Brave new (digi­tised) world

THE “GIG ECON­OMY” IS NOTH­ING NEW, BUT THE DIGITALISATION OF THE WORK­ING WORLD IS FORMALISING THE SEC­TOR – EVEN IF LABOUR LAW ISN’T KEEP­ING PACE

Destiny Man - - EXECUTIVE INTELLIGENCE - WRIT­TEN BY TREVOR CRIGHTON

The digitalisation of the work­ing world has had sev­eral 21st-cen­tury spin-offs, most tellingly a shift in the re­la­tion­ship be­tween em­ploy­ers and em­ploy­ees. While the 9-5 work­ing day will con­tinue to be a re­al­ity for many, the dig­i­tal-driven de­cen­tral­i­sa­tion of workspaces, places and jobs them­selves has given rise to an en­tirely new econ­omy. A McKin­sey re­port en­ti­tled In­de­pen­dent Work: Choice, Ne­ces­sity and the

Gig Econ­omy found that up to 162 mil­lion peo­ple in Europe and the USA – 20-30% of the work­ing-age pop­u­la­tion – en­gage in some form of in­de­pen­dent work and are con­tribut­ing mas­sively to the rise of the “gig econ­omy”.

It’s an econ­omy which sees work­ers paid per job, rather than re­ceiv­ing a reg­u­lar fixed salary. If the first ex­am­ple that comes to mind is Uber, you’re not far wrong – though the on­go­ing de­bate about whether the com­pany’s a trans­port ser­vice or a trans­port fa­cil­i­ta­tion ser­vice makes it dif­fi­cult to de­fine the na­ture of its busi­ness and the re­sult­ing re­la­tion­ship it has with the peo­ple per­form­ing ser­vices on its be­half around the world.

The gig econ­omy, in ef­fect, al­lows work­ers to be paid per unit of work, with in­creased flex­i­bil­ity and no need for them to visit an of­fice – mean­ing they can work for com­pa­nies any­where in the world, from any­where in the world, in­creas­ing earn­ing po­ten­tial and al­low­ing their niche skills to shine. This means that the gig mar­ket for IT pro­fes­sion­als, mar­ket­ing spe­cial­ists and many other typ­i­cally pro­fes­sional, de­greed roles is boom­ing too – rather than “just” em­ploy­ing work­ers to com­plete odd jobs.

Two of the ma­jor gig-driven mar­ket­places for the new econ­omy are Up­work and Fiverr, both of which con­nect free­lancers and com­pa­nies. Both of­fer on­line workspaces to fa­cil­i­tate the col­lab­o­ra­tion and both charge ser­vice fees on billings, with Up­work claim­ing

that its plat­form is cur­rently fa­cil­i­tat­ing up­wards of $1 bil­lion in pay­ments to gig work­ers ev­ery year.

While plat­forms like these have thrown open the global world of work to peo­ple who – make no mis­take – still need to be at the top of their game and have ex­cel­lent time man­age­ment skills, there are some in­evitable down­sides for both em­ployer and em­ployee. The em­ployer needs to test free­lancers’ com­pe­tence at the tasks it’s seek­ing to hire them to com­plete be­fore en­gag­ing them. Con­versely, it can also drop them with­out con­se­quences if they don’t mea­sure up. Free­lancers re­ceive few of the ben­e­fits avail­able to full-time em­ploy­ees, such as com­pany con­tri­bu­tions to­wards re­tire­ment sav­ings and med­i­cal aid.

Ac­cord­ing to Raoul Kis­sun, Se­nior As­so­ciate at Nor­ton Rose Ful­bright SA, law­mak­ers around the world are strug­gling keep up with this tech­no­log­i­cal rev­o­lu­tion and courts are grap­pling with defin­ing new forms of em­ploy­ment in terms of tra­di­tional

THE GIG ECON­OMY MEANS PEO­PLE CAN WORK FOR COM­PA­NIES ANY­WHERE IN THE WORLD, FROM ANY­WHERE IN THE WORLD, IN­CREAS­ING EARN­ING PO­TEN­TIAL AND AL­LOW­ING THEIR NICHE SKILLS TO SHINE.

laws, leav­ing work­ers open to a cer­tain level of ma­nip­u­la­tion by un­scrupu­lous em­ploy­ers. “SA’s no dif­fer­ent, in that there are no laws spe­cific to gig econ­omy par­tic­i­pants, who are de­fined as ei­ther em­ploy­ees or in­de­pen­dent con­trac­tors, de­pend­ing on var­i­ous fac­tors,” says Kis­sun. “In de­cid­ing which def­i­ni­tion ap­plies, our courts com­monly use the ‘dom­i­nant im­pres­sion test’ and take into ac­count fac­tors such as whether the em­ployer ex­er­cises con­trol over the em­ployee, the em­ployee’s role within the or­gan­i­sa­tion and the ex­tent of their eco­nomic de­pen­dence on the em­ployer.”

He cites the ex­am­ple of a re­cent CCMA rul­ing on South African Uber driv­ers who had been de­ac­ti­vated from the ser­vice by the lo­cal com­pany. The CCMA found that the driv­ers were em­ploy­ees be­cause they of­fered a per­sonal ser­vice, in terms of an in­def­i­nite ar­range­ment. The rul­ing found that the driv­ers were un­der the con­trol of Uber and sub­ject to its stan­dards and per­for­mance re­quire­ments, and were also fi­nan­cially de­pen­dent on Uber. (Like­wise, Uber re­lies on the driv­ers for its ser­vice to func­tion.) How­ever, this rul­ing was later set aside by the Labour Court as Uber BV (the Nether­lands-based par­ent com­pany) wasn’t joined to the ar­bi­tra­tion.

The crux of the mat­ter in the gig econ­omy is that if the par­tic­i­pant’s an in­de­pen­dent con­trac­tor, they’ll stand or fall by his con­tract. “In other words, his rights and obli­ga­tions will be dic­tated by the con­tract. If he’s an em­ployee, SA’s labour laws will ap­ply re­gard­ing is­sues such as leave and un­fair dis­missals,” says Kis­sun. That said, there doesn’t ap­pear to be any leg­is­la­tion – even in the draft phase – to clar­ify the sta­tus of the re­la­tion­ship be­tween a com­pany and a “gig” em­ployee, so the mer­its of both are up for dis­cus­sion on an in­di­vid­ual ba­sis.

With most gig econ­omy par­tic­i­pa­tion plat­forms hosted out­side the coun­try, Kis­sun warns that pur­su­ing cases against them or the com­pany that con­tracts a worker via the plat­form can be chal­leng­ing. “If the em­ployer’s en­tirely based out­side the coun­try with no South African as­sets, then

South African courts may not have ju­ris­dic­tion, which leaves those un­fairly treated in the un­en­vi­able predica­ment of lit­i­gat­ing over­seas, which would be pro­hib­i­tively ex­pen­sive for most,” he says. “This

il­lus­trates that jurisdictional is­sues can be an in­sur­mount­able hur­dle.”

A re­port called The Risks and Re­wards of On­line Gig Work at the Global Mar­gins, pro­duced by re­searchers from the Ox­ford In­ter­net In­sti­tute and the Gor­don In­sti­tute of Busi­ness Science, Univer­sity of Pre­to­ria, found that the ben­e­fits of on­line gig work in­cluded higher in­comes for some (68% of re­spon­dents said on­line gig work was im­por­tant or very im­por­tant to their house­hold in­come, cit­ing it as one of their main sources of in­come), as well as greater au­ton­omy and task diver­sity. The down­sides in­cluded an over-sup­ply of par­tic­i­pat­ing work­ers, em­ploy­ment in­se­cu­rity, dis­crim­i­na­tion (to­wards those on the mar­gins be­cause of their coun­try of ori­gin), so­cial iso­la­tion (due to work­ing across dif­fer­ent time zones, as well as not be­ing able to in­ter­act with oth­ers), over­work (due to lack of bal­ance), opac­ity (not know­ing the per­son who em­ployed them), tax­a­tion (not un­der­stand­ing the tax im­pli­ca­tions of gig work) and in­ter­me­di­a­tion dif­fi­cul­ties (re­spon­dents said that in­ter­me­di­aries could com­pli­cate the flow of in­for­ma­tion from clients to work­ers, po­ten­tially hin­der­ing skills de­vel­op­ment).

De­spite all this, the cur­rent 27,7% un­em­ploy­ment rate in SA makes the gig econ­omy ap­peal­ing through sheer ne­ces­sity, if not choice, with many peo­ple will­ing to do any job in or­der to earn even a glim­mer of a liv­ing. On the up­side, the rel­a­tive weak­ness of the rand against ma­jor cur­ren­cies means that even South Africans with spe­cialised skills could present a cost­ef­fec­tive op­tion for over­seas-based em­ploy­ers, lead­ing to more op­por­tu­ni­ties for those in the South African mar­ket who are will­ing to take on a 21st-cen­tury work­ing chal­lenge.

Raoul Kis­sun,Se­nior As­so­ciate: Nor­ton Rose Ful­bright SA

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