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Update Employment Law July 2019

Directive on transparent and predictable working conditions in the European Union

(2017/0355 (COD))

On 16 April 2019, the European Parliament adopted a new Directive aimed at ensuring transparent and reliable working conditions for employees in the area of crowdworking. On 13 June 2019, the Council of Ministers also adopted the Directive. In the following the main content of the new Directive.

Well-known online platforms such as Uber, Deliveroo and others do not only change people's consumer behaviour, they also practice forms of employment that raise legal (employment law related) questions. The new form of employment known as crowdworking, i.e. the awarding of contracts via an online platform, is characterised by a low degree of commitment and low responsibility towards the personnel employed in such way compared to traditional employment relationships. In the case of internal crowdworking, i.e. when orders are placed exclusively with the platform's own employees, companies in the so-called gig or sharing economy have a wide range of options for shaping contractual relationships with their crowdworkers. It is the purpose of the new EU Directive to improve the conditions of such "atypical" employment relationships by promoting more transparent and predictable employment and at the same time maintaining adaptability to entrepreneurial needs. The period for implementing the Directive into national law is three years.

The new Directive lays down minimum rights applicable to every employee in the Union in an employment relationship. In this context, the Directive expressly refers to the case law of the European Court of Justice to be taken into account. If they meet the criteria laid down in the Directive, employees employed on demand, on vouchers and on online platforms, interns and apprentices could fall within its scope. Self-employed employees are not covered by the Directive.

The minimum requirements for working conditions (Art. 8 et seq. of the Directive) include a maximum probationary period of six months, allowing and not discriminating multiple employments of the employee, a more transparent organisation through a (temporal) minimum predictability of the work and the offer of free compulsory further training during working hours. 

In addition, the employer has an obligation to inform the employee about the essential aspects of the employment relationship. This includes, where work patterns are totally or largely unpredictable, the reference hours and days within which the employee may be asked to work, the minimum notice period, the number of hours guaranteed to be paid, etc. 

Article 18(1) of the Directive prohibits dismissals (or measures having equivalent effect) based on the fact that an employee is exercising the rights provided for in the Directive. In addition, Article 18(2) provides for an easing of the burden of proof in favour of the employees concerned: it provides that employees who believe that they have been dismissed as a result of exercising those rights may ask the employer to provide sufficiently detailed grounds for dismissal (or equivalent). The employer must then state these reasons in writing. Article 18(3) even goes one step further: in cases where the employees concerned present facts in court suggesting that a dismissal (or measure having equivalent effect) has taken place because the employee has exercised his rights, the burden of proof that the dismissal was for other reasons lies with the employer.

Well-considered contract design necessary

Whether the new Directive or the national implementation will ultimately change the working conditions of individual crowdworkers depends on whether the respective crowdworker is to be qualified as an employee. This assessment will be based on the case law of the European Court of Justice. The decisive criterion in most cases will probably be the obligation to follow instructions. The crucial factors in this context are the respective contract design as well as the actual execution of the contract.

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