How should labour law accommodate the gig economy?

Labour law experts Jonathan Goldberg and Grant Wilkinson share their thoughts on the issue.

The traditional paradigm of full-time, stable individual employment is being challenged by on-demand freelance contractor work. No longer is an employee, who works from 8 to 5, the norm in the workplaces. Many, whose work allows for it, have opted to pursue different working options such as freelancing, working part-time or telecommuting. 

“The rise of the Gig Economy – which is so-called as their members work from ‘gig’ to ‘gig’ as opposed remaining in the full-time employ of one employer – has not just been seen in the United States. According to the Millennial Survey Report, which was conducted by Deloitte in 2018 and surveyed millennials over 36 countries, the majority of the respondents stated that they are already part of this economy or do part-time work,” reads an article penned by Global Solutions’ labour law experts Jonathan Goldberg and Grant Wilkinson.

The article states that a question has to be asked as to whether or not labour legislation in South Africa affords the increasing numbers of people choosing the gig lifestyle over full-time employment the appropriate level of protection. The other question is whether they need any protection at all.

The gig economy presents a huge range of opportunities for businesses that have historically favoured a more traditional employment model. One of its pivotal advantages is flexibility: a company is able to scale up rapidly and efficiently in busy periods to satisfy customer demands. Furthermore, the gig economy lets businesses source talent from the global marketplace and hire more quickly and cheaply than via familiar recruitment channels. Companies can thus “try before they buy” and avoid the cost of unnecessary long-term or permanent hires. 

Essentially, it an economic model in which temporary and flexible jobs are the norm and in which companies hire contractors for on-demand work. Generally, workers in the gig economy do not receive salaries, as would employees, but are paid in return for the services or 'gigs' they perform.  Consequently, certain protections and benefits that employees usually enjoy are not afforded to workers in the gig economy. 

“Up to this point, SA labour law has not afforded any protection to workers who are not employees of an organisation. In fact, these laws specifically exclude an ‘independent contractor’ or freelancer. This is even though other countries’ labour laws, such as those in the  United Kingdom, have begun to recognise gig workers,” say Jonathan and Grant. 

“At the end of last year, President Ramaphosa signed a number of pieces of labour legislation into law. What is significant to note about these laws is that the new National Minimum Wage Act (NMWA) is extended to protect employees in addition to workers. This is specifically made a wider definition and maybe a sign of things to come. This means that even though someone may not be in an employment relationship with an employer, that person is still afforded the protection of the NMWA.”