The dynamics of the South African labour market has overwhelmingly changed in recent years. This has largely contributed to technological advancements, high rates of unemployment and an overall dissatisfaction with workplace cultures, to name a few. While gig work is no new phenomenon, more South Africans are opting out of standard and traditional forms of work and venturing into gig work and freelancing instead. The gig economy is a labour market consisting of short-term contractors and freelancers who undertake to perform a specific service or task without a long-term commitment to any one employer. Gig workers generally offer their services virtually, to a multitude of clients or customers and have the flexibility and independence of regulating their own service terms. Despite the benefits of gig work, there are a number of challenges and opportunities within the market which call for greater involvement from all stakeholders. These challenges and opportunities will be briefly discussed in this article.
Challenges in the gig economy
Gig workers are not exempt from the challenges faced by many independent contract workers in South Africa. From a legal perspective, the most common challenges faced by gig workers include:
- Lack of social protection provisions: Gig workers do not have access to the same social security benefits as employees, such as unemployment insurance, pension funds, sick leave and worker compensation. Gig workers are faced with unpredictable income as they do not have consistent employment and no governmental assistance is offered to them. Being a gig worker also means forfeiting training benefits, travel, retirement funding and a host of employer benefits that are associated with traditional employment. Furthermore, should a gig worker sustain any injury while rendering services to clients, no statutory compensation benefits or sick leave entitlements are available to them.
- Lack of labour legislation and other legal protections: labour legislation such as the Basic Conditions of Employment Act 66 of 1995, as amended (“BCEA”); the Labour Relations Act 75 of 1997, as amended (“LRA”) and Employment Equity Act 55 of 1998, as amended (“EEA”) are not applicable to gig workers as they are classified as independent contractors and not employees for purposes of these Acts. As a result, gig workers are not afforded the protections which employees enjoy, particularly relating to minimum wages, working hours, overtime, meal breaks and rest periods, annual leave, notice pay, severance pay and being subjected to unfair dismissals or other unfair labour practices. No employment legislation exists to protect the interests of gig workers and they are often left to fend for themselves and run the risk of being exploited by business and clients. Additionally, as gig workers are independent contractors, they do not have the right to organise collectively and join trade unions, unlike employees and other categories of workers, such as domestic workers.
- Payment defaults by clients and customers: non-payment by clients and customers for services rendered is one of the most common challenges faced by gig workers. Unless otherwise agreed, gig workers are paid upon completion of the specific task or service. When the receiving party fails to make payment, gig workers cannot rely on labour legislation such as the BCEA to claim payment of the amounts to which they are entitled. The only available remedies to gig workers are contractual in nature. Gig workers may claim specific performance from the client or customer to remedy the client breach by upholding their contractual obligation to pay for services rendered; or they may cancel the agreement between the parties; and/or claim damages for loss suffered as a result of non-payment. These remedies are however costly and time consuming, and in most cases will result in strenuous litigation proceedings which most gig workers are not in a position to afford.
Opportunities in the gig economy
There are great opportunities for gig workers and other stakeholders within the gig economy, however the future sustainability and accessibility of gig work will require particular intervention from government and businesses.
A new Code of Good Practice is one of many policy interventions which has been suggested to address the lack of regulation of gig work and afford gig workers the legal protections they may need. A Code of Good Practice may provide clarity on grey areas for gig workers and codify best practices relating to contract work. An example of one such code is the Fairwork Code of Good Practice for the Regulation of Platform Work in South Africa, 2020 (“Fairwork Code”) which has been drafted by legal jurists as a guideline to address the legislative gaps in the South African gig economy. The Fairwork Code focuses specifically on five principles of decent work, namely, fair pay, fair conditions, fair contracts, fair management and fair association. In accordance with the Fairwork Code, these categories were developed through wide consultation both in South Africa and in other countries, such as Switzerland, with workers’ and employers’ representatives (including platforms) and policymakers and regulators. Although the Fairwork Code does not form part of South African labour and employment legislation, it does serve as a useful resource for platform workers, policymakers, legal practitioners and other stakeholders to protect the interests of gig workers within the existing legal framework.
Additionally, other suggested legislative interventions include:
- recognising gig workers in labour legislation and affording them the same rights as employees, so that they may have access to the same protections and dispute resolution forums as traditional employees;
- requiring gig work platforms to contribute to social security systems or to apply minimum wages to allow workers social protections in the event that they are unable to work; and
- encouraging collective bargaining for platform workers and forming trade unions to ensure adequate representation of gig workers.
Employment as we know it is changing globally as new forms of work emerge. No longer are individuals working the standard “8 to 5” and given the fact that more people are preferring to work independently and on their own terms and conditions, there is an opportunity for labour legislation to cover this gap and extend the same protections afforded to employees, to this new category of workers. It is imperative to have legislative frameworks in place to encourage gig work, provide adequate protections to gig workers and thereby prevent further exploitation in the gig economy. Not only will gig workers benefit from these interventions, but the South African economy will also grow exponentially should gig work become more regulated.
Andrea Miguel – Candidate Attorney
JUSTINE DEL MONTE & ASSOCIATES INCORPORATED