WELCOME TO THE INFLUENCER GIG ECONOMY!
Guest post by Elisabeth Gschösser
Influencer Law Clinic series
12/3/20214 min read
Social media is becoming increasingly ingrained in our daily lives. More than half of the world’s population uses social media every day[1] spending an average of 2 hours and 30 minutes online.[2] Furthermore, new platforms are constantly evolving. With more people using a variety of social media platforms, the influencer marketing industry grows in parallel.
Influencer marketing constitutes an effective strategy for companies to connect with their target audience in an authentic and engaging way.[3] However, finding the right influencer and creating a successful commercial engagement can prove to be challenging. By creating a marketplace that enables companies to identify suitable influencers, platforms like TapInfluence try to mitigate these hurdles.[4] These platforms build on a new form of work – the Gig Economy.
In the Gig Economy, companies tend to rely on freelance or part-time jobs instead of hiring full-time employees. Often, online platforms serve as intermediaries between the companies and the Gig worker which can encompass a wide range of fields such as influencers.[5]
Platform-mediated gig work poses a question on how this form of work shall be understood. Distinguishing between a self-employed and an employed person is crucial, as the level of protection fundamentally differs. In the recent judgments on Deliveroo[6] and Uber[7], Dutch courts qualified the companies’ offline gig workers as employees. This provokes the question of how online gig-workers can be classified under Dutch labour law? Are influencers on TapInfluence employees or self-employed persons?
In the Netherlands, there are no legal definitions of what constitutes an employee or a self-employed person. However, Article 7:610 of the Dutch Civil Code (hereinafter: DCC) provides a definition of an employment contract. Accordingly, a contract of employment is a contract whereby one party, the employee, undertakes to perform work in the service of the other party, the employer, for remuneration during a given period.[8]
Three elements follow from this definition: Firstly, the employee has to perform work. The nature of the work is not further defined and it is thus not important. Secondly, the employer has to provide remuneration which constitutes any kind of compensation. Thirdly, the employee has to perform the work in service of the employer. In other words, there has to be a relationship based on authority or subordination. According to case law, the notion of “in subordination” allows the employer to issue binding instructions on how the work should be carried out.[9] This element is the main legal tool to distinguish a contract of employment from other contracts. However, its application is not always straightforward, especially since Article 7:402 DCC requires a self-employed person to follow the instructions of the contracting party.[10] Consequently, the courts take a variety of factors into account when distinguishing between employees and self-employed persons such as the freedom of the worker to determine whether to work or not and to what extent the worker is performing other activities besides the one concerned.[11]
In the case Groen/Schoevers, the Dutch Supreme Court determined two key questions when approaching the classification issue:
What did the parties intend when entering into the legal relationship?
In what manner have the parties given execution to the legal relationship?
It follows that the classification of a contract by the parties is important but can never be decisive. Even if a contract is explicitly addressed by the parties as a contract of employment or services, the actual execution of the contract matters.[12] Thus, the assessment of the conditions stemming from Article 7:610 DCC is crucial in establishing an employment relationship.
Influencers on TapInfluence need to consent to the TapInfluence Master Influencer Agreement before providing their services. Thus, TapInfluence unilaterally imposes terms and conditions which influencers have to accept. These terms explicitly state that the parties do not intend to conclude a contract of employment but instead classify it as a service agreement. While it is clear that the platform has no intention to conclude a contract of employment, the intention of the influencer is more difficult to determine. Influencers are confronted with an all-or-nothing approach: either accept and work on the platform without negotiating or decline the offer. Thus, it is not possible to identify what influencers have in mind when entering into a legal relationship with TapInfluence. A case-by-case assessment has to be conducted.[13]
When examining the actual execution of the contract, it is clear that influencers perform work and receive remuneration. Thus, the main question is whether they perform the work in service of the platform. Several factors have to be weighed when making this assessment:
Firstly, influencers do not get paid an hourly rate. Instead, they are paid per service performed. Moreover, they are not paid in case of sickness or in case of vacation days. These elements point towards self-employment.
Secondly, influencers on TapInfluence can work for different platforms at the same time. They are not bound to TapInfluence. However, if TapInfluence provides sufficient work opportunities, how likely is it for influencers to perform services on other platforms?
Moreover, an online gig-worker is not obliged to work. It is possible to decline work and no fixed working hours are set. Furthermore, no permission for absence or vacation days is needed. These elements point towards a service contract. However, the platform provides incentives to increase the influencer’s working hours by using rating systems to evaluate the service performance of the influencer. If one’s rating sinks, the influencer will be given less favorable gigs. Thus, it is not totally up to the influencers when and how much they want to work.[14]
It is important to note that performing personal labour is an essential element of the influencer marketing industry. The advertisement builds upon the personal qualities of the influencer. No substitution is possible. This is an essential element of an employment relationship.
Furthermore, influencers are obliged to align content with the TapInfluence Content Policy. The influencers are encouraged to use the TapInfluence technology to produce the content. By accepting the agreement, the influencer grants and assigns all rights and titles in the content to TapInfluence. These are strong indications of an employment relationship.[15]
Taking all these factors into account, I would argue that there can only be one proper conclusion: the legal relationship between influencers and platforms like TapInfluence has to be classified as a contract of employment under Dutch law. This is probably also the reason why the Master Influencer Agreement provided by TapInfluence is guided by American Law.[16]
[1] https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/
[2] https://www.statista.com/statistics/433871/daily-social-media-usage-worldwide/
[3] https://builtin.com/marketing/gigfluencer-trend
[4] https://thesiliconreview.com/magazine/profile/the-evolution-of-the-influencer-economy
[5] https://www.investopedia.com/terms/g/gig-economy.asp
[7] https://techcrunch.com/2021/09/13/dutch-court-finds-uber-drivers-are-employees/
[8] Article 7:610 Dutch Civil Code
[9] https://arno.uvt.nl/show.cgi?fid=151921
[10] Article 7:402 Dutch Civil Code
[11] https://www.deburcht.nl/userfiles/file/van%20geel%20%2C%20scriptie%20-Masterthesis.pdf
[13] https://www.tapinfluence.com/tapinfluence-master-influencer-agreement/
[14] https://www.tapinfluence.com/tapinfluence-master-influencer-agreement/ under Services and Ownership
[15] https://www.tapinfluence.com/tapinfluence-master-influencer-agreement/ under Services and Ownership
[16] https://www.tapinfluence.com/tapinfluence-master-influencer-agreement/ under governing law