Written by David Doorey, York University
There’s much excitement today in Europe surrounding the fact that the European Commission has issued a draft Directive “on improving working conditions in platform work”. The EC draft is the first step in an extended process that could take years before the law in some form becomes effective at the EU level, at which point nations would be required to make the rules effective at a national level. To be clear, platform workers can’t just file a complaint alleging that Uber has violated the Directive. European law doesn’t work that way. I learned that when I struggled through European Labour Law class 20 years at LSE under the very intellectually intimidating (though very kind) Professor Paul Davies.
Nevertheless, the draft Directive represents a potential turning point in the treatment of platform workers in Europe, so let’s consider the Directive through Canadian eyes. The Directive begins with some background context. Over 28 million people in the EU work through digital platforms. By my math, that works out to about 6% of EU inhabitants. Statistics Canada has estimated that about 8% of Canadians perform some “gig” work, although the definition of what that means and how it is calculated leaves much uncertainty. The Directive states that “up to 5.5 million people working through digital labour platforms could be at risk of employment status misclassification”, which I presume means that the remaining 22.5 million platform workers are “genuinely autonomous in their work” (i.e. they are true independent contractors”). The EC estimates that “between 1.72 and 4.1 million people are expected to be reclassified as workers” as a result of Directive.
So, we are talking about a very small percentage of European workers who will be affected by this Directive if it passes. Nevertheless, there is an out-sized policy interest in platform workers in large part due to a fear that virtually any job could be transformed into a platform job and therefore there is a need to get a grip on this form of work now to ensure the future of work is not a future entirely outside of the reach of protective labour laws.
Objectives of the Directive
The Directive identifies three objectives:
- to ensure that people working through platforms have – or can obtain – the correct employment status in light of their actual relationship with the digital labour platform and gain access to the applicable labour and social protection rights;
- to ensure fairness, transparency and accountability in algorithmic management in the platform work context; and
- to enhance transparency, traceability and awareness of developments in platform work and improve enforcement of the applicable rulesfor all people working through platforms, including those operating across borders.
Substance of the Directive
Now to the meat and potatoes of the Directive.
Definitions and Scope of Coverage
It begins with definitions of “digital labour platform”, “platform workers”, “persons performing platform work”, and “platform workers”. In a nutshell, a digital platform company provides a commercial service at a distance though electronic means (such as a website or mobile App) that connects a customer to a service provider. This clearly captures companies like Uber; less clear is whether it captures traditional taxi companies that have long used dispatch services that traditionally used radio but not increasingly use digital equipment too. “Platform” work is work that is assigned through a digital labour platform, including by an “employee” or an independent contractor, whereas a “platform worker” is a person who performs “platform work” under an “employment contractor”.
This is all a bit confusing, but it is done this way because part of the Directive deals with defining who is an “employee” for the purposes of coverage under national employment-protection statutes, whereas other parts (information, entitlements to disclosure about digital monitoring and decision-making, and anti-reprisals) apply to both “employees” (platform workers) and independent contractors (included along with “employees” as “persons performing platform work”). Follow? Think about it this way: in Canada we have some employment standards that only apply to “employees” and some standards that apply to both “employees” and “dependent contractors”. The somewhat confusing definitions in the EC Directive are getting at the same basis idea, by defining things in a way that makes some rules applicable to one category of worker only and other rules applicable to a broader category of worker.
Defining Employee Status of Platform Workers for Purposes of Employment Legislation
Article 3 provides that the determination of whether someone is an “employee” must be determined by considering the facts relating to performance of the work and will not be determined by how the relationship is defined in the contract between the platform company and the worker. This aligns with existing Canadian law, which has long looked past the formal language of the contract (see Braiden v La-Z-Boy for a common law example). Otherwise every employer could just add a clause to employment contracts stating “you are an independent contractor” and, voila!, the worker would be magically removed from all legal protections our laws have developed to protect employees.
Article 4 creates a presumption that platform work is “employment”. We had a law in Ontario recently that did something similar by shifting the burden on alleged employers to prove that a worker is NOT an employee for the purpose of labour standards legislation. However, inexplicably, Premier Doug Ford’s government repealed that law in 2018 to ensure that vulnerable, legally unsophisticated workers held the burden to prove that they meet the legal definition of an employee. The presumption of employment status applies under the EC Directive provided that the platform company “controls” the performs of work. “Control” exists when at least 2 of the following 5 listed factors exist:
(a) effectively determining, or setting upper limits for the level of remuneration;
(b) requiring the person performing platform work to respect specific binding rules with regard to appearance, conduct towards the recipient of the service or performance of the work;
(c) supervising the performance of work or verifying the quality of the results of the work including by electronic means;
(d) effectively restricting the freedom, including through sanctions, to organize one’s work, in particular the discretion to choose one’s working hours or periods of absence, to accept or to refuse tasks or to use subcontractors or substitutes;
(e) effectively restricting the possibility to build a client base or to perform work for any third party.
The condition of ‘control’ will almost certainly be satisfied regarding classical platform companies like Uber, Lyft, etc, since those companies unilaterally fix compensation rates, impose all sorts of rules, and use of substitutes is not permitted. Part (c) is interesting because it seems to include the use of customer ratings as a form of performance evaluation and imputes those rankings to the company itself. That is a useful legal innovation. At a practical level, a worker who would be an “employee” under the EC Directive would probably also be at least a “dependent contractor” under Canadian law, if not an actual “employee”. You can read a nice summary of criteria such as that specified in the EC Directive are applied in Canadian labour law in the OLRB’s recent Foodora decision finding that platform app-based couriers are “employees” under the Labour Relations Act.
So far then the Directive shifts the legal presumption of platform work to “employment” status and then makes it difficult for platform companies to rebut the presumption by including a test that closely resembles the Canadian test for “dependent contractor” status. This is similar to the approach gig worker advocates are pushing for in the US, the ABC Test, which presumes a worker is an “employee” unless the alleged employer can satisfies a difficult three-pronged standard. In this way, the Directive once implemented into national law would probably sweep most digital platform workers under legislation that covers “employees”. It would be similar to Canadian law expressly including “dependent contractors” under employment standards legislation, a move that was recently recommended by the Ontario Changing Workplaces Review, but not implemented by either a Liberal or Conservative-led Ontario government.
Information About Algorithmic Decisions
Article 6 introduces a new twist with no Canadian comparator that I am aware of. It creates an obligation on digital labour platform companies to inform workers (both “employees” and “independent contractors” who receive work through digital means) of the existence and operation of “automated” monitoring and decision-making systems, including how any decisions to restrict, suspend, or terminate a worker is made with the aid of digital monitoring. In other words, the digital platform companies must provide a document to workers and governments that takes them behind the curtain to disclose how the programming assigns and monitors work. One purpose of this rule is to provide information that could be used to test whether automated systems have built-in bias, including gender and racial bias for example.
The Directive also requires digital labour platforms to hire “sufficient human resources” to monitor whether automated monitoring and decision-making systems put undue pressure on platform workers “or put at risk the physical and mental health of platform workers.” Litigation trying to sort out what that means sure would interesting. Those HR folks must also be protected from dismissal or discipline “for overriding automated decisions or suggestions for decisions”.
Article 8 continues with this theme and requires digital platform companies to employ “competent” human being who will be point person for workers to speak with about any job-related issues. I wish Canadian telecommunications and cable companies would be subject to the same law! But I digress. Also, the Directive entitles the worker to a written statement explaining any decision to restrict, suspend, or terminate a workers’ account or that otherwise adversely impacts the worker. This is a useful addition that should be easy to duplicate in Canada, in fact, I think our employment standards statutes should require that every company provide a written explanation for any decision to discipline or terminate a worker.
Information and Consultation Regarding Substantial Changes to Automated Systems
Article 9 creates a right to information and consultation with workers or their representatives about any “substantial change” to the use of automated monitoring and decision-making systems. We have something similar in the Canada Labour Code that imposes certain limited duties on employers to inform, consult, and bargain with unions when they intend to introduce technological change. However, I am not aware of any provincial laws that would impose an obligation on, say, Uber to inform and consult drivers about changes in their technology.
Article 12 requires digital platform companies to provide information to government authorities about the number of workers performing work through their platforms and a summary of the general terms and conditions of the contractual arrangements. We could use this in Canada for sure if for no other reason than to make it easier to track how many people we are talking about.
Article 17 prohibits platform companies from dismissing workers as a reprisal for exercising rights protected by the Directive. This is a standard type anti-reprisal law found in almost all Canadian employment related statutes. Notably, this section applies to both “employees” and independent contractors, which makes sense given that the Directive includes rights that cover both types of workers.
The EC Directive includes some aspects that are not new to Canadian law. For example, Canadian law has long emphasized substance over form in assessing whether a worker is an “employee” or “independent contractor”. The default test for employee status in Canada is whether, considering all of the facts, the worker more closely resembles an entrepreneur or an employee (see Chapter 4 of The Law of Work). Moreover, a worker who is an “employee” under the EC Directive would almost certainly also be at least a “dependent contractor” as understood in Canadian labour law. Nevertheless, it would be useful if Canadian law made explicit that employment protection legislation applies to digital platform workers to remove that uncertainty. We also have (or have had) examples in Canada of a reverse burden of proof that requires companies to prove that a worker is NOT an “employee”, and all of our employment-related statutes should include this.
The most novel elements of the EC Directive from a Canadian perspective are probably the rules relating to transparency relating to the use and operation of digital monitoring and decision-making algorithms. This is very interesting stuff. Insofar as digital labour platform companies want to replace the HRM/industrial relations function with software and machines, it will be necessary and desirable for governments to legislate in a manner that permits us to ‘look under the hood’ at how decisions are being made. This is an interesting new avenue for the future of labour and employment law, one that Canadians should be studying closely.