The European Commission's new draft law targets working conditions in today's popular digital workforce platforms. If the proposal passes into law, platforms may have to undertake more obligations for employee rights.

The European Commission has recently proposed a draft law on the status of employees who provide services through digital platforms. The new regulation, which is estimated to affect 4.1 million people in EU countries, aims to protect drivers, couriers, cleaning services workers, home care providers, sports coaches and anyone who uses these platforms to find a job. Thus, freelancers will be able to entitle worker status and have better working conditions and fringe benefits.

The number of digital work platforms has increased fivefold in the last 10 years

Digitalization, which is gaining momentum in all fields of life today, especially with the Covid-19 pandemic, has led to a great transformation both in the usual behavior patterns on the consumer side and in new technology-supported business models. According to the International Labor Organization (ILO), the number of digital work platforms has increased fivefold in the last 10 years.

As digital platforms grew in parallel with the increasing demand for fast-moving consumption, the number of freelancers, in other words, independent contractors, who provide services on these platforms, also increased significantly. According to European Union’s data, 28 million people in EU countries work on digital work platforms and this figure is expected to reach 43 million by 2025.

Freelancer or wageworker?

Digital platforms serving through applications adopt a speed-oriented business model. Only a small number of these companies employ “wageworkers” by positioning themselves as direct employers. By contrast, in the growing digital work market, vast majority of the players choose work with freelancers. Instead of indefinite-term employment contracts, temporary and short-term contracts are made with employees. Employees must go to the court to prove their employment status in a contingency situation, or they work at the risk of being deprived of their fundamental rights. Therefore, with this business model, unfortunately, most of the employees cannot benefit from social security services such as health insurance, unemployment and disability insurance and retirement benefits. This circumstance also poses a great threat in terms of occupational health and safety.

Priority: Protecting the employee

According to the European Commission, 5.5 million people are currently misclassified by their employers under the laws and qualifed as "freelancer " . Based on this misclassification, companies are content to only pay minimum wage to fulfill their legal obligations. With the new regulation, it is aimed to determine the employment status of the employees accurately and to benefit from all the social rights that come with it.

The European Commission also demands software and algorithms used in assigning jobs and determining their wages to be transparent. Regulations about relevant persons’ controls of software and algorithms and object to automated decisions made about employees are also on the way towards.

The proposal can encourage good practices for platforms in all markets

Platforms such as Amazon, Uber and Deliveroo have many representatives in Turkey. If the proposal is accepted, employees who work with digital platforms in EU countries will be entitled to fringe benefits such as minimum wage, unemployment and health benefits, and other legal protections, depending on the country they work in. After this phase, new standards may enter in force all over the world and in Turkey, starting with the European Union, and this may cause groceries, textile products or food delivery platforms that employ tens of thousands of people in Turkey to reevaluate or even change their business models.