European Union regulators have reached a provisional agreement on a proposed directive to improve working conditions for platform workers.

The European Council and the European Parliament agreed Wednesday morning on a platform worker directive with the aims of helping to improve the working conditions of people working through digital platforms, while preserving the opportunities and benefits brought by the platform economy.

The directive introduces two key improvements: it helps determine the correct employment status of people working for digital platforms and establishes the first EU rules on the use of algorithm systems in the workplace.

Currently, the majority of the EU’s 28 million platform workers, including taxi drivers, domestic workers and food delivery drivers, are formally self-employed. However, many of them have to abide by many of the same rules and restrictions as an employed worker. The European Council said this indicates that these workers are in fact in an employment relationship and should therefore enjoy the labour rights afforded to employees under national and EU law.

The provisional agreement addresses these cases of misclassification and eases the way for such workers to be reclassified as employees. Under the agreement, workers will be legally presumed to be employees of a digital platform (as opposed to self-employed) if their relationship with the platform fulfils at least two out of five indicators set out in the directive.

These indicators include:

• upper limits on the amount of money workers can receive
• supervision of their performance, including by electronic means
• control over the distribution or allocation of tasks
• control over working conditions and restrictions on choosing working hours
• restrictions on their freedom to organise their work and rules on their appearance or conduct

The agreed text also says member states may add further indicators to this list as a matter of national law. Furthermore, in cases where the legal presumption applies, it will be up to the digital platform to demonstrate that no employment relationship exists according to national law and practice.

Fiona Coombe, SIA, Director of Legal and Regulatory Research, said, “The agreed text is an amalgamation of the suggestions made by the EU Commission and the EU Council. It is a relief that the Parliament’s suggested automatic presumption of employment for anyone working through a platform has been dropped. However, where the legal presumption applies, the onus is still on the digital platform to demonstrate that no employment relationship exists. This may be more difficult and costly than it sounds.”

According to the European Commission, around 5.5 million workers currently classified as self-employed are in a de facto employment relationship with digital platforms and should therefore be entitled to the same labour and social rights granted to employees under EU law.

The deal also ensures that workers are informed about the use of automated monitoring and decision-making systems. It also prevents digital labour platforms from processing certain kinds of personal data by means of automated monitoring or decision-making systems. Such data will include:

• personal data on the emotional or psychological state of platform workers
• data related to private conversations
• data to predict actual or potential trade union activity
• data used to infer a worker’s racial or ethnic origin, migration status, political opinions, religious beliefs or health status
• biometric data, other than data used for authentication

Under the new rules, these systems need to be monitored by qualified staff, who enjoy special protection from adverse treatment. Human oversight is also guaranteed for significant decisions such as the suspension of accounts.

Under the new law, it will also not be possible for a platform to circumvent the rules by using intermediaries, i.e. when workers have a direct contractual relationship with a party other than the relevant digital platform. Member states will have to make sure that persons performing platform work working through intermediaries enjoy the same level of protection as those with a direct contractual relationship.

The provisional agreement will now have to be endorsed by the Council and the Parliament. It will then be formally adopted by both institutions following legal-linguistic revision. After the formal steps of the adoption have been completed, member states will have two years to incorporate the provisions of the directive into their national legislation.

Yolanda Díaz, Spanish second deputy prime minister and minister for work and social economy said yesterday, “Today’s agreement represents a huge step forward for gig workers in the EU. Once confirmed by the Council and the Parliament, it will provide better overall protection for platform workers. In particular it will help ensure that those workers who have wrongly been classified as self-employed have easier access to their rights as employees under EU law.”

Ride-hailing lobbying group Move EU, which represents Uber, Bolt and Freenow, told AP News that it was “deeply concerned” about the agreement and asserts that the rules fail to meet the wishes of platform workers.

“We call on EU Member States to not approve an unbalanced provisional agreement which will create legal uncertainty for hundreds of thousands of drivers throughout the EU,” the group said in a statement.

The European Commission welcomed the political agreement.

Nicolas Schmit, Commissioner for Jobs and Social Rights, said, “The platform economy has transformed the way we consume and work, and we want it to continue to thrive. At the same time, we have to make sure that it meets the same labour and social standards that offline companies adhere to. This is a question of fairness, for both workers and companies.”

“The new rules we have agreed ensure platform workers, such as drivers and riders, receive the social and labour rights they are entitled to, without sacrificing the flexibility of the platform business model,” Schmit said. “Workers will also understand better how automated decisions are taken. Platforms will have legal certainty throughout the EU for the first time. And consumers will continue to enjoy access to platform services at their fingertips. This is a historic achievement.”

UK legal firm Osborne Clarke said the agreement is likely to affect the UK. Kevin Barrow, partner at Osborne Clarke said this is because a new Labour government seems likely to seek legislative convergence with the EU in this area, and there is a groundswell in the UK towards giving gig workers more rights. Furthermore, Barrow added that it seems likely to affect traditional staffing to the extent matching, etc., is automated by the staffing company such that the staffing company is effectively a platform.

Last week members of the European Parliament struck a political deal with the European Council on a bill for harmonised rules on artificial intelligence (AI). The rules categorise recruitment as a ‘high-risk’ AI system.