Setting the stage for gig workers

Gig work in Malaysia is also associated with low-paying and low-skilled jobs such as e-hailing and food delivery. High-skilled workers working in project-based roles are typically excluded from this category. 一 CHAN TAK KONG/The Star

GIG worker is an all-inclusive term for independent contractors or freelancers.

The gig economy has always existed, from casual workers in the countryside assisting their more prosperous neighbours who owned farms or large estates hundreds of years ago. It also existed for those making a living by helping merchants and artisans with seasonal work in cities and towns.

As a matter of fact, the term freelancer, which dates back to medieval Europe, comes from the military, referring to mercenaries who took up temporary employment.

What has changed today?

There are still casual labourers in rural and urban settings, and it is certainly growing, with informal or own-account workers, a proxy for gig workers, making up nearly a fifth of Malaysia’s employed population in April, according to Statistics Department data.

The growth of gig work has been accelerated by technological changes and the Covid-19 lockdowns, which resulted in many people losing their full-time jobs and taking on part-time or freelance work.

Governments are still figuring out how to extend protection to gig workers, despite their prevalence and rapid growth around the world.

In underdeveloped economies, gig work is often associated with underemployment and unemployment. Platforms enabled by technology are often used in emerging and developed economies to source gig work, which ranges from e-hailing rides to food delivery and content creation. Also, it can involve working for agencies, filling up temporary or project- based positions.

Muhendaran Suppiah, a partner of a law firm specialising in employment law and industrial relations, says a key issue when regulating gig work is understanding whether a gig worker is an independent contractor or what is termed “workman” or employee.

“The term gig workers, referring to these independent contractors, is problematic as this acknowledges that they are employees or workmen,” he points out. Employees are covered by a range of laws, including the Employment Act 1955 and Employees Provident Fund Act 1991.

Gig work is also varied and workers aren’t easily identified as independent contractors or employees. A lot will depend on how the government defines gig workers.

The informal sector is generally understood as not including gig workers, while those who source work through platforms are.

Gig work in Malaysia is also associated with low-paying and low-skilled jobs such as e-hailing and food delivery. High-skilled workers working in project-based roles are typically excluded from this category.

The number of gig workers in the country has risen to almost one in five, so there is pressure to extend social protection and retirement benefits, as well as improve work conditions. There are concerns, however, that regulating gig work could have an adverse impact on businesses or that businesses will find loopholes to circumvent their obligations to gig workers.

As subsidies are being abolished or reduced, there is also concern that regulation will lead to higher costs. Gig workers are not only protected and given rights in Canada, China, and the UK, but they are also treated as dependent workers in those countries.

Muhendaran believes that defining gig work will complicate the work of the Gig Workers Commission, which the government intends to create next month as part of its efforts to protect and extend the rights of gig workers. “I am quite convinced that the commission cannot say for sure that all of them are workmen or that all of them have protection under existing laws,” he says.

Reviewing gig worker conditions on an industry-by-industry basis may be necessary to find solutions, such as social protection and retirement funds.

The government and private sector have taken initiatives to improve the welfare of gig workers, but they have been piecemeal. Notably, the government partnered with Grab Holdings Inc, in which the company provides a matching contribution of 5% up to a certain annual limit to its Malaysian driver-partners and delivery-partners to save for retirement through the EPF’s i-Saraan scheme. Budget 2024 also includes other initiatives.

Communications specialist Julia Pong says the government’s initiative to form the commission is encouraging.

Pong, who quit her full-time job in an investor relations firm where she had been working for 19 years to focus on project-based work a few months ago, notes that she has the luxury of choosing to pursue gig work while many others do it to earn a living or care for elderly parents.

A formal ecosystem would establish a sustainable, inclusive and progressive infrastructure, she says.

This article first appeared in Star Biz7 weekly edition.

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