We come across platform work daily, but do we know how it works? Platform work is a new way to hire paid work on online platforms. Online users can access platform workers who offer a wide range of paid services. These platforms include Uber, Wolt, Deliveroo, Glovo, to name a few.
Both consumers and labor can gain significantly from the platform economy, part of the broader phenomenon known as the gig economy. Digital platforms make it simpler for anyone to become self-employed and earn regardless of socioeconomic standing by having low entry requirements and flexible working hours. In the same way, digital platforms provide many benefits for users as they increase consumer choice and convenience. Therefore, the platform economy is growing immensely. According to the European Commission (Commission), in 2020, the platform economy generated around €20 billion in income, and there were more than 500 digital labor platforms and over 28 million platform workers in the EU alone.
The current state of play is that platforms generally always classify their employees as independent contractors, meaning that they have little or no access to labor protections, including collective bargaining rights, health and safety protections, and social security programs under most European legal systems due to vague legal frame around it. Additionally, their wages are rarely predictable, and their working conditions differ depending on the platform type.
Aiming to ensure sustainable business growth on one side and ensure better working conditions for the platform workers as the main point of controversy, the Commission proposed a Directive on improving working conditions in platform work (Proposed Directive) in December 2021. The Directive provides a list of requirements that help determine whether the platform is an employer. Based on the Proposed Directive, the platform is legally assumed to be an employer, provided it satisfies certain conditions. According to projections, the new guidelines could reclassify between 1.7 million and 4.1 million workers.
The following benefits will be available once the platform workers classify as workers: paid holidays, rest time, national or sectoral minimum wage, safety and health protection, unemployment and health care, parental leave, pension rights, and all the benefits connected to accidents at work and occupational diseases.
This move will surely be a big step towards improving platform workers’ rights, which seem not to be protected entirely at the EU level. On the other side, platforms will rely on the fact that the same rules will apply EU-wide, making their business model more predictable.
The situation is almost the same in the Western Balkans as in most EU countries. The platforms do not act as official employers but hire self-employed workers by establishing entrepreneurial companies or through agencies. In some cases, agencies, for example, reserved the right to retroactively fire a worker one day before an injury, aiming to prevent them from exercising the right to insurance. Current legal norms allow platforms to interpret them in their favor, and labor inspections often fail to protect workers’ rights due to a vague legal framework. Additionally, platforms often hire workers through temporary contracts, and therefore they fail to obtain their rights to social and health insurance, which, according to labor laws, are reserved for employees with permanent contracts.
The good news is that things in the EU are changing for the better for platform workers, especially with the proposed Directive. This will protect workers’ rights and ensure enough transparency as, according to the proposal, platforms will be obliged to provide national authorities with all the information regarding their operations and the individuals who use them. Moreover, platforms may benefit from the new rules as the process will be transparent and applied equally to everyone, ensuring the platform economy’s sustainability. Even though the situation with the rights of platform workers is slightly worse in the Western Balkans, the new Directive will stimulate the countries to align with it, which will improve the status of the platform workers and ensure the sustainability of platforms, through the unique set of rules, to the satisfaction of users.
Authors: Branko Gabrić and Milica Novaković
