EU deal on platform workers falls apart, pushing law into limbo

The coalition was large enough to act as a blocking minority and derail the political agreement reached last week between the Council and the European Parliament.

Germany, the bloc’s most powerful state and host of Delivery Hero and Free Now, chose to abstain, further complicating the arithmetic to obtain the required level of support.

The deal was considered the last chance for the law to get across the finish line during this legislative session due to the cut-off date imposed by the upcoming EU elections.

Friday’s debacle had a strong sense of déjà vu as an almost identical scenario had happened in late December when the original agreement between Council and Parliament was derailed by a larger-than-expected group that included France, the Czech Republic, Ireland, Greece, Finland, Sweden and the three Baltic states, all of which are governed by either right-wing or liberal parties.

Even if some countries, like the Czech Republic and Ireland, eventually switched to the positive side, the outcome among ambassadors was the same: the compromise brokered by the institutions is, once again, in tatters.

Belgium, the current holder of the Council’s presidency, announced the news in a short post on social media.

“We believe that this directive, aiming to be an important step forward for this workforce, has come a long way,” the presidency said. “We’ll now consider the next steps.”

First presented in 2021, the Platform Workers Directive (PWD) is meant to improve the working conditions of those who service popular apps such as Uber, Deliveroo and Glovo and are often treated as self-employed despite being under rules similar to ordinary employees. The tension between platforms and workers has triggered numerous complaints and court cases at the national level, prompting the European Commission to table a durable scheme for all 27 member states.

The directive’s centrepiece is a novel system of legal presumption that would readjust the status of platform workers if they meet a certain number of criteria, or indicators, in their day-to-day businesses, such as being forbidden from servicing a competitor app or being compelled to follow norms on appearance, conduct and performance.

Brussels estimates that about 5.5 million of the 28 million platform workers currently active in the European Union are misclassified and would therefore fall under the legal presumption. Doing so would make them entitled to rights like minimum wage, collective bargaining, work-time limits, health insurance, sick leave, unemployment benefits and retirement pensions – on par with any other regular worker.

A divisive law

Since the presentation of the directive, the legal presumption has been under intense scrutiny, not only by the platforms themselves, who fear ballooning costs to accommodate the updated status, but also from some governments wary of increasing administrative burden and slowing down the so-called Gig Economy.

Member states spent months trying to converge their disparate viewpoints until they agreed on a common mandate in June last year, which added a provision to grant national authorities the “discretion of not applying the presumption” in certain cases.

The Parliament, by contrast, opted for a maximalist, workers-friendly position that made it harder for platforms to circumvent the legal presumption, strengthened the transparency requirements on algorithms and ramped up penalties for non-compliance.

The deep gap between the two institutions bogged down negotiations. It took six rounds of negotiations, a particularly high number, until a deal was reached in mid-December.

But while lawmakers cheered on the breakthrough, a rebellion erupted in the Council.

A robust coalition of countries, including France, the Czech Republic, Ireland, Greece, Finland, Sweden and the three Baltic states, made it clear they could not support the new amended text, as they believed Spain, then holder of the Council’s rotating presidency, had drifted too far from the June mandate. Germany kept silent, a position interpreted as a prelude to an abstention.

The last-minute opposition threw the entire process into disarray and raised serious doubts about whether the law would survive or fall apart.

The Belgian presidency strove to rescue the directive before it was too late and drafted a new compromise to bring all 27 on board. This new text was used for negotiations in January, which failed as the Parliament and the Council were still too far apart.

The mandate was again revised but faced renewed resistance. Still, Belgium managed to get the go-ahead for a new round of talks, attended last week by Pierre-Yves Dermagne, the country’s minister for economy and employment.

This time, though, negotiators succeeded and struck a revamped deal, which would forbid platforms from dismissing workers based on automated decisions.

This agreement was put on the table of ambassadors on Friday afternoon for a political follow-up. It was then rejected and thrown in the bin.

Ahead of the high-stakes vote, the Socialists and Democrats (S&D) group in the European Parliament singled out three leaders as the prime roadblocks: France’s Emmanuel Macron, Greece’s Kyriakos Mitsotakis and Estonia’s Kaja Kallas. A parliamentary committee concluded last year that President Macron had helped establish Uber in France by way of a “privileged” relationship with the online platform.