Platforms and the Nature of the Link with Workers
The incorrect classification of workers by digital platforms both prevents them from accessing Rights of Truth and makes genuinely autonomous work unfeasible.
Subordinate work
The distinction between business activities and those of workers depends on a concrete analysis of the relationships established between the parties. This is important because confusing these two different roles can harm employees.
When a company organizes, directs and controls the various aspects of the activity/service performed by the workers, it is an employer and the workers are employees. Even when digital technologies are used in this relationship, such as algorithmic management, the element of subordination remains.
Workers are subordinate whenever they are subject to the control and direction of a company, whenever they have to follow instructions which, if they don't follow them, could lead to punishment and also when they have their work evaluated and the value of their work determined by someone else (in this case, the employer).
In subordinate work, there is no freedom for workers to autonomously organize their own activities, determine the price of the service or form their own clientele. There is, in fact, subjection and dependence on the workers, who have no participation in the dynamics of the business activity. There is inequality in the negotiating power of companies and employees. The employee does not exploit any economic activity, but is part of someone else's productive organization.
Employees have employment rights guaranteed by law, such as minimum pay, paid weekly rest, vacations, 8-hour days or 44-hour weeks, overtime pay, prior notice, FGTS, 13th salary, unemployment insurance, protection against unfair dismissal, sick pay, maternity and paternity leave, retirement, among others.
Self-employment and entrepreneurship
Freelance work only exists when it is carried out with total freedom and autonomy. The self-employed person does not abide by rules set by another person, application or company. They determine the value of the service they perform with total freedom and have the power to freely choose their clients, as well as not being subject to any control or order.
The hallmark of self-employment is the complete and absolute freedom to organize your own activity, without control or punishment:
- freedom of action: they have the freedom to choose when and how to carry out their professional activities;
- pricing freedom: sets the prices and payment terms for its professional activities;
- freedom to choose clients: you choose the clients you want to work for and can refuse without being punished; and
- freedom of workinghours: do not confuse freedom with flexibility of working hours (this is present in subordinate work).
The word that defines self-employed is freedom to organize and manage your work, without having to respect orders or rules that are not determined by you.
In turn, to become an entrepreneur is to be a "business owner". The activity of an entrepreneur is very much related to the issue of capital investment, in which there is a certain objective of creating something within a sector or producing something.
It's important to know that the self-employed and entrepreneurs don't have labor rights such as paid rest, vacations, notice, non-exhaustive working hours, minimum wage, 13th salary, sick leave, retirement.
The Brazilian Law on Subordination at Work
Brazil's labor protection legislation (CLT) states that an employer is the company, whether an individual or a legal entity, that hires a person, establishes the amount to be paid for the activity or service they perform, and also determines how the activity/service must be performed and the rules that must be obeyed.
The law states that there is no difference between work done inside an establishment, in the worker's home or on the street, as long as the characteristics of an employment relationship are present.
In order to adapt to the current reality, Brazilian legislation has also stipulated algorithmic, computerized or telematic subordination since 2011, so that there is no difference if the order, rules and control of work are given by a person in person or by an application or system managed and controlled by a company or group of companies. Thus, the law provides that the employer's powers can be carried out by means of electronic, computerized and telematic instruments.
Under Brazilian law, subordinate work exists when, in practice, the employer exercises control over the organization and management of the work, who also establishes the amounts to be received for the activity/service performed, sets deadlines for its completion, receives the profits and has the power to punish those who fail to comply with the rules imposed or do not perform the established activity. Subordination is the characteristic element of the employment relationship.
When control, management, organization, supervision of the work done and profit do not belong to the worker, he or she is a subordinate and as such is an employee and has employment rights such as paid rest, vacations, prior notice, non-exhaustive working hours, minimum pay, 13th salary, leave in the event of illness or accidents, retirement.
"[The delivery platform] not only provides an electronic intermediation service that connects consumers (the clients) and genuinely autonomous workers, but coordinates and organizes the productive service [...] It uses delivery workers who do not have their own autonomous business organization and who provide their services as part of the employer's work organization, subject to the platform's management and organization [...]"
Spanish Supreme Court - Ruling on Delivery Platform
Criteria for Identifying Whether Work on Platforms is Subordinate or Freelance
Faced with the changes brought about by new technologies in the world of work, some European countries have created laws that stipulate criteria for identifying the correct classification of work performed: subordinate or autonomous. Based on these criteria, it is possible to raise some questions that serve as a guide to understand, in concrete cases, whether work done for companies that use digital platforms is subordinate or not:
- Is it the worker or the digital platform that determines the price of the service?
- Who determines how much the worker earns and how much the platform makes?
- These are the platforms that establish how the worker should behave in front of the client, such as how they should present themselves?
- Do the platforms, by technological means or not, supervise the execution of the work?
- Do the platforms evaluate the results of the work, even creating mechanisms that are used by clients to do so (such as ratings and likes)?
- By punishing, blocking, limiting the transfer of services, deactivating accounts, hiding information, etc., the platforms restrict the freedom to organize one's own work, restricting, for example, whether or not the worker can choose the services to be provided?
- Do the platforms state that no substitutes or subcontractors should be used to carry out the services?
- Do the platforms place restrictions on building up your own client portfolio or working for third parties?
European Courts and the Nature of the Link between Platforms and Workers
The introduction of algorithmic labor management by various companies has brought with it a series of challenges for workers and public authorities around the world.
In particular, the question of the correct classification of workers - especially on the most emblematic digital platforms for private transportation or food delivery - has required courts in various countries to analyze and decide on the nature of the relationship between platforms and workers.
Faced with such challenges, a first and fundamental question is how digital platforms contractually designate the relationships they establish with their workers. Courts around the world, while not totally disregarding what is stipulated in contracts drafted by the platforms (terms of use) - predominantly unilaterally - focus on the factual relationships established between the parties to decide on the classification of workers.
From the outset, this implies tackling a specific problem posed by various digital platforms: the opacity of algorithmic management, i.e. the resistance of many companies to making information available about the internal workings of their systems.
On this issue, a key point, recognized by several courts, is the centrality that digital platforms themselves have for the business model of many of these companies, in other words, the way in which for many of them the main means of production of the activity carried out is the platform itself, which organizes the various aspects of providing a service. Cars, motorcycles or bicycles, for example, although essential for the job, are secondary when compared to the importance of the digital platforms themselves. For the courts that have looked at this issue, this has been fundamental in indicating that, despite the fact that these secondary tools are owned by the workers, they cannot be taken as an indication of self-employment.
On the other hand, recognizing the platform as the main means of production also indicates the need for a detailed analysis of how many platforms manage their workforce algorithmically.
Several courts have indicated that the freedom to turn an app on or off or to accept or reject orders sent by digital means are not sufficient elements to designate a worker as self-employed. What's more, many courts have found that certain platforms implement sanctions to restrict the possibility of workers rejecting the services transmitted by the apps or use bonuses, forms of ranking, promotions, etc. to make them stay logged in to the companies' systems for as long as possible.
Even at a distance and without the visible presence of a human, by capturing and processing a large amount of worker and client data, the algorithmic management of platforms is able to effectively manage and control the various aspects of providing a service: managing the assignment of clients to a worker; determining the rules, forms and deadlines they consider appropriate for carrying out a service; calculating the prices to be charged to clients and the remuneration to be paid to workers; monitoring the execution of an activity in real time; evaluating the work performed and calculating a worker's productivity; and implementing sanctions, including the dismissal of workers from the platform itself.
In this way, many companies have at their disposal workers who spend long hours connected to their systems and subjected to algorithmic management. This has led certain courts to view these workers as effectively integrated into the organization of these companies.
Carrying out the main activity for which the platform is known - delivering food, for example - and, in some cases, using tools with company identifications, or even uniforms, the workers are recognized not as owners of their own business, but are confused with the digital platforms' own brand, which some courts have also considered to be an indication of integration into the company's organization.
The fundamental point of this integration, however, once again goes back to algorithmic management and the central role that many platforms play in the business model of these companies. As certain courts have recognized, there is no genuinely entrepreneurial or independent action on the part of workers, since they depend on a non-transparent system of algorithms that restricts their possibilities to independently optimize their activity and earnings - and which is also unilaterally designed and modified by the company.
In these cases, a relationship is established that can further aggravate the worker's position, as they take on responsibilities such as the costs of work tools and materials and the fluctuating demand for the services offered, without being able to decide, or having their independence severely limited, on issues such as the value of their services, the way they are carried out, the possibility of building up a client portfolio of their own, etc.
Considering these various aspects, which obviously have to be analyzed on a case-by-case basis, there is a trend among European courts, particularly in last instance decisions, to reject the classification that certain platforms make of their workers as self-employed. The concern here, of course, is to protect the rights of these workers, recognizing, in some cases, the need for case law to update and refine its analyses in order to prevent an increase in precarious work.
On the other hand, the European Union recently approved a directive regulating platform work, which will be implemented by the 27 member states of the region, and which seeks both to strengthen public authorities in verifying employment in platform work, and to substantively regulate algorithmic management, restricting its actions, supervising it and seeking to make it more transparent.