Opinion

Letter – Make gig work, work in Malaysia – Izwan Zakaria

It’s promising that Putrajaya recognises existing employment laws don’t cover this area

Updated 3 years ago · Published on 16 Nov 2020 10:15AM

Letter – Make gig work, work in Malaysia – Izwan Zakaria
Only 7% of the 400,000 e-hailing riders and drivers in the country have registered for the self-employment social security scheme. – AFP pic, November 16, 2020

IN several months’ time, the Supreme Court in the UK will decide if Uber drivers will be entitled to the usual benefits enjoyed by a normal worker.

If Uber loses, thousands of its drivers in the UK will be able to claim minimum wage from the company. This is in addition to holiday pay, paid sick leave and the right to unionise.

The Uber case began when Yaseen Aslam, one of 35 Uber drivers, sued the firm six years ago.

The case has reached the Supreme Court, which will give an ultimatum after the drivers won twice in the lower courts – the Labour Tribunal and then the high court – with the judges deciding that Uber drivers “are very much company workers”.

The decision by the Supreme Court will cause a ripple effect for millions of gig workers in the UK.

In other words, the decision may be used as a precedent for other gig workers to initiate similar claims.

Regulatory trend in gig economy

The UK judges are not the only ones in favour of gig workers. Around the world, the definition of “gig worker” appears to have been decided as similar to normal employment. And, this trend seems to be led mostly by judges as opposed to lawmakers.

France in March, and then Canada in June, saw judges ruling that Uber drivers are not self-employed.

In the US in September, California lawmakers initially decided the same. However, the decision was overturned when voters approved a referendum known as Proposition 22 that allows Uber and Lyft to continue treating their drivers as independent contractors.

On a side note, it was reported that Uber and Lyft spent over US$200 million (RM823.7 million) to support this ballot.

In Malaysia, there does not seem to be any reported case on this subject as yet.

Defining ‘gig worker’ in Malaysia

We currently do not have a legal definition for “gig worker”. Generally, such a worker is broadly defined as someone who is engaged on a freelance or on-demand basis.

For example, a gig worker may be someone who signs up with a ride-sharing company or on-demand platform, such as GoGet, Lalamove, BungkusIt and so on.

There are also many crowdsourcing platforms that offer freelancing jobs like Workana, Fiverr, Upwork, and the Malaysian-based Go-eCommerce (previously known as eUsahawan) that lets people sign up as gig workers.

Now, let’s look at the differences between a “normal” employee and a gig worker.

Contract of service v contract for service

To summarise, contracts can be categorised into two types: a contract of service and a contract for service.

A contract of service usually refers to the relationship between an employer and an employee.

Those engaged in full-time employment usually fall in this category.

It is different from a contract for service, which usually refers to an independent contractor (a legal phrase that often refers to someone who does something on an ad hoc basis, like a freelance writer or graphic designer).

So, when it comes to employment disputes, an aggrieved employee may initiate a claim against their former employer in an industrial court. Generally speaking, our industrial courts have been inclined towards protecting employees’ rights.

However, if a gig worker were to initiate such a claim, it is unclear whether they would succeed.

To recap, only a complainant who is engaged as an employee can refer a case to the industrial court. It is unlikely for the court to recognise an independent service provider, like a gig worker, as an employee.

What is govt doing about gig workers?

In July, the Human Resources Ministry, in a written reply in the Dewan Rakyat, said the government plans to introduce a specific law to regulate gig workes.

Putrajaya also recognises that existing employment laws may not be suitable, as they are not meant to cover gig workers.

The government has spent a lot of money to help gig workers. In June, it launched PenjanaGig, a RM75 million matching grant to provide a social safety net for these workers.

Under the scheme, gig economy platforms are also involved in contributing to the existing Social Security Organisation employment injury scheme and Employees Provident Fund’s i-Saraan.

Additionally, the balance RM25 million will be disbursed to the Global Online Workforce programme managed by the Malaysia Digital Economy Corporation (MDEC), a government agency responsible for spearheading the nation’s digital economy agenda.

There have been interesting anecdotes and case studies published on its website of successful gig workers in jobs like copywriting and translation, making a decent monthly income.

However getting the buy-in from gig workers seems to be an issue as they will have to sign up on their own to participate in the self-contributions. According to MDEC, only 7% – roughly 21,000 of e-hailing riders and drivers – out of more than 400,000 have registered for the self-employment social security scheme.

The government faces the tough challenge of striking a balance between regulations to protect gig workers and allowing technology companies to remain focused on their core strength, that is, innovation. – The Vibes, November 16, 2020

Izwan Zakaria is managing partner of Izwan & Partners

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