Opening remarks by Commissioner Schmit at the press conference on Platform Work and the Social Economy Action Plan

Thank you Valdis. Good morning everybody.

I will speak first about our proposal on Platform Work and then move onto the Social Economy Action Plan.

You have heard about the scale of the platform economy: More than 500 digital labour platforms operate in the EU and many of them, I would even say most of them, operate in several EU Member States, which shows clearly that the platform economy has a clear European dimension and, even, a global dimension.

There is a need to have a European level playing field for their operations.

The number of people working for them has been mentioned: 28 million, and we expect, indeed, that this number will increase very rapidly and reach 43 million by 2025.

So it's clear that the platform economy is developing, is increasing, is growing. And it is growing because the demand is growing.

The first point I would like to make is that no one is trying to “kill”, to stop or hamper this growth of the platform economy. I think we all are committed to the development of this economy, because it corresponds to a demand in our societies. So, quite the opposite. We want the platform economy to thrive.

But if technology has allowed us to develop this new kind of business model, well, this business model should also fit our standards, including the social standards. And, therefore, we have to bring the platform economy also inside of what we call the ‘European social model'.

So we have to make sure its development also upholds the labour and social standards which have been established in the EU.

If people are missing out on labour and social rights that they are entitled to, then there is a need to act.

It is about what work is taking place, based on facts, not on contracts. We want to correct the misclassifications that exist.

It comes down to ensuring that these jobs are quality jobs, because this is also an important issue: Those who are working in a platform are entitled to have quality jobs.

We don't want this new economy just giving low quality or precarious jobs. We don't want people working in the EU to face precariousness.

There is also an economic argument which is about ensuring a level playing field. Why should some companies not be obliged to meet the same social standards as other companies who they are competing against, outside of the platform economy?

So this is an issue of fair competition between, on the one hand, platform economy, and on the other hand, more classical forms of companies, but also competition between platforms.

One argument we hear a lot is that people working through platforms value the flexibility this work offers.

Our proposal does not mean an end to flexibility. We perfectly understand that platforms need flexibility because the markets - they are operating, by definition - need this flexibility. You can have an employment status and also enjoy flexibility.

So these are not two aspects which are mutually exclusive.

We see this, by the way, in other sectors such as retail, hospitality, and tourism. We also see that this is already happening in platforms that do employ workers, or have some workers and some self-employed. So it's not something which does not yet exist.

A lot of platforms and - even, among the biggest platforms - they have already employees, they have workers, and despite of that, they work, they operate, and they are profitable.

These are platforms, big platforms, listed on the stock exchange, and they are absolutely competitive.

I would also say that while it's true that people working for platforms value flexibility, they also value some social protection, social benefits and, especially, protection against accidents.

Because we have a lot of cases where, especially young people, had accidents and had no protection against accidents or protection against sickness.

And again, it's not a question of preference of your employment status, it's a question of looking at the facts.

The many court rulings from across the EU that we have seen have inspired us in our preparations of this proposal.

And in those rulings they cite criteria related to “control”. So this is about establishing clear criteria and looking at the facts.

If the platform is in fact an employer, then the people working for it are entitled to the same rights and protection as workers in the “offline” world.

A word on another very important aspect of the proposal which is algorithmic management.

The proposed Directive increases transparency on algorithms, so people can understand:

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  how tasks are allocated
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  how prices are set, and
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  how they are being evaluated.

It also increases accountability in the use of algorithms by ensuring there is human monitoring of decisions taken by the automated systems that can affect working conditions.

By the way, these rules on algorithms apply to employees or workers, but also to the self-employed.

And the Directive makes it possible to challenge those decisions, giving people the right to receive explanations within a short timeframe and to rectify the situation if needed.

Another area we are addressing is traceability. National authorities often struggle to access data on platforms and the people working through them.

And this is even more difficult when platforms operate in several Member States.

The Commission's proposal asks platforms to declare work where it is performed and to make some information about their activities and the people who work through them available to national authorities.

A final word on collective bargaining and social dialogue, we are improving the possibilities for people working through platforms to join or form unions and have collective representation.

In the platform economy, often no physical workplace is involved. This means that people working through platforms rarely interact with each other - at least not in an organised way - so traditionally there is not much collective representation.

The directive will create possibilities for people working through platforms to get in touch with each other, to organise themselves and discuss issues through their representatives.

The Commission is also issuing guidelines on collective bargaining by solo self-employed people, clarifying that they are not in breach of competition law if they seek to make collective agreements.

Now a few words about the Social Economy Action Plan.

The Social Economy Action Plan addresses an important sector in Europe - in some countries, it covers more than 10% of GDP.

Social Economy organisations, nevertheless, face very often difficulties developing and scaling up their activities because they are not sufficiently understood and recognised.

They need more and better support to grow and thrive, so they can have an even bigger impact on society.

Social economy organisations span a diverse range of sectors and forms, from care services to recycling; from cooperatives to social enterprises.

Thanks to its strong local roots, the social economy can offer innovative bottom-up solutions to many of the global challenges of today, especially climate change, digitisation and social exclusion, but also very much the territorial dimension: Rural areas, remote areas, here the social economy, the social enterprise can bring the services, the activity and also the jobs. Therefore, we have a strong cooperation also with Commissioner Ferreira on these particular issues in a more territorial context.

The social economy works with and for local communities and, therefore, has a huge job creating potential.

The objective of the Action Plan we are presenting today is to help the Social Economy to grow.

Therefore, the Action Plan is divided into three main areas:

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  Creating the right conditions for the social economy to grow
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  Opening opportunities for social economy organisations to start up and scale up
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  Making sure the social economy and its potential are absolutely recognised

Firstly, creating the right business environment is one of our first objectives. Policy and legal frameworks need to be adapted to account for social economy organisations.

We are thinking about things like state aid, public procurement and taxation for example, which have to be adapted or reviewed in this context of pushing the social economy and social enterprises.

To address these issues, the Commission will propose a Council Recommendation on developing the social economy framework conditions in 2023.

Secondly, the action plan seeks to open up opportunities through enhanced support to capacity building and skills, as well as improved access to funding. We need to boost social innovation across the EU.

There is ample EU funding that can be used, and has already been used for interesting social economy projects, like an interesting project in Austria I want to mention for social enterprises, which is developing digital technology to provide real-time sign language translation for people with hearing impairments. Which shows also that social economy can be very present in the new digital economy.

The Commission will launch a new EU Social Economy Gateway in 2023 to ensure social economy actors can find all the information they need in one place on EU funding, policies, training and initiatives. It will also launch new financial products in 2022 under the InvestEU programme.

And the Commission will set up in 2022 a new European Competence Centre for Social Innovation.

Finally, the action plan will promote a better understanding of the specific situation of the social economy to help all relevant stakeholders including policy makers and financial intermediaries.

I would like to add a big interest in the international context. The social economy is growing in the neighbouring countries, especially, in the Balkan countries. It is also developing in the Mediterranean countries, as well as in Africa. In Senegal, for instance, the social economy is growing.

Thank you very much.