The European Parliament’s Employment and Social Affairs Committee overwhelmingly gave its backing to the EU Platform Work Directive agreement last week. Out of 40 MEPs on the committee, 37 voted in favour, three against. This now paves the way for ratification by the whole of the European Parliament next month.
Why is it controversial?
The wording of the directive has been under discussion since 2021, and has been controversial as some EU nations do not want to stifle growth of the gig economy. However everyone agrees on the need to protect workers from possible exploitation by the platforms engaging them. So there is broad support for the concept of the Platform Work Directive, but the sticking point has been in how it will operate in practice.
Presumption of employment
The most important element of the new legislation will be the presumption of employment. This means that all gig workers engaged within the EU will be presumed employees, and it will be for the platform to disprove this. It means that gig workers should automatically be entitled to receive statutory rights unless the platform engaging can prove they are genuinely self-employed.
The provision of rights such as NMW, holiday, SSP and pensions auto-enrolment is likely to be very costly for many platforms, which could increase prices and/or constrain the platform’s flexibility.
Subject to nations own criteria
The new legislation recognises that it is going to be controversial to implement, and that there is considerable variation in employment laws in each European nation. For that reason the presumption of employment will be subject to each member nation’s own criteria, so there will be no parity throughout Europe. This means that a practice that could be exploitative in one nation might be acceptable in another.
How is it relevant to the UK?
Strictly speaking EU legislation does not affect the UK due to Brexit. However, the Platform Work Directive is certainly one to watch because the presumption of employment is an innovative policy which has never been done before. The UK government has been grappling with employment status for many years now, but following numerous consultations they have made no progress. Despite the lack of progress, the government does want to simplify employment status given the never-ending volume of high profile employment status cases hitting the headlines.
So, if the EU legislation is successful and/or perceived as a vote-winner then the UK government may choose to create similar legislation here. And that could have far-reaching implications for the whole freelance and self-employed workforce.
