Text written by Laura Immonen
In Finnish labor law, work can be conducted as either an employee or an entrepreneur. The labor law status of platform workers, for example, food couriers and drive-haling drivers, has been a subject of discussion in Finland and other European Union member states for several years.1 The subject has been assessed by different authorities and courts of law with varying results. Defining whether a platform worker is an employee or an entrepreneur is important because it determines if a platform worker is in the scope of labor law regulation and collective agreements or not. Defining the correct labor law status also affects the competitive position of companies.
Determining the labor law status of platform workers can be complicated because platform work differs from the so-called traditional employment relationship that is full-time, permanent, and the work is conducted in the employer’s premises. Platform work is usually performed outside the employer’s premises, and a platform worker has more freedom to affect his/her work than a traditional employee. A platform worker can often decide, for example, when and where he/she works and which routes he/she uses to complete the work task. Algorithmic management is often used in platform work. In the Platform Work Directive2 algorithmic management is defined as automated monitoring systems and automated decision-making systems powered by algorithms replacing functions that managers usually perform in businesses, such as allocating tasks, pricing individual assignments, determining working schedules, giving instructions, evaluating the work performed, providing incentives or applying adverse treatment and such algorithmic systems being used as a way of organizing and managing the work (recital 8).
In the Finnish Employment Contracts Act (55/2001), there are five criteria listed that need to be met for a legal relationship to be an employment relationship. Section 1 of Chapter 1 of the Employment Contracts Act states that the Act applies to contracts (employment contracts) entered into by an employee, or jointly by several employees as a team, agreeing personally to perform work for an employer under the employer’s direction and supervision in return for pay or some other remuneration. Therefore, the criteria for an employment relationship are a contract, performing work personally, working under the employer’s direction and supervision, and pay or other remuneration. The Employment Contracts Act and other labor law regulations must be complied with if the relationship between the parties fulfils the criteria determined in Section 1 of Chapter 1. The parties’ choices concerning the legal relationship can have an effect on whether the relationship is viewed as an employment relationship or not.
It has been argued that, from the aforementioned criteria for employment relationship, the most important criterion is the one that work must be performed under the employer’s direction and supervision. Employer’s right to direct and supervise the work means that the employer can define when, where, and how the work is performed. In Finnish case law, legislative materials, and legal literature, it has been agreed that fulfilling the criterion does not require actual direction and supervision. It is enough to meet the criterion that the employer merely has the right and possibility to direct and supervise the work.
Since the right to direct and supervise the work can be viewed as the most important criterion of employment relationship, and in platform work, algorithmic systems are typically used to organize and manage the work, this raises a question of how the relation between these two should be assessed when determining the labor law status of a platform worker. Platforms have various means to affect the behavior of a platform worker indirectly, such as punishments and so-called nudges, which aim to steer the worker’s behavior in the desired direction without directly obliging him/her to do so. The used algorithms enable collecting a lot of information about the platform worker’s work performance. These factors must be taken into account when considering whether the use of algorithmic management can be seen as a means to exercise direction and supervision over the work.
- See, for example, the case of Supreme Court of France Arrêt n°1737 du 28 novembre 2018 (17-20.079) – Cour de cassation- Chambre sociale ECLI: FR: CCASS:2018: SO01737, Pourvoi n°17-20.079 | Cour de cassation and the case of Supreme Administrative Court of Finland KHO:2025:41, https://www.kho.fi/fi/index/paatokset/ennakkopaatokset/1747729406840.html. ↩︎
- Directive (EU) 2024/2831 of the European Parliament and of the Council of 23 October 2024 on improving working conditions in platform work. OJ L, 2024/2831, 11.11.2024, p. 1–26. ↩︎
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