Legal Protections Afforded to Malaysian Gig Economy Workers.




Introduction


The gig economy is a free market in which individuals earn income from on-demand, short-term assignments, tasks, or jobs as an independent contractors or freelancers. Common gig economy seen in Malaysia include e-hailing services, online delivery services, and online food delivery services. Gig workers have the freedom of setting their own hours, working from home and being their own bosses. However, the disadvantages that follows are that there is no traditional legal protection, no union negotiating with management and inequality when it comes to labour relations.


Current Legal Protection Available for Gig Economy Workers


It is true that Gig economy workers have only limited protection compared to ordinary full-time employees under our Malaysian labour and employment law at present. Gig economy workers in Malaysia are not included under the definition of employees under the Employment Act 1955 (Act 265).


They do not receive similar statutory rights and protections that are afforded to ordinary employees such as minimum wage, annual paid leave and right to claim for unfair dismissal. One of the main rationales behind this is that gig workers are also their own bosses. Being the bosses themselves, they only have to answer to themselves and the work they take on.


They enjoy flexible work schedules, have absolute discretion on the work they choose to take on as well as the commitment to be given for each respective work, which are something unimaginable for ordinary employees. Following the English idiom “you can’t have your cake and eat it”. Hence, to a certain extent, it justifies why gig workers are afforded lesser protection compared to ordinary employees as rights and benefits are always proportional to the obligation and commitment that they are expected to have.


In fact, even the Self-employment Social Security Act 2017 (“The Act”) in our country merely provides protections to them merely for the situation where there is self-employment injury suffered by self-employed individuals during the course of their self-employment with the precondition that they registered themselves under Social Security Organisation and have made monthly contributions to the said organisation. They will then be entitled to claim benefits such as temporary disability benefit, medical benefit, constant attendance allowance, dependants’ benefit and education benefit to their children in the situation where they pass away due to the personal injuries.


What Can Gig Workers do to Safeguard Themselves in Terms of Law?


In order to better safeguard themselves under the current situation, gig workers should always do proper and thorough research prior to engaging on a gig economy platform. Such thorough research will allow gig workers to make statistical comparisons between platforms and have a clearer image on the condition of each respective platform as well as the pros and cons of participating in each platform in order for them to make a better decision on which platform to engage with.


Furthermore, gig workers should always insist on having a copy of a written contract between them and their clients to protect their own interest. They should try their best to fully understand the terms and conditions in their agreement with gig economy platform companies before they execute the contract.


For situations where the gig workers are in a more equal bargaining position with their clients, they should seek legal consultation from lawyers to ensure that the important contractual clauses such as terms pertaining to schedule of payments from clients and scope of the service being included and stated clearly in the contract to protect their interest.


How Do Gig Economy Workers Redress if There is a Dispute?


Unlike ordinary employees who can refer their employment and industrial relation dispute to the Labour Court or Industrial Court of Malaysia free from the worries of the legal costs to be awarded against them, gig workers are not afforded with such privilege.


On March 1, 2022, the Bill to amend the Employment Act was tabled in the Dewan Rakyat, where it proposes that under Section 101C, a worker will be deemed an “employee” if the manner of work is subject to the control or direction of another person, and if the hours of work are subject to the control or direction of another person.


Therefore, gig workers would formally be considered as an “employee” under the Employment Act 1955. However, the amendments under the Bill are not in force yet, it still must go through Senate approval and obtain royal assent. Until then, gig workers are not considered to be an “employee” under the Employment Act 1955.


Hence, what is available to the gig workers as of now is merely the civil judicial system where the gig workers need to file proceedings under contract law in civil courts. However, they would not only need to bear their own cost of engaging a lawyer if they want to have legal representation, they also bear the risk of paying for a certain amount of legal costs incurred by their opponent if the civil courts do not decide in their favour and grant costs against them. In order to reduce the legal costs incurred by the gig workers, it is advisable to have a properly and clearly written contract between them and their clients regarding the provision of their services.


If there is merely an oral agreement, it will be more challenging to prove the existence as well as the validity of the contractual terms agreed by both parties to the court as compared to having a clearly written contract between both parties. This will complicate their claims against their clients and a trial which involves the calling for witnesses will need to be conducted by the Court to dispose of the claims filed by the gig workers. Hence, for gig workers, it is always advisable to have a proper contract for service entered into between them and their clients.


Potential Solutions to Solve the Existing Problems that Gig Workers Face


Even though there has been an amendment to the Employment Act 1955 in early January of year 2021, there is a still a need for the legislature to enact legislative changes due to the increasing number of gig workers in our country in order to solve the problems that gig workers currently face. However, there is a strict necessity to strike the balance on the interest between the gig workers and the companies which engage gig workers.


To simply include the gig workers in the legal definition of “employees” in employment act or to let the gig workers enjoy the same level of benefit and legal protections such as enjoying the same rate of minimum remuneration entitled by the ordinary employees would unfairly and unduly burden those companies which engage the service of the gig workers. This would have far-reaching effect and may lead to the chain reaction where the companies are forced to limit the number of gig workers engaged by them in order to control costs. This would then reduce the available job opportunities in the market and eventually the public at large are going to suffer due to the rising unemployment rate.


A win-win solution for both gig workers and the companies would be a legislative change that introduces a minimum wage protection to the gig workers subject to the condition that the gig workers can hit the threshold of bringing certain sales or incomes to the companies as well as other related protections and welfare which are proportionate to the level of commitment of the gig workers to the companies.


Furthermore, legislative change to grant the gig workers the rights to form unions should be welcomed in order for the interest and welfare of gig workers to be protected. As the number of gig workers rises, there is definitely a need to have a trade union to represent the gig workers who are under-represented as well as to bargain on behalf of the gig workers for better working conditions.


In addition to that, a tribunal which protects the interest of the gig workers should be established so that the gig workers can refer their dispute to the said tribunal without the worry of paying for the legal costs suffered by the companies which engage their services.

Conclusion


The gig economy is expected to continue to grow, especially in recent times since the Covid-19 pandemic hit and several people who have since lost their jobs. Until the government has made legislative changes, it is therefore advisable for gig workers to be fully aware of their legal rights as well as the terms stipulated in the contract for service.

 

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