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Is this the end of “junk contracts”? The European Union proposes a new law

Is this the end of "junk contracts"? The European Union proposes a new law

Image source: © canva
Maja Kozłowska,
28.07.2023 12:00

The European Union has decided to look into the problem of employing workers by digital platforms. Its proposed directive could affect up to 2.5 million people.

There is only a handful of people who do not use digital platforms. They are convenient, always available and, in addition, they often offer various discounts just for using them regularly. Digital platforms have grown tremendously during the pandemic period when, for example, ordering takeaway food was the only option to experience something akin to going out to a restaurant.

The European Union decided to look at the forms of employment offered by these companies (including Glovo, Uber, Wolt, Bolt, etc.). It found that digital platforms employ at least 5.5 million people are formally self-employed, but many of them have to abide the same rules and restrictions as an employed worker.

The EU plans to sort this out. The directive, however, will cover a much larger group than employees of digital platforms as it will also apply to civil-law contracts.

Who is self-employment convenient for? It is more profitable for the employer

The European Parliament reports that around 28 million people work through online platforms in the EU. This figure is estimated to rise to 43 million by 2025. This includes not only delivery drivers of popular companies, but also gig workers hired "by the hour" e.g. to care for children or seniors.

Self-employment also has its advantages for the employee, just to mention flexible working hours. For the employer, on the other hand, it entails a convenient and hassle-free method of finding a gig worker. A digital platform definitely benefits more here as the people working in B2B model, although they are in an employment relationship, cannot enjoy the labour rights and social protection afforded to employees under national and EU law.

These include:

  • the right to earn a minimum wage,
  • working hours regulations,
  • the right to paid holidays,
  • easy access to social protection (without the need to pay social security premiums themselves).

An employment contract for everyone? Is it even possible?

1.5 million Poles are self-employed and at least another million have signed civil-law contracts. These groups may also benefit thanks to the directive that the European Union is working on, as the law prohibits the selective treatment of entrepreneurs.

For an employment relationship to exist, a minimum of three conditions from the following list are met:

The digital labour platform:

  • determines upper limits for the level of remuneration
  • requires the person to respect certain rules with regard to appearance, conduct towards the recipient of the service or performance of work
  • supervises the performance of work, including by electronic means
  • restricts the freedom to choose one's working hours or periods of absence
  • restricts the freedom to accept or to refuse tasks
  • restricts the freedom to use subcontractors or substitutes
  • restricts the possibility to build a client base or to perform work for any third party​.

The directive is due to enter into force in Member States from 2025. The final decision on whether or not an employment relationship exists will be in the hands of the National Labour Inspectorate. The employer will have the possibility to appeal against it.

Source: wyborcza.pl, gazetaprawna.pl

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