Gig employee and gig freelancer: Is there a difference?

Mar 06, 2017 08.00PM |
 

by Wan Ting Koh

WORKING in the gig economy doesn’t necessarily make you a freelancer, said Manpower Minister Lim Swee Say in Parliament today, in his Committee of Supply speech on the gig economy in Singapore.

In fact, according to Mr Lim, you can technically still be an employee under contract with an employer even if you work in the gig economy. Mr Lim termed these group of workers “gig employees”. But this distinction means that gig employees should be covered under labour laws, such as the Employment Act – a right which freelancers are not entitled to.

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And this throws into uncertainty the fate of full-time Uber and Grab drivers here, who are currently considered self-employed.

Responding to questions from Members of Parliament (MPs) about the increasing number of freelancers in Singapore, Mr Lim said that whether a gig worker is an employee or freelancer depends on his or her contractual arrangement.

He raised the example of a private car driver. If this driver joins a transport company with an employment contract, but primarily takes on jobs offered via an app, he is still an employee of that company, even if he is on a short-term employment contract. In other words, gig employees are no different from those employed under “contract of service”.

Freelancers, on the other hand, are those who do not enter into employer-employee relationships. They provide service for a fee and are not overly constrained by the conditions imposed by the platform owner, or a service buyer, said Mr Lim.

Mr Lim’s announcement is timely as it follows a booming gig economy where an increasing number of workers are turning to “on demand” gigs to gain an income, instead of conventional, stable nine-to-five jobs. The phenomenon raises issues of employment rights for a group of workers who often go unprotected by labour laws.

Although there is no official definition of the gig economy worldwide, said Mr Lim, gig workers are commonly referred to by the Organisation for Economic Cooperation and Development as workers who work on the “platform economy”. This “platform economy” refers to online platforms which match service buyers with workers who take up the short-term jobs.

New survey findings released by Mr Lim in Parliament showed that there are about 20,500 gig workers here. Of these, around 10,500 come from the private car driving industry such as Uber and Grab, while workers from the professional services, creative services, delivery services and media and communications make up the rest.

The survey also found that of a total of 200,000 freelancers here, some 167,000 freelanced as their main job, while the rest did it part-time alongside other jobs.

A further breakdown of survey findings revealed that more than eight in 10, or 81 per cent of freelancers chose freelance work as their preferred job, while the remaining 19 per cent did not freelance as their preferred choice.

The survey also asked freelancers their top concerns or worries, and these were: The lack of income security, the lack of employee benefits and savings for housing and retirement, and the possibility of untimely payment from clients, said Mr Lim.

The growing numbers of freelancers are enough to make the G look into providing more employment protection for them, so the G will be forming a tripartite workgroup, comprising of representatives from the labour movement and employers, to study the issues they face.

He said: “While these concerns may not be new to freelancers, we are taking them seriously. This is because the number of freelancers may grow in our future economy, in tandem with the growth of the platform economy.”

The National Trades Union Congress (NTUC) has also been giving freelancers some coverage. It set up the Freelancers and Self-Employed Unit about two years back to provide a range of benefits for members for a fee of $117 per year. Read our article about it here.

Even though Mr Lim did not mention any names, his example of the private car hire industry brings to mind the situation of Grab and Uber drivers in Singapore. They are currently considered self-employed, that is, they do not have CPF contributions, are not equipped with insurance, and have no leave days.

With distinctions between gig employee and gig freelancer being made, Uber and Grab might have to do something about their practices here, which might conceivably affect their bottom-lines. Hopefully, this won’t affect their fares. Conventional taxi drivers, who often complain about the competition, will be pleased though.

 

In other countries, the employment status of Uber drivers has become a source of contention between drivers and their employer.

In the US, a group of drivers representing 5,000 Uber Technologies drivers in New York filed a lawsuit against Uber last June, accusing the company of depriving drivers of various employment protections by misclassifying them as independent contractors. On one hand, drivers say they were promised decent wages, but a majority of earnings went toward company surcharges and vehicle payment. On the other hand, Uber insists that their drivers are self-employed and hence have no contractual obligation to subsidise rental or surcharges.

By October, two drivers had successfully sued to be considered employees of Uber rather than independent contractors. The court’s decision meant that the two would be entitled to unemployment benefits from their work with Uber, according to the New York Taxi Workers Alliance.

In the UK, a landmark ruling by a London employment tribunal last October ruled that Uber drivers are not self-employed and should be paid “national living wage”.

The ruling by a London employment tribunal involves a case taken by two drivers, Mr James Farrar and Mr Yaseen Aslam, who argued on behalf of a group 19 Uber workers that they were employed by Uber, rather than working for themselves. Uber said in response that it would appeal against the ruling.

 

Featured image by Najeer Yusof.

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