In Malaysia, the population of gig workers almost doubles the global average at 26% of the labour force. Their work can often be directed as non-traditional, short-term and self-employed. Gig worker’s unique work arrangement often gives them the leverage of flexibility and choice of work. Nevertheless, the English idiom ‘You can’t have your cake and eat it (too)’ prevails as gig workers often only have limited protection compared to ordinary full-time employees under the Employment Act 1955 (Act 265).
Independent Contractors
With the new amendment from the Employment (Amendment) Act 2022 (Act A1651), Section 101C of the said Act now provides clearer classifications on who is or is not an employee/employer under the law.
101C. Offence by body corporate, etc.(1) In any proceeding for an offence under this Act, in the absence of a written contract of service relating to any category of employee under the First Schedule, it shall be presumed until the contrary is proved that a person is an employee—(a) where his manner of work is subject to the control or direction of another person;(b) where his hours of work are subject to the control or direction of another person;(c) where he is provided with tools, materials or equipments by another person to execute work;(d) where his work constitutes an integral part of another person’s business;(e) where his work is performed solely for the benefit of another person; or(f) where payment is made to him in return for work done by him at regular intervals and such payment constitutes the majority of his income.(2) For the purpose of subsection (1), it shall be presumed until the contrary is proved that a person is an employer—(a) where he controls or directs the manner of work of another person;(b) where he controls or directs the hours of work of another person;(c) where he provides tools, materials or equipments to another person to execute work;(d) where the work of another person constitutes an integral part of his business;(e) where another person performs work solely for his benefit; or(f) whether or not payment is made by him in return for work done for him by another person.(3) The first-mentioned person in subsection (2) includes the agent, manager or factor of such first-mentioned person
Prior to the Amendment, the Federal Court in the case of Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia & Anor (1995) 1 MELR 1, laid down the essential test of determining whether someone was a gig worker or not following these factors:
- the nature of the task undertaken and the degree of skill required;
- the freedom of action given to the worker;
- who gives the orders and the nature of those orders;
- who has the power to hire and fire;
- whether tasks and duties assigned to the worker can be delegated;
- the manner of payment;
- whether contributions are made to statutory employee social security funds such as the employees provident fund and the employees social security;
- whether deductions are made for payment for income tax;
- who provides the tools and equipment;
- whether there are defined or regular hours of work;
- whether exclusive service is required;
- the expressed intention of the parties; and
- who has the right to exercise overall control of the manner of performing the tasks assigned.
In the case of Loh Guet Ching lwn Menteri Sumber Manusia dan lain-lain [2022] MLJU 2503, the High Court affirmed the decision of the Industrial Court by dismissing the appellant’s submission. The Judge agreed that E-hailing drivers are not employees, but independent third party contractors.
What happens when I fall under the category of a gig worker, and what protection am I afforded?
Following the Self-Employment Social Security Act 2017 (Act 789), and the Perkeso Self Employment Social Security Scheme, all Malaysian citizens or permanent residents may register for the scheme to cover matters related to self-employment injuries. Schedule 1 of the Act provides for the relevant industries that will be entitled to these protections effective 1st January 2020.
Self-employment injuries that are protected by the Act for the self-employed are as occupational diseases, disablement, and other medical matters.
What can I do to safeguard myself better as a gig worker?
Firstly and most importantly, gig workers should do thorough and adequate research prior to engaging in any gig work. It is significant to outweigh and consider the possible condition of the work, and then make the best available decision.
Additionally, gig workers should always insist on having a copy of a written and complete contract, as afforded to them by the law, to fully comprehend and acknowledge the terms and conditions in their agreement with the relevant parties. When in doubt, gig workers should aim to seek legal consultation from professionals when possible.
Budget 2024 (Belanjawan 2024)
In the recent Budget 2024, it was highlighted that the government intends to continue the Career Building Programme to incentivise and train gig workers involved in the programme. Furthermore, the EPF’s i-Saraan Programme will raise the government’s contribution limit from RM300 per year to RM500.
See our other article on Malaysian Employment Law here.
