For freelancers considering using online platforms, understanding your employment status is crucial. It affects your rights, benefits, and tax obligations. While some platforms might categorise workers as independent contractors, recent legal developments across Europe are challenging this classification, according to a report by law firm Osborne Clarke.
The EU has stated that around 500 digital labour platforms are operating in the EU. The growth of the platform economy surged between 2016 and 2020, when revenues in the platform economy grew almost fivefold from an estimated €3 billion to around €14 billion.
The biggest revenues are estimated to be in the sectors of delivery and taxi services.
Presumption of employment and shifting the burden of proof
The Platform Work Directive (PWD) introduces a significant shift in how employment relationships are viewed within the gig economy. In jurisdictions adopting the PWD, if you meet specific criteria, you’re presumed to be an employee. This places the burden of proof on the platform to demonstrate that you are not an employee, rather than on you to prove that you are.
Each country has its own platform rules
This legal landscape, however, varies significantly across Europe:
Belgium and France: Both countries adopt a balanced approach, requiring both the freelancer and the platform to share the burden of proof in determining employment status.
Germany, Italy, the Netherlands, Poland, Sweden, and the UK: In these countries, the burden of proof traditionally falls on the individual claiming employment status. However, nuances exist. Germany, for example, has a lower threshold for recognizing employment relationships.
In the UK, while the individual needs to initiate the process, tribunals often favour workers and readily disregard contracts designed to circumvent employment rights. Moreover, the rise of ‘group actions’ backed by independent law firms is making it easier and more cost-effective for UK freelancers to collectively assert their employment rights.
Spain: While Spain allows for the rebuttal of the presumption of employment status, the burden of proof lies with the platform to demonstrate a genuine commercial relationship, especially during legal claims or investigations by authorities.
Tax and social security: a separate consideration
Remember that employment status for tax and social security purposes might differ from your employment law status. For instance, Belgium applies an irrebuttable presumption of employment status in the transport sector concerning social security, regardless of the contractual arrangement. In the UK, platforms could face legal challenges for facilitating tax avoidance schemes.
What this means for freelancers
This evolving legal framework offers greater protection for freelancers working on digital platforms. Understanding where the burden of proof lies is crucial for asserting your rights. However, if you believe you are misclassified as an independent contractor, seek legal advice to understand your options and potential avenues for redress.
