Transform the platform into the right work-form

By: Ruben Houweling (Professor of Labour Law at Erasmus School of Law, Rotterdam, The Netherlands)

At the dawn of summer holidays, we reflect on the first half of 2020 and without a doubt the impact and consequences of Covid-19 predominate. At the same time, many important and relevant things are happening in the field of labour law. I could recall the impact of the AMFB-ruling (determination of which undertaking is the ‘employer’ in social security law) or Yodel (classification of couriers engaged under a services agreement). In this academic insight I would like to draw your attention to the EP Briefing called ‘Platform economy and precarious work: Mitigating risks’ (April/June 2020).

This briefing gives you an overview of recent research, recommendation and views by relevant stakeholders. According to this briefing recent research consistently points to the unclear employment status of platform workers as the main challenge in platform work, given that platform work is performed in a triangular relationship and platform workers enjoy considerable flexibility. Platforms typically specify that workers are self-employed, irrespective of the conditions under which they work. This may be a misclassification and lead to bogus self-employed workers.

Two main legislative pathways are proposed to tackle the challenges of platform work in the medium run: (i) a directive on fair working conditions in the platform economy with a rebuttable presumption that the platform worker is employed as worker, a single directive ensuring equal treatment between all forms of non-standard work and standard work or an adjusted Temporary Work Agency directive for online crowdwork; (ii) a regulation on the digital services facilitated by online (work intermediation) platforms, regulating some fundamental rights and obligations concerned with the contractual relationship and use of data, applicable to all users (platform workers regardless of their employment status and clients regardless of their status as consumer or undertaking).

The briefing shows us once again that tackling the challenges of the digital platform economy needs, as always, a multi-disciplinary approach. First of all we need a good understanding ‘why’ platforms function as they do and why there is – in certain countries such as The Netherlands – an increasing number of self employed workers (even during Covid-19) using these platforms. The desire to access preferential tax treatment is one of the main drivers for such workers. At the same time current employment regulation is too much of a burden for certain employers, who then prefer to use platforms which enable them to be entrepreneur with a very flexible group of workers. And then of course there always is the socio-economic point of view that platforms might create work for a certain group on the labour market that is not activated yet. If this would be the complete analysis, then the way forward should be ‘tax reform’, ‘national employment regulation reform’ and support platforms to fulfill the ‘bridge function’ on the labour market.

Of course there is more. When platforms in fact post workers in companies to perform ‘core business’ on an unregulated basis, than there is every reason to be alarmed. I’m not sure if specific regulation is the way forward. I’m more in favor of using the current legal framework. I think that the CJEU shows us that with extended interpretation of current legislation a lot can be achieved. In this regard, I support the suggestion of Ratti (2017) to interpret or adjust the Posting of Workers Directive in such a way that it includes (a lot of the) platforms. At the same time, regulating platform work is not enough. We need new international corporate taxation rules for the digital economy to provide a level playing field for companies and to make sure that these platforms contribute to e.g. local social security schemes.

Last but not least… we must not hold on to the past, because the future is too uncertain. In other words, combating platform work because we’re not willing to reform existing institutions and regulation, is not the way forward. And in reforming existing institutions and regulations ILO and OECD have done some very interesting preparatory work: protection regardless the contractual basis (including self-employed), social security schemes for all, life long learning for all. So yes, let’s tackle the outliers of platform work and at the same time profit from the new economy while in the meantime we reform our regulation of work. Food for thought… on your summer holidays!