The Social Security Impact of the Proposed Directive on Improving Working Conditions in Platform Work
On 9 December 2021, and after a long process of preparation (including two public consultations), the European Commission finally published its proposal for a Directive on improving working conditions in platform work, firmly anchored in the EU pillar of social rights. The proposal presented some important implications for the implementation of social security schemes (such as, potentially, those relating to unemployment or incapacity). In particular, it required digital labour platforms to declare and inform social protection authorities of the work performed through the platform and to share with them relevant data, among other aspects. It is important that these implications are maintained in a final instrument, as suggested by the Parliament in its position for trilogue negotiations.
On needs and means
When preparing the proposed Directive on improving working conditions in platform work, the Commission faced two realities in relation to social security issues.
The first one is that platform workers often face problems accessing social security protection. This is due, in part, to the fact that access to adequate social protection in many Member State still depends on employment status. But even for employed platform workers, the fragmented character that is typical of this form of work makes both traceability and the fulfilment of minimum insurance periods often a challenge. In view of the EU’s commitment to fight issues of social protection experienced by many non-standard workers, these issues required EU action on the point, independent of employment status.
The second one is how notably difficult it is to create binding EU rules on social protection due to the current distribution of competences and the demanding legislative procedures required to do so, as well as a typical lack of political consensus. Initiatives on social security protection often need to rely on the social security clause of Art. 153(1)(c) TFEU, which requires unanimity within the Council for approval. Some recent (and, arguably, very needed) EU initiatives relying on said legal basis have ended up being enacted via non-binding instruments, as was the case with the Council Recommendation on access to social protection of November 2019 and the Council Recommendation on adequate minimum income of January 2023. Even when only majority voting is required, like in the field of social security coordination for persons exercising their right to free movement (based on Art. 48 TFEU), the EU struggles to adopt measures. This can be observed in the long (and, to date, unsuccessful) process to reform the Coordination Regulations (i.e. Regulations 883/04 and 987/08). The reform has been dragging since 2016 with the Swedish Presidency trying to relaunch it in the spring of 2023.
Walking the line – the EU Commission’s proposal on platform work
In order to face this conundrum for the field of platform work, the Commission chose to put forward an instrument with a primary focus on working conditions but relying on a dual legal basis that allowed for some social security relevance. This is particularly the case concerning the provisions on transparency on algorithmic management and on platform work information, which rely on a legal basis (i.e. Art. 16(2) TFEU on data protection) that allows for a broader social protection relevance than the general legal basis used for the proposed Directive, namely the clause on working conditions (i.e. Art. 153(2)(b) TFEU in conjunction with Art. 153(1)(b) TFEU).
While the Commission mentions the relevance of the legal presumption of employment for social protection purposes in recital 24, it shies away from explicitly regulating it. Instead, it loosely refers to the employment presumption being applicable in ‘all relevant administrative and legal proceedings’ and to all ‘competent authorities verifying compliance with or enforcing relevant legislation (…)’ (Art. 4(1) Commission proposal). However, this allows for some fragmentation in applying the legal presumption between the fields of labour law and social security law.
Different is the case of the provisions on transparency in algorithmic management and platform work information (in Arts. 11, 12 and 19), in which the Commission explicitly mentions ‘social protection authorities’ as entities concerning which these provisions apply. In this regard, Art. 11 would require digital labour platforms who are employers to declare the fact that platform work is being performed to labour and social protection authorities, including the sharing of relevant data. Art. 12 of the Commission’s proposal, in turn, would provide key information not just on individual situations, but on the activity of the platform as a whole, as it requires platforms to inform the competent authorities on aspects such as the number of persons performing work in a regular basis through a specific platform, as well as the terms and conditions. This information could be of great use for social protection authorities to make decisions on their design and enforcement.
Finally, the provisions on transparency in algorithmic management (and especially Art. 6, in connection with Art. 19) would ensure that social protection (and tax) authorities have access to some important and very relevant information when assessing the employment status and other aspects of the working conditions of platform workers, all aspects that, again, are fundamental for assessing rights and obligations in cross-border situations.
The EU Parliament’s push for maintaining the social protection relevance
The European Parliament’s position for trilogue negotiations addressed several limitations of the Commission’s proposal. For example, it extends the scope of the obligation to declare platform work under Art. 11 to include the situation of all persons performing platform work, no matter their contractual designation. It also sheds some light on the process of cooperation between public authorities of different Member States when transferring such information, as well as clarifies what exactly ‘declaring platform work’ encompasses.
The Council’s conservative and narrower position
The Council’s general approach goes in the opposite direction, taking a very clear stance: it eliminates almost every single mention of social protection from the text of the proposal, both from the Recitals and, more importantly, Arts. 11, 12 and 19. Without such mentions, Member States would be left without any indication on whether these provisions should be applied to social security purposes, with the potential result of a fragmented and uneven regulation of these obligations across the EU. Some Member States may thus implement the Directive for social protection purposes, while others may limit the implementation to labour law purposes only. Moreover, the Council’s general approach explicitly states that Member States are not required to apply the legal presumption to tax, criminal and social security proceedings (even if it allows the national legislators to decide whether to go further on that point, failing to ensure a common approach across the EU on this aspect).
Furthermore, the Council’s general approach states (Art. 20a) that Member States may allow the social partners to establish by way of collective agreement arrangements concerning platform work which differ from the provisions of the directive on information and transparency (from Arts. 8a, 9, 11 and 12 of this Directive). Moreover, the safeguard provision that such derogations should respect ‘the overall protection of platform workers’ is obviously something hard to determine, as demonstrated in relation to a similar provision in the Temporary Agency Work Directive.
Red lines for the trilogue negotiations
At the very least, the explicit requirement that digital labour platforms provide certain information to ‘social protection authorities’ (and not just to ‘relevant authorities’) should be maintained. Similarly, it is important that Art. 19 be adopted, providing for the cooperation of data protection authorities (responsible for monitoring the application of the provisions on transparency in algorithmic management) and social protection authorities. Finally, the Council’s approach of dispensing with the application of the presumption of employment in social security and tax proceedings, should not be present in a final version of the Directive.
The author would like to thank in particular Catherine Jacqueson, Six Silberman, Eva Kocher, Christina Hiessl, Isabelle Daugareilh, Aude Cefaliello, Daniel Pérez del Prado, Olga Chesalina, Adrián Todolí and Miriam Kullmann for discussions on this and closely related topics. The research on which this post has been based was performed in the framework of the Reshaping Work and Welfare in the Digital Age (WorkWel) research project (No 118164), which has received funding from the Independent Research Fund Denmark. The views expressed in this post represent only its author’s own.
Barrio, Alberto: A Hidden Battlefield: The Social Security Impact of the Proposed Directive on Improving Working Conditions in Platform Work, VerfBlog, 2023/7/20, https://verfassungsblog.de/a-hidden-battlefield/, DOI: 10.17176/20230721-012058-0.