Persons providing services through a platform should not be considered employees

The Chamber of Commerce informed the Ministry of Social Affairs that Estonia should not support the European Union directive turning the contracts of people providing services through platforms into employment contracts. Such a change limits the flexibility for both the platforms and the persons providing services through them and has a negative impact on the business environment.

With the amendments, the European Commission wants to extend the availability of social security (health insurance, paid leave, pension contributions) to people providing services through a platform, turning some of the contracts of people providing services through the platforms into employment contracts. The Chamber is opposed to such a change, because labour relations in Estonia are sufficiently well regulated and the Labour Inspectorate even now re-evaluates contracts under the law of obligations into employment contracts and vice versa. In addition, as far as the Chamber is aware, there are no major problems today with the social security of those providing services through the platform, as in many cases the service is provided in addition to the person’s main job or the remuneration for providing the service is sufficient to obtain health insurance.

The Chamber does not support the employment relationship criteria set out in the draft
According to the draft there is an employment relationship between the platform and the service provider if at least two of the following five criteria are met. These criteria are:

• fixed salary cap;
• compliance with the required appearance and behaviour;
• monitoring the performance and quality of the work;
• restriction of the freedom of a person to organise their work, with regard to work time and duties;
• prohibition of working for third parties.

The Chamber points out that those criteria are worded in a confusing manner and are inappropriate for the purpose of establishing an employment relationship, since it is self-evident that the platforms have an interest in ascertaining the quality of the tasks performed and the way in which they are performed. For example, the Chamber considers that the criterion of a fixed salary cap can be understood in two ways. One way of understanding the content of this criterion is that it is an employment relationship where a periodic upper limit is set on earnings (i.e. setting an upper limit on, for example, the amount earned per month); another way is that an upper limit is set on the amount earned for a specific task.

The exact date of entry into force of the directive is not yet known. If the directive enters into force, Member States must transpose it into national law within two years of its entry into force.

See an overview of the draft HERE