Putrajaya mulls arbitration avenue for gig economy pay disputes

KUALA LUMPUR, June 5 — Gig workers could soon get a platform to formally challenge companies over commission payments, as the Anwar government looks to enhance legal protection for the growing number of Malaysians employed in the sector.

The gig economy has grown exponentially in the last decade, making up almost a fifth of the workforce as of 2023, tracking a similar expansion in tech-based firms.

Those employed in the sector tend to be young, including many graduates.

Despite its popularity, however, there has been growing frustration among those working in the gig economy, as rising interest rates and increasing competition have led tech-companies in the sector to cut down on the once-generous payments from the early days of the sector.

As the companies argue that gig workers are self-employed contractors, this also means they do not have the same legal protections and avenues that formal workers have to challenge decisions by their employers.

Young voters are crucial constituents, making up nearly half the electorate today. Upon taking office, Prime Minister Datuk Seri Anwar Ibrahim had vowed to heed their complaints as part of his administration’s push to strengthen labour laws and improve worker welfare.

Human Resources Minister Steven Sim described it as fundamental to ensure gig workers in Malaysia receive fair wages, social security protection and welfare assistance. — Picture by Miera Zulyana

Malay Mail understands that the Ministry of Human Resources has already drafted a paper outlining out how the arbitration mechanism might look like and operate.

The idea, one of the key proposals detailed out in an interim report for a policy framework for the setting up of a Gig Workers Commission, is set to be presented at today’s Cabinet meeting.

Human Resources Minister Steven Sim confirmed the matter yesterday. Sim was reported saying the report aims to seek approval for a more detailed plan towards establishing the commission.

He described it as fundamental to ensure gig workers in Malaysia receive fair wages, social security protection and welfare assistance.

The interim report will be the first document that would define the scope of the Gig Workers Commission, which Anwar plans to present in Parliament next month.

However, Sim was reported saying that the final report may only be ready in August.

In 2023, the number of gig workers in Malaysia reached a record high, surpassing 3 million or over 17 per cent of the total workforce, a significant increase from just two years prior when there were only 2.4 million self-employed workers. — Picture by Firdaus Latif

Malay Mail understands that the report will outline the commission’s mandate, scope of work, power and jurisdiction, and organisational structure, as well as the financial cost.

The areas of focus of the commission would include mandating career progression and upskilling opportunities, and empowering it to scrutinise contracts and punish companies that fail to provide clear terms and conditions.

“Among the aims are to safeguard gig workers’ welfare and set up a mechanism to tackle grievances regarding commission paid to gig workers,” a source familiar with the matter said.

In 2023, the number of gig workers in Malaysia reached a record high, surpassing 3 million or over 17 per cent of the total workforce, a significant increase from just two years prior when there were only 2.4 million self-employed workers.