EU Labor Rights in a World of Platform Work

Since the 1990s, Europe is increasingly recognized as a place where dynamism and security coexist. The continent has boasted its strong welfare state and comprehensive union rights, but despite these social protections, the European dream has failed to prevail for the average European worker, especially when considering the Posted Workers Directive and social dumping. 

In context, the Maastricht Treaty marked a key development in the advancement of European integration through the creation of the European Union (EU). The treaty allows for the “free movement of goods, services, capital, and people within all of the EU’s member states.” meaning that EU citizens are free to find work in any EU country. In 1996, the European Commission (EC) issued the Posted Workers Directive (PWD), in which they defined a posted worker as “an employee who is sent by his employer to carry out a service in another EU Member State on a temporary basis, in the context of a contract of services, an intra-group posting or a hiring out through a temporary agency.” Posted workers are appealing to Multinational Corporations (MNCs) and other foreign agencies as they can work for lower wages and can be sent back to their home countries at any point while local workers, in contrast, are guaranteed more labor protections and rights.

The post-1993 EU has seen significant social progress in areas such as women’s rights and environmental protection. Additionally, the reinforcement of democracy has been attributed to European enlargement, as Eastern European states have mostly reformed their governments to reflect 21st century democratic ideals. While the EU has been instrumental in tracking and improving social progress, the regional bloc has actively undermined wages and unions for workers across the region. 

The treaty allows for the “free movement of goods, services, capital, and people within all of the EU’s member states.” meaning that EU citizens are free to find work in any EU country. In 1996, the European Commission (EC) issued the Posted Workers Directive (PWD), in which they defined a posted worker as “an employee who is sent by his employer to carry out a service in another EU Member State on a temporary basis, in the context of a contract of services, an intra-group posting or a hiring out through a temporary agency.” Posted workers are appealing to Multinational Corporations (MNCs) and other foreign agencies as they can work for lower wages and can be sent back to their home countries at any point while local workers, in contrast, are guaranteed more labor protections and rights.

In 2016, the European Union claimed that “posted workers have no claim to equal treatment of equal pay in comparison with workers in the host state. Instead, the PWD requires the Member State to only apply a certain ‘hard core’ of labor rights,” some of which may include working conditions and terms of employment. Posted workers across the EU, therefore, are vulnerable to lower wages and lower social security contributions. 

In 2018, however, the EU looked to revise its rules on the PWD to better protect labor rights and freedom. The revision of Directive 2018/957 called for consistent remuneration for local workers and posted workers, the introduction of long-term posting, more potential for collective agreements, equal terms and conditions guaranteed by work agencies, and greater cooperation for fraud and abuse prevention. Not all member states, however, openly welcomed the revision. Poland and Hungary, for example, staunchly opposed the revisions because doing so would potentially limit their competitive advantages in low labor costs. Both Poland and Hungary brough the attacks to the court, resulting in Grand Chamber cases C-626/18 for Poland, and C-620/18 for Hungary. Both legal cases requested the annulment of the reform, but none of the arguments were accepted by the Court. After the 2018 revision, all Member States were mandated to implement Directive 2018/957.

A similar problem is seen in Europe’s gig economy, in which platform workers, especially food and grocery deliverers, are not sufficiently protected. Sacha Michaud is the co-founder of Glovo, a delivery firm that has become a prominent player in Europe’s gig economy. In October 2021, Glovo launched Couriers Pledge, which ensured fair pay, maternity and paternity leave, as well as sick leave for delivery riders. Michaud has recognized the benefits of the gig economy, especially in regards to innovation and flexibility, but has made it a point to emphasize the lack of worker protections. 

With the implementation of the Couriers Pledge in different regional economies, Michaud admitted to some difficulties in Spain due to regulatory reasons. He claimed that “the more social rights you give to a freelance worker, the more indicative it is of a labor relationship. There are regulatory things we'll have to fix in Spain to get these autonomous workers more and more social rights.” Essentially, greater cooperation and harmony between EU Member States is imperative to see progress made for the gig worker in the EU. 

In Commissioner Schmit’s recent opening statement on the International Day for the Eradication of Poverty, he affirmed the EU’s commitment to the 17 UN Sustainable Development Goals while concluding that “social justice is the condition and foundation of peace. The EU should be in the forefront of building a fair, just and sustainable world economy that eradicates poverty.” In order to see social justice and a fair, just, and sustainable world, the EU cannot stop at the PWD reform — they must ensure that workers who are posted abroad are entitled to fair and equal labor conditions. In order to see this commitment suggested by Commissioner Schmit come to full fruition, posted workers across the EU must be protected by wage policies and an adequate minimum wage in order to counter poverty and insecurity.

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