New legislation providing more protections to gig workers, obligations for platform operators
The Platform Workers Act coming into effect on 1 January 2025 will be a game-changer in Singapore’s labour landscape. It marks a significant step towards recognising the unique circumstances of platform workers and providing them with essential protections. As one of the first countries to establish specific safeguards for this growing workforce, Singapore is demonstrating its commitment to adapting labour laws to the evolving digital economy.
The Act defines “platform workers” as individuals who contract with platform operators to provide services (currently limited to ride-hailing or delivery services). These workers operate with some level of autonomy, subject to the platform operator’s rules and requirements on service levels, pricing and payment terms.
Platform operators are the businesses that facilitate these services through digital platforms, connecting platform workers with consumers and exercising certain levels of management and control.
Central Provident Fund (CPF) contributions: Currently, platform workers contribute to their MediSave accounts only. Under the Act, platform operators will be required to contribute to both employer and employee CPF accounts for platform workers, ensuring a retirement safety net. The contributions will gradually align with those of salaried employees over five years, starting with mandatory contributions for workers born on or after 1 January 1995. Older workers have the flexibility to decide whether to opt in to the increased CPF contributions but may choose to stick with a lower level in order to reduce their own mandatory contribution and so increase their take-home pay.
Work injury compensation: Currently, platform workers are not covered under the Work Injury Compensation Act. Platform operators are now required to provide work injury compensation insurance that offers coverage comparable to that available for traditional employees broadly. This means financial security for the platform workers in case of incapacitating accidents.
Collective bargaining: The Act empowers platform workers to form associations and collectively negotiate with platform operators. This strengthens their bargaining power and voice, allowing them to advocate for better working conditions, fair payment terms and improved benefits.
Compliance obligations: Operators now need to implement measures to comply with the Act’s requirements, such as notifying the Commissioner of the start or cessation of their business, maintaining records of its platform workers (past and present), issuing earning slips, ensuring accurate CPF calculations, and record-keeping, all of which will increase administrative burdens for platform operators. Failure to comply may mean administrative penalties.
Labour relations: The Act may lead to increased labour negotiations and potential disputes between platform operators and platform workers, as platform workers gain a stronger voice. Operators should be prepared to engage in constructive dialogue with these associations.
Review and update of agreements: The Act prescribes terms that should be included in the contract between the platform operators and the platform workers, such as restrictions on the workers to solicit their own clients in the course of their operations and their ability to negotiate on the fees to the end users. The platform operators must also ensure that they do not directly or indirectly restrict or induce the workers to contract out of their rights under the Act, as that will attract criminal penalties.
Review and update of policies: Platform operators should also review and update their internal policies and procedures to address the specific needs of platform workers including issues of discrimination, harassment and other grievances.
Train managers and HR staff: Managers and HR staff should be trained on the Act’s requirements and how to implement them effectively. HR personnel may require new training to effectively navigate potential disputes with platform workers.
Data privacy: In Singapore, gig workers are individuals who are accorded specific rights for the protection of their personal data under the Personal Data Protection Act. Currently, the handling of customer personal data by gig workers may impute liability for and on the platforms through which their services are made available. Platform operators should therefore ensure that proper governance is in place to mitigate against these associated risks from a regulatory, contractual and tortious standpoint. This may encompass policies, consent and data subject request handling procedures, incident management, training, contracting standards, and other standard operating protocols and practices in respect of personal data processing.
It is an opportune time for platform operators and even their constituent businesses to implement and refresh their legal and compliance strategies, to take into account the new requirements and risks brought about by the Platform Workers Act.
While the scope of the legislation is to primarily to offer protection to gig workers and clarifies the allocation of legal rights and responsibilities in respect of platforms and platform workers, the Act also impacts on other ancillary regulatory issues such as data protection and privacy, consumer protection, and advertising and marketing.
The Platform Workers Act represents a landmark achievement in labour rights in Singapore. By recognising the unique circumstances of platform workers and providing them with essential protections, the Act has set a precedent for other countries seeking to address the challenges of the gig economy. As the digital economy continues to evolve, the principles established in this Act may serve as a model for future labour reforms.
Julia Yeo is a regional hub partner for the Labor & Employment and Immigration teams at Squire Patton Boggs in Singapore. Charmian Aw is a partner at Squire Patton Boggs in Singapore. Li Lian Eu is a senior associate with the Labour & Employment team at Squire Patton Boggs in Singapore.
