As Malaysia embraces digital economy, are the gig workers protected?

This act addresses the issue of unfair dismissal or dismissal without cause. Grab however, has not taken any serious step to resolve it. The Industrial Relations Department (IRD) on the other hand did not give a clear verdict, leaving the case hanging.


Another driver, Suhaimi, has also lodged a police report for being removed from using the app permanently. One of his passengers complained that he was drunk while driving. Perplexed by the charge, Suhaimi undertook a test to confirm that he was not drunk on that day, but he was not given any chance to explain and prove his innocence.


As Malaysia prepares for the gig economy, one key question is whether gig workers’ rights are protected. This concern stems from the lack of legal framework that governs this issue, which can easily lead to exploitation of workers by big companies.


The Khazanah Research Institute’s (KRI) report highlighted that the gig worker and digital economy is becoming the defining feature of Malaysia’s labor landscape. It is no doubt that these platform-providers have become the source of income for many Malaysian youths.


One issue with the current situation is the classification or definition of a gig worker. They are not considered as employees, but more of an Individual Contractor / Self-Employed who in essence are not protected by a clear legal framework.


Aside, the nature of their relationship is also different than the usual definition of Independent Contractor / Self Employed as the former has a specific task with a specific agreement/contract while the gig workers do not.


On top of that, the former has a clearer work nature and relationship to categorize themselves as independent as they have more authority in the rules and regulations they set for the services, fees that they charge and their own ability to find the customers/clients without the platforms.


As opposed to the latter, these gig workers are not in control of the types of clients/customers that they receive, nor the fees charged. More importantly, they have to abide by the rules of the platform and face consequences, such as being barred from using the app without an adequate chance to explain themselves.


These have been justified by the blanket rule of zero-tolerance policy that the company practices. There is also a ‘relationship of subordination’ where the platform-provider is able to give instruction, examine and oversee the execution as well as the power to sanction any non-compliance.


This resembles more closely a relationship of ’employer-employee’ instead of Independent Contractor / Self Employed. While the gig-workers have to abide by the rules and regulations to use the apps in the pursue of protecting the company’s reputation and business, what rules and regulations that the platform-provider abide by to protect the gig-workers? None.


What’s happening outside Malaysia


United Kingdom

• The Employment Tribunal in UK has decided that Uber drivers are considered ‘workers’, and the case is now being brought to the Supreme Court of Appeal by Uber. UK has not just ‘employee’ status, but also ‘worker’ status which has a broader criteria.



• The Paris Court of Appeal and Cour de Cassation have agreed that Uber drivers are considered as ’employees’ as they only have two worker statues whether ’employed’ or ‘self-employed’. At the moment, they are discussing the details of the ruling such as the over-pay, dismissal procedures and others.


California, United States

• The State Supreme Court has ruled that an Uber driver is categorized as employee. However, Uber spent over US$200 million (MYR824 million) for a ballot referendum and won 58 percent that overturned the court’s ruling making the drivers contractors.



• This year, the Supreme Court ruled in favor of Uber’s drivers to regard them as the company’s employees.


What’s happening in Malaysia


In July 2020, the Ministry of Human Resource – in response to Nik Nazmi in Sidang Dewan Rakyat – stated that they are still researching the solution to this matter. We urge the government to work with think tanks, legal authorities, and gig workers to develop a legal framework to protect the gig workers’ fundamental rights.


At the same time, a meticulous and comprehensive plan needs to be in place, to ensure a conducive environment for businesses and investment. Discussion paper from Research for Social Advancement (REFSA) for example has outlined several suggestions.


Among them are: First, to classify gig workers as “independent employees” where despite not getting the full benefits as traditional employees, they should be protected by specific regulation.


Second, to develop a Platform-2-Government (P2G) for data sharing which will allow the government to gather and analyse data from the independent employees, and enable the incorporation of social security measures automatically as well as easing the calculation of tax deduction.


Other than these, REFSA also underscored the importance of market competition between different platform providers – a move that will spur offering of rebates, subsidy and procurement of different insurance types, and other perks that will attract independent employees and provide them with more options.


Aside than these, a thorough focus groups discussion should also be made to explore different stakeholders groups’ opinions together with their underlying perceptions and attitudes towards the issue. The discussion need to be made in a non-threatening and permissive environment as to ensure all pain points are covered in developing effective policy solutions.


The interest of all stakeholders especially the ‘rakyat’ is ought to be prioritised where integrity should be held at all time as to avoid any quick fix like “money-offering” which don’t necessarily resolve the source of the issue to begin with.


As our country embraces the digital economy, we must ensure that it comes with adequate social protection, zero exploitation and healthy competition.


Farah Nabilah Abdul Rahman
Researcher & Activist
Asean Young Leaders Forum (AYLF) Malaysia Chapter

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