European Parliament approves platform worker directive

The European Parliament has overwhelming approved measures to ensure millions of people working for gig economy platforms have their employment properly classified, while also regulating how they are being algorithmically managed at work.

Initially proposed by the European Commission (EC) in February 2022, the approved “platform worker directive” introduces a “presumption of employment”, meaning millions in Europe working for gig economy platforms such as Uber, Deliveroo, Amazon Mechanical Turk and others could be reclassified as “workers” rather than “self-employed”.

The distinction is important because being classed as a direct employee would entitle the workers to a much wider range of rights and protections in the workplace. The directive – passed with 554 votes in favour and 56 votes against – will also reverse the current burden of proof in employment disputes, meaning it is now on the platform to prove that there is no employment relationship.

However, while previous versions of the directive included detailed criteria for when the legal presumption of employment would be triggered, these have been jettisoned from the latest version in favour of placing an obligation on member states to create presumption mechanisms within their own national systems.

The directive will also attempt to regulate the use of algorithms and data in the workplace in a number of ways, including by ensuring that a person performing platform work cannot be fired or dismissed based on a decision taken by an algorithm or an automated decision-making system. Instead, digital labour platforms will have to ensure there is human oversight of important decisions that directly affect workers.

It will also prohibit digital labour platforms from processing certain types of personal data about their workers, such as information about their personal beliefs and emotional or psychological states.

Improved data transparency will also extend to placing obligations on platforms to inform workers and their representatives on how their algorithms work, as well as how a worker’s behaviour affects decisions taken by automated systems.

A European Commission analysis from 2021 found that digital labour platforms (more than 500 of which are currently active in Europe) collectively employ more than 28 million people – a figure that is expected to reach 43 million by 2025. It added that at least 5.5 million of these workers could be wrongly classified as self-employed.

“With this directive, up to 40 million platform workers in the EU will have access to fair labour conditions. This historic deal will give them dignity, protection and rights,” said Italian MEP and rapporteur of Committee on Employment and Social Affairs (EPML), Elisabetta Gualmini.

“It will correct bogus self-employment and prevent unfair competition, protect true self-employment, and introduce ground-breaking rules on algorithm management. This will become a real benchmark at global level. I am proud to say: Europe protects its workers, its social model and its economy.”

Pierre-Yves Dermagne, the Belgian deputy prime minister and minister for the economy and employment responsible for negotiating the directive on behalf of the European Council, added: “This is the first-ever piece of EU legislation to regulate algorithmic management in the workplace and to set EU minimum standards to improve working conditions for millions of platform workers across the EU.

“The agreement confirmed today builds on the efforts of previous Council presidencies and reaffirms the social dimension of the European Union.”

Once the text has been formally adopted by the Council and published in the Official Journal of the EU, member states will have two years to incorporate the provisions of the directive into their national legislation.

In mid-April 2024, the UK’s Trades Union Congress (TUC) published a “ready-to-go” law for regulating artificial intelligence (AI) in the workplace, setting out a range of new legal rights and protections to manage the adverse effects of automated decision-making on workers.

TUC policy officer Mary Towers said the approval of the platform directive demonstrates the extent to which the provisions in the TUC's AI Bill are already being advanced in other jurisdictions.

“The passing of this directive shows just how timely the TUC’s AI Bill is, and given the similarities demonstrates that our bill is rooted in common sense solutions that have attracted consensus internationally,” she said.

“Like the directive, our bill has provisions on human oversight of algorithmically driven decision-making, as well as collective information and consultation rights. On human review, our bill sets out a series of specific requirements, including the person carrying out the review being suitably trained, able to discuss and clarify the reasons for the decision.”

Specific provisions in the TUC bill include making employers carry out detailed Workplace AI Risk Assessments (WAIRAs) both pre- and post-deployment, create registers of the AI decision-making systems they have in operation, and reverse the burden of proof in employment cases to make it easier to prove AI discrimination at work.

Under the WAIRA framework, the bill would also establish consultation processes with workers, a statutory right for trade unions to be consulted before any high-risk deployments, and open up access to black box information about the systems that would place workers and unions in a better position to understand how the systems operate.

“The clear direction of travel now is towards regulation of AI at work – our ready-to-go bill gives UK law makers the ability to act quickly to protect workers, and give certainty to employers and business,” said Towers.