November the 28th, 2023 – Since the arrival and blooming popularity of digital platforms such as Uber, Bolt Food, Wolt, Glovo and others, disorganisation and misuse have been rife. The Croatian Government now hopes to be among the first in the EU to bring proper order and control to the platforms which don’t always follow good practices.
As Poslovni Dnevnik/Josipa Ban writes, the emergence of digital platforms has been very visible over the last several years. The most famous of them currently operating here in Croatia are Uber, Bolt and Glovo and Wolt. Unfortunately, the market has become a mess with workers who have been left almost entirely unprotected. Croatia, as one of the first countries to take matters into its own ”hands” in the entire European Union, has decided to put a stop to bad practices. Or at the very least – try to do so.
First of all, this will be carried out through the adoption of amendments to the Labour Act. New provisions related to work via digital work platforms were recently adopted, and they’re set to enter into force at the beginning of next year. The transitional period of one year, namely, was adopted in order to create an application with which the Ministry of Labour will manage and process all of the data related to work via digital platforms. The application is currently in its testing phase, and should be functional from mid-December onwards, as revealed by Dražen Opalić, director of the Directorate for Labour and Occupational Safety at the Ministry of Labour.
“The plan is to start registering digital work platforms and aggregators in the register from mid-December. By the beginning of 2024, all subjects in Croatia should be registered”, announced Opalić.
At the end of January 2024, he hopes, Croatia could have publicly available data on the state of the market created by the arrival of digital platforms. At the moment, we’re only going off assumptions, according to which about 40,000 people currently work through digital platforms, and in addition to the aforementioned platforms, the country also has several hundred aggregators.
Regulations aren’t always properly followed
In addition to all of that, it’s also widely assumed that the majority of these workers, around 80 percent of them, work through aggregators for digital platforms. They, on the other hand, as the findings of the State Inspectorate show, often circumvent the proper national regulations. In the first ten months of this year, as many as 102 violations were found in 186 inspection findings in the field of labour relations.
The largest aggregator in the Republic of Croatia was also subject to supervision – the Split company Meta Mate, where a concerning 18 violations of several laws were found, according to the State Inspectorate. In the meantime, that company led by young entrepreneur Mate Dučić has grown from zero to more than 2.5 million euros in revenue in just four years.
Now new rules are coming according to which platforms and aggregators will not only have to be entered in the register, but through the information system for the suppression of undeclared work (JEER) they will also have to submit data on the scope of that work using digital work platforms, data on the number of workers they have, the type of contract have with the worker, the time and location of the work, and so forth.
Opalić explained that the digital world of work can be controlled “only through digital tools, which will be our platform, that is, the registry and JEER”.
“Through them, we’ll be able to see in real time the routes of drivers and delivery people, that is, how much they’ve actually worked. The platform will also have an obligation to report when it pays the aggregator money for the work that has been done. We’ll then match the paid money with the books for incoming invoices (U-RA) and we’ll track how much was actually paid to the worker using the JOPPD form. If we’ve got a situation in which there’s a foreign worker in question, we’ll be able to match the data with what the Interior Ministry’s database has, and check what kind of work permit the worker has,” explained Opalić.
He emphasised that the system will perform analytics and risk assessment, thus providing Croatian Government institutions, the State Inspectorate and the Tax Administration with all of the data necessary for quality control. “We wanted to protect workers’ rights as much as possible, and at the same time enable such a business model. I don’t know what greater control we could have introduced than the one we’re introducing now”, believes Opalić.
However, the Croatian Government didn’t dare to do what the Spanish one did. What Spain introduced was also demanded by the trade unions, as well as the Wolt Delivery Community Initiative – and that was to remove aggregators from the law and to force these platforms to assume the obligation of the employer instead of the aggregator.
Opalić pointed out that Croatia is still too small a market, and that certain platforms left Spain after such regulations were introduced. Because of this, the Croatian Government is understandably reluctant to make very bold moves.
“We’ve created a balance between entrepreneurial freedom, business solutions offered by digital work platforms and worker protection rights,” he stated, adding that ultimately, these platforms will be responsible for all of the data put into the system. “Digital work platforms will have to indirectly put their aggregators in order. Otherwise, they’ll also be held responsible if they’ve given any falsified information”, he noted.
Another significant novelty is the limitation that the current Croatian Labour Act places on the one for whom the platform worker performs the work. Namely, if a worker (natural person, who isn’t self-employed) will earn more than 1,512 euros in one quarter (which would amount to 504 euros per month), the aggregator or digital platform will no longer be allowed to let them perform the work, or they’ll have to offer them an employment contract.
This poses another problem, according to some
This provision of the law is wrong for several reasons, according to Iva Bjelinski Radić from the Faculty of Law in Zagreb, which she writes about in a scientific paper in which she analyses the new provisions of the Labour Act related to platform work. It’s disputed that it makes the existence of an employment relationship dependent on the scope of receipts and ignores the element of subordination as a key criterion for determining the existence of an employment relationship.
“The described approach could encourage operators of digital platforms to, in an effort to prevent the retraining of the workforce into workers, algorithmically assign jobs to drivers or delivery people only until the moment they reach the prescribed earnings limit,” she noted.
How unorganised this segment of the labour market actually is, is confirmed by the story of one individual who wished to remain anonymous, and who worked for two platforms, first directly, through their own company, and later they performed the work through an intermediary, or aggregator.
“It’s not a grey economy, but a black economy,” he said, adding that working directly for the platform didn’t pay off for him. Because if he paid all the expenses, and then also the state benefits, he’d barely cover himself by the end of the month. He therefore decided to work through an aggregator. When asked how things worked between him and the aggregator, he said that everything was done secretly. From the earned rides, the digital platform took 10% commission, the aggregator 20%, and the rest went to the worker. In such an organised relationship, the Croatian Government must step in somewhere.
EU-wide regulations are now being demanded
There are still many objections to the regulation of this very complicated labour law relationship. Croatia’s practice will be among the first in Europe to show whether the chosen approach is actually any good. In the meantime, we’re waiting for the EU regulation that should be passed through the proposal of the Directive on improving the working conditions of platform workers.