1. Introduction

The rise of platform-based business models has created new forms of work organisation, prompting the EU to establish a harmonised framework to regulate employment classification, automated management, and transparency.

Directive (EU) 2024/2831 of the European Parliament and of the Council of 23 October 2024 on improving working conditions in platform work forms the cornerstone of this framework. It responds to the growing prevalence of platform-mediated work, which, while offering flexibility, may also create uncertainty regarding employment status, working conditions, and the role of automated systems in the management of work.

The Directive aims to enhance the protection of individuals performing work through digital labour platforms by introducing clearer rules on employment classification, algorithmic management, and transparency obligations.

For the purposes of the Directive:

• “digital labour platform” refers to a service provided, at least in part, through electronic means, such as a website or an app, that organises work performed by individuals in return for payment at the request of a customer (recipient of the service) and involves the use of automated monitoring or decision-making systems;
• “platform work” means work organised through such a platform and performed in the EU on the basis of a contractual relationship between the platform and the individual;
• “person performing platform work” means an individual performing platform work, irrespective of the nature of the contractual relationship or the designation of that relationship by the parties involved; and
• “platform worker” means any person performing platform work, who has or is deemed to have an employment contract or an employment relationship.

Within this framework, the Directive is structured around three principal objectives:

Employment status: To facilitate the correct determination of whether a person performing platform work is genuinely self-employed or should be classified as an employee, based on the factual reality of the working relationship.

Algorithmic management: To introduce safeguards and transparency requirements governing the use of automated monitoring and decision-making systems by digital labour platforms.

Transparency and enforcement: To enhance information rights and supervisory powers of national authorities, thereby improving oversight and enforcement in relation to platform work, including in cross-border contexts.

Overall, the Directive seeks to promote fairer, safer, and more transparent conditions in platform work across the EU. Member States, including Cyprus, are required to transpose its provisions into national law by 2 December 2026.

2. Main provisions

Use of intermediaries and subcontracting models

The Directive addresses situations where digital labour platforms organise work through intermediaries or subcontracting arrangements. Member States are required to ensure that persons performing platform work via such intermediaries benefit from an equivalent level of protection, and may introduce appropriate mechanisms, including joint and several liability, to prevent circumvention of the Directive’s safeguards. For businesses, this means that reliance on intermediary structures will not, in itself, remove or reduce the application of the Directive’s employment classification and algorithmic management rules.

Employment status and the presumption of employment

A contract may describe a person as “self-employed”, but the legal assessment must be based on the reality of the working relationship rather than its contractual label.

The Directive requires Member States to introduce effective procedures, under national law, for determining employment status based on how work is actually performed in practice.

Where factual indicators demonstrate that a digital labour platform exercises direction or control over the performance of work, national legislation may establish a rebuttable presumption of employment. In such circumstances, the relationship may be treated as an employment relationship unless the platform proves otherwise in accordance with the applicable national rules.

This does not mean that all platform workers will automatically be classified as employees. However, it facilitates the challenge of incorrect classification in cases where the platform’s level of control is comparable to that of an employer.

Additionally, the Directive does not require Member States to extend the legal presumption of employment to tax, criminal or social security proceedings, although it does not preclude them from doing so. It will therefore be for the Cypriot legislator to determine whether the presumption will apply solely to "relevant administrative or judicial proceedings where the determination of the correct employment status of person performing platform work is at issue”.

Finally, it is also worth mentioning that contractual relationships entered into before and ongoing on 2 December 2026, the legal presumption applies only to the period starting from that date.

Algorithmic management and decision-making

The Directive imposes strict limits on how digital labour platforms may process personal data through automated monitoring or decision-making systems requires digital labour platforms to treat the use of automated monitoring and decision-making systems as high-risk processing under the GDPR, necessitating a data-protection impact assessment (DPIA).

As a number of digital labour platforms rely on automated systems to assign tasks, monitor performance, rank workers, and make decisions that affect access to work, the Directive introduces safeguards to ensure that such systems are used transparently and subject to appropriate human oversight.

In particular, platforms must regularly evaluate their impact, involve workers’ representatives, allocate trained personnel able to override automated decisions, and take corrective action where risks or rights infringements are identified. Individuals must be informed of and able to obtain explanations for significant automated decisions (such as suspension, deactivation, payment refusal or contractual status), have access to a contact person, and may request human review and rectification within set timeframes, with compensation where correction is not possible; in all cases, decisions to restrict, suspend or terminate accounts or contractual relationships must be taken by a human being.

Health and safety risks linked to platform management

The Directive recognises that app-based management may give rise to health and safety risks, including stress, fatigue, and work-related pressure that could increase the likelihood of accidents.

Digital labour platforms are therefore expected to assess and mitigate such risks, including those arising from workload pressure and the organisation of work through digital management systems, in accordance with applicable occupational health and safety obligations.

Information rights, enforcement, and remedies

The Directive requires platforms to provide relevant information to competent national authorities regarding the organisation and operation of platform work. This is intended to facilitate more effective supervision and enforcement of labour and data protection rules.

Member States must also ensure that persons performing platform work have access to effective complaint and dispute-resolution mechanisms, protection against retaliation, access to relevant evidence, and the availability of proportionate and dissuasive penalties for infringements.

What this means for businesses in Cyprus

Cyprus is required to transpose the Directive into national law by 2 December 2026. Even before the implementing legislation is finalised, businesses operating digital labour platforms in Cyprus (or targeting the Cypriot market) should review their current practices in anticipation of the forthcoming regulatory framework.

In particular, businesses may need to review:

• Worker classification models and contractual arrangements;
• Automated monitoring and decision-making systems;
• Suspension, restriction and deactivation decision processes;
• Information and transparency frameworks for persons performing platform work and authorities;
• Data processing practices linked to algorithmic management;

Depending on the manner in which the Directive is transposed into Cypriot law, these developments may have implications for employment classification, compliance exposure, and the risk of reclassification disputes before national courts and competent authorities.

3. How Economou & Co LLC can assist

The EU Platform Work Directive represents a significant development in the regulation of platform work, with direct implications for both employment classification and operational practices.

Economou & Co LLC advises digital labour platforms and other affected businesses on preparing for the implementation of the Directive in Cyprus. Our support includes assessing worker classification and contractual frameworks, reviewing platform governance and management practices to ensure compliance with the Directive’s requirements, and advising on engagement with competent authorities in anticipation of the Directive’s transposition into Cypriot law.

Image credit: European Union, 2025. Council of the European Union (consilium.europa.eu)