Wednesday 24 April 2019

Workers’ rights in the gig economy: is the new EU Directive on transparent and predictable working conditions in the EU really a boost?

Bartłomiej Bednarowicz, PhD Researcher at the Faculty of Law of the University of Antwerp

Last week, the European Parliament approved the Directive on Transparent and Predictable Working Conditions in the European Union, which interestingly is the very first legally binding instrument that has been fleshed out from the European Pillar of Social Rights (EPSR) proclaimed by the European Commission, European Parliament and the Council in 2017. [Update: the Directive was published in the EU Official Journal in July 2019]

In short, the Pillar, which consists of a set of 20 principles and rights, is to serve as a way to deliver new and more effective rights to the citizens in 3 main categories: equal opportunities and access to the labour market, fair working conditions and social protection and inclusion. It is designed as ‘a compass for a renewed process of upward convergence towards the future of social Europe’. However, it lacks any solid enforceability vis-à-vis the Member States, so at least for the time being it is more of symbolic value, yet with a fully-fledged boosting potential to become a catalyst for the Court of Justice while interpreting the Directive on Transparent and Predictable Working Conditions.


The Directive, proposed by the Commission as a Christmas present in 2017, is to repeal the archaic Directive 91/533/EEC on an employer's obligation to inform employees of the conditions applicable to the contract or employment relationship (‘Written Statement Directive’) which dates back from 1991 when no one supposed that the world of work would undergo such a transition and that people will be using apps like Uber or Deliveroo on a daily basis. The new Directive’s primary objective is to improve the working conditions by promoting more transparent and predictable employment while ensuring labour market adaptability. It covers all workers in all forms of work, including those in the most flexible non-standard and new forms of work such as zero-hour contracts, casual work, domestic work, voucher-based work or even platform work. According to the Impact Assessment presented by the Commission, the coverage will extend up to 2-3 million workers, including 3% of platform workers, overall impacting 200 million workers in the EU.

The adopted Directive

The Directive guarantees that all workers within its scope, regardless of the specific working arrangements they are engaged in, should be provided with more thorough and complete information regarding the essential aspects of their work, which are to be received by the worker – depending on the nature of the information, either within first 7 days or within a month since the employment commences. Workers will also have a right to be informed within a reasonable period in advance when exactly their employment will start, which is especially important for those with very variable working schedules that are to be determined by the employer in cases of on-demand work or zero-hours contracts. Workers ought to also have a right to seek additional employment by having widespread exclusivity clauses prohibited. Probation periods are limited to 6 months and can be extended only in exceptional circumstances. The Directive comes also with substantiated provisions on enforcement and introduces the reversed burden of proof to ensure that workers will effectively benefit from these rights and will not be subject to adverse treatment or consequences because they have exercised their rights.

More importantly, the Directive has a broad personal scope of application, although the initial proposal foresaw a wider ambit. For the first time in the history of EU employment law, the Commission presented a codified concept of a worker derived from the CJEU case-law. However, some Member States were far from being happy with the new proposal, so heated discussions in the Council were to be expected soon after the reasoned opinion came in from the Swedish Parliament asserting that the draft does not comply with the principle of subsidiarity.

As suspected, the proposal underwent some serious modifications in the Council which undercut its most ambitious proviso relating to the introduction of a Union definition of a worker. What is left in this regard, is ‘an employment contract or employment relationship as defined by the law, collective agreements or practice in force in each Member State with consideration to the case-law of the Court of Justice’. This severely undermined the Commission’s initial intentions to safeguard a unilateral personal scope of application that would preclude Member States from policing that very definition rigidly.

The case-law on free movement identifies that ‘the essential feature of an employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration’ (Case 66/86 Lawrie-Blum) provided ‘the pursued activity is genuine and effective, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary’ (Case 53/81 Levin). Member States can nevertheless decide not to apply the Directive to workers whose predetermined and actual working time is equal to or less than an average of three hours per week in a reference period of four consecutive weeks. However, for those engaged in zero-hours contracts, i.e. contracts that do not stipulate guaranteed working hours and do not create any obligations for the employer to offer the job and for the worker to accept the offered job, do not enjoy such an exclusion, so the Directive applies in full.

The reasoning behind it is that such workers constitute the most vulnerable workforce prone to experience precarity dictated by low income and unstable employment. On top of that, in cases of irregular work patterns, workers on zero-hours contracts or else engaged in on-demand work can be only called into work within the time frames they have made themselves available to the employer. If they are called in outside their reference hour period, workers are allowed to refuse the job assignment and cannot be subject to any adverse consequences by the employer, i.e. not calling the worker in again. In situations where the employer cancels a previously agreed work assignment, workers will be also entitled to compensation. This surely gives certain stability for the workers who are working on contracts with a variable working pattern.

What is more, special provisions are addressed to the Member States to prevent abusive practices of employers when it comes to on-demand work. Therefore, Member States can take measures to fight abuse such as setting limitations to the use and duration of such contracts or introduction of a rebuttable presumption of an existence of an employment contract stipulating a minimum amount of paid hours. It remains to be seen how this provision will be actually implemented in practice.

Perhaps the most far-reaching provision of the Directive is the workers’ right to transition for another form of employment that is more predictable and secure. If requested, the worker must receive a written reply from the employer with clear reasons for the decision within one month. The Directive also prescribes a legal presumption in cases when a worker has not received in due time partially or all of the mandatory information. In such situations, the worker is to enjoy the favourable presumptions that are to be defined in national law, which the employer has a right to rebut. Finally, Member States have 3 years to implement the Directive.


The Directive is to be warmly welcomed as it introduces a nuanced approach towards the mandatory information obligation regime for every employment relationship, regardless of its form. The only (narrow) inclusive criterion is the personal ambit of application to be decided pursuant to national law. However, a clear reference to the case-law of the CJEU on the concept of a worker gives certain hope that the Directive is capable of being interpreted broadly to attain its overarching objective of social policy. It is a shame that the Council decided not to include the full codified definition of a worker in the final text but at least placing an explicit reference to CJEU case-law boosts the EU legal awareness by hinting where to search for sources, especially for national judges or employment lawyers.

In any case, simple information rights are far from combating precarious employment and social exclusion so widely present nowadays in the gig economy. The Directive nonetheless is to be seen as a stepping stone in paving the winding road leading to high-quality jobs. The major bulk of responsibility lies now on the Member States to properly implement it. Once that is done, the national employment judges would have to step up their game and take charge of the sincere enforcement of the rules in the full spirit of EU law.

Indeed, the biggest pitfall is that the Directive has a different target group which is certainly not all platform workers. For them to enjoy the rights, they need to be first reclassified from bogus (false) self-employment and that might be an easier case for on-demand work (e.g. Uber, Deliveroo), but definitely not for crowdworkers who perform their tasks solely online (e.g. Amazon Mechanical Turk, Upwork, Clickworker). This will not be done automatically by virtue of the Directive, which nonetheless mentions in the recitals that false classification of a self-employed person under national law does not preclude the person from being a worker under EU law (Case C-413/13 FNV).

This will be up to the national courts to decide but while faced with that exercise, judges can and in fact, should, rely on CJEU case-law and elements that already echoed in Luxembourg such as degree of power of management, supervision, margin of discretion in the performance of assigned duties, capability to be dismissed and merely notional general independence; recruitment procedure and nature of the entrusted duties; freedom to choose the time, place and content of the work; extent of rights and duties vested upon the individual. Only then, platform workers can fall under the scope of the Directive and be protected against unpredictable work patterns which will enhance the transparency of their jobs. To put in short and bluntly, the principle of sincere cooperation and effet utile simply demands it.

On the bright side, the major accomplishment is that the Commission has actually delivered a new legal instrument in the long-forgotten field of employment as social policy is back on the agenda again. The European Pillar of Social Rights, albeit not binding, is therefore not an empty set of profound Eurojargon. Explicit references made in the Directive to the EPSR (thanks to the Parliament’s amendments) will allow the Court of Justice to elaborate on the Pillar’s value and status, just as it was with the EU Charter before it came into force. Frankly, more initiatives arising from the EPSR are coming up: the European Labour Authority has been set up, the Council Recommendation (not binding) for access to social protection for workers and the self-employed has been agreed and the Proposal for a Directive on work-life balance for parents has been negotiated successfully. It seems that the Commission’s hands are finally full with mainstreaming material social rights for the sake of social Europe and its future.

To conclude, in the wake of the centenary of the International Labour Organization, let us not forget about the apt statement from the 1944 Declaration of Philadelphia that ‘labour is not a commodity’. Thankfully, the Commission, after a period of stagnation taken in the name of flexicurity, seems to have finally gotten that forsaken memo. Point for the Commission, a win for the workers but still a loss for some platform workers who struggle to make ends meet in the gig economy.

Barnard & Peers: chapter 20
Photo credit: Manchester Evening News

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