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Singapore: Improving Protection for Gig Economy Workers

Mis à jour : 4 août 2019

Originally written for Black Marketing, Singapore

The gig economy is a revolution in the service economy. Smartphone technology and the startup culture have drastically changed the way we live. Any service we might require – whether we are getting a cab, ordering food at home or hiring a plumber – is just a click away. Gig economy workers have become the contingent workforce of the 21st century, and they are growing exponentially fast.

According to The World Bank’s collection of development indicators, self- employed professionals in Singapore made up 14,07%1 of the employed population in 2017. The Ministry of Manpower has further issued that 8,4% of the resident workforce currently make their income primarily through self- employment. As many as 82% of contingent workers do such work by choice.

While regular employment often guarantees company-subsidised insurance and pension plans as well as career development through training within the company’s hierarchy, the situation is different for freelancers. In fact, with the rise of new forms of employment, there is a need for self-employed workers to replace what employers provide for full-time employees.

Contingent workforce in the digital economy

A contingent workforce is a labour pool whose members are hired by an organisation on an on-demand basis. It consists of freelancers, independent contractors and consultants who are not permanent employees of an organisation, but are hired on a per-project basis.

Although the contingency workforce has been prevalent since the 1990s, the exponential growth of connectivity that societies have been experiencing has led to the creation of massive online marketplaces that can be accessed anywhere, anytime. As a result, the costs of sourcing work have been reduced, thereby making on-demand work more accessible for businesses and consumers.

Legal systems are however first and foremost designed to accommodate full- timers, and regulators have only recently begun to tackle the situation. The rise of the platform in the economy has also shed light on certain issues: the legal and social conundrum of the vulnerable status of gig economy workers.

Current protection

Securing a job does not guarantee income security for contingent workers. Those falling sick often end up losing income and have to work extra hours to make up for it. In fact, they tend to fall outside the social safety and employment protection framework, as they are not entitled to annual leave, medical benefits, pensions, and so on.

Requiring companies to provide benefits to self-employed workers could be a solution. The risk however is that it will increase the cost of business for companies and complicate the process of hiring freelancers. This might result in a reduced interest in hiring contingent workers and harm both gig workers and organisations.

Outsourced insurance policies

Too much regulation might impair the flexibility of the contingent workforce; when adaptability is an inherent aspect of freelance and temporary work arrangements. Basic benefits should however not be ignored.

For instance, the ride-hailing firm Grab has signed a partnership with the insurance company Chubb to provide innovative solutions to drivers. It is designed to make insurance more affordable and convenient, and has features such as pay-per-ride options, one-click enrolment and the possibility to claim payment via the app.

Prospective changes

Most firms do not have as many self-employed workers as Grab and do not necessarily have the possibility nor the required organisation to provide insurance for their freelancers.

A workgroup led by the Ministry of Manpower’s deputy secretary Augustin Lee therefore conducted a study on how to better support the self-employed in Singapore. They recommended creating both an avenue for companies to publicly commit to written contracts with freelancers, and a prolonged medical leave (PML) insurance product that provides income protection in the case of a freelancer’s illness or injury.

The research was duly taken into account by the government. In fact, a set of guidelines on hiring freelancers was recently issued by the Parliament: the new Tripartite Standard on Contracting with Self-Employed Persons encourages organisations and freelancers to discuss and settle on terms of engagement prior to working together. The Second Minister for Manpower Josephine Teo has also announced that NTUC Income is keen to develop a PML insurance product for self-employed workers, which will likely be available next year.

All things considered, the future looks bright for the gig economy in Singapore. With new measures put in place, the disadvantages of being a contingent worker might decrease significantly; while still allowing both organisations and self- employed workers to benefit from the flexibility of freelance and temporary work.