Gigs On The Rise, Pay and Conditions At What Price?

With the explosion of on-demand platforms, gig work - temporary, flexible, freelancing jobs - has emerge as a central theme when it comes to discussions on the future of work.

In Malaysia, while there is no official government or research data conducted on gig workers yet, a 85.7 percent internet penetration suggests that Malaysians are very much technologically enabled that to jump on the gig economy fueled by digital on-demand jobs.

“We are seeing it expanding rapidly,” says Leigh Howard, Director of Sheffield Executive, a Kuala Lumpur-based talent solutions and recruitment firm.

There are a multitude of benefits that a gig economy can offer; flexible work arrangements, access to more work and opportunities to pursue one’s passion. However, have workers arrangement and benefits been able keep pace with the gig economy?

“On the flipside of the gig economy, these people are not classified as employees and they experience some level of uncertainty. They don’t get the security, protection and benefits that employees expect,” says Howard.

What it means is that a growing number of people lack health care or retirement plans and other employer-sponsored benefits.

“What we haven’t quite seen yet is the wholesale adoption by businesses to have a strategy to engaging gig workers. And that’s really where we are - on the cusp of what might emerge in Malaysia as well as other parts of the world,” says Howard, who has called Kuala Lumpur home for the last two decades.

As such, conversations on relooking workplace classifications are actively taking place globally with the increase in the number of people providing services on a per-gig basis.

Take ride-hailing company Uber, as example.

In the United States, a district judge ruled in April this year that Uber limousine drivers are independent contractors, not full-time employees. Similarly in Australia, the Fair Work Commission ruled that Uber drivers are not employees.

Whereas, in the United Kingdom, an employment tribunal found that the ride-hailing app’s drivers should be classified as workers, rather than self-employed, which entitles them to receive workers’ rights such as overtime, holiday pay, compensation fees and the national minimum wage.

Uber is now challenging to overturn the landmark ruling at the England’s court of appeal, prompting protests from the country’s independent workers union.

“What is interesting coming out of those court cases is that -- just because that piece of paper or contract says you are an independent contractor, doesn't mean you necessarily are.”

“We don’t want to end up with a situation where there’s a level of uncertainty and work relationships have to be tested in court.”

“What both groups really want to see is a level of certainty so that they know how to proceed and where they stand, where their rights are. That way, they can at least operate with confidence,” says Howard.

Engaging Gig Economy As A Core Part of Business

Whether drivers for ride-hailing services, or other individuals partaking in gig jobs, are employees or independent contracts is indeed shaping up to be an important issue for labour policymakers and businesses.

In most countries, Malaysia included, the law of employment has yet to evolve to catch pace with the digital economy, where work arrangements differ fundamentally from traditional employee or independent contractor relationships.

One possible middle ground, says Howard, is to establish a third category of worker called dependant contractors, that allows workers to enjoy some benefits and address issues arising from work classifications.

“The other option that we are seeing being explored is by creating a third category of a dependant contractor - somewhat trying to balance the protection while maintaining flexibility.”

“As far as I’m aware, no one (in Malaysia) has put it in place; it is still being explored. This is on the cusp of a move, when it comes to employment trends - there are a multitude of non-standard work agreements out there and they are just growing.”

No Longer 'One Size Fits All' Approach To Attracting Talent

Redefining traditional notions of employment is a necessary process to broadening protection and encourage participants in the digital economy. In Malaysia, Howard views that the government is attuned to the changing employment landscape, not just necessarily the gig economy.

“I know reviews are taking place and it is great that they are looking to modernise employment legislation in Malaysia.”

“There are some megatrends that are facing all progressive nations, like gig economy. I wouldn’t suggest acting straight away or looking to push reforms through a short time. But in parallel to what’s taking place, look at some of the longer term trends that may really change the nature of employment relationship between companies and workers in Malaysia," Howard says.

Commenting on the evolving trends facing Malaysia’s workforce, Howard says companies are facing skills shortages.

“One of the big challenges is the availability of talent in specialist skills,” he says. “A common problem for companies is looking at how they balance technology and talent because those are the two big drivers for companies today and they are integrating more than ever.”

He observes that Malaysia’s educated and multilingual workforce and the ease of doing business have continued to attract interests from foreign firms to set up shop here. Nonetheless, companies need to be assured that they can get the talent they need.

“I would actually say that Malaysia, as a place to work, is at a high point, it is more attractive than ever. I am seeing a much better melting point of talent in Malaysia.”

“Having said that, companies do want to know, if there’s talent in the country that they can’t get to, there is some freedom to complement or supplement that talent and bring in the workers that they might need from elsewhere,” says Howard.

Malaysia As Shared Services Hub