Melanie Lane

Melanie Lane

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21 December 2016

The gig economy and employment rights in Singapore

Determining an individual’s proper employment status has only increased in complexity as working practices and structures evolve to become ever more sophisticated, never more so than in the gig economy.  

In the UK, various claims are underway or pending where individuals are alleging that they have been incorrectly classified as self-employed meaning they are denied basic employment rights and protections.  Most recently, an employment tribunal ruled in favour of a group of Uber drivers finding that they were "workers" and therefore, for example, entitled to be paid national minimum wage and to take paid holidays.  Meanwhile some Deliveroo riders, backed by the Independent Workers Union of Great Britain, are asserting that they are workers for collective bargaining purposes.

It is a topic which is now very much on the UK government's radar with the Prime Minister  announcing an independent review into modern employment practices at the Conservative party conference, HMRC reported to be launching a new specialist unit to investigate companies using a large number of self-employed or agency workers and the Business, Energy and Industrial Strategy Committee initiating an inquiry into the future world of work including the status and rights of agency workers, the self-employed, and those working in the 'gig economy'. The inquiry is also to look at issues such as low-pay and poor working conditions for people working in these non-traditional employee roles.

In Singapore, the gig economy (also known as the “on-demand” economy) is not only expanding, but becoming a mainstay in its economy as the country continues not only to embrace, but also to invest in innovation.  This ranges from the private-car hire sector (dominated primarily by Uber and Singapore-based Grab) to cleaning services (such as Fuss). 

The Singapore government’s proposed legislation to regulate the private-car hire sector can be seen as an attempt to embrace the benefits that the disruptive taxi model brings while ensuring commuters' interests are safeguarded. For instance, in measures expected to take effect by mid-2017, prospective private-hire car drivers will have to undergo medical tests, background screenings and obtain a Private Hire Driver’s Vocational Licence to include completing a 10-hour training course. The vehicles used will also have to be registered with the authorities and display a special decal for identification. 

The growing recognition of the gig economy in Singapore will inevitably shine a spotlight on the employment status of those involved in providing their services through it. The Ministry of Manpower has provided guidance on what amounts to a contract of service (used to employ an employee) and a contract for services (used to engage an independent contractor), which includes taking into account factors such as who is responsible for the provision of work, who provides the tools, equipment or vehicle and economic considerations such as whether there is any profit sharing and liability for losses). 

At the time of writing, there are not yet any (reported) cases involving the employment status of those who are involved in the “on-demand” economy.  However, with the commencement of the Employment Claims Tribunal in April 2017, more employment related claims are expected to surface, and it is likely that it will not be long before there is a case involving employment rights in the gig economy. Monitoring the developments in Europe may provide an indication of where the law may head in Singapore when the time comes. 

This article was co-authored by Lakshanthi Fernando, Managing Director and Eric Lai, Practice Trainee of Holborn Law LLC, which is an independent Singapore law practice that works in association with Olswang Asia.