Towards decent work in the gig economy

 

The challenges delivery riders face have once again brought gig workers to public attention.

In a protest on Jan 19, hundreds of Grab delivery riders voiced their objection to the company’s new fee and bonus framework, a recurrent action by gig workers whenever changes are made that affect their income.

In response to the protest, deputy prime minister Ahmad Zahid Hamidi pledged to establish a gig economy commission to protect them.

While commendable, the plan risks complicating the policy process rather than ensuring the gig workers’ welfare.

Not all gig workers are the same

Any move to regulate gig work must take into account its landscape in Malaysia.

Today, gig work spans a wide spectrum — from manual ride-sharing and delivery tasks to technical freelance assignments such as programming.

Different tasks, different motivations and varying working hours characterise the diversity of gig work.

While those in technical tasks may get better terms and build a clientele, ride-sharing and deliverymen have to work long hours to make ends meet.

Whatever they do, gig workers are legally considered independent contractors without basic rights, benefits and protection accorded to those in formal employment.

Over time more e-hailing and delivery gig workers, especially those doing it full-time, get dissatisfied with their end of the bargain, forcing them to seek fairer work conditions and compensation.

Commission only leads to more red tape

Given the heterogeneous nature of gig work, setting up a commission for specific segments like ride-sharing and delivery is a myopic, short-term policy.

Piecemeal initiatives from such a commission risk overlooking other gig workers and the broader group of informal workers they represent.

Such a commission not only duplicates functions but also causes bureaucratic inefficiencies, a point underscored by former human resources minister V Sivakumar’s rejection of the policy proposal last year.

There already are four agencies, namely the National Digital Economy Council, the Fourth Industrial Revolution Council, Sharing Economy Committee and Malaysia Digital Economy Corporation to address gig and sharing economy issues.

Policymakers should emphasise that less is more; giving a strong and clear mandate to an existing policy vehicle to address gig worker challenges can be more effective than adding another layer of bureaucratic complexity.

Forward-looking approach for decent work

Rather than the need for a new commission, the policy conundrum presented by an expanding gig economy today centres on the root problems, namely gig worker classification.

As long as they are broadly classified as “independent contractors”, decent work remains a struggle, especially for those meeting full-time formal employment criteria.

Some gig workers do fit the definition of independent contractor, and reclassifying them risks unintended consequences.

As observed in Germany, Spain, and the Netherlands, some gig platforms have ceased country operations entirely after formal employment classification was imposed, rendering their business models unsustainable.

The all-or-nothing approach of classifying gig workers either as independent contractors or formal employees carries risks from two extremes.

On the one hand, classifying gig workers as independent contractors means leaving gig workers vulnerable to working conditions that are highly influenced by gig platforms’ practices.

On the other hand, classifying gig workers as formal employees would increase the cost of doing business without necessarily improving their working conditions or preserving their jobs.

To overcome these challenges, policymakers should consider adding a new employment classification known as “dependent contractor” to capture the unique nature of gig work.

The should also prescribe labour provisions for gig workers based on the employment power dynamics inherent in different gig platforms.

The human resources ministry could develop a national employment status test to examine the employment power relationship between gig workers and gig platforms against the definition of employment set in the Employment Act 1955 to trial and refine this policy approach for a feasible duration.

This approach will allow policymakers to determine the classification, rights, and welfare of gig workers, differentiating between those who are truly independent contractors and dependent contractors with fair labour provisions owed to them.

The transition from formal full-time employment to flexible-hour gig work marks a significant, perhaps enduring, change in contemporary work culture.

At this juncture, a structured trial-and-error approach, such as introducing a national employment status test and an intermediate “dependent contractor” classification, offers a progressive way to embrace the future of work while ensuring decent work for all.

In doing so, we will move beyond traditional dichotomies and recognise the nuanced nature of gig work, paving the path for a more inclusive and adaptive regulatory framework to address the evolving workforce dynamics in the future of work.

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