The digital platform economy has exploded in recent years.
According to figures from the European Commission, more than 28 million people in the EU work through digital work platforms Today. By 2025, their number is expected to reach 43 million.
Digitization of the workforce, what accelerated during the COVID-19 pandemichas radically changed the European labor market.
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For some people that means: uncertain contracts and stressful working conditions. While others are fortunate enough to freely embrace platforming as a way to… escape the 9-to-5 and increasing economic opportunities.
It is a very complicated issue, and these are the treacherous waters that European policymakers are sailing with a new directive on “improve working conditions in platform work”.
There is a common saying that the road to hell is paved with good intentions. Although we support the overarching mission of the directive, there is a dangerous interaction within the legal text.
While aiming to protect the vulnerable from exploitation – a cause we can no longer stand behind – the new laws will counterintuitively reduce economic opportunities for workers, prevent people from entering the labor market and harm SMEs, startups and entrepreneurs of all levels.
Why? Because the proposal came about without consultation with the most important stakeholders of all: freelancers and platform workers.
That has to change.
What needs to be changed before MEPs vote on the legislation this autumn?
To truly protect workers’ rights, it is essential that we have a dynamic legal framework that supports individual needs and preferences.
The main issue concerns what legally defines a freelancer. Please bear with us…
As it stands, regulators have proposed a set of five criteria to determine an employee’s employment status. The checklist includes things like ‘monitoring performance and quality’ and ‘the employer determines the amount of remuneration’.
If only two of the criteria are met, the employee is legally classified as an employee.
While that may sound like a good idea, freelancers and business owners know that it would limit opportunities and innovation rather than protect employees. For example, setting prices for services and ensuring quality services are essential elements of any successful commercial relationship. Linking them to a suspicion of employment creates all kinds of problems.
The proposal reflects a lack of understanding of both freelancing and the European labor market today.
When it comes to the debate surrounding the platform economy, there is an understandable focus on: taxi companies and courier companiesbut the reality is that DIY work and freelancing is infinitely broader than this.
Many technologists, designers, lawyers, architects, musicians, educators, builders, healthcare professionals, beauticians, hairdressers and models – just to name a few – are all freelancers and independent contractors.
We interviewed thousands of gig workers across Europe, 80% of whom said freelance work is a lifestyle choice that gives them freedom, flexibility and the “possibility to create”.
In addition, the survey’s findings show that 90% of the sample population is happy to be freelancers (the full report will be released in the fall of 2022).
Of course, much more research is needed on this complex issue. But our data strongly indicates that a significant number of people and their livelihoods will be oppressed by the current proposal.
We therefore believe that the legislation should be amended to apply these measures only when the employee chooses to do so. This would give employees the choice to be classified as employees, rather than being automatically enforced.
In addition, the criterion “effectively determining or setting upper limits for the amount of remuneration” should be deleted. It is common in B2B relationships that a price for services can be set between commercial partners. There is no reason to deviate from this path when it comes to the digital sector.
The future of work is at stake
European labor markets must adapt to the changing needs and demands of workers.
The dividing line between traditional, full-time and freelance work will continue to blur. The result is a mixed workforce that will have to be facilitated legally, technologically and policy-wise.
The directive “improving working conditions in platform work” is an important building block for a healthy, inclusive and sustainable future of work. We believe that protection is necessary for many employees, and implementing these safeguards is our moral responsibility as a society.
However, it is vital that freelancing can thrive at the same time and not be stifled by an outdated set of misjudged rules.
It would be shortsighted to ignore the needs of freelancers today. The knowledge work economy is expanding rapidly. In the not-too-distant future, this issue will be of concern to a large portion of the population, and not just to a relatively privileged group.
With the European Parliament’s Employment Committee returning after the summer holidays and working its way through the huge number 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 Free Trade Europe think tank and Secretary General of Freelance Movement.
Ben Marks is a campaigner, impact entrepreneur and writer and is currently the founder and executive director of the #WorkAnywhere campaign.