(Jan 22): In response to a recent peaceful protest held by a group of about 300 delivery riders to demand that an e-hailing company resolve several lingering issues, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi once again made another promise. 

He said the setting up of a Gig Economy Commission (SEGiM) would be sped up once approval from the Cabinet is received. Would this promise be a firm government commitment or mere political rhetoric?

With due respect, all the local players of the gig economy have every right to take everything the deputy prime minister says with a pinch of salt. Why? 

On Nov 29, media reported a statement by the then human resources minister that the government had no intention of setting up SEGiM. That was his official reply in Parliament. 

And in July, it was the same deputy prime minister of the Madani government who made an assurance for such a commission to be established to resolve issues in the informal work ecosystem. Hence, the promises have been recurrently given by the government and consistently broken.

Anyway, the ongoing debates in ascertaining the real legal status of gig workers have been dominating the employment law for quite some time. 

As far as the legal question as to the status of gig workers — whether they should be treated as employees and be accorded legal protections or as mere independent contractors — that has not been universally or satisfactorily resolved yet. 

Hence, we may safely say that the nub of the question has invariably been whether the relationship between a tech platform or company that facilitates gig work and the gig worker can (or should) be classified as employer and employee? 

The number of gig workers in Malaysia is quite substantial in that as of 2020 alone, such workers, according to statistics of the World Bank, constituted about 26% of the Malaysian workforce. 

Hitherto, gig workers have not been duly recognised as employees/workmen in Malaysia.

And such a legal position was undergirded by the Malaysian High Court in the case of Loh Guet Ching v Myteksi Sdn Bhd (berniaga atas nama Grab). Apparently, the Malaysian court was not ready to confer on e-hailing drivers their legal status as workmen under the definition of the Industrial Relations Act 1967. 

The court, on the contrary, only viewed their legal status as not more than independent contractors, thus the relationship between Grab and its drivers was treated as a contractual relationship like any other commercial agreement. 

In placing gig workers in the “box" of independent contractors, the Malaysian law still cannot run away from the perennial debate about a contract of service or contract for service.

Such a distinction is invariably deemed to be significant and relevant by Malaysian courts in ascertaining an individual’s legal position. 

Ergo, in Malaysia, individuals who are under a contract of service will be considered as employees for the purposes of the Employment Act 1955 and the Industrial Relations Act 1967.

On the contrary, individuals who are under a contract for service — such as gig workers — will only be treated as independent contractors, and they will not be treated as employees for the purposes of the two aforementioned employment laws. 

Gig workers are treated as independent contractors, due to the fact they merely entered a contract for service with the entity which hired them, and the hiring entity is said to have no control over such gig workers. 

In 2021, the then deputy human resources minister of Malaysia also indicated in Parliament that the proposed Employment (Amendment) Bill 2021 was in the pipeline, whereby gig workers would in effect be included into the definition of “employees” under the Employment Act 1955. Unfortunately hitherto, the proposed amendment has not been in the picture yet. 

Perhaps the government needs to study other countries such as Chile. The Chile government has taken initiatives to resolve the woes of gig workers by proposing a regulatory framework via a legislation known as Act No 21.431, which seeks to distinguish between “dependent digital platform workers” and “independent digital platform workers". 

By having this new law, the government of Chile attempts to protect both dependent and independent worker categories, as well as specific rights that are distinct for each category.

Hence, the new law also guarantees the right of independent workers by insisting the platform company to duly practise a culture of transparency in terms-of-service agreement. 

The law also prohibits any unilateral modification by platform companies, with the intention of addressing the power imbalances between workers and platforms. 

Mohamed Hanipa Maidin is a former Member of Parliament for Sepang.