The Platform Workers Directive No Deal
How Not to Do Things
Friday, December 22 something that is almost unheard of in Brussels happened. The Council of Ministers, meeting through the Permanent Representatives, failed to endorse the text of an agreement that had come out of a trilogue negotiation between the Council, the Parliament, and the Commission. The “agreement” was the proposed text of a Directive on the Employment Status of Platform workers. Twelve Member States signalled that they were opposed. The Spanish chair of the meeting, sensing the mood, decided not to put the matter to a vote.
Under a qualified majority voting (QMV) system, a file is adopted in Council when at least 55% of Member States vote in favour and the proposal is supported by Member States representing at least 65% of the total EU population. These numbers just were not there on the day.
According to reports, the Baltics, Czech Republic, France, Hungary, Ireland, Sweden, and Italy were opposed to a deal they believed had moved too far from the Council’s position. Germany said it would abstain.
It will now fall to the incoming Belgium Presidency to see what can be salvaged from this debacle.
How had it come to this?
Disputed Methodology
At issue, was the methodology to be used to determine if platform workers were employees or genuinely self-employed.
According to the trilogue agreement, if workers met two out of five criteria they would be classified as employees. The five criteria are:
upper limits on the amount of money workers can receive.
supervision of their performance, including by electronic means.
control over the distribution or allocation of tasks.
control over working conditions and restrictions on choosing working hours.
restrictions on their freedom to organise their work and rules on their appearance or conduct.
The French Labor Minister, Olivier Dussopt, had already said publicly that this was unbalanced and leaned too heavily in favour of a presumption of employment. He would oppose it in Council.
"When you move towards (rules)... that would allow massive reclassifications, including self-employed workers who value their self-employed status, we cannot support it". here
Other Member States agreed with him.
A good number of Member States have always seen the gig economy as a pathway into employment for many who might otherwise be excluded from the labour market, especially those coming from marginalised communities. There are around 28 million working in the gig economy today. This could rise to 45 million in the years ahead. Of the 28 million, the “trilogue agreement” would have reclassified around 5.5 million as employees.
The Spanish Get it Wrong
Normally, when it comes to a trilogue negotiation, the Member State representing the Council goes into the talks with an agreed mandate and clear red lines. It was well known that there was continuing disagreement in the Council on the presumption of employment issue. Yet the Spanish Presidency decided to go ahead with the talks anyway. It did what we Irish call a “solo run”, where in Gaelic football a player grabs the ball and runs at goal without considering passing to a teammate.
Sometimes the “solo runner” scores. More often than not, they don’t. In negotiations, solo runs are rarely a good move.
In its approach, the Spanish Presidency may have been influenced by its own ‘Riders’ Law”, published in the Official Bulletin on 12 May (Real Law Decree N. 9/2021, 11 May 2021) It revises the Workers’ Statute to “guarantee labor rights to individuals working in distribution via digital platforms”. There is a built-in presumption of employment. This is what the Parliament was pushing for. The Spanish were talking to people who thought as they did. Unfortunately, the colleagues they were representing thought differently.
Politics
On December 21, a Brussels court ruled that a number of Deliveroo riders were to be regarded as employees, not as self-employed. This decision is largely in line with similar decisions from courts across Europe which have come down in favour of employment status, though some, such as the Supreme Court in the UK also in a case involving Deliveroo held the riders to be self-employed.
In the absence of an overarching European law, it is likely that courts across the EU will continue to rule in the same vein. By the time the EU agrees on a Directive, the employment ship may have already sailed.
Platforms obviously want their workers to be seen as self-employed because of the considerable extra costs involved if they are employees. But judges are looking at the total package and coming to the conclusion that these workers are not genuinely self-employed in the classic sense of that word. In effect, they are applying the type of criteria set out in the “trilogue agreement” and concluding that the control exercised by the platforms points to a hierarchical, employment relationship.
Clearly, Member State governments do not see things the same way as the judges or, indeed, the trade unions and academic commentators calling for a solid, presumption of employment to be built into the law. They are reluctant to try and shoehorn the emerging gig economy labour model into traditional, employment regulation frameworks.
Such differences of opinion are called politics, in which competing economic interest groups push alternative ways of doing things. Whatever your views on the Employment Status Directive, this outbreak of politics is to be welcomed. It shows that there are genuine and deep-seated differences of opinion about how European laws should be framed and written. Differences of opinion are the lifeblood of democracy. No one economic interest group has a monopoly on what should be considered right and proper.
Negotiating Lessons
For those of us involved in the business of labour relations, we can also draw some valuable negotiating lessons from what has just happened.
Do not go into a negotiation without the solid backing of your own stakeholders. Make sure you have a clearly defined mandate about what can and cannot be agreed.
Do not let your own biases shape your negotiating behaviour. This would appear to be what the Spanish Presidency did. Its own progressive orientation led it to make concessions to the Parliament which its fellow Council members were not prepared to sign off on.
Do not be pressured by artificial deadlines. There was no objective reason why the trilogue negotiations had to be completed when they were, other than that the Spanish Presidency wanted the credit for a deal on platform workers and the Parliament wanted it done before it dissolved for elections in 2024. It is always better to get it done right than to get it done quickly.
The negotiators may also have suffered what I call “dealitis”. This refers to situations in which the parties have invested many hours in talks that they end up saying to one another: “We have put so many hours into this that we cannot leave without a deal”. It gets to the point where “any deal is better than no deal”.
Too many deals made in the early hours of the morning wither in the cold light of day. Call a halt, take time out, get some sleep and review.
One further takeaway from this. There are other employment laws coming down the track. A revision of the European Works Council Directive is on the cards with the Commission due to publish proposals on January 16. The unions are calling for a Directive on Remote Work, after the ending of talks between the European Trade Union Confederation (ETUC) and BusinessEurope with agreement. The unions also want the EU Procurement Directives amended so that only businesses with a collective bargaining agreement can be considered for public sector contracts.
No matter where you sit on the European labour relations spectrum thinking that the Council and Parliament will deliver for you on your agenda is a very risky bet. The Council will not be “bounced” into decisions, by its own Presidency or by the Parliament.
When it comes to EU labour and employment laws, there may no longer be just one direction of travel.
Our HR Policy Global – Europe Network Meeting in February will be looking in depth at all current developments involving EU employment and labour laws. Our training programs offer insights into negotiating skills. If you would like to know more about what we do, drop me an email at tom.hayes@beerg.com.