New EU directive 2024/2831[1] (the “Directive”), which aims to regulate the rapidly expanding digital platform work sector, was published in the Official Journal of the EU on 11 November 2024. It enters into force on 1 December 2024 and must be implemented into national law by 2 December 2026 at the latest.
The Directive starts by acknowledging that digitalisation is transforming the world of work by increasing productivity and flexibility, but that it also poses risks to employment and working conditions. Algorithm-based technologies, particularly automated monitoring and decision-making systems, have enabled the emergence of digital labour platforms. If well-regulated, they can offer good quality jobs. However, without a proper legal framework, they risk increasing surveillance, power imbalances and the opacity of decision-making, and compromising the working conditions, health, equal treatment and privacy of workers on these platforms. [2]
The aim of the Directive is therefore to better protect workers on digital labour platforms by clarifying their legal status in particular and by ensuring they enjoy social rights equivalent to those of traditional employees. As a result, it will have an impact on how digital labour platforms operate in Luxembourg.
What is digital platform work?
Digital platform work is work organised through a digital labour platform and performed by an individual on the basis of a contractual relationship between the digital labour platform (or an intermediary) and the individual, irrespective of whether there is a contractual relationship between the individual (or the intermediary) and the recipient of the service.
A digital labour platform is an individual or legal person providing a service via a website, mobile application or any other electronic means which involves organising work performed by individuals in return for payment, irrespective of whether the work is performed online or at a physical location. The service is provided at the customer’s request, and the platform uses automated systems to monitor or take decisions about the work performed.
Key objectives
The Directive creates a large number of obligations for digital labour platforms, along with rights for their workers. Below is an overview of the most significant changes.
Clarification of employment status: The Directive aims to resolve the problem of the status of platform workers: are they self-employed or employees? As a result, EU Member States, including Luxembourg, will need to have in place appropriate and effective procedures to determine whether platform workers should be treated as employees or self-employed.
The Directive also introduces a presumption of employment where the facts indicate direction and control (assessed in accordance with domestic law, collective bargaining agreements or practice in force). This will oblige digital labour platforms to prove that their workers are in fact self-employed, thus reversing the burden of proof. The final version of the Directive differs markedly from the original proposal submitted by the EU Commission, which listed specific criteria for determining whether a platform controls the performance of work. The presumption of employment would have applied once two indicators were present, such as the determination of remuneration, the supervision of work or the requirement to wear a uniform.
Management of algorithms and human oversight: Digital labour platforms will have to comply with strict rules concerning the processing of personal data and the use of algorithms to allocate tasks or evaluate worker performance. Human oversight of automated decisions will be mandatory, allowing workers to raise a dispute or request an explanation. Significant decisions, such as suspension or termination of a contract, will have to be taken by a human being, justified in writing and reviewed if disputed.
Transparency: The Directive requires digital platforms to inform and consult workers’ representatives or the workers themselves in certain circumstances. In particular, digital platforms must provide clear and accessible information on various matters, such as monitoring systems, how the algorithms work and working conditions (hours, earnings etc.) to workers, candidates, representatives and national authorities, as appropriate. Platforms must also set up secure and private communication channels allowing workers to communicate among themselves and with their representatives.
Cross-border cooperation: Where a digital labour platform operates in more than one EU Member State, the Directive encourages increased cooperation between national authorities to ensure that the rights of workers are protected in every country where the platform is active.
Data portability: Workers will have the right to portability of their work-related data (such as reviews and ratings), which will enable them to transfer this information to other platforms or employers.
Protection of workers: Platform workers must be protected against discriminatory or abusive practices associated with automated systems, as well as against any retaliation. The Directive ensures they have effective remedies to defend their rights.
Penalties:The Directive introduces penalties equivalent to those in Regulation (EU) 2016/679 [3] (GDPR) in cases of infringement of the rules relating to data protection (i.e. administrative fines of up to EUR 20,000,000 or 4% of total annual worldwide turnover for the preceding financial year, whichever is higher). For other infringements, the Directive requires Member States to put in place penalties that are effective, dissuasive and proportionate to the nature, gravity and duration of the undertaking’s infringement and to the number of workers affected.
What are the next steps?
It is crucial for any business operating in Luxembourg via a digital labour platform to follow Luxembourg’s implementation of the Directive closely, as this could necessitate changes to contracts and to economic models.
A non-government bill of law (number 8001 [4]) was submitted to the Luxembourg Parliament on 4 May 2022. It has been the subject of a number of discussions among the various professional associations and its text will be amended to align it with the Directive. In any event, the implementing legislation will have to strike a “fair balance between the protection of platform workers and Luxembourg’s competitiveness on the European market”, according to Georges Mischo, Luxembourg Minister of Labour. [5]
[1] Directive (EU) 2024/2831 of the European Parliament and of the Council of 23 October 2024 on improving working conditions in platform work.
[2] Recital 4, directive (EU) 2024/2831 of the European Parliament and of the Council of 23 October 2024 on improving working conditions in platform work.
[3] Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).
[4] Non-government bill of law 8001 on work performed through a platform (not available in English).
[5] Quelles règles pour le travail des plateformes au Luxembourg ? (What rules should apply to platform work in Luxembourg?), Chambre des députés, 22 May 2024 (not available in English).
