New Bill recognises gig workers as distinct labour class

Cabbies, private-hire drivers and freelance delivery workers who rely on online matching platforms for income will get better labour protection from Jan 1, 2025, after Parliament passed a landmark Bill on Sept 10 designating them as a distinct legal category in between employees and the self-employed.

Known collectively as platform workers, this 70,500-strong group will get greater levels of contributions to the Central Provident Fund (CPF) savings scheme, aligned with what employees and employers pay today.

Platform operators will also have to provide them with standardised work injury compensation insurance policies with the same level of coverage as employees.

In addition, platform workers, who cannot unionise under current laws, will be able to form representative bodies called platform work associations, with legal powers similar to those of trade unions.

This will allow them to negotiate and sign legally binding collective agreements with operators, and gain access to various avenues of redress, including the right to strike if the decision is considered and justified.

The culmination of a three-year process that began in 2021, the Platform Workers Bill received support from lawmakers on both sides of the aisle.

Over two days, 26 MPs spoke in support of the law but raised a range of issues, with implementation details and the higher costs that will result from the stronger protection among key concerns.

Senior Minister of State for Manpower Koh Poh Koon said Singapore is among the first in the world to provide statutory protection for platform workers as a distinct group.

Many other countries are grappling with this, given the heterogeneous and rapidly evolving nature of the sector, he noted.

Pointing to the complexity of implementing the new platform workers law here, Dr Koh said the policy solutions may not be perfect.

“We will have to make trade-offs and accept that not all issues and gaps in the platform space can be fully addressed through this legislation alone,” he added.

Illustrating these trade-offs, Dr Koh noted how MPs had expressed concerns about the higher costs arising from the new law, but at the same time called for more protection that would drive up costs further.

“I raise this observation to make the point that where we have landed at this Bill today is a careful balance of the interests of the various stakeholders involved,” he said.

Dr Koh said there are measures in the law that prevent operators from passing on costs to workers. Market competition is also an important self-regulating force, as workers and consumers have the choice to switch platforms, he added.

He noted that added costs incurred by platform operators on work injury compensation and CPF can also be audited to counter any claims of profiteering.

“Platform operators will need to consider how best to manage the costs. Consumers, too, will have a role to play,” he said, noting that the higher costs arising from the protection of platform workers are no different from the business costs that employers already incur.

“It is a levelling up of what platform operators ought to have been paying... It will also ensure a level playing field for companies operating in Singapore to compete fairly in terms of business costs,” Dr Koh said.

He warned platform operators against reflecting and charging these added business costs through a separate fee component, calling it “disingenuous”. “Such a move would be tantamount to passing the costs directly to customers,” he added.

Dr Koh noted how MPs like Mr Gan Thiam Poh (Ang Mo Kio GRC) had asked if the Government would consider reducing the phase-in period for higher CPF contributions.

While Dr Koh said he shared the sentiment that CPF contributions are very important, he noted that the five-year transition period was a careful decision made after considering the impact on take-home pay for workers, the cost impact on platforms, and how these costs may be passed on to consumers.

The five-year period will moderate the impact on various stakeholders and give the market time to adjust, he added.

Similarly, he said allowing older platform workers to opt in for the new CPF scheme reduces the administrative burden on platform operators and workers, compared with an opt-out system.

“It’s not just one operator that has to make system changes, or (bear) administrative costs. All the apps that this person has signed up with, even if it’s an app that he uses very infrequently, would have to, then, also reflect that same CPF opt-in or-opt out status,” Dr Koh later said.

On suggestions by MPs to police or audit platform algorithms to weed out any discriminatory practices, Dr Koh said the dynamic nature of these algorithms means any audit will be reactive and have limited utility.

He said forcing platforms to reveal proprietary information like how their algorithms work may drive them away from Singapore and lead to a loss of platform-worker jobs. Regulating the use of such algorithms will also impose significant compliance costs and deter potential entrants.

Instead, the new union-like platform work associations will be empowered to take up issues such as discrimination with the relevant operators, he said.

He added that it is also in the interest of platform operators to treat workers fairly, since all younger platform workers will be required to make higher CPF contributions over time, and those who feel they are being treated unfairly can switch platforms.

On work injury compensation, Dr Koh turned down a suggestion to set up a centralised insurance system to minimise disputes, saying an open and competitive insurance market will facilitate sustainable insurance premiums.

He said these premiums will account for the risks in the respective sectors, and be based on indicators such as payroll size and number of workers.

The current estimate by insurers is that premiums for platform work injury insurance will not be much higher than those for employees in the same sector, he added.

“Today, there’s no actuarial data, so everyone is pricing a little bit more conservatively... I think we should probably give the market some time to come to equilibrium,” he said.

On suggestions to regulate working hours and incentive structures, or impose minimum earnings, Dr Koh said being too heavy-handed with regulation could stifle the innovation and sustainability of the platform economy.

“Instead of the blunt tool of regulation, it is better to focus on the outcomes, and empower stakeholders to negotiate for their interests,” he added.

In a Facebook post, Prime Minister Lawrence Wong said the landmark Bill is the result of Singapore’s strong tripartite partnership.

“Together, we have crafted a solution that benefits both workers and businesses, ensuring fair treatment while preserving the flexibility that gig work offers. It’s another meaningful step forward in our ongoing efforts to renew and strengthen our social compact,” he said.

Dr Koh said that when the platform workers law comes into force on Jan 1, 2025, it will supersede any existing platform work agreements. He also assured the House that the scope of the new law will be reviewed in future to potentially cover other platform services, beyond ride-hailing and delivery.

MPs like Mr Louis Ng (Nee Soon GRC) had pointed to the growing number of freelancers who use online matching platforms to provide services such as domestic cleaning and caregiving.

Nominated MP Ong Hua Han cited locum nurses as an example of freelancers who are also subject to the management control of caregiving platforms.

Dr Koh said the Government will consider taking a similar phased approach and providing transitional support if new sectors are added to the law.

In response to Arts Nominated MP Usha Chandradas, who flagged the vulnerability of freelancers in the arts community, Dr Koh said the Government will consider how this group may be better supported too.

MPs also raised broader concerns about the long-term viability of platform work.

Mr Xie Yao Quan (Jurong GRC) said platform work provides little prospect for career advancement and pay progression. He suggested using the collective bargaining structure provided for in the new law to push for skill, job and pay ladders for platform workers.

He added: “It will be challenging, and there is no precedent around the world. But if there is anywhere in the world that can take a shot at this and do this, it is in Singapore.”