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European institutions strike a deal on new protections for gig economy workers

The big picture: A provisional agreement between the Council and the European Parliament could soon become law in Europe, offering gig workers transparency and fair treatment. According to the EU, if a “contractor” is required to adhere to the same rules as an employee, they are effectively considered an employee.

The European Union aims to enhance working conditions for “platform workers,” a term encompassing 28 million EU workers, including taxi drivers, domestic workers, and food delivery drivers. Despite being formally self-employed, these individuals work for digital platforms that may exploit them through misclassification of their employment status.

The agreement reached between the Council and the European Parliament pertains to a proposed new directive aimed at ensuring millions of workers have proper access to their employment rights. If approved, the directive would introduce two crucial enhancements to EU legislation: a clear definition of a gig worker’s employment status and effective restrictions on the use of algorithm systems in the workplace.

Yolanda Díaz, the Spanish Minister for Work and Social Economy, stated that the agreement marks a “huge step forward” for gig workers in the EU. Once confirmed, it has the potential to offer comprehensive protection for platform workers and curb potential abuses by major digital platforms.

A significant number of the European Union’s 28 million platform workers are required to adhere to many of the same rules and restrictions as employed workers, according to the EU. This implies that they are, in fact, in an “employment relationship” with the platform holders and should consequently enjoy the same labor rights as employees under national and EU laws.

The draft legislation aims to combat incorrect (and unlawful) classification, asserting that workers are legally presumed to be employees of a digital platform if at least two of the following five conditions are met:

  • there’s an upper limit to the amount of money workers can receive
  • workers’ performance is supervised
  • distribution and allocation of tasks are controlled
  • choice over working hours and working conditions are limited
  • freedom to organize work and rules on workers’ appearance or conduct are restricted

Furthermore, the directive seeks to regulate the use of algorithms for human resources management among platforms. Companies will be required to inform workers about these algorithms, and they will also be prohibited from processing certain kinds of personal data (such as emotional state, private conversations, and ethnic origin) for monitoring or decision-making systems. The use of biometric data will be permitted for authentication procedures alone.

Before becoming law, the provisional agreement must be endorsed by both the Council and the EU Parliament. The directive will then receive formal approval from both institutions after legal and linguistic revision. Following approval, EU member states will have two years to incorporate the new law into their national legislation.

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