From gig to guarantee: how the EU is transforming platform work

Digital platforms have transformed how people perform work. From food delivery to taxi services, millions of workers across the EU now earn their living through apps and websites. This new way of working, however, has created uncertainty on whether these workers should be treated as employees or as self-employed individuals.

To address this, the European Parliament and the Council of the European Union adopted Directive (EU) 2024/2831 on improving working conditions in platform-based work on 23 October 2024, which is intended to improve the working conditions of platform workers and protect the personal data of persons performing platform work. Member states must transpose the provisions of the Directive into their national law by 2 December 2026. Hungary has not yet taken steps to transpose the Directive.

The following article describes the provisions of the Directive.                                                           

Scope of the Directive

Most platform workers in the EU are classified as self-employed. In practice, however, many of them work under conditions that resemble employment: they follow platform rules, work set hours or have little control over how they do their jobs. This mismatch leaves many workers without the protections that employees normally receive.

The Directive aims to improve working conditions and protect personal data for people who work through digital platforms. It does this through three main pillars: helping to determine the correct employment status of platform workers; ensuring transparency, fairness and human oversight in how algorithms manage work; and improving transparency for cross-border work.

Key definitions

A “digital labour platform” is any online service that connects workers with tasks and uses automated systems to organise or make decisions about their work. In simple terms, if a company operates through an app or website, assigns work to individuals, pays them for it, and relies on algorithms to manage that work, it falls within the Directive’s definition.

“Platform work” refers to any work arranged through a digital labour platform and carried out within the EU. This applies regardless of how the contractual arrangement is structured – whether the worker contracts directly with the platform or through an intermediary.

Who does the Directive apply to?

The Directive applies to all platform workers who have an employment relationship under their member state’s laws or practices. Importantly, when determining whether an employment relationship exists, how the work is actually performed matters more than what the contract says. If a platform uses algorithms to organise someone’s work, this must be taken into account even if the contract labels the worker as self-employed. If the platform wishes to challenge the legal presumption, it will bear the burden of proving that the contractual relationship in question is not considered an employment relationship. 

Across the EU, courts are deciding on a case-by-case basis on the employment status of platform workers. In 2023, the Curia, the supreme judicial body in Hungary, ruled in a specific case that platform work does not constitute employment. The court also emphasised that platform work can take many different forms and each case must be assessed on its own facts. It is not possible to apply general rules. Whether an employment relationship exists depends on the specific circumstances of each arrangement.

The Directive also applies to any digital labour platform that organises work in the EU, regardless of where that platform is based.

Algorithmic management and transparency of platform work

The Directive sets out detailed rules on how platforms can use automated systems to monitor and manage workers.

• What platforms cannot do:platforms are banned from using automated systems to process certain types of sensitive personal data. This includes data about a worker’s emotional or psychological state, their private conversations, or any data collected when the worker is not actively working or offering to work.
• Transparency and human oversight: platforms must inform workers, their representatives, and, upon request, national authorities about their use of automated monitoring and decision-making systems. They must also review the impact of these systems on workers at least every two years and ensure there is proper human oversight. Staff responsible for this oversight must be properly trained and have the authority to override automated decisions. These individuals are also protected from dismissal or disciplinary action for carrying out their role.
• Health and safety: platforms must assess the risks that automated systems pose to workers’ health and safety, particularly psychosocial and ergonomic risks, and take appropriate steps to prevent harm.
• Reporting obligations:platforms are required to report the work performed by platform workers to the relevant authorities in the place where the work is carried out, along with information about the workers’ employment status.

Remedies and enforcement

Member states must ensure that platform workers, including those whose working relationship has ended, have access to effective dispute resolution and the right to seek legal redress if their rights under the Directive are breached. This includes the right to claim compensation for any damage suffered. To help workers access evidence, national courts or authorities can order platforms to hand over relevant documents, including confidential information, provided appropriate safeguards are in place.

The Directive also protects workers from retaliation. Platforms cannot dismiss or penalise workers for exercising their rights under the Directive. If a worker claims they were dismissed for this reason, the burden shifts to the platform to prove otherwise.

Key takeaways for companies

The Directive will bring major changes for digital labour platforms operating across the EU. Platforms will need to review how they classify their workers to ensure they comply with the new presumption of employment. Furthermore, to challenge this presumption, they must prove the relationship is not one of employment. This represents a fundamental shift that may require companies to reconsider how they structure their workforce and contractual arrangements. 

Given that the legal presumption may also apply to social security procedures, companies should also assess how their contractual arrangements affect workers’ access to social security protections. If workers are reclassified as employees under the Directive, companies may face increased obligations relating to social security contributions.

In practical terms, companies should start reviewing their operating models, worker classifications and data-processing practices to be better prepared to comply with the new regulatory framework. This early action can also help reduce the risk of legal disputes or administrative penalties once national laws come into force.

This article was co-authored by Viktor Kovács.

For more information on the Directive, contact your CMS client partner or the CMS experts who contributed to this article.