is the new EU Directive on transparent and predictable working conditions in the EU really a boost?


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

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.
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 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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