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Are gig workers protected in digital economy?

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IN December 2019, hundreds of Grab drivers made complaints about unfair removal from the app, which was their main income source.

Early this year, Loh – one of Grab drivers – reported the case, citing Section 20 (1) of the Industrial Relations Act 1967.

This act addresses the issue of unfair dismissal or dismissal without cause. Grab, however, has not taken any serious step to resolve it.

The Industrial Relations Department (IRD), on the other hand, did not give a clear verdict, leaving the case hanging.

Another driver, Suhaimi, has also lodged a police report for being removed from using the app permanently.

One of his passengers complained that he was drunk while driving. Perplexed by the charge, Suhaimi undertook a test to confirm that he was not drunk on that day but he was not given any chance to explain and prove his innocence.

As Malaysia prepares for the gig economy, one key question is whether gig workers’ rights are protected.

This concern stems from the lack of legal framework that governs this issue, which can easily lead to exploitation of workers by big companies.

The Khazanah Research Institute’s (KRI) report highlighted that the gig worker and digital economy are becoming the defining feature of Malaysia’s labour landscape.

It is no doubt that these platform providers have become the source of income for many Malaysian youth. One issue with the current situation is the classification or definition of a gig worker.

They are not considered as employees, but more of an individual contractor or self-employed who in essence are not protected by a clear legal framework.

The nature of their relationship is also different than the usual definition of independent contractor or self-employed as the former has a specific task with a specific agreement or contract while the gig workers do not.

On top of that, the former has a clearer work nature and relationship to categorise themselves as independent as they have more authority in the rules and regulations they set for the services, fees that they charge and their own ability to find the customers and clients without the platforms.

As opposed to the latter, these gig workers are not in control of the types of clients and customers that they receive, nor the fees charged.

More importantly, they have to abide by the rules of the platform and face consequences, such as being barred from using the app without an adequate chance to explain themselves.

These have been justified by the blanket rule of zero-tolerance policy that the company practices. There is also a “relationship of subordination” where the platform provider is able to give instruction, examine and oversee the execution as well as the power to sanction any non-compliance.

This resembles more closely a relationship of “employer-employee” instead of independent contractor or self-employed. While the gig workers have to abide by the rules and regulations to use the apps in the pursue of protecting the company’s reputation and business, what rules and regulations that the platform provider abide by to protect the gig workers? None.

What’s happening outside Malaysia

United Kingdom

• The Employment Tribunal in UK has decided that Uber drivers are considered “workers”, and the case is now being brought to the Supreme Court of Appeal by Uber.

UK has not just “employee” status, but also “worker” status which has broader criteria.

France

• The Paris Court of Appeal and Cour de Cassation have agreed that Uber drivers are considered as “employees” as they only have two worker statues whether “employed” or “self-employed”. At the moment, they are discussing the details of the ruling such as the over-pay, dismissal procedures and others.

California

• The State Supreme Court has ruled that an Uber driver is categorised as employee. However, Uber spent more than US$200 million (RM824 million) for a ballot referendum and won 58% that overturned the court’s ruling making the drivers contractors.

Canada

• This year, the supreme court ruled in favour of Uber’s drivers to regard them as the company’s employees.

What’s happening in Malaysia

In July, the Human Resources Ministry – in response to Nik Nazmi Nik Ahmad in Parliament in – stated that it is still researching the solution to this matter.

We urge the government to work with think-tanks, legal authorities and gig workers to develop a legal framework to protect their fundamental rights.

At the same time, a meticulous and comprehensive plan needs to be in place, to ensure a conducive environment for businesses and investment.

A discussion paper from Research for Social Advancement (REFSA), for example, outlines several suggestions.

Among them are: first, to classify gig workers as “independent employees” where despite not getting the full benefits as traditional employees, they should be protected by specific regulation.

Second, to develop a platform-2-government (P2G) for data sharing which will allow the government to gather and analyse data from the independent employees, and enable the incorporation of social security measures automatically as well as easing the calculation of tax deduction.

Other than these, REFSA also underscored the importance of market competition between different platform providers – a move that will spur offering of rebates, subsidy and procurement of different insurance types, and other perks that will attract independent employees and provide them with more options.

Aside than these, a thorough focus groups discussion should also be made to explore different stakeholders’ opinions together with their underlying perceptions and attitudes towards the issue.

The discussion needs to be made in a non-threatening and permissive environment as to ensure all pain points are covered in developing effective policy solutions.

The interest of all stakeholders, especially the rakyat, ought to be prioritised where integrity should be held at all time as to avoid any quick fix like “money offering” which doesn’t necessarily resolve the source of the issue to begin with.

As our country embraces the digital economy, we must ensure that it comes with adequate social protection, zero exploitation and healthy competition. – December 22, 2020.

* Farah Nabilah Abdul Rahman is a researcher and activist at Asean Young Leaders Forum (AYLF) Malaysia chapter.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight.



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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer

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Uber’s UK ruling could have implications for gig economy startups

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Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
(Carl Court/Getty Images)

The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.

The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.

The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.

“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”

Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.

“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”

In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood,  said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business,  providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

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The future is now for gig-based entrepreneurship – San Gabriel Valley Tribune

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With Californian Kamala Harris as vice president, it’s clear the new Biden administration is taking its cues from the once-Golden State on labor policy.

In one of its first acts in office, the Biden Administration placed a regulatory freeze on a Department of Labor regulation enacted in the waning days of the prior administration relating to independent contractors.  The rule, according to labor and employment law firm Fisher Phillips, “aims to make it easier for businesses to classify workers as independent contractors.”

It’s unlikely this rule to give more workers freedom to be their own boss and set their own schedules will survive in a Biden administration that was heavily reliant upon labor unions for money and manpower to win the 2020 campaign.

Meanwhile, House Democrats recently re-introduced the controversial PRO Act in Congress, which “seeks to reduce the use of the independent contractor classification by companies such as Uber,” according to CNBC.

Both of these efforts followed the lead of California’s liberal legislative majority, which two years ago enacted the controversial Assembly Bill 5 to severely restrict the ability of Californians to work as independent contractors.  Their goal is to increase union membership and dues and force people to work in traditional, 9-to-5, union jobs that are relics of the past.

Doubling down on AB 5-type restrictions at the national level – which may be the Biden administration’s goal with the nomination of Julie Su, California’s chief AB 5 enforcer, as deputy Secretary of Labor – would be a tremendous mistake.  It would threaten innovation and hurt the ability of Americans who have lost their jobs to put food on the table during a global pandemic.

As documented in the new Pacific Research Institute study, “The Small Business Gig,” Americans are increasingly working in the gig economy.  They don’t want government – whether in Sacramento or Washington, DC – dictating how they can earn a living.

A 2018 Gallup survey found that 36 percent of U.S. workers have some sort of a gig worker arrangement.  Whether renting out an extra room to earn cash to pay the mortgage or using an app to earn a living on an alternate schedule, the gig economy is increasing opportunities for Americans to become entrepreneurs, while providing customers with lower cost services.

Many in California state government see the gig economy as exploitative and disruptive.  But data from the ADP Research Institute shows that 70 percent of gig workers are independent workers by choice.  Gig Economy Data Hub research found that more than two-thirds of gig economy workers are satisfied with their current work arrangement.

Government shouldn’t pick winners and losers in the economy.  New restrictions on the gig economy, like those proposed in Congress, will limit people’s freedom to become entrepreneurs while institutionalizing the old way of doing work.

Instead of adopting regulations at the federal level that 58 percent of Californians – Democrats, Republicans, and independents alike – rejected when they passed Proposition 22 in November, the Biden administration and Congress should take the opposite approach and enact market-based policies to encourage entrepreneurship and innovation.

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