The digital platform economy has exploded in recent years.
According to the European Commission, over 28 million people in the EU now work on digital work platforms. By 2025, their number is expected to rise to 43 million.
The digitization of the workforce, accelerated during the COVID-19 pandemic, has radically transformed the European labor market.
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For some, that means insecure contracts and stressful working conditions. While others are fortunate enough to use platform work as a way to escape the 9-to-5 and increase economic opportunity.
It’s a really complicated subject and these are the treacherous waters European politicians are treading with a new directive to ‘improve working conditions in platform work’.
There is a popular saying that the road to hell is paved with good intentions. While we support the directive’s overarching mandate, a dangerous compromise is taking place within the legal text.
While aiming to protect the vulnerable from exploitation – a cause we could not do better to support – the new laws will counter-intuitively reduce economic opportunity for workers, prevent people from entering the labor market, and SMEs, start-ups and Harm entrepreneurs of all stripes.
Why? Because the proposal came about without consulting the most important stakeholders in the first place: freelancers and platform workers.
That needs to change.
What needs to change before MPs vote on the law this fall
For workers’ rights to be truly protected, it is vital that we have a dynamic legal framework that supports individual needs and preferences.
The central question concerns the legal definition of a freelancer. Please bear with us…
Currently, regulators have proposed a set of five criteria to determine a worker’s employment status. The checklist includes things like “performance and quality monitoring” and “determination of the level of remuneration by the employer”.
If only two of the criteria are met, the worker is legally classified as an employee.
While that might sound like a good idea, freelancers and business owners know that instead of protecting employees, doing so would actually limit opportunity and innovation. For example, setting prices for services and ensuring quality services are essential elements of any successful business relationship. Coupling it with an employment presumption creates all sorts of problems.
The proposal shows a lack of understanding of freelance work and today’s European labor market.
When it comes to the platform economy debate, the focus is understandably on ride-hailing and courier services, but the reality is that gig work and freelancing are infinitely broader.
Many technologists, designers, lawyers, architects, musicians, teachers, builders, health workers, beauticians, hairdressers, and models—to name a few—are all freelancers and independent contractors.
We surveyed thousands of gig workers across Europe, 80% of whom said freelancing is a lifestyle choice that gives them freedom, flexibility and the “opportunity to get things done”.
In addition, the results of the study show that 90% of the sample population is happy to be a freelancer (full report will be published in autumn 2022).
Of course, a lot of research is still needed on this complex topic. However, our data strongly suggests that a significant number of people and their livelihoods will be stifled by the current proposal.
We therefore believe that the legislation should be changed so that these measures only apply if the worker ‘consents’ to them. This would allow workers to be classed as workers instead of being automatically enforced.
In addition, the criterion of “effective determination or setting of upper limits for the amount of remuneration” should be deleted. It is common practice in B2B relationships that a price can be set for services between trading partners. There is no reason to leave this path in the digital realm.
The future of work is at stake
European labor markets need to adapt to the changing needs and demands of workers.
The boundaries between classic, full-time and freelance work will continue to blur. The result is a mixed workforce that needs to be facilitated legally, technologically, and politically.
The “Improving working conditions in platform work” policy is an important building block for a healthy, inclusive and sustainable future of work. We firmly believe that many workers need protection, and implementing these protections is our moral responsibility as a society.
However, it is vital that freelancing is allowed to flourish at the same time and not be stifled by outdated misjudged rules.
It would be short-sighted to ignore the needs of freelancers today. The knowledge work economy is expanding at a rapid pace. In the not too distant future, this issue will be of concern to a large segment of the population, and not just to a relatively privileged group.
As the Employment Committee of the European Parliament returns after its summer break and makes its way through the vast body of amendments to the current text on platform workers’ rights, we urge MEPs to take these points to heart.
Flexible workers across Europe are counting on them now and in the future.
Glen Hodgson is CEO of the think tank Free Trade Europe and Secretary General of the Freelance Movement.
Ben Marks is a Campaigner, Impact Entrepreneur and Author and currently serves as the Founder and Executive Director of the #WorkAnywhere campaign.