The passing of Singapore’s
Platform Workers Bill is a
monumental step in addressing
the evolving nature of work in the
digital age.
As gig economy platforms such
as Gojek and Grab become
ingrained in everyday life, the
status of platform workers has
increasingly come under scrutiny.
Striking a careful balance
between protecting workers’
rights and preserving the
flexibility that the gig economy
aspires to provide is not easy. It is
an issue faced by many countries.
ADDRESSING THE
CLASSIFICATION DILEMMA
One of the thorniest issues in the
gig economy is the classification of
platform workers.
Currently, these workers are
classified as self-employed, meaning they lack access to the
benefits that employees enjoy
under Singapore’s Employment
Act. They do not receive paid
leave and Central Provident Fund
(CPF) contributions, and have no
mandated work injury
compensation.
Platform operators, on the other
hand, refer to these workers as
“partners” – independent
contractors who provide services
to consumers. This arrangement
theoretically gives workers the
freedom to work when and how
they want, setting their own hours
and determining their earnings
based on effort. However, the
reality is far more complex.
There is a clear power
imbalance between platform
workers and operators. Algorithms
dictate the terms of engagement,
and workers are heavily managed
by the platforms, from job
allocation to performance ratings.
The supposed autonomy that gig
workers have is often illusory.
To earn a decent wage, platform
workers must conform to the app’s
rules and work patterns, much like
traditional employees, but without
the associated benefits.
Singapore’s recognition of this
hybrid status in the new Act is a
crucial acknowledgment of the
reality these workers face.
A NEW CATEGORY OF WORKER
The Platform Workers Act carves
out a distinct category for
platform workers, acknowledging
that while they exhibit some traits
of employees, they also retain a
degree of flexibility.
The Act grants platform workers
protections that are much needed,
while still maintaining their
independent status.
The most significant of these
protections are CPF contributions,
crucial for home ownership and
retirement planning in Singapore.
Platform workers born from 1995
onwards will be automatically
enrolled for CPF contributions,
while older workers can opt in.
While some may baulk at the
idea of lower take-home pay, the
long-term benefits of CPF savings
– such as easier access to housing
and retirement adequacy – cannot
be overstated.
Many platform workers
recognise the importance of
saving but need structured
mechanisms to help them do so.
The Act provides just that,
ensuring that CPF contributions
are promptly deducted and
funnelled into workers’ CPF
accounts.
Of course, there are concerns
that CPF deductions will hit
low-income workers the hardest,
with less cash to take home at the
end of the day.
But the Government’s decision
to offer support during the first
year is an important move,
softening the blow and ensuring
no immediate impact on
take-home pay.
Under the Platform Workers
CPF Transition Support scheme,
Singaporean platform workers
earning $3,000 or less in net
income from platform and other
jobs will receive direct cash
payouts.
These payments are designed to
offset the rising CPF contributions
to their Ordinary and Special
accounts as their contribution
rates gradually rise to match those
of regular employees.
In the first year, the increase will
be fully offset, with the support
reducing by 25 per cent each year
until 2028.
This phased approach, while
compassionate, is also strategic. It
gives workers the “nudge” they
need to invest in their long-term
financial well-being through
opting in to CPF deductions, a
decision they cannot later retract.
PROTECTING WORKERS WITHOUT
SACRIFICING FLEXIBILITY
Another essential protection
introduced by the Act is Work
Injury Compensation, which will
be on a par with what regular
employees in similar sectors
receive.
Delivery riders and private-hire
vehicle drivers face significant
risks in the course of their work. A
2022 Institute of Policy Studies
survey found that around a third
of delivery riders in Singapore had
experienced an injury requiring
medical treatment.
The Act recognises these
dangers and requires platform
operators to address workplace
risks through safety assessments
and risk control measures.
However, it is important to note
that this coverage extends only to
periods when platform workers
are actively engaged in work tasks
such as picking up or delivering
passengers or items.
While some argue that accidents
during waiting periods should be
covered, the unique status of
platform workers – who still retain
some control over their schedules
– makes it impractical to extend
full coverage for non-working
periods. This is a reasonable
compromise, ensuring protection
without overextending the
platform operator’s liability.
AVOIDING OVER-REGULATION AND
ACHIEVING POSITIVE OUTCOMES
While the Act is primarily
designed to safeguard the needs of
platform workers, it is mindful not
to overly burden platform
operators in the process. It offers
clarity on how liability is
determined for workers
performing tasks across multiple
platforms.
The administrative hassle of
determining the net earnings of
workers has also been reduced
through the application of a Fixed
Expense Deduction Amount
which computes a 60 per cent
deduction for those who use cars,
vans and lorries in their platform
work, 35 per cent deduction for
those who use motorbikes and 20
per cent for those who use
bicycles or public transport.
Some argue that the
Government should go further,
auditing algorithms for fairness or
guaranteeing minimum earnings.
However, as Senior Minister of
State for Manpower Koh Poh Koon
pointed out during the second
reading of the Bill in Parliament,
there is a risk of over-regulation,
which could stifle innovation and
harm the very workers the Bill
seeks to protect.
If companies are faced with an
unsustainable burden of
regulatory compliance, they may
opt to leave, reducing competition
and limiting opportunities for
workers. Singapore has wisely
chosen not to legislate in areas
that could disrupt the delicate
balance between worker
protection and business
innovation.
Instead, the Act empowers
platform worker associations to
negotiate collective agreements
with a platform operator and take
matters to the Ministry of
Manpower for conciliation.
Platform associations can thus
negotiate with operators on key
issues like compensation and
working conditions.
This approach allows for greater
flexibility and transparency, as
workers and operators can
collaborate to find solutions that
serve both sides’ interests.
Additionally, market forces help
restrain platform operators who
might attempt to pass on the
added costs of worker protections
to platform workers or consumers.
If platform workers feel they are
being underpaid or treated
unfairly, they can choose to switch
to competing platforms.
Price-conscious consumers are
also likely to opt for platforms that
absorb most of these protection
costs, even though they
understand they may face some
inevitable price increases when
using such services.
We must be realistic about how
much competition alone can push
platform operators to absorb
additional costs.
The nature of the platform
economy means that large players
dominate due to network effects,
drawing in more users and making
it tough for smaller competitors to
gain traction.
This is why regulation is
essential to curb anti-competitive
practices as the platform economy
continues to grow.
Without it, the market will
remain tilted in favour of one or
two giants, leaving little room for
true competition and therefore
less choice for workers and
consumers to vote with their feet.
THE TRIUMPH OF TRIPARTISM
The successful passage of
Singapore’s Platform Workers Bill,
while many other countries
remain stalled on this issue,
highlights the effectiveness of
tripartism in Singapore.
The close collaboration between
the Government and the tripartite
partners enables the Government
to simultaneously be pro-worker
and pro-business.
The Platform Workers Act – the
culmination of a three-year
process – is a testament to this
collaborative spirit, where multiple
stakeholders have been able to
come up with a well-calibrated
policy that protects workers
without stifling business.
This article was first published in
The Straits Times on 18 September 2024.