Clarity on worker status can help ensure fair work in platform economy

Platforms bring many benefits to the economy, such as helping job creation and giving workers more flexibility and independence – but they can still carry many risks for both the labour force and society


The European Economic and Social Committee (EESC) has urged the EU and Member States to work to clarify terms of employment in the platform economy as lack of standardised definitions of both workers' and employers' status can complicate the application of labour legislation and many labour protection rights.

The main concepts that need clarifying are those defining platforms as "supply and demand intermediaries" rather than "employers". This leads to workers being considered "self-employed" rather than "employed", often stripping them of legal and social protection, including health and safety at work or employment protection, the importance of which has especially come to the fore during the current pandemic.

The EESC argues that the EU and Member States should take steps to regulate the status of platform workers by adopting the concept of economic dependence and subordination as their yardstick for determining whether a worker is employed or self-employed. Platform workers whose livelihoods depend mainly on what they earn from this work and who are in a subordinate work relationship are thus to be considered as employed.

In the EESC's view, the EU and Member States should carefully consider applying the principle that a worker is regarded as an employee in the absence of proof to the contrary. However, genuinely self-employed workers should be able to keep that status if they so wish. The Committee also believes that the algorithms used by platforms should be treated in the same way as spoken or written instructions in conventional work.

These arguments were put forward in the EESC's opinion "Fair work in the platform economy", adopted at its September plenary session and drafted at the request of the German EU presidency.

In the words of the opinion's rapporteur Carlos Manuel Trindade: We believe that all workers should have access to a set of rights and protection, regardless of their employment status or type of contract, guaranteeing that some platform operators cannot gain a competitive edge by not meeting obligations and responsibilities. Social dialogue and collective bargaining must play a key role in the platform economy. We should also ensure that platforms provide information which would allow for transparency, predictability and fair treatment for all.

Listing work flexibility and autonomy, supplementary income for workers and easier access for vulnerable people to employment among the benefits brought by the platform economy, the EESC also warned of the risks, which were not be underestimated.

Workers risk having their basic rights denied, including their rights to organise themselves and to collective bargaining. Low pay and precarious jobs are also worrisome, as is the absence of social security arrangements.

The EESC also warned of the threats for society as a whole, given the increased risk of competition based on undercutting social standards. This also has harmful consequences for both employers, who are subject to unsustainable competitive pressure, and for Member States, who lose tax revenue and social security contributions.

Since social matters are the responsibility of Member States, the Committee recommended drawing up guidelines which would define employment status on platforms and safeguard workers' rights and protection. Another suggestion is to compile codes of conduct, with the involvement of platforms, workers and consumers, that would bring together the best principles and guidelines on pay, working conditions and quality of service.

The measures applied so far, mostly at national level, to achieve fair work on platforms have as yet failed to provide a proper answer.

With a view to establishing an international governance system for platforms, as proposed in the report of the Global Commission on the Future of Work, the EESC had earlier recommended that the European Commission, the OECD and the ILO work together with the social partners and wider civil society organisations to design adequate provisions on decent working conditions and the protection required.

Despite its rapid growth in recent years, the platform economy still carries little weight. According to the OECD, most studies show that platform work accounts for between 0.5% and 3% of the total labour force. In a group of 16 European countries, only 1.4% of the population aged between 16 and 74 are platform workers as their main job (ranging from 0.6% in Finland to 2.7% in the Netherlands).

It remains difficult to estimate the scale and growth of platforms due to their complexity and the lack of standardised concepts and statistical data.