Platform work had gained, unfortunately, but also deservingly, a negative reputation. Consumers love them and cannot imagine their lives without them, because they offer unparalleled convenience and efficiency. On the other hand, public opinion of platform work is very poor due to their association with sub-standard employment practices.
Putting things into a more even perspective however, platforms offer a business model which works successfully for all the stakeholders involved, especially consumers and the smallest business units offering a product or service. We have many exceptional examples of these platforms especially in the tourism and hospitality sector where one can easily find accommodation offers, compare prices, and so on.
Platforms are very useful tools of empowerment, without which the business units linked to it would never be able to have the same level of visibility and offer the same level of service on their own. The Platform would have carried out significant investments and this only makes sense due to the number of users it manages to rake in. Target single business units would not be able to achieve on their own.
On the other hand, however, some platforms have also affected the labour market and that is where the picture is not very rosy. Platforms work best when they bring together service providers and business units. In some instances, the relationship between businesses becomes more like that between an employer, the platform and an employee, the service provider – here problems start to arise.
Malta’s employment rules already provide for important safeguards. The law gives clear guidelines to distinguish whether a relationship is de facto between businesses, typically between a self-employed and a larger business unit or between an employee and an employer. If the relationship between both parties ticks five of the eight specified criteria, than the relationship would prima facie be deemed as an employment relationship.
This legal measure has always worked very well and can be applied to platform work. One must also keep in mind that the law does not permit for third country nationals coming to work in Malta to convert their work permit to a self-employed status. There are very strict rules governing this, yet unfortunately the rules were not being applied correctly or safeguarded for a stretch of time and this led to a quick deterioration of the platform work dynamic. This has since been corrected.
Like with every law there are always grey areas, or rather, creative initiatives to surpass the law. The strongest law in place regulates specifically the employer and the employee and cannot regulate third parties. It has become an increasing practice for some businesses or platforms to engage a contractor, instead of an employee directly, and have the contractor act as middle-man or the employer in order to shed responsibilities onto this middle-man, among others. The self-employed or the employees would therefore fall under the responsibilities of the middle entity, which usually has little say or power with regard to the business providing the work itself.
This is where the Chamber of SMEs sees room for some fine tuning of the law where regulators can extend their reach to third parties directly effecting the working conditions and responsibalising them. The aim of this would not be to stifle economic developments or practices but to curb any abuse in attempts to circumvent the law.
Abuse in this respect not only damages employees caught up in the system but also the many bona fide employers that carry their responsibilities according to the law and suffer due to lack of a level playing field.
Abigail Agius Mamo is CEO at Malta Chamber of SMEs. She was a panellist in a conference organised by Malta Federation of Professional Associations, as part of the EU-funded project Mutuus VS/2021/0073, in which MFPA partnered with Confprofessioni, the Italian Federation for Liberal Professions. The theme of the event was ‘Social Benefits for the Self-Employed: from Policy to Practice’.