Whether it is to hail a ride in the comfort of our own home or to have our favourite food delivered at our doorstep, the gig economy has become an integral part of our modern-day lives.
The “gig economy” involves digital platforms facilitating the networking of gig workers and customers. Gig workers are essentially non-exclusive freelancers who work on a temporary basis with different employers or organizations associated with online platforms on un-restricted contractual terms. The model enables organizations to allocate work to independent contractors and freelancers on a temporary and flexible basis instead of employing them full-time.
The organizations handle the entrepreneurial and administrative aspects of the services while connecting the freelancers with customers for the provision of services. Customers avail those services in a quick and accessible manner using their mobile devices.
In Bangladesh, this arrangement can be seen in ride-hailing apps, food delivery apps, product delivery apps, holiday rental apps, and others. The rate at which digital Bangladesh has been embracing the ever-expanding gig economy begs the question of whether the legal framework is keeping pace with the gig economy.
The usual arrangement
The app provides a platform and generates leads for work that the gig workers can choose to undertake as third-party service providers for an end-customer.
This arrangement would suggest that the gig worker, instead of being a worker or any kind of employee, is a mere contractor or supplier. The immediate implication of being a third-party contractor is that the rights of a contractor are limited to those contained in the contract and nothing beyond that.
Legally speaking, in the context of Bangladesh, there is a lack of clarity surrounding gig work in relation to the rules governing their operations and the regulation of the relationship between a gig worker and their employer.
As most Bangladeshi labour laws predate the contemporary gig economy, there remains a gap in the legal framework as to the precise classification of a gig worker. Gig workers do not quite fit into the traditional legal definition of a worker.
The Labour Act categorizes workers into seven different categories: Apprentice, substitute, casual, temporary, probationer, permanent, and seasonal worker.
A permanent worker, as per the law, must be permanently employed by an establishment and the work they perform must be performed uninterruptedly in the company for a period of six months or more. Due to the nature of being a freelance service provider, gig workers cannot qualify as permanent workers.
A probationary worker is one who is working on probation for a period of up to six months after which he is also to be made a permanent worker. Again, gig workers are not eligible to be probationary workers either.
The gig workers are not apprentices who work for the company under an apprentice program. They are neither seasonal workers nor substitutes, as they potentially work all year around, with no fixed time of business, and do not work as a substitute to other workers.
Albeit, they may constitute a casual worker under the Bangladesh Labour Act, 2006. If that is the case, they may well be entitled to certain rights allocated to casual workers, such as the entitlement to festival bonuses subject to the completion of one year of service as a gig worker.
However, given the nature of the gig work and the scope of employment, the most sensible interpretation of the classification of a gig worker under the labour laws of Bangladesh is as a self-employed, independent contractor as opposed to a traditional worker engaged in standard, long-term employer-employee relationships.
In contrast with traditional workers employed by companies, such as garments workers in the apparel industry, gig workers are not afforded the same legal rights and entitlements.
Due to the vagueness of the laws and the lack of having a system in place, gig workers are unable to demand regulatory protection -- such as minimum wage, overtime pay, fixed daily/weekly work hours, festival leave, festival bonus, etc -- unlike the workers classified under the labour laws of Bangladesh.
The effect of the uncertainty
The vagueness in the legal status of gig workers has far-reaching implications on all concerned parties.
From the perspective of employers, the gig model allows them to have a diverse provisional workforce, who will work for them as per their demand, and they may not require a full-time office or workspace as most of these workers usually have their own setup or are usually working outside the office.
It saves employers from making extra expenses on setup and space. Employers are able to avoid giving gig workers basic, common benefits such as overtime payment, leave days or bonus payments.
However, employers still have to ensure sufficient training and support for these employees.
One of the problems faced by employers is maintaining consistency amongst workers in terms of their presence. Due to the rolling nature of gig workers, the training and support needs to be conducted on a regular basis to bring new workers up to date.
Another big issue for most of these employers is that the perception of the company is based on the service of these gig workers. Even if the company is diligent at the operational level, the reflection of that at the customer level is what matters the most and that may not be in the company's control because that is where the worker represents the employer.
From the perspective of workers, the gig economy allows them the flexibility and independence in choosing when they work and the number of hours they work, since the gig economy relies heavily on temporary and part-time positions; this may provide for a better alternative to working full-time jobs with fixed hours.
Gig workers have the option to work for multiple employers and multiple projects at the same time without being tied down under contract with one entity. Due to the lack of regulations and records, a lot of these gig workers are able to evade taxes. Workers have ample freedom to choose their arrangements, how they wish to be engaged, how much time they wish to spend working, and which work they want to prioritize. They are not met with any disciplinary action upon failing to meet job requirements, but may face the maximum penalty of a cancellation of contract.
However, what lacks the most in this model is the consistency and the protection for the workers themselves.
How are gig workers classified around the world?
Several jurisdictions are considering developing, are developing, or have developed a set of laws to regulate the employment of gig workers. The rights and restrictions of gig work, thus, evolve and vary from country to country in accordance with their respective domestic laws and regulations.
In the US, gig workers are generally regarded as independent contractors who are not bound by the labour laws.
However, some states have taken legal steps to provide gig workers with certain rights and protections. For example, in 2019, California passed the Assembly Bill 5 (AB5), popularly known as the “Gig Worker Bill,” which makes it more difficult for companies to classify workers as independent contractors as opposed to employees. Under AB5, gig workers in California are entitled to certain rights and benefits, such as minimum wage, overtime pay, and worker's compensation.
In 2020, New York passed the “New York State Minimum Wage and Labour Standards Act” which requires companies to provide certain benefits and protections to gig workers, including a minimum wage, overtime pay, and unemployment insurance.
In the UK, the government encapsulated certain rights of gig workers in the form of a new policy called the “Good Work Plan” in 2020. This provides gig workers with certain rights, such as the right to request a stable contract, the right to a pay slip, and the right to be protected from discrimination. The law also includes provisions for sick pay and parental leave. One of the propelling factors to the inception of the law was a suit being filed against one of the prominent ride-sharing platforms in 2018.
France adopted an ordinance in 2021 which gives gig workers in the country certain rights, such as the right to minimum wage, the right to paid leave, and the right to be protected from discrimination.
Brazil passed the “Provisional Measure 936” in 2021 which created a new category of worker, known as the “CLT Digital” worker, recognizing gig workers as a specific category of worker with certain rights, such as the right to a minimum wage, the right to paid leave, and the right to be protected from discrimination.
However, in some nations, gig work is still in the infancy of gaining legal recognition. In Singapore, gig workers are not considered employees and are not covered by labour laws. In Pakistan and Indonesia, gig workers are considered self-employed and are not covered by labour laws.
The way forward
In Bangladesh, there are no set body of rules governing the gig economy. Legislative reform and intervention are of paramount importance in order to consolidate the rules on the gig economy and to have a system of regulation in place.
There are too many ambiguities in this sector even though the number of people getting engaged in this sector is proliferating. With lack of regulations and regulatory bodies, it is sometimes unfair on the employees as they are not yielded the basic rights and benefits of a worker. Employers are sometimes sued and protested against for the wrong matter in the wrong forum leading to loss of goodwill and business based on unjustified opinions.
The tech companies which are making big investments based on this model are important stakeholders in the framing of policies in this area and should play an active role in getting the policy conversation started. Furthermore, it is important for growing employers in the gig economy scenario to be cautious about the terms and conditions under which they are employing the workers.
Ultimately, the question of how to regulate and protect gig workers and employers in Bangladesh will likely require a nuanced and multi-faceted approach. While it is important to ensure that gig workers have access to an appropriate grade of protection and benefits, it is also important to consider the unique nature of gig work and the needs and preferences of the employers in the gig economy. Should the state take any steps to reform the labour laws and make it gig economy friendly, the employers and workers must be aware and vigilant of the changes.
Saqeb Mahbub, Barrister-at-law, is a Partner at Mahbub & Company, Md Wazed Jamil, Barrister-at-law, and Mohua Morshed, Barrister-at-law are Associates at Mahbub & Company. Mahbub & Company is a leading law firm in Bangladesh.
