour

Member states will be able to also introduce additional indicators.

The second improvement focuses on the use of automated systems in monitoring and decision-making on digital labour platforms (‘algorithmic management’). To address the current lack of transparency, the upcoming directive foresees a right to information by the workers regarding the use of such systems, as well as restrictions in the processing of certain personal data, and enhanced human oversight for significant decisions.

The provisional agreement by the two Institutions now awaits formal adoption.

CESI Secretary General Klaus Heeger said: “Today’s political agreement marks a significant step for the protection of platform workers. Currently, at least 5.5 million persons working for platforms may be wrongly classified as self-employed. Hopefully, the new directive will limit bogus self-employment in the gig economy and will grant these people significant labour and social protection rights. Having participated in both social partners’ consultation on the upcoming directive, CESI can be proud of contributing to more decent work across Europe. Once the official text of the agreement is published, we will gain a deeper understanding, allowing us to better assess the details.”