Can Europe combine flexibility, sustainability and innovation when regulating the platform economy?

Speakers: Kanev Radan, Voet Ludovic, Laurinkari Samuel, Bart Menno
Moderator: Burns Chris

On the 6th of December 2021, PubAffairs Bruxelles organised an afternoon session session on the question of whether Europe can combine flexibility, sustainability and innovation when regulating the platform economy with our distinguished speakers Mr Radan Kanev MEP (EPP/BG); Committee on Employment and Social Affairs, European Parliament; Mr Ludovic Voet, Confederal Secretary, European Trade Union Confederation – ETUC; Mr Samuel Laurinkari, Head of Global Public Policy, Wolt, Mr Menno Bart, Senior Manager, Public Affairs, Adecco.

The event was moderated by Chris Burns, long-time international and Brussels journalist.

Watch the full event video here

Chris Burns introduced the speakers and the issues at stake before giving the floor to Radan Kanev MEP by drawing attention to the European Parliament Report, which called for better social protection, collective bargaining and regulatory changes in data management.

Radan Kanev MEP first expressed his concerns regarding the current precarious nature of the platform economy, which has accelerated considerably during the Covid-19 pandemic and has resulted in an excessive degree of flexibility on the European platform-based labour market. However, he added that it is also necessary not to underestimate some of the drivers underpinning this trend, namely voluntary choice, flexibility and self-organisation as existing motivational choices of new forms of employment. He continued by explaining that, over the past decade, although the overall decentralisation of work processes has been facilitated by digital solutions for both employers and employees, the technological shift of the world of work is only at the beginning. This state of play, he specified, behoves European institutions, on the one hand, to undertake a thorough risk assessment, while, on the other hand, not to deny or prevent such evolutions from taking place.

Regarding the European Parliament Report, Radan Kanev MEP stated that EU legislation should take into consideration the new trends, as it would be detrimental to the policy management of the platform economy in the foreseeable future to do the contrary. While acknowledging that new working models often translate into an increased hourly-based work under numerous employers, with workers actually acting both as an employee and self-employed worker simultaneously, he stated that the current state of affairs might limit the choice of workers as a result of an uncoordinated legislation process across Europe. He exemplified this risk by referring to a recent Spanish court case, whereby platform employment was considered as a regular form of employment with the limitation of working under maximum two employers. This setting, he specified, has evidently decreased income opportunities for several workers.

The moderator added the element of current labour rights and moved on by giving the floor to Ludovic Voet.

Mr Voet started by stressing the importance of rebalancing the European labour market vis-à-vis the phenomena of misclassification and bogus self-employment, as platforms have been operating through an actual system of subordination of workers, while classifying them as self-employed. On the question of freedom of choice, the speaker stated that it is not a core issue in labour law, let alone regarding workers’ protection, while suggesting to focus the attention on the primacy of facts. Indeed, he argued, when subordination is only apparent, one cannot label the contractual arrangement between the self-employed and the employer. For this reason, the question of misclassification needs to be addressed, the speaker added, as for years platforms have exploited the loopholes in European legislation in order to elude social security, while avoiding to pay taxes and provide decent working conditions, including those regarding health and safety standards.

Mr Voet went on by stating that, on the one hand, if there is subsidisation, platforms must respect the rules that also other companies abide by in order to create a level-playing field between traditional employers and the actors of the platform economy. He then argued that if these actors are intermediating between customers and a genuine self-employed worker, the proposal put forward by the European Commission, which includes the notion of rebuttable presumption of employment, will protect self-employed workers from several subordination aspects that platforms impose through algorithm management. In this connection, he stated that clear rules must be put in place in order to foster the set-up of socially sustainable business models for the European platform economy.

The moderator then turned to Samuel Laurinkari from the delivery platform Wolt to seek a response with regard to the responsibility of online platforms to ensure social protections to their workers.

Mr Laurinkari began by stating that there are several kinds of platforms and models within the European economy which can be classified according to several factors, including the sector in which they operate, the way in which the business has been built over time and the markets in which they are present. As an example, he added that Wolt, as a delivery platform for food and merchandise in 23 countries in Europe and beyond, employs two different models, the first being ‘self-employed-based’ and the second being ’employed-based’. The speaker went on to explain that the former model maintains a high level of flexibility, whereby the worker can decide to accept or reject any task at hand and that, through on-demand models, the worker can choose his or her working hours, using the platform both as a complementary or the main source of income. The employed-based model, he continued, differs in several ways from the self-employed model, as it resembles more the traditional form of work and its classical features such as shifts, schedules, management supervision, efficiency monitoring and obligations to perform the tasks assigned.

The speaker subsequently remarked that valuable benefits can be found in both the ‘self-employed model’ and the ‘employment model’. In this context, Mr Laurinkari stated that self-employed workers are able to enjoy an unprecedented level of freedom and flexibility, which numerous workers appreciate, as there are no other forms of work in which one is able to decide when and to what extent to work. Nonetheless, the speaker also acknowledged the challenges inherently linked to this form of work, since it does not necessarily fit neatly into the categorisations of the European labour market, nor are the protections granted to self-employed workers on the same level as those of employed workers. Mr Laurinkari, also added that employment-based models do not come with the same level of flexibility, while highlighting that these last may however offer better predictability of working conditions.

In this regard, the speaker stated that, as a society, we must embrace what technology allows for, which is on-demand work and self-organisation, while putting an emphasis on modernising social models by allowing self-employed workers to have the same level of protection as employees. For these reasons and as a matter of social fairness, Wolt has been advocating for both self-employed collective bargaining and for platforms fostering both flexibility and social security.

The moderator moved on to Menno Bart and touched upon the concept of flexibility since the Adecco Group uses it as a modus operandi in the business model of agency work and steered the discussion back to the European Commission proposal on platform workers by wondering how far regulations and social protection must go in order to maintain the European way of life.

Mr Bart took the floor to tackle the question of responsibility and precariousness that surrounds the platform economy, as well as to connect to what has been previously discussed. On the one hand, he first addressed the level playing field question, as portrayed by Mr Voet, by noticing that some players have taken advantage of self-employment and have been favouring bogus self-employment models, creating a de facto unfair competition to agencies, such as Adecco, which offer agency work as a tripartite employment relationship.

On the other hand, however, the speaker also remarked that the debate on platform work has been dominated by oversimplification to the detriment of a fully-fledged discussion. Indeed, Mr Bart highlighted that if employment is intermediated via a platform, it does not fundamentally alter the quality of the relationship, nor does it necessarily mean that precariousness is at stake. The speaker also specified that a vast number of bogus self-employed workers in Europe are not platform workers, while several platform workers are often intermediated by online applications and being employed by an agency which grants fair access to social protection. In this regard, he stated that the oversimplification of the discussion around the risks attached to platform work is detrimental to the debate on the future of work, while adding that the idea that other forms of work run less risks is simply unfounded.

With regard to the question of how far labour regulations and social protection shall go, Mr Bart explained that the key question of the European public debate is whether there will be a rebuttable presumption of employment which, in the speaker’s opinion, would go too far, as it could ultimately imply that every freelancer in Europe would have to prove their self-employment status. On the same note, the speaker remarked that, in his opinion, there is still some room for improvement regarding this question, which a paper published by the Adecco Group addressed by listing three specific recommendations: the first is granting social protection for employed and self-employed workers, the second is the need for clear criteria to define workers’ status across Europe, the third consists of the opinion that the cost of social protection should be somehow included in the price of the given service. Indeed, the speaker stated, the platform economy has the potential to create stable jobs and offer flexibility, while meeting consumer needs efficiently. However, if this trajectory is to be followed, he concluded, every stakeholder must embrace a certain degree of responsibility with regard to social protection.

The moderator shifted the attention to a statement by Radan Kanev MEP regarding the question of “applying 19th century metrics on 21st century social relations” and adjusting to current realities rather than resisting them. The moderator also enquired about the connection between labour precariousness and political instability.

Mr Kanev MEP started his reply by acknowledging that labour precariousness and political instability are indeed interconnected and that this is the very reason for which the public debate on the platform economy has emerged. He also expressed the feeling of not being particularly worried about over-regulation, while stating that this 90s-style type of discourse is an outdated heritage, as regulatory interventions are needed in both the digital space and the labour market. Furthermore, Mr Kanev MEP sided with Mr Voet by arguing for more regulation, though he added that he was not convinced that the upcoming European Commission’s proposal is the type of smart regulation which is needed in this case, as it seemed to the MEP that imposing a sort of general labour code is rather inadequate in terms of acting on current labour relations in Europe.

The speaker also added that he was not opposed to the idea that subordinated work should be considered as an actual form of employment, a right which could already be granted in European jurisdictions. He also stated that he was not opposed to the notion of ‘rebuttable presumption’, while highlighting that, in his opinion, the latter is not as relevant to labour law as it has been portrayed in the public debate and that it is likely to remain rather a political message.

However, Mr Kanev MEP highlighted the importance of avoiding precariousness, as well as the risks which the European social model runs by considering that, in the foreseeable future, work will no longer be classified merely under the umbrella of part-time work with no social benefits and full-time work with full social benefits. Indeed, he specified that a renewed European social model will have to guarantee both social security payments and benefits for all types of workers. In this connection, Mr Kanev concluded that EU Member States need to be more proactive in guaranteeing that every worker and employer do not avoid, either voluntarily or involuntarily, paying their fair share.

The moderator started taking questions from the audience and directed the first to Mr Voet by asking the speaker which aspects of platform work would require the most action at the EU level.

Mr Voet expressed the necessity for an EU directive, due to the fact that the regulation of platform workers is a multifaceted issue that, in several cases, includes actors which operate in different countries and the cross-national dimension of the issue must therefore be tackled. Mr Voet also stated that the EU should address the question of employment based on algorithm management by ensuring the accessibility and negotiability of algorithms and data that govern platform-based labour relations. In addition, he said that the presumption of employment should not be considered a burden, as platform work does not necessarily mean precariousness. With the help of the algorithm management, he added, and once a platform has sufficient customers and workers, the two can be matched to organise an efficient service through subordination.

However, he also reiterated that the employer must bear the responsibility of subordination within an employment contract, unless rebuttable otherwise. This setting entails that self-employment would be paid during waiting times, he argued, as freedom of choice is a key concept that returns constantly in the public debate on the platform economy. Yet, in practice, he stated, this is hardly the case. For instance, a delivery food worker cannot work during mornings due to a lack of demand and the question of hourly wages should be considered to compensate for waiting times. Mr Voet concluded his series of statements by affirming that on-demand work is not a novel idea, as it has existed for centuries, while the need to both create a level playing field for all actors of the economy and foster the improvement of working conditions are emerging once again in the public discussion.

The moderator drew attention to a Copenhagen Economics’ study, commissioned by Delivery Platform Europe, which identifies the risk that the new policy orientation would imply a move from flexible work models towards non-flexible work models, as well as a loss of income for independent workers.

Mr Laurinkari provided the background to the study and detailed the exchange with other platforms regarding their respective experiences, as well as the feedbacks received from workers across Europe. He subsequently stated that platform-based models are sometimes misrepresented in the public discussion, as these undertakings are regularly in touch with self-employed workers, contracting partners and their communities at large through, for example, surveys, which often indicate high levels of satisfaction with regard to compensation, freedom of choice and flexibility that the platform work provides. He further added that a fully-fledged representation of platform workers themselves is often missing in the public debate. Indeed, he specified that the Copenhagen Economics study reflects what delivery companies have understood in terms of importance of the feature of flexibility for platform workers. He concluded by stating that the key figure from this research consists of the fact that around 250.000 workers in Europe would stop performing deliveries on platforms if forced into regular employment without the choice of when, where and how they can perform their duties.

Mr Bart returned to Mr Voet’s example on the “employment versus self-employment” model by stating that what truly defines employment status is to what extent both the worker and companies are willing to engage with the risk of doing business. For instance, the speaker said, for the morning hours of delivery workers, the self-employed worker can take the entrepreneurial risk of working during those hours believing there may be an opportunity or not, or the given platform can set a shift for those hours or not, depending on what model is in place. The speaker also stated that, however we wish to look at these issues, workers must be willing and able to take the entrepreneurial risk, and regardless their status, they should be included in social protection programmes. Elaborating on this example, the speaker highlighted the need of a clear EU-wide direction on how to conduct business, as the core matter underpinning the public debate is the definition of ‘self-employed’ and ‘platform work employment’.

Mr Voet continued the argument of classification of workers by stating that ETUC is boldly in favour of the introduction of the rebuttable presumption of employment, while adding that a clear definition of ’employment’ and ‘self-employment’ is needed to prevent platforms from exploiting the loopholes in labour law, with special regard to the question of subordination. As a result, he stated that there is no need to be afraid of the introduction of the notion of ‘rebuttable presumption’ if business models are not based on legal loopholes. He also specified that the rebuttable presumption will not force every single self-employed worker to go to court and demand to be reclassified as self-employed, as it would apply solely to the platforms whereby a bogus self-employment relationship occurs.

Mr Voet also disagreed on the idea that platforms workers are in the position to take the entrepreneurial risk by reiterating the example regarding work during certain hours of the day for the food delivery sector, with similar parallels drawn in the restaurant economy where the worker is employed when clients are present and if there is demand. He also highlighted that, if unions’ relations with platforms were organised through collective bargaining, flexibility would be discussed in a collective manner and not in an individual fashion, while workers would not be forced to take the entrepreneurial risk. However, he added that it is not impossible to apply flexibility in the employment relationships of platform workers, but new forms of legal protection are needed.

The moderator posed a question directed at Mr Kanev on the diversity of online platforms operating either under a ‘self-employment’ or an ‘employment’ model.

Mr Kanev MEP concurred with Mr Bart’s recommendation on the need for clear criteria at the EU level, which he reminded they will encroach with national legislation, while emphasising that the real issue lies in the extent to which EU legislation will be comprehensive and adaptable to EU Member States’ labour laws in order to set Europe-wide guidelines. National labour legislation varies between Member States, he specified, and therefore the impact of EU legislation may also vary accordingly. He subsequently stated that the focus of the discussion should not be on whether the presumption of employment is included in European legislation, but on the criteria integrated within this presumption. At the European level, he reiterated, the regulation should be rather smart and comprehensive to allow for the greatest variety of corporate solutions to be applied under both the ‘self-employment model’ and the ’employment model’.

The moderator drew attention to the Commission proposal and sought Mr Laurinkari’s opinion on what should be included in European legislation.

Mr Laurinkari deemed it necessary for EU institutions to regulate platform work in order to provide clarity in this domain. He further stated that the presumption of employment included by the European Commission proposal could be beneficial, if appropriately shaped, and if those who are genuinely self-employed can continue to do so and enjoy the freedom and flexibility that accompany their status. He also said that the conditions to be considered self-employed must also be just and that existing court rulings mandate that self-employed individuals should maintain the right to choose when to work and which tasks to accept and have the right to use substitutes and provide services to any third party. In this context, the speaker stated that the European Commission also had to take the European jurisprudence into consideration.

As far as flexibility in the platform economy is concerned, Mr Laurinkari explained that ‘employment-based models’ and ‘self-employment models’ are not the same, as the freedom of choice in the latter cannot be comparable to the former. He also specified that certain levels of flexibility are simply impossible to be applied within the employment-based model and reiterated that EU legislation should also grant the freedom of choice for those who are willing to take advantage of flexibility and self-employment, which he deemed a valuable feature of the labour market. On the question of intermediation, Mr Laurinkari also pointed out that platforms can intermediate, for example, between customers and workers or between customers, merchants and delivery services. As a result, he concluded, it is also essential to enter into the specifics of the different business models in place, as it seemed to the speaker that the public debate has been focusing prevalently on certain platform models. 

The moderator moved on to discuss the point of improving platform work, especially regarding data and algorithms, by asking if platform data management is part of this debate and what challenges data present.

Mr Bart steered the discussion back to the notion of flexibility and explained his organisation’s experience with the issues at stake. Adecco has offered flexibility through agency work for decades, he said, attracting criticism from local labour unions who opposed flexibility within employment, while there is now a shift in the perception of flexibility from those actors. A fundamental difference resides in flexibility via shift-based work or via the entrepreneurship of a worker who decides how to organise his or her day-to-day activities.

On the question of algorithm management, the speaker stated, is that workers need a higher degree of protection in that domain. Indeed, the proposal of the Artificial Intelligence(AI) Act lists human resources management as a high-risk area. For this reason, he stated that the debate around the use of AI must not be overlapping with the debate around platform work, as it would run the risk of creating confusion.

Mr Voet disagreed with Mr Bart’s statement on the AI Act, as it does not deal with the question of working conditions, although he agreed on the fact the two proposals should be coherent and added that the platform workers’ proposal is only complementary. On the same note, the speaker stated that what is needed to address the question of algorithm management in the platform economy is collective bargaining, as well as algorithm transparency in order to ensure that workers are aware of how data is used to protect them from discriminatory practices. These rights must be aligned with the principle of the General Data Protection Regulation (GDPR), while new provisions are needed in order to enhance workers’ protection, he concluded.

Mr Kanev MEP wished the question data management to be included in the Commission’s proposal on platform work, while adding that the AI Act is a fundamental piece of law with far-reaching ramifications regarding the role of algorithms in people’s daily lives with special regard to basic human rights. In addition, Mr Kanev MEP highlighted that the European Parliament asked the Commission to consider the European Parliament report on the question of data management in its proposal on platform work. He subsequently warned about the fact that one must be very cautious in the coming years to put human values first when regulating the role of AI in contemporary society.

The moderator drew attention to the question of social protection for all forms of work in Europe and other audience questions related to workers’ representation vis-à-vis platforms.

Mr Kanev MEP moved on to the topic of an EU-wide social policy and the social security number project being replaced by a “social security pass”. The MEP favoured an actual European social security number, as portability of rights across borders is the direction the European Union is heading in and this should be a goal for EU institutions as a whole. He also said that “every minute of work should count” and contribute to a better social security, taxation and health services in Europe. Mr Kanev MEP further argued that the European Social Security Pass in its current form is not sufficient, as it needs a form of identification which ensures portability and accumulation of rights acquired through work, regardless of the Member State the work was conducted in. Moreover, the coordination of social security systems, for which the Regulation is severely out-dated, must be revisited and he concluded his statement by highlighting that further action than the proposal of the European Commission is needed to ensure social benefits in a fast-changing economy and society.

Mr Bart responded by saying that, in addition to the portability of rights, it must be ensured that everyone contributes to the social security system. European labour markets and social protection systems are, for the moment, so diverse that the basic issue of contribution remains crucial, he stated. Another element that Mr Bart highlighted is the question of thresholds when, for instance, individuals have worked a certain number of hours but cannot access those social rights. Mr Bart also raised the issue of pensions by noting that when workers are not solely dependent on a single employer, this can gear towards pension access. “Every hour of work should contribute to the pension system”, he said, and added that this is already in place through agency intermediation which guarantees pension rights, unemployment benefits and healthcare protection.

Mr Voet reiterated ETUC’s support to universal access to social protection and highlighted two focal points, the first being the question of the European Pillar of Social Rights, which should be implemented by Member States and thereby increase social protection for self-employed workers as well. The second focal point raised by the speaker consisted of ETUC’s opposition to social protection developed by platforms, as private social protection is emerging as an apparently innovative feature, which runs high risks of translating into ‘social security dependency’.

Mr Voet continued by responding to an audience question on how many platform workers ETUC represents by stating that platform workers are often unable to organise collectively, as they have no actual employers and so there is little possibility for mobilisation and it is often difficult for trade unions to reach out to them, although it has been possible. Mr Voet concluded his statement by drawing attention to the example of Denmark which prohibited agreements between self-employed workers and platforms, as they were classified as cartels by competition authorities.

Mr Laurinkari fully agreed with Mr Voet’s statement that competition law should not stand in the way of collective bargaining agreements for self-employed workers and stated that these legal aspects must be clarified by the EU legislation, while adding that promising developments are emerging in some Member States where unions have sub-organisations for self-employed workers, a feature which contributes to improving their working conditions.

The moderator posed a question regarding the question of ‘sustainable competitiveness’, which the European Commission has put forward in order to combine the notion of sustainability and competitiveness for the European economy. 

Mr Bart delved into the crucial topic of sustainability by highlighting that the notion is wide. Within the concept of Environmental, Social, and (Corporate) Governance (ESG), many stakeholders put an emphasis on the environmental side of the matter, while the “S” of “social sustainability” is equally important and deserves more attention. It implies for example a notion that every worker has access to decent quality work and social security.

Mr Laurinkari added to this point and explained that Europe can seize global leadership in developing fair and better platform work. Europe can therefore embrace what flexibility has to offer in the platform economy and, at the same time, respect the European social model, the speaker said. In the case of platforms, according to the speaker, the Commission proposals is twofold, as it aims to provide clarity on the flexibility that platform work allows and couple it with social protection and collective bargaining.

Mr Voet returned to the question of sustainability and noted that decent quality work in the platform economy and a level playing field for all actors foster social sustainability. With the workers’ platform initiative, he specified, it has been estimated that 4 billion euro could be recovered in fiscal and social contributions, ensuring fairness vis-à-vis the entire economy and society. Social security systems can therefore be re-enforced and can bolster sustainability levels by bringing benefits to the whole society.

The remaining part of the debate and the Q&A session covered the following issues: the definition of bogus self-employment at national and European levels, the lack of resources for the respect of labour regulations and the need to go before court instead of implementing laws through enforcement, the notion of future-proof legislation for the platform economy, the necessity of keeping innovation and flexibility in the EU labour market, the necessity of having a larger scope of the debate on the future of work, the importance of social dialogue and bargaining in an increasingly digitalised world, the number of platform workers in Europe, the question of how to avoid a race to the bottom in Europe’s working conditions, the possible evolutions of the proposal of platform workers during in the EU decision-making process, the interrelation between technological evolutions and regulatory actions, the necessity of a progressive approach to work and technology.

Want to know more about the issues discussed in this debate? Then take a look at the selected sources provided below.

European Pillar of Social Rights. Building a fairer and more inclusive European Union, European Union

Working Programme 2021: A Europe fit for the digital age, An economy that works for people, European Commission

Fair working conditions, rights and social protection for platform workers – New forms of employment linked to digital development, Own-Initiative Report, European Parliament

Fair and equal social protection for riders, drivers and other platform workers, European Parliament

‘Old’ rules and protections for the ‘new’ world of work, Social Europe

Parliament demands equal social protection for gig workers, Brussels Times

Fair working conditions, rights and social protection for platform workers – New forms of employment linked to digital development, Vote Detail, Vote Watch Europe

Commission proposals to improve the working conditions of people working through digital labour platforms, European Commission

Questions and answers: Improving working conditions in platform work, European Commission

Platform Workers, Euractiv.com

Study to gather evidence on the working conditions of platform workers, European Commission

The platform economy and precarious work, European Parliament Think Tank

Study of the value of flexible work for local delivery couriers, Copenhagen Economics

ETUC reply to the First phase consultation of social partners under Article 154 TFEU on possible action addressing the challenges related to working conditions in platform work, European Trade Union Confederation – ETUC

ETUC reply to the Second phase consultation of social partners under Article 154 TFEU on possible action addressing the challenges related to working conditions in platform work, European Trade Union Confederation – ETUC

Delivery pending: making the gig economy work for everyone, Report, Adecco Group

Consultation on working conditions in platform work, World Employment Federation

Future of Work, McKinsey & Company

The Future of Jobs Report 2020, World Economic Forum

Future of Work, OECD

European Social Security Pass, European Commission