By Branka Andjelkovic and Tanja Jakobi, Public Policy Research Center
Since the European Commission proposed the Directive on platform work, at the end of 2021, the debate on how to improve labour conditions for platform workers has continued to gain momentum. The proposal and subsequent discussions revolve around three main topics: 1) how to effectively address the misclassification of employment status; 2) how to ensure fairness and transparency in algorithmic management; and 3) how to enforce applicable rules in diverse national contexts.
This blog in broad strokes illustrates how platform work differs within the EU as well as between the EU and EU candidate countries like Serbia, and asks if the directive is too narrow in scope and focused on selected issues prominently playing in the largest EU countries often situated on the western shores of the Union.
The case of Serbia, a country dominated by online platform workers
Serbia as well as some Central European¹ and Southeast European² countries have a significantly larger online workforce compared to the on-location platform workforce. For example, in Serbia there are ten times more workers on platforms similar to Upwork than on platforms similar to Glovo. The same division of labour more or less applies to all Southeast European and most Central European countries. As a result, the social partners, researchers, and platform workers themselves are predominantly interested in finding a solution for the labour status of online platform workers. This is in contrast to the situation in the countries predominantly situated on the western shores of the European Union, where there is a prevalence of precarious, often migrant on-location platform workers.
Although the Directive’s focus is on digitally-mediated work, both online and on-location (on-demand), aiming to provide universal rights to all platform workers, the solutions offered and the current debate surrounding the Directive are primarily focused on on-location work, while the online aspect is largely overlooked. The proposed directive is too narrow-sided, tackles mainly low-skilled, on-location platform workers, i.e riders. Therefore, the Directive is hardly applicable to platforms, such as Upwork, which are registered in the United States and elsewhere, making it difficult for national legislators to impose their own rules on them. From this perspective, the current directive offers very little guidance on how to address the specific issues facing platform workers in the above-mentioned countries.
Moreover, there is no unanimity on the definition of platform worker, especially an on-location platform worker, within the EU nor between the EU and the candidate countries. Namely, on-location platform workers in these countries are relatively rarely engaged as independent contractors and much more often as employees in the “fleet companies” or so-called Third-Party Logistics (3PLs), business entities who are in turn business partners of the platform companies. Although on the surface, through these entities (3PLs), on-location platform workers receive regular employment contracts, in reality, these contracts are often abused leaving workers with little or no access to social insurance and other protection. Platform workers do not object as they are usually well-educated individuals who left their regular but low-paid jobs for irregular but well-paid engagement in on-location platform work. Thus, they rarely go on strike, but even when they do as the Wolt riders in Serbia and Croatia these days, they rarely sue platforms in courts. Given their small number, apparently regular employment contracts and invisibility, they are out of the focus of the Directive itself.
Namely, Article 3 — Correct determination of the employment status of the proposal of the directive defines a platform worker as any individual who works through the platform, regardless of their contractual relationship with the platform. While this is meant to help identify cases of employment relationships, it actually narrows the field of application, as it only applies to platform workers who are registered as independent contractors. For platform workers engaged through third-party logistics providers (3PLs), who have a contractual relationship with another entity between them and the platform, the mentioned criteria cannot be applied due to the restrictions in Article 3 of the proposal of the Directive.
Potential solutions to the current platform worker protection gaps
The remedies might come from somewhat unexpected corners of legislation: the first is related to Germany’s new Supply Chain Due Diligence Act which is expected to become a model for the similar EU supported legislation. The Act might offer a glimpse of hope for those online platform workers who are out of the scope of the Directive. Namely, the Supply Chain Due Diligence Act focuses rather on clients that procure work through platforms then on platforms themselves. The Act stipulates that the large companies based in Germany or German-registered branches of foreign companies need to set up processes to identify, assess, prevent, and remedy human rights and environmental risks and impacts in their supply chains, and in their own operations. They must also make sure they provide ways for employees of indirect suppliers (suppliers they do not have a direct commercial relationship with) to file a complaint alerting the company to human rights or environmental violations, including the online platform workers they engage. This solution, as demonstrated, successfully solves the problem of global platforms being registered out of the hand of national legislators.
The second solution comes from the national level. Namely, the legislators might successfully argue that the platforms are abusing the 3PLs concept which was originally meant to serve the needs of manufacturing companies to hire economic entities to provide them with storage and transportation services for the needs of their products. With 3PL contracts used in platform work the emphasis is not only on providing logistical support in relation to the storage and transportation of goods — but above all on providing real-time information regarding where the goods are and how they will reach the specific user. Bearing in mind the mentioned characteristics of 3PL contracts, the conclusion is that we cannot put a sign of equality between them and the previously described contracts that digital platforms conclude with the so-called partner companies for delivery purposes. By dissembling the current relation platforms-3PLs, the national legislators may create space for applying the Article 3 of the Directive.
- Such as Czech Republic, Slovakia, Poland
2. Such as Romania
* The blog is published as part of the Reshaping Work efforts to stimalute timely debate. The opinions and views expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of Reshaping Work.