SEGiM is the right regulatory mechanism for Malaysia’s gig economy

 

DEPUTY Prime Minister (DPM) Datuk Seri Dr Ahmad Zahid Hamidi recently proposed that the Cabinet consider and approve the Gig Economy Commission (SEGiM) as the main regulatory body to ensure the sustainable growth of Malaysia’s gig economy ecosystem.

This step is seen as crucial in addressing the dynamics of the gig industry, which increasingly dominates the Malaysian job market.

According to the DPM, SEGiM will function as a regulatory authority to protect gig workers’ rights, balance job flexibility with social security, and support national economic goals under the Twelfth Malaysia Plan (RMK-12).

In a recent study, 96% of respondents welcomed this announcement, reflecting high public expectations for the commission’s role.

A commission, by definition, refers to an independent body established by the government or Parliament to carry out specific duties impartially.

A commission’s key feature is its independence from external influence, ensuring decisions prioritise public interest.

SEGiM, as a new entity, is expected to uphold this principle by providing clear legislative frameworks for gig workers, covering wages, social protections, and workplace safety.

Historically, commissions are not new to Malaysia. The 1956 Reid Commission, for example, laid the foundation for the Federal Constitution of Malaya, balancing the rights of diverse ethnic groups and institutions pre-independence.

The Reid Commission’s success in creating inclusive policies should inspire SEGiM to holistically address gig economy issues.

Just as the Reid Commission prioritised political stability, SEGiM is hoped to become the backbone of a fair gig ecosystem, particularly in bridging gaps under existing laws like the Employment Act 1955, which does not recognise gig workers’ status.

However, SEGiM will face complex challenges. First, it must balance the flexibility that attracts workers to the gig economy with guarantees of basic rights like insurance, retirement savings, and fixed wages.

Second, the lack of comprehensive data on gig workers’ profiles hampers effective policy planning.

Third, resistance from platform companies that may view new regulations as threats to their business models. Additionally, SEGiM’s operational and funding costs must be managed wisely to avoid burdening government expenditure.

To strengthen its regulatory framework, SEGiM could learn from Australia’s Fair Work Commission (FWC).

Through amendments to the Fair Work Act 2009, Australia classified gig workers as “employee-like workers,” granting them social protections, unemployment insurance, and collective bargaining rights.

This approach balanced worker and corporate needs without stifling industry flexibility. SEGiM should study this model while adapting it locally, particularly by enacting laws that recognise gig workers’ status and address issues like data management and unclear contracts.

With majority public support, SEGiM has the potential to position Malaysia as a global pioneer in gig economy regulation. Its success depends on close collaboration between the government, platform providers, and gig workers.

If implemented transparently, the commission could not only protect workers but also enhance the country’s economic competitiveness.

This aligns with RMK-12’s aspirations for sustainable and inclusive growth, creating opportunities for youth, homemakers, and vulnerable groups to contribute productively to national progress. 

Assoc. Prof Dr Nurhidayah Abdullah is an Associate Professor at the Faculty of Law, University of Malaya.

The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.

- Focus Malaysia.