Text written by Merle Erikson
It is generally known that the legal nature of employment relations is determined by the extent to which the individual performing the work is subordinate to the person who provides the work. To ascertain the relationship of subordination, it is necessary to examine how the work is organised. For example, if the party providing the employment determines the time, place, and manner of performing the work, obliges the other party to perform the work personally, and pays remuneration for the work performed, which is the sole income of the worker, such a worker is likely to be an employee. Therefore, it is an employment contract if the worker is subject to the other party’s management and control.
In employment relations, it is becoming increasingly common for work processes, task allocation, performance evaluation, and employee guidance to be carried out through algorithmic management, i.e., using automated monitoring and decision-making systems. The use of artificial intelligence-based employee management systems, which originated from platform work, is becoming increasingly widespread in traditional employment relationships. This type of work organisation is the main reason determining a worker’s status is complicated in practice.
Speaking more specifically about platform work, scholars and practitioners have been discussing the legal status of platform workers for more than ten years. The proposal for the platform work Directive that was elaborated in 2021 also included special criteria (e.g., a platform supervises the performance of work by electronic means, restricts the freedom to organise one’s work, decides upper limits for the level of remuneration, etc.) to ascertain the legal status of a platform worker. The final version of the Directive, adopted in 2024, no longer sets forth these criteria. Article 4 of the Directive emphasises that the correct status of a platform worker must be determined and establishes a legal presumption of an employment contract to protect workers.
When determining the legal status of platform workers, European countries are divided into two groups. Some follow the traditional principles of distinguishing workers, which hold that the identification of the subordination relationship is decisive. Others have established additional criteria, the (partial) fulfilment of which leads to the presumption of an employment contract. However, these criteria (e.g., the platform provides instructions on how work is done, intervenes in assigning working hours and wages) are not new in content; rather, they explain how the platform can organise work, mostly through algorithmic management.
Thus, the use of algorithmic management does not change the nature of the employment relationship; it only adjusts the context in which it is determined. In such a system, a person who provides work uses technological solutions that differ from standard ones to manage and control employees. These allow, e.g., to distribute tasks, monitor the performance and intensity and quality of employees in real time, direct them to work at specific times using bonuses or sanctions, prevent the choice of working hours or tasks or interrupt availability, unilaterally set and change the amount of remuneration, rank employees based on user ratings or other performance indicators, and exercise disciplinary power by reducing pay or closing an account.
In the above examples, the worker is subject to the other party’s management and control. Thus, the use of algorithmic management does not require establishing special criteria for identifying an employment relationship. Still, in such cases, it is necessary to understand how algorithmic management affects the determination of the subordination relationship. As usual, it should be remembered that, in the case of algorithmically managed work, employment status cannot be ascertained solely on the basis of a specific aspect of work organisation; all the circumstances of the work performed must be assessed.
Leave a Reply