Making ‘gig work’ work in Malaysia — Izwan Zakaria

NOVEMBER 16 — In several months time the Supreme Court in the UK will decide if Uber drivers in London will be entitled to the usual benefits of a normal worker.

If Uber loses, thousands of its drivers in the UK will be able to claim minimum wage from Uber. This includes the usual holiday pay, minimum wage, paid sick leave including the right to form a union.

The Uber case began when Yaseen Aslam, one of the 35 Uber drivers sued Uber over six years ago. The case has now reached the Supreme Court, the apex court that will give an ultimatum after they won twice in the lower courts namely the Labour Tribunal and second in the High Court where judges in both cases decided that Uber drivers “are very much company workers.”

For many involved in the gig economy space in the UK, the decision by the Supreme Court will cause a “ripple effect” across millions of similar gig workers in the country. In other words the decision could be used as a precedent for other gig workers that could initiate similar claims.

Some regulatory trends in the gig economy space

The UK judges are not the only one that are in favour of the gig workers. Around the world the definition of what makes a “gig worker” appears to be decided as similar to a normal employment. And these trends seem to be led mostly by the judges as opposed to the lawmakers.

In June this year, Canada’s Supreme Court became another country following France in March. Both of these judges decided against Uber and decided that Uber drivers were not “self employed.”

In the United States in September this year California’s state lawmakers initially ruled that Uber drivers were not self employed. However the decision was overturned when the California voters approved a ballot referendum known as the “Proposition 22 which 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 (RM824 million) to support this ballot.

In Malaysia there does not seem to be any reported case on this subject at the moment.

Defining ‘gig workers’ in Malaysia

We currently do not have a legal definition on who is a “gig worker.”

Generally a “gig worker” is broadly defined to be someone who is engaged on a “freelance” or “on demand” basis. For example, a “gig worker” may be someone that signs up on a ride sharing company or an “on demand” platform like 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 to sign up as “gig workers.”

Now let’s look at the differences between an employee and a “gig worker” or a “freelance worker.”

Contract 101: ‘Contract of service’ vs ‘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 a relationship between an employer and an employee. Anyone that is engaged in a full time engagement or employment usually falls within this contract of service engagement.

This is different from a contract for service when it usually refers to “independent contractor” (a legal phrase which usually refers to someone that does something on an ‘ad hoc’ basis like a freelance writer or a graphics designer).

So when it comes to employment disputes an aggrieved employee may initiate a claim against the former employer in an Industrial Court (a court that hears employment disputes).

Generally speaking our Industrial Courts have been inclined toward employee protections rights.

But if someone who is a gig worker were to initiate such a claim as well it is unclear if he or she would be able to succeed in such claim.

To recap only a complainant who has been engaged as an employee can refer a case to the Industrial Court. In other words, it may be unlikely for the court to recognise an independent service provider like a gig worker as employees.

What is the Malaysian government doing about gig workers

In July this year the Human Resources Ministry said in a Dewan Rakyat written reply that the government is planning to introduce a specific law to regulate gig workers in Malaysia. The government also recognises that the existing employment laws may not be suitable as they are not meant to cover gig workers.

The government has spent a lot of money in helping gig workers. In June this year the government launched PenjanaGig, a RM75 mil matching grant to provide a social safety net for gig workers. Under the scheme the gig economy platforms also be involved in contributing toward the existing Social Security Organisation’s (Socso) employment injury scheme and the Employee Provident Fund’s (EPF) i-Saraan contribution.

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

There have also been interesting anecdotes and case studies published on its website featuring some successful gig workers involved in various jobs like copywriting and translation work making decent monthly income.

However getting the “buy in” from gig workers seems to be an issue as the gig worker will have to sign up on their own to participate in the self contributions. According to MDEC, only 7 per cent (roughly around 21,000 of e-hailing riders and drivers) out of over 400,000 people had registered for the self employment social security scheme.

The government will have a tough challenge ahead between striking a balance on regulations on protecting the gig workers while at the same time allowing technology companies to remain focused at their core strengths on innovation.

* Izwan Zakaria is managing partner of Izwan and Partners.

** This is the personal opinion of the writer(s) or organisation(s) and does not necessarily represent the views of Malay Mail.