Saturday, March 2, 2024

THE COURTS DEFINE THE CONCEPT OF WORKER AND EMPLOYER; LEGISLATORS ARE MOSTLY SILENT

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Lacking clear guidelines from the International Labor Organization and the European Commission, courts and national legislators in Europe are doing their best to answer the question of whether gig workers working through digital platforms, either on-site or remotely, are employees or self-employed. However, different business models and insufficient understanding of the nature of work across platforms often lead to conflicting views of decision-makers. This can further lead to diminishing gig workers’ labor rights, warned domestic and international labor law experts at the June roundtable, organized online by the Public Policy Research Center.
Anticipating a working group for the drafting of the Law on Flexible Forms of Work, announced by the Government of the Republic of Serbia – which many have already challenged as an idea explaining that it leads to dilution of labor rights and derogations from the Labor Law – opinions and views at the round table represent a resource of knowledge for making far-reaching decisions in qualifying this form of work.
Carlo de Marchis Gomez, a lawyer of the General Italian Confederation of Labor (CGIL), part of a team of lawyers who won one of the most important European cases in the field of non-standard forms of work (in Turin), pointed out three important dilemmas faced by the courts: The first is a new organizational model (platform), which, with the help of an algorithm, enables real-time availability of the current workforce, which is a new model of work. “In labor disputes before our courts, accustomed to standard company employment and normal working hours, this new form of work came as a kind of shock,” said de Marquis.
This new model of work can be seen as traditional work with the employer or as a type of independent work as an entrepreneur. In an attempt to answer this question, the courts in Italy have followed the example of other European courts that have attempted to qualify this employment relationship.
Given that the Italian legislation has introduced some new legal provisions that define types, subtypes, categories, subcategories, and extended or partial forms of this work more closely, the problem for judges arose at a time when it was necessary to specify the form of work.
Why? That is because, in labor disputes that have been before the courts, the principle of “freedom” of workers has been emphasized, who allegedly have the discretionary right to accept or reject engagement at any time.
The first rulings of the Italian courts did not benefit workers and, in their decisions, they did not acknowledge the existence of any form of work with the employer, even partial, until the Court of Appeal in Turin and then the Italian Supreme Court of Cassation and other courts, explained their position that the relationship between the platform for ordering and the supplier of food is the relationship between the employer and the worker, taking into consideration firstly the way of doing business, i.e., the subordination of the supplier in regard to the platform. The courts demystified the issue of the alleged freedom of a deliverer to decide to accept or reject any order and also that owning a bicycle as an asset makes them entrepreneurs who do the work independently.
Legislators tried to deal with this work less often and, even then, often, wrongly. In Italy, the legislator, through poorly coordinated interventions, created a risk of creating a zone of weakened protection by introducing special provisions regarding digital workers, which created the risk that workers will be legally visibly weakened in the future, according to the principle “I grant you some, but not all the rights,” de Marchis thinks.
Bojan Urdarević, a professor of labor law at the Faculty of Law in Kragujevac, believes that such a wrong approach to the problem is a consequence of the lack of a general approach that we expect from the European Commission and the International Labor Organization. “This universal approach would mean recognizing all workers as employees, and then specifying in one clause or article in labor law that platform workers are considered employees – unless the platform as an employer proves otherwise, as already proposed by The German Metal Workers’ Union (IG Metall).”
However, he says, care must be taken that not all platforms are the same. According to him, for example, LinkedIn – like some other platforms – functions as a special type of private employment agency, which charges a commission for its work, which is, for example, completely contrary to ILO Convention 181. However, some of them are just instruments, means of work – not employers, and fall under several other regulations concerning copyright, personal data protection, occupational health and safety, and tax regulation issues.
The second very important issue related to the platforms is the algorithms, the essence of which we do not know well, while the third issue is the trade union organization and collective bargaining of these workers. The earlier doctrine of labor legislation was such that self-employed persons do not have employee rights, and therefore no right to collective bargaining. Today, however, the “winds of labor law” are changing so that more and more people are moving towards recognizing the right to collective bargaining.
The need to redefine obsolete labor legislation, which knows only bilateral labor relations based on the employer-employee relationship, existed even before the rise of digital internet platforms. New forms of work often involve tripartite relations, such as agency work or work on platforms.
However, the labor legislation is changing very slowly because those who enjoy the rights from the Labor Law do not want those rights to be reviewed because they are afraid that they will lose those benefits and rights that have already been won. “It is one of the motives for passing special laws on seasonal work, platform work,” and then the labor legislation is weakened, and the labor law becomes a relic – just an artifact that will serve no purpose because all areas of work will be regulated by special regulations having the edge over the general law,” believes Urdarević.
Martin Risak, a professor of labor law at the University of Vienna, believes that legislators are cautious because platform work is just a magnifying glass that shows how technologies will affect work in general. “It is a kind of test, and that is why it has gained such an important place in political debates.” Another reason for legislators’ hesitation is the fact that platforms fulfill a useful function in society, especially when it comes to meeting consumer needs. Even unions themselves refrain from taking the side of these workers because their members also enjoy the benefits of this cheap and efficient service. What further complicates the situation is the fact that workers hired through these platforms are often migrants, poorly educated, and therefore reluctant to initiate litigation.
The restraint of legislators has led us to judges that increasingly enter into the work of legislators who engage in the interpretation of the terms employer and worker that would correspond to the 21st century, which should not be the case. “The only real answer should be supranational legislation, which would then be applied at the state level,” Risak said. We will know more about that at the end of this year when the European Commission will complete the work on drafting the Directive on platform work, which is currently in the process of consultation.
The first attempt to establish uniform rules was made in mid-2019 when two acts were adopted at the EU level: 1. The new Directive 2019/1152 on Transparent and Predictable Working Conditions, and 2. Regulation 2019/1150 on promoting fairness and transparency for business users of online intermediation services. Although these regulations are more up-to-date, they do not bring fundamental novelties when it comes to platform workers. According to Darko Božičić, a teaching assistant at the Faculty of Law in Novi Sad, one of the good solutions is Article 10 of the Directive, which refers to the minimum predictability of work because this article stipulates that any worker who works full or mostly unpredictable working hours – which is one of the main features of platform work – may refuse to work if the employer did not inform them on time about the number of working hours and the period within the working day in which the planned work should be performed. “So, we can talk about a small dose of freedom of choice, that is, the real flexibility of work.”
When it comes to the functioning of algorithms, Božičić points out that automation and artificial intelligence have changed the nature of the employer. “The employer is now the one who is automated and under the guidance of information technologies, and that is why I think that the new act of the European Commission, which should regulate the position of platform workers comprehensively, must go hand in hand with the proposal for a regulation on harmonization of rules related to artificial intelligence in the European Union, which in a certain way regulates the application of artificial intelligence in the process of functioning of algorithms. It could be an initial first step in protecting digital workers further and uncovering the “black box” of algorithmic action on which the platform is based.”
Senad Jašarević, a professor of labor law at the Faculty of Law in Novi Sad, pointed out the example of the Croatian legislator who says that “if the employer concludes a contract with the employee for the performance of work which, given the nature and type of work and the employer’s authority, has the characteristics of the job for which the employment has been established, it is considered that they have concluded an employment contract with the employee–- unless the employer proves otherwise.” While this is a commendable move, a new Directive and an international agreement are needed, similar to the one recently reached by the G7 countries regarding corporate taxation. “It is obvious that taxes are much more important to them than the position of workers, but it seems that this will soon become part of the agenda,” Jašarević believes.
Sylvia Rainone, a researcher at the European Trade Union Institute (ETUI), pointed out the connection between platform work and non-standard forms of work. For instance, platform work is just a new version of well-known wage work.
The way each regulator – whether national or European – addresses the platform is a roadmap for understanding how that regulator envisions work and the role of work in society. Achieving ambitious employment rates and productivity and growth became among the EU’s top goals during the 1990s and early 2000s due to pressure to reach global productivity benchmarks. Working on platforms as a non-standard form of work has revealed the fact that European and national legislators are now a bit confused because they are facing lawsuits and the question of what to do, whether to “let it go” because it supposedly provides a higher employment rate… or still try with providing greater protection to these workers,” Rainone said. It is this strong ambiguity, and it is also the reason why the judiciary finds opportunities to define the main challenges and provide solutions that these legislators could use.
According to Rainone, through its research, ETUI demystified the assessment that working on platforms is a solution for a more inclusive labor market with high performance. Although a larger number of people enter the labor market with the help of platforms, they do so with significantly reduced labor standards and thus contribute to the lowering of general labor standards in traditional labor relations. “Therefore, instead of trying to see the chances of finding work in the unregulated labor market offered by the platforms, it would be much more useful to focus on the risks that this trend brings, e. g. high insecurity of workers at the cost of negligible employment growth,” Rainone said. She also added that it is important to consider the risks of lower tax revenues on such wages that undermine existing welfare state standards, encouraging unfair competition between standard employers and platforms, which have a significantly lower tax burden.
In the previous consultations on the new EU directive on platform work, the option of the third (intermediate) category of workers on platforms with reduced labor rights has appeared. There is a risk of creating a “legislative Trojan horse,” through which the gray zone will expand, where employers will progressively adjust the rights that workers should exercise. “This is especially risky at the moment when the platforms have significantly strengthened during Covid-19. “We are not just talking about working on a location via mobile app platforms, but the large increase in technology-aided work, which is a fast-expanding gray area,” Rainone warned.
In her opinion, the only correct solution is the option of expanding the scope of labor legislation we have and the labor law to all those who work on platforms. This will require a very well-argued discussion and understanding among regulators and judges, as lawyer Carlo de Marchis Gomez explained – to clarify that the algorithm is another form of governing authority.
Finally, the participants concluded that it is very important to organize such gatherings, which should include representatives of the courts, to understand the mechanism of work of the platform better.
“Abstract debates about working for an employer or working independently will not mean a lot if you do not look at and understand exactly how platforms work, how work is organized through them, and what their language is. Meetings like these, where experiences are exchanged, and peculiarities of this type of work are observed are very useful, and we must hope that this will lead to a better understanding of this type of work,” concluded de Marchis.

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