LawFlash

Singapore to Offer Better Protections for Gig Economy Workers

March 07, 2018

The Singapore government recently accepted in principle the recommendations of the Tripartite Workgroup addressing challenges faced by self-employed persons in the country’s gig economy.

All around the world, the burgeoning gig economy—the trend of workers taking contract, short-term, or “side gigs” rather than tradition long-term, one-company commitments—continues to expand. In Singapore, it is now common to see private hire-car drivers on the streets, just one example of the myriad “gigs” that the gig economy comprises. According to a survey by Singapore’s Ministry of Manpower (MOM), there were approximately 200,000 freelancers in Singapore in 2016, and self-employed persons (SEPs) made up 8%–10% of the total resident workforce in the last 10 years.

Being a gig worker can be an attractive proposition, given the degree of autonomy and flexibility typically offered by such jobs. However, gig economy workers are not “employees” in the legal sense, and this poses significant disadvantages to SEPs working in this space. The recommendations of the Tripartite Workgroup (TWG) were proposed after the TWG engaged in consultations with SEP associations and communities, businesses, and government agencies to assess the challenges faced by the rising number of SEPs in Singapore. Second Minister for Manpower Josephine Teo addressed some of these recommendations at the recent Committee of Supply parliamentary debates in Singapore on 5 March 2018.

This LawFlash summarises the key features of the TWG recommendations.

Tripartite Standard and Mediation

To address an issue commonly faced by SEPs—payment-related disputes—the TWG has recommended developing a Tripartite Standard for engaging SEPs’ services. This standard will require businesses to commit to using written contracts when engaging SEPs, which would contain key terms of employment such as a payment schedule and payment amounts, as well as a dispute resolution mechanism. Additionally, the TWG has recommended that more sector agencies such as the Land Transport Authority be involved in mediation of payment-related disputes in these sectors.

Insurance

Another common problem highlighted by SEPs is the loss of income due to prolonged illness or injury. In response, the TWG recommended that the tripartite partners (the MOM, National Trades Union Congress, and Singapore National Employers Federation) work with insurers to make an SEP insurance product available that could provide a daily cash benefit for prolonged illness or injury (additional protection can be structured as option riders). The TWG recognized that higher premiums for SEPs in high-risk occupations may deter the purchase of such insurance, and recommended that the government promote the adoption of insurance through licensing controls or as a service-buyer.

Contribute-As-You-Earn Model

Many SEPs also lack Central Provident Fund savings for healthcare and retirement needs. To address this issue, the TWG recommendations propose to adopt a “contribute-as-you-earn” model whereby a Medisave contribution is required as and when a service fee is earned. Further, intermediaries and corporate service-buyers that contract with SEPs are required to deduct and transmit the Medisave contribution to an SEP’s Medisave account whenever they pay the SEP.

Occupation-Specific Competency Framework

Finally, the recommendations propose that the tripartite partners support SEP associations to assess skills needs and to develop occupation-specific competency frameworks to ensure that SEP skills remain current and professionalism is enhanced.

Singapore Government Responds

In the recent Committee of Supply debate on 5 March, Second Minister for Manpower Josephine Teo was of the view that it is impractical to mandate written contracts for all SEPs. Instead, the Singapore government will launch a set of guidelines on best practices for engaging SEPs, called the Tripartite Standard on Contracting with Self-Employed Persons. Businesses which adopt this Tripartite Standard will be required to document written key terms with SEPs before delivery of any products or services.

Ms Teo hopes that the new Tripartite Standard will “shape contracting norms and entrench best practices” over time. This standard is supported by the public sector, which will implement new measures to align with this standard by mid-2018. It is understood that further details will be made available in due course.

Another key action taken by the government is to extend the voluntary mediation services offered by the Tripartite Alliance for Dispute Management to SEPs who face payment disputes with businesses. If mediation is successful, a mediated settlement agreement will be signed between the disputing parties, which can be registered at the State Courts. This allows the settlement agreement to be enforceable, having the effect of a court order. For example, if the service purchaser refuses to pay, the settlement agreement can be enforced through a Writ of Seizure and Sale.

In relation to the other TWG recommendations, the Singapore government is also working toward having an insurance product catered for SEPs, to be available next year, and will encourage the adoption of insurance in higher-risk occupations. Additionally, the government is studying the implementation of the “Contribute-As-You-Earn” model, and is aiming for the government procurement entities to start a pilot by 2020.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the author, Daniel Chia, who is a solicitor of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated ‎with Morgan Lewis & Bockius LLP.