According to the International Labour Organization (“ILO”) the ‘platform economy’ emerged in the early 2000s. Two forms of digital labour platforms can be distinguished: ‘crowd work’ and ‘work on demand via apps’. The ILO expects that digital employment will further expand in the future. But the ILO warns that little is known about the quality of jobs that are generated in the platform economy.
It is clear that the platform economy is growing in the Netherlands as well. On 1 November 2017, Deliveroo (the global food delivery service) announced that it would no longer renew any existing fixed-term employment agreements in the Netherlands. After expiry of their employment agreements delivery workers could only keep working for the company as self-employed individuals. The twenty-year old delivery worker Ferwerda accepted the self-employed contract, but (with hindsight) believes that this is actually a matter of pseudo self-employment. In court he claimed a declaratory judgment stating that the contract concluded between the parties should be qualified as an employment agreement.
This is the first time that a Dutch court has expressed an opinion on the qualification of a working relationship in the platform economy. Just recently FNV (a Dutch labour union) announced they will sue the online platform ‘Helpling’ for not offering employment contracts to their workers. In other European countries, such as France and the United Kingdom, several court cases have already been conducted. In Spain too the court has ruled in a case concerning Deliveroo on 1 June 2018; the conclusion was that there was pseudo self-employment and that the delivery worker was actually employed under an employment agreement.
The Deliveroo ruling
On 23 July 2018, the Subdistrict Court of Amsterdam ruled that there clearly was no employment agreement. The Subdistrict Court gave two reasons for its opinion.
Firstly, it matters what the parties have agreed upon. In the opinion of the court it is clear from the contract for services that it was the intention of the parties that the delivery worker would start working as a self-employed person and that the parties did not intend the delivery worker to enter the employment of Deliveroo under an employment agreement. Indeed, the delivery worker had confirmed this in an e-mail. Moreover, he has registered with the Chamber of Commerce as a sole proprietorship and has applied for a VAT number. By doing this, the delivery worker knowingly and willingly accepted a contract for services.
Secondly, it matters in what way the parties have executed the agreement. In a self-employed working relationship no relationship of authority is allowed to exist between the client (Deliveroo) and the contractor (the delivery worker). If there is, that would imply a pseudo construction. The Subdistrict Court ruled that there is no relationship of authority between Deliveroo and the delivery worker, since the delivery worker is free to decide whether or not to report for work and is also free to refuse orders, after which the order will be offered to another delivery worker. Furthermore, the delivery worker is free to work wearing his own clothes or the clothes of a competitor and using his own thermobox, as long as these meet security requirements. Finally, the delivery worker is free to work for a competing company and can freely ask other persons to do the work for him.
Given the above information, the Subdistrict Court concluded that in view of the contract concluded between the parties and the way in which they subsequently in fact performed this contract, their relationship does not qualify as an employment agreement.
The interesting thing about the Deliveroo ruling is that the Subdistrict Court acknowledges that current employment law in the Netherlands has not taken into account the employment relations arising from the (relatively) new platform economy, but rules nevertheless that the qualification as a self-employed individual is not so unreasonable as would force the Subdistrict Court to rule differently. According to the Subdistrict Court, it is up to the legislator to take action if it is considered undesirable for work platforms such as Deliveroo to offer contracts as described above.
However, taking action is not an easy task for the legislator. In a recent Issue Brief the ILO states that regulating the platform economy poses many challenges. An ‘intermediate category’ between employment and self-employment could be necessary. And it can be difficult to guarantee the fundamental rights of workers.
A recent report from the ILO regarding ‘crowd work’ puts forward a long list of 18 criteria to ensure decent work on digital platforms. Especially with ‘crowd work’, where activities are performed online irrespective of the location, globalization adds another complicating factor.
The future of the Platform Economy
The ruling of the Subdistrict Court of Amsterdam of 23 July 2018 confirms that the Dutch courts assess whether the relationship between the platform company and the worker qualifies as an employment relationship or as a self-employed relationship on the basis of all facts and circumstances. This means that the working method of the platform company will determine the outcome and that other (deviating) rulings for other platform companies may follow in the future.
This casuistic approach will allow the legal uncertainty about the status of platform workers to continue. In the meantime, concerns about the increasing platform economy are growing. The debate about the qualification of platform workers follows from the general current debate in the Netherlands about the increase of (pseudo) self-employed persons.
In the Coalition Agreement of 10 October 2017, the Dutch government announced measures to fight pseudo self-employment by setting clearer criteria, such as minimum rates. However, it is still doubtful whether the announced legislation will indeed offer platform workers a solution. Also the Dutch proposal to introduce minimum rates for self‑employed workers might not be possible due to European legislation. The use of a minimum rate can possibly be seen as a restriction on the freedom to provide services. The Dutch legislator will discuss this matter with the European Commission. We will await the outcome of these discussions and naturally the point of view of the European Commission will also be important to other countries of the European Union.
*Soo-Ja Schijf is a partner in the Employment group of Kennedy Van der Laan, Amsterdam. She can be contacted at Soo-Ja.Schijf@KVdL.com