On the way to a Platform Workers’ Directive

#gigeconomy #platformwork #platformworkersdirective

What does it mean to be a “platform worker”? According to the European Industrial Relations Dictionary,[1] “platform work” is “a form of employment in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services in exchange for payment.” This immediately triggers the thought: “Oh, this is Uber!” or “This is Bolt/Glovo/[any other similar service].” But a platform worker may also offer their services for qualified services, such as programming, copyright services or even legal services.

At EU level, it was considered that the conditions under which platform workers offer and provide their services often resembles employment conditions. According to official data, approximately 28 million workers in the EU are platform workers, while about 5.5 million thereof are working under conditions resembling employment, while not benefitting from the benefits of such set-out.[2] Thus, the European Commission initiated in December 2021 a public debate in relation to a new draft directive on “improving condition of persons working through digital labour platforms” i.e. the so-called “Platform Workers Directive” (EU Directive 2021/0414 Improving working conditions of persons working through digital labour platforms) (see the draft under this link: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52021PC0762&qid=1700641785604 )

If adopted in its current form pending further negotiations and debate, the Platform Workers Directive will create the framework for Member States to adopt national legislation granting platform workers various rights which would otherwise be only available for employees i.e. individuals who have concluded labour agreements. According to the explanatory memorandum to the draft Directive, “the general objective of the proposed Directive is to improve the working conditions and social rights of people working through platforms, including with the view to support the conditions for the sustainable growth of digital labour platforms in the European Union.” while “the specific objectives through which the general objective will be addressed are: (1) to ensure that people working through platforms have – or can obtain – the correct employment status in light of their actual relationship with the digital labour platform and gain access to the applicable labour and social protection rights; (2) to ensure fairness, transparency and accountability in algorithmic management in the platform work context; and (3) to enhance transparency, traceability and awareness of developments in platform work and improve enforcement of the applicable rules for all people working through platforms, including those operating across borders.”

In Romania, the status of platform workers remains for the time being unregulated. Hence, most such workers register either as PFA (self-employed individuals or, in Romanian, persoană fizică autorizată) or they set up limited liability companies via which they provide the services. At governmental level and in the context of EU-wide negotiations/discussions, Romania has expressed its support towards the adoption of regulation in order to create legal safeguards for platform workers (including by instituting a legal (rebuttable) presumption of employment under certain conditions).[3]

Undoubtedly, creating rights and protections for platform workers may prove to be beneficial in certain circumstances (for social benefits mostly). However, the question remains why regulate platform work in the first place? Isn’t it just as clear that individuals choosing to do platform work effectively have opted out of the standard type of employment allowing certain particular rights, but removing the benefit of enhanced flexibility, at least a certain degree of self-management of time and other resources and allowing the practice (or even simulation) of entrepreneurship (if not actually creating the basis for it)? And if the answer to this question is a sound “yes”, then why do we need regulation? The continuing debate on the draft Directive may suggest that the benefits of such regulation are not that obvious to all parties and that the impact may be less than fully favourable. Nevertheless, the Directive is expected to be adopted; more comments to follow on its final form.

[1] Available on the website of the European Foundation for the Improvement of Living and Working Conditions (Eurofound) under the link https://www.eurofound.europa.eu/en/european-industrial-relations-dictionary/platform-work [2] https://www.consilium.europa.eu/en/policies/platform-work-eu/ [3] See in this regard the Joint Statement by Belgium, Luxembourg, Malta, the Netherlands, Portugal, Romania, Slovenia and Spain regarding the Proposal for a Directive of the European Parliament and of the Council on improving working conditions in platform work: https://gouvernement.lu/dam-assets/documents/actualites/2023/06-juin/12-engel-directive-travail-epsco/proposal-for-a-directive-of-the-european-parliament-and-of-the-council -on-improving-working-conditions-in-platform-work-joint-statement.pdf

Shareholders’ Agreements

#legalbrain #lclegalproof #shareholdersagreements #mergersandacquisitions #acordasociati #inanutshell

Shareholders' agreements are legal documents found on the borderline between company law and contract law. They are contractual in nature, but their effectiveness depends in some respects on their compliance with the provisions of Law 31/1990 on companies (Law 31).

The characteristics of shareholders’ agreements could be summarised as follows:

• They are contractual in nature, which gives the shareholders more flexibility as regards the agreed contractual provisions (including the law applicable to the agreement, which does not have to be Romanian law).

• They do not have to be published (similar to company articles of association), although they usually contain essential elements concerning the exercise of control in the company and are confidential.

• They are not regulated as such and their contents is usually determined by practice.

• They are of unquestionable economic importance, as they provide essential rights for members/shareholders such as the right to participate in company decision-making, participation in the management of the company through the appointment of board members, exit rights i.e. in the case of transfer of shares.

• They can be concluded both at the time of the company's incorporation and subsequently. Shareholders’ agreements are usually negotiated and concluded in the context of attracting new investors to the company through the sale of a stake or an increase in share capital,

• Not regulated and not public, shareholders’ agreements may seem curious to new entrepreneurs and even to the courts of law. This may be a disadvantage if a party to such an agreement wants to protect its rights before the Romanian courts. For this reason, usually shareholders' agreements contain arbitration clauses i.e. clauses on the settlement of possible disputes through arbitration - a more costly - but more efficient and confidential way of settling disputes.

The good news is that shareholders’ agreements don't have to be an exotic concept for entrepreneurs but can be used successfully with the guidance of the right lawyer. #lclegalproof

Share capital increase and bringing in new shareholders as way of business financing

An article from the series: The Entrepreneur and their Business in Romania

#lclegalproof #legalbrain #antreprenor #societati #srl #sa #societatepeactiuni #societatecuraspunderelimitata #businesschallenges #entrepreneurship #companylaw #startup #founders #beingafounderinRomania #majorare #capitalsocial #majorarecapitalsocial #sharecapitalincrease

One of the ways to raise capital in an existing company is to increase the share capital through contributions Finanțarea unei societăți prin participarea la o operațiune de majorare de capital social poate fi atractivă pentru investitori întrucât deținerea unei participații în societatea în care au decis să investească poate reprezenta o garanție suplimentară în sensul că activitatea și rezultatele societății se îndreaptă în direcția dorită. from investors, individuals or other companies, which implies that investors will become partners/shareholders in the company in exchange for a stake in the share capital and receiving shares in return. Contributions from new (or existing) shareholders can take the form of cash, in-kind or by offsetting certain, liquid and payable claims.

According to the Companies’ Law 31/1990 ("Companies Law")[1] the increase of share capital is decided by a resolution of the extraordinary general meeting of shareholders, with the participation of the existing shareholders and those who will become shareholders. The resolution shall also provide for the additional contributions and the related shareholdings. It should be stressed that, depending on the specific situation of the company in question (e.g. if we are talking about a joint stock company with several existing shareholders) it may be necessary to take into account the observance of certain preferential rights of the existing shareholders in order to avoid their dilution. The provisions of Article 216 of the Companies Law suggest that such pre-emptive rights would only exist for shareholders in a joint stock company. However, the law does not prohibit the creation of similar rights for shareholders in a limited liability company by its articles of association.

Financing a company by participating in a share capital increase operation can be attractive to investors as holding a stake in the company they have decided to invest in can be an additional guarantee that the company's business and results are moving in the desired direction. On the other hand, the involvement of investors may mean less control of the entrepreneur over the business.

In order to establish clearly from the outset what the rights of the new shareholders are and the level of control they can exercise, the share capital increase could be accompanied by the signing of a shareholders' agreement - which we will discuss in detail in a separate article.

Carrying out a share capital increase operation requires going through certain formalities at the Trade Register Office. But this is the last stage of the whole process - what should be of particular interest is the outcome of the operation and how the company operates once the new shareholders/partners join.

[1] Article 113 letter f) of the Companies Law.