INTRODUCTION
From low-skilled and temporary work to a professional ecosystem, the gig economy has evolved significantly through digital and technological advancements. Gig economies have existed for many years, rooted in informal and short-term work arrangements like jazz sessions and small-scale artisan work. Today, the gig economy is characterized by technological integration, providing diverse job opportunities for both workers and employers.
The modern gig economy is reshaping the traditional concept of employment characterized by the 9-5 system. Now, Mr. A can travel globally while working virtually, enjoying flexible and less stressful employment. Nevertheless, Mr A may be exposed to wrongful termination, lack of job security, income instability, and absence of job benefits such as health insurance and retirement plans. Without adequate legal protection, gig workers like Mr. A may face several challenges.
Therefore, there is a need for legislation to address the various challenges associated with the gig economy around the world which is growing rapidly. This blog will explore how various countries have approached gig economy legislation, highlighting successes and areas for improvement.
OVERVIEW OF THE GIG ECONOMY
A gig economy is a flexible work environment involving an exchange of labour and services
that allows workers and employees to share income through online platform jobs, often referred to as a sharing or access economy. Unlike traditional employment, Independent contractors, self-employed employees, platform workers and freelancers are employed in the gig economy. These gigs range across various digital platforms like Uber, Airbnb, DoorDash, Fiverr etc. The spectrum of gig jobs is diverse, while some offer on-site services such as ride-hailing, cleaning services and food delivery, others are majorly online including coding.
The modern gig economy has its roots in informal and short-term work arrangements of the past. From Jazz entertainers earning per session to artisans selling their crafts locally, the gig economy has long been part of the economic landscape. However, the true rise of gig economy jobs can be traced to the advent of the internet and digital platforms in the late 20th and early 21st centuries.
The occurrence of COVID-19 significantly accelerated the trend creating a shift in how employment is viewed. With physical distancing and lockdowns, digital and remote work became essential, allowing many to pivot to virtual gigs for income. Technology and the internet enabled the gig economy to flourish, providing a vital lifeline during times of economic uncertainty and transforming the way we work and earn money.
THE NEED FOR LEGISLATION
As a result of the gig economy, people of all ages and genders can work different types of jobs without being tied down. One major benefit is the flexibility and autonomy gig workers enjoy. Gig workers are allowed work hours tailored to their daily lives, creating a more cost-effective system. Gig workers can earn extra income from a wide variety of jobs as they are not confined to a particular one. This is why Sandra, a college student, can have a side gig working as a freelance writer while balancing coding tasks.
However, like everything else, the gig economy is not without its challenges. These range from uncertain income, unstable employment, and minimal work benefits. They are often not classified as a part of the company they work for and face issues like wrongful termination and lack of job security. For instance, a platform worker driving for ridesharing services may have his account removed without any notification or explanation from Uber.
Some of these challenges have been mitigated by legislation in some countries, but many developing countries, like Nigeria, have yet to take a stand on the growing gig economy legislation. The following section will analyze the various legislation of the European Union, Asia and developing countries.
GIG ECONOMY LEGISLATIONS AND PROTECTION OF WORKER’S RIGHTS
European Union
The European Union has been at the forefront of regulating the gig economy. With over 500 operating digital platforms and more than 28.3 million platform workers in 2022, the union is a strong advocate for labour and employment rights, addressing gig workers’ challenges. According to the EU, more than 5 million gig workers in Europe may be wrongfully classified as self-employed, denying them employment rights. The European Union introduced a ‘Platform Directive’ draft which stated rights characterizing gig workers as employees. The objective of the directive is to ensure that platform workers obtain the correct employment status and gain access to applicable and social protection rights, enhancing transparency in platform work, improving enforcement of applicable rules for all platform workers, and allowing them to be informed of the automated decision-making system. The European Commission put forward the proposal on rules for platform workers in December 2021. In February 2024, the Council and Parliament reached a provisional agreement on the rights of platform workers, which was later adopted in March. The agreement brought about the Presumption rule, which will apply to 43 million platform workers by 2025. The new directive allows Member- states to set their criteria for determining the status of gig workers using the presumption rule. Where the rule applies, the digital platform has the burden to prove that there isn’t an employee-employer relationship. Where it is unable to do so, the gig worker will be entitled to employee benefits and be classified as an employee under the EU rules. Spain was the first state to legislate on employment status, with more than a million gig workers and its adoption of Rider Law in 2021, which gave delivery platform workers the title of ‘employees’ granting riders the right to minimum wages and employee benefits. France and the UK have also made significant strides with courts recognizing gig workers as employees.
ASIA
Asia presents a mixed landscape regarding the gig economy. In China, efforts were made to ensure the protection of gig workers. Only 217 million of the 462 million urban workers had unemployment insurance in 2020, and by 2021, an employment policy was introduced to improve the working conditions of gig workers, ensuring social security benefits and insurance for platform workers. It was reported that Singapore had 88,400 platform workers in 2022, and by September 2024, the Platform Worker Bill was passed and is to take effect in January 2025. Being the first of its kind, it will benefit more than 70,000 delivery riders and ride-hailing drivers. In India, however, progress is slow. In 2019, the Indian Parliament adopted the Code of Wages, and the Industrial Relations Code in 2020, and in July 2023, the Rajasthan Government passed the Rajasthan Platform-Based Gig Workers(Registration and Welfare Act) thereby becoming the first state to regulate the Gig economy at the legislative level. It is predicted that there could be 350 million gig jobs in India by 2025.
DEVELOPING COUNTRIES
The gig economy is growing rapidly in developing countries and gig workers in these countries face the most challenges. According to the World Bank, gig workers constitute a significant portion of the global workforce, with increased demand in developing countries. Most African countries have little to no regulations protecting gig workers, and the ones in place are either ineffective or unenacted. South African government, for instance, passed a National Land Transport Amendment Bill in 2020, but it has still not been enacted. In 2022, the Kenyan Government passed the Transport Network Companies(Owners, Drivers and Passengers Regulations), which fell short of the platform workers’ expectations, rendering it ineffective. The Nigerian government, also, has put no regulations in place protecting gig workers and ensuring their employment rights.
CONCLUSION
Conclusively, more effort still needs to be put into protecting the rights of platform workers. The rapid growth of the gig economy demands equally rapid legislation as more people are inclined towards the economy. Although there has been a notable development in the European Countries that deserves an accolade, there is still much to be considered. The discretion of member states to determine criteria for the status of gig workers might result in uneven implementation. Nevertheless, the EU’s regulation is sure to set a precedent for other countries. More work still has to be done in Asia to recognize gig workers; the Indian government should clearly distinguish gig workers, and there is a need for a comprehensive regulatory framework. More developing countries need to take a stand on the growing economy as there are more gig workers in these countries.
Author(s) Name: Kaosarat Lawal (Lagos State University)
