Work Injury Compensation Act could be first of several painful but crucial gig worker reforms

IT WILL soon be a year since Prime Minister Lee Hsien Loong raised concerns about basic job protections for gig economy workers at the 2021 National Day Rally.

Since then, an advisory committee has been studying how to better protect these “platform workers”, who include cabbies, ride-hailing drivers and delivery persons who work for online platforms. There are 3 areas of focus: retirement and housing adequacy, bargaining power and financial protection in case of work injuries.

The committee’s work is still ongoing, but there has been an indication of at least one big change that could come. Last month, Senior Minister of State for Manpower Koh Poh Koon said that the committee is looking at whether the Work Injury Compensation Act (Wica) could be applied to platform workers.

The act provides a minimum compensation of S$76,000 for the accidental death of an employee, with the maximum set at S$225,000. For permanent incapacity, compensation ranges from S$97,000 to S$289,000, adjusted for the degree of disability.

In contrast, platforms offer varying levels of compensation, generally lower than the Wica thresholds. For instance, Deliveroo provides US$45,000 of coverage for accidental death and permanent disablement, while Gojek provides just up to S$15,000, according to their websites.

Extending Wica to platform workers will likely introduce new complexities for the companies and their insurers, and possibly raise prices for the end-consumer. It could be painful, and some may question the need for it, now that the pandemic-fuelled gig-work boom has cooled and more are said to be leaving for full-time roles.

But regardless of whether there is actually a smaller pool of platform workers now, the gaps in financial protection for this group should still be plugged sooner than later. This is especially as such workers face more financial precarity with the current climate of inflation and economic uncertainty.

Edric Pan, joint deputy managing partner at Dentons Rodyk, reckons that extending Wica to platform workers would clearly benefit them, with no direct costs to the workers.

But he noted that such an expansion “will further blur the already hazy distinction between employees and independent contractors, and will burden platform operators with additional costs in terms of insurance premiums”.

In particular, if all platform workers are to be covered under Wica regardless of how frequently they work for the platform, this will vastly increase the number of insured persons, and could force insurers to raise premiums, Pan said.

Another big complication is in how liability is determined, given that platform workers can perform back-to-back jobs for multiple providers and may be injured between jobs.

“There may also be difficulty ascertaining whether an accident occurred while performing such gig services. For instance, if a food delivery rider has an accident as he is riding to meet some friends at a coffeeshop after dropping off a delivery, was the injury sustained in the course of work?” noted Pan.

These are big and messy challenges – but not insurmountable – if there can be a consensus on what parameters are fair to both platforms and workers. For instance, could the extension of Wica be made mandatory only for workers who clock in a certain number of hours with a platform? With pooled data from the major platforms, perhaps such a threshold could be quantified.

“One possibility is to say that if a person spends more than x number of hours each day working for one platform, that person could be considered an employee of that platform – or perhaps more appropriately, an intermediate class of ‘worker’ for the platform,” said Ian Lim, who heads the employment and labour team at law firm TSMP.

On the latter aspect, relevant legislative changes would be needed to accommodate such an intermediate class. Lim pointed to how the UK has 3 classifications for employment status: employees, independent contractors and an in-between category of “worker”.

It remains to be seen if the committee will recommend such a new classification, and more broadly, how it will move forward on the question of Wica. Beyond this, observers are also expecting even bigger changes, especially on the Central Provident Fund’s (CPF) social security savings scheme, as well as potential unionisation.

“Given the competing interests between workers’ protection and business costs, we expect a cautious approach here,” said Ray Chiang, partner and co-head of the employment practice at Dentons Rodyk. For instance, CPF contributions for platform workers could be introduced, but possibly at a lower rate and in phased stages.

“As for giving a voice to platform workers, we may possibly see the introduction of tripartite guidelines, as well as unions to represent platform workers over critical issues,” he added.

The implementation of such changes will likely be even messier, but no less timely and important to work through. As with Wica, any rise in costs may be passed on to end-consumers.

But then again, perhaps that is something we need to accept as the true cost of conveniences like food delivered to our doorsteps, no longer subsidised by venture capital.