As technology advances, we must strengthen social institutions. Growing agreement could allow policymakers to prepare the ground for action, with the goal of offering realistic solutions for everyone in the “platform economy.”
Author: Antonio Aloisi, Assistant Professor of European and Comparative Labour Law at IE Law School
Based upon an online public consultation and after promoting social dialogue, the Spanish government is considering adopting a new regulation on certain aspects of platform work, incited by the mounting litigation over the legal status of gig workers—mostly couriers in the food-delivery and logistics industries. Weeks ago, Spain’s Supreme Court ruled that riders working for a food delivery app were employees, not self-employed workers. This blog offers some insights on this emerging phenomenon from a purely policy perspective.
“Platform-mediated work” is a non-standard form of employment where a digital infrastructure enables the matching of labor demand and supply. It often organizes performance by means of guidelines, rating systems and other internal mechanisms. The scale, pace and volume of this socioeconomic trend is adding new impetus to discussions in several fields including public, competition, labor and tax law. When it comes to analyzing employment-related implications, it can be said that platforms engage with “providers” who are pre-emptively and predominantly classified as self-employed workers. Despite this, many of these platforms exert some degree of managerial prerogative, albeit in a sophisticated manner, while avoiding the vast bulk of direct employment obligations. Hence, platforms are embroiled in several lawsuits relating to the appropriate classification of workers.
Recently, there has been intense activism both at the EU and at national level. In France and Italy, where a binary distinction between employment and self-employment still exists (although the Italian framework has admitted intermediate solutions), two different policy options have been implemented. On the one hand, the French law enacted in 2016 defines a special regime of “social responsibility”: platforms must respect a set of insurance and training obligations towards “dependent” self-employed platform workers. On the other, by adopting an anti-fraud approach, the Italian government expanded the full coverage of mandatory employment protection for a subset of workers who are “autonomous yet organizationally dependent” on the client. Overall, the two approaches purport to address the issue of worker classification in an inventive way, as it represents an essential gateway to employment protection. What can we learn from this recent regulatory engagement?
1. Despite the multiple efforts to draft a far-reaching and accurate definition, it can be said that there is no such a thing as “platform work.”
When considering the implications of work patterns mediated and organized by constantly connected digital tools, many variables must be taken into account (location, sector, organization, flexibility, forms of management, methods of payment, etc.), thus leading to a situation where differences far exceed shared characteristics. For this reason, regulators need to resist the idea of a singular and homogenous form of work deserving one-size-fits-all interventions. From a policy perspective, this may prove to be ineffective, if not even detrimental: excessive precision results in undercoverage.
2. Notwithstanding the heterogeneity of the phenomenon, we must distinguish between two major classes of platform work: activities performed remotely, potentially from all over the world, and those performed on a local level.
These two categories of services have been referred to as “crowdwork” and “work on demand via platform,” respectively. This broad-brush distinction is appropriate as many ongoing initiatives are only addressing activities performed on location (i.e. transport, delivery, household services, etc.). There are several explanations for this, one being that workers operating in specific locations are more visible, and they have been able to join forces and exert pressure on social partners and rule-makers. Yet “crowdwork” features critical elements that cannot be underestimated, even if it might be difficult to determine the most appropriate level of intervention. This is an important point which should not be forgotten.
3. Regardless of the size of this phenomenon, it is undeniable that a large number of workers face the looming consequences of the inefficacy of labor protection resulting from a combination of deliberate attempts to circumvent legislation and the ambiguity of certain areas of law.
This demonstrates in a more vivid manner that further emphasis must be placed on enhancing the social dimension—by making good and sustainable jobs an urgent priority for all stakeholders—as well as the need to strengthen the enforcement of widely recognized rules and to ensure compliance with basic provisions. This also raises issues about the willingness of national governments to deliver a stronger social agenda in times of digital transformation. The Covid19 pandemic has once again revealed that precarious work makes our societies precarious and our democracies vulnerable, since insecurity for individuals has huge social reverberations. We need to act, and act fast.
4. Local initiatives specifically tailored to platform work are very rare, and concrete policy interventions are lagging behind. The platform economy is an ideal testbed for assessing the suitability of the “binary divide” between employment and self-employment that can be found in many legal orders.
However, we must acknowledge that the debate echoes long-lasting discussions on whether a dualistic option (allowing for only a few exceptions in some countries) can provide adequate responses to a world of work where a large number of unprecedented organizational templates are on the rise. While alternative options can overcome the classification dilemma by broadening the scope of protective measures selected to include all vulnerable self-employed workers, evidence from past experiences shows us that the adoption of “third or intermediate categories” can result in widespread arbitrage favored by the existence of a low-cost alternative to employment.
5. Now that techno-deterministic enthusiasm has waned, there is a more scrupulous way of looking at work practices in the platform economy, including management by algorithms and workforce analytics.
Having dismissed the idea that self-proclaimed “disruptors” can be allowed to operate in a permissionless environment based on unjustified favorable treatment, it has now been acknowledged that many working patterns are in no way novel. In fact, they belong to the long-standing catalog of non-standard and casual forms of employment, possibly even generating unfair competition. EU and international institutions have a long tradition of intervention in the area of atypical employment. Therefore, each initiative in the framing of a (new) regulatory framework must, by necessity, involve a careful impact assessment of existing schemes and, possibly, their application or revision.
The more technology advances, the more urgent the need to strengthen social institutions.
Finally, a reminder. The new Directive on Transparent and Predictable Working Conditions could mark the start of much-needed adaptation of pre-existing legal tools to new needs that have emerged from the ongoing “digital transition.” There is indeed increased necessity for non-standard workers “regardless of the specific working arrangements” to be fully informed about their essential working conditions, in a timely manner and in written and accessible form (including by electronic means). The most important rights which platform workers could benefit from are the limitations to the use and duration of “atypical” contracts, the ban on unnecessary exclusivity clauses, and the possible definition of a rebuttable presumption of the existence of an employment contract with a guaranteed amount of paid hours based on hours worked in a preceding reference period. A purposive interpretation of the protective aims of the Directive could lean towards the inclusion of many non-standard workers in its (seemingly narrow) personal scope of application. All eyes will be on the transposition at the domestic level, where national governments can take bold action on this.
The more technology advances, the more urgent the need to strengthen social institutions to better harness its beneficial potential. After uneven development in recent times, this renewed involvement could trigger the implementation of a stronger social agenda promoting rights for non-standard workers—praised as “essential”—regardless of their nominal classification.
The author provides a more comprehensive discussion of this topic in “Platform Work in the European Union: Lessons Learned, Legal Developments and Challenges Ahead,” European Union, 2020, paper prepared for the Conference “Exploring ways to improve working conditions of platform workers: the role of EU labour law.” Available at: https://ssrn.com/abstract=3556922
Antonio Aloisi is an assistant professor of European and Comparative Labour Law. Prior to joining IE University, he was a Max Weber postdoctoral fellow at the European University Institute (EUI), Florence and an academic fellow at Bocconi University, Milan. His research focuses on forms of work in the so-called “platform economy,” the effect of digital technologies such as artificial intelligence and algorithms on labor regulation, and new processes of collective action.
Note: The views expressed by the author of this paper are completely personal and do not represent the position of any affiliated institution.