PUBLIC CONSULTATION ON STRENGTHENING PROTECTIONS FOR PLATFORM WORKERS

Detailed Description

1 Preface

1.1 Self-Employed Persons (“SEPs”) refer to individuals who operate their own trade or business. Unlike employees, SEPs generally have greater autonomy over what assignments to accept as well as when, where, and how they work. Many SEPs are not seeking to be employees. Recognising this, even as institutional support has been strengthened in recent years, personal responsibility remains the core principle for SEPs who prefer to be their own boss. 

1.2 Many SEPs are able to and have taken responsibility for their own well-being through making informed choices about contracting practices, protecting themselves against contingencies, and planning for their future needs. This is understandably easier to achieve for SEPs who are earning a high income. The need to further strengthen employment protections like work injury compensation, union representation, and employer Central Provident Fund (CPF) contributions is less relevant for this group.¹

1.3 However, SEPs are not a homogeneous group, and can be found in over 200 occupations including taxi and private hire car drivers, insurance agents, business consultants and creative professionals. Given their diversity, we should avoid a one-size-fits-all approach to supporting SEPs.
  
1.4 Singapore, like many other countries, has seen a rise in recent years of the number of SEPs who work with platform companies to provide transport and delivery services (“platform workers”)². Platform companies and workers have a symbiotic relationship, and provide a valuable service for users. The continued viability of the platform ecosystem is important. 

1.5 Many platform workers resemble employees in that they are subject to significant control by platform companies over the jobs they receive and accept, as well as the fee for their services. Yet, they do not have basic employment protections accorded to employees, such as work injury compensation, union representation, and employer CPF contributions. 

1.6 At the same time, these platform workers generally have modest incomes with limited prospect of wage progression. While we hear anecdotes of platform workers being able to earn high amounts especially during peak demand periods, our statistics show that the median take-home earning of people whose main source of income is platform work was comparable to that of the 20th percentile full-time resident employee in 2019.³ Platform workers also face uncertainty over their income per hour worked and bear their own costs of operations. Thus, there is a strong case to examine how we can do more for this specific group of SEPs. This situation is not unique to Singapore, and other countries have made moves or are similarly studying moves, including to strengthen protections for platform workers.

1.7 It is with this in mind that the Ministry of Manpower (“MOM”) convened an Advisory Committee on Platform Workers (“the Committee”) to look into strengthening protections for platform workers, specifically delivery persons, private-hire car drivers and taxi drivers.

1.8 The Committee will focus on the most critical protections pertaining to the long-term livelihood and resilience of platform workers:

(a) Improving retirement and housing adequacy: Platform workers, like other SEPs, are required to contribute up to 10.5% of their income to their CPF MediSave Account. This corresponds to the Medisave contribution rates made by employees. However, in the case of employees, the Medisave contribution is made by both the employee and the employer. Platforms, on the other hand, are not required to make contributions for platform workers. As platform workers generally have modest incomes, they are also more likely to need additional support to save for their retirement and housing needs.

(b) Strengthening financial protection in case of work injury: Platform workers, like other SEPs, are not covered under the Work Injury Compensation Act as they do not have an employment contract. However, they spend a disproportionate amount of time on the roads, putting them at higher risk of accidents and injury. 

(c) Enhancing representation: Platform workers, like other SEPs, are not able to unionise like employees can. They may thus face difficulties in seeking redress for work and pay-related grievances and better working conditions. This is despite the higher degree of control platforms have over their work arrangements.

3 Improving Retirement and Housing Adequacy

3.1 Today, platform workers, like other SEPs, are required to contribute up to 10.5% of their income into their MediSave Account to support their healthcare needs. The government provides additional support for lower-income platform workers through top-ups to their incomes via the Workfare Income Supplement Scheme. Ideally, platform workers should build on this and set aside a separate sum for housing and retirement. In practice, they will likely find it challenging to do so on their own, as they generally have modest incomes.

3.2 For employees, their employers play a critical role in helping them save for the long-term by providing significant contributions (up to 17% of their income) to their CPF. However, while many platform companies have an employer-like relationship with platform workers, they are not required to make CPF contributions to platform workers.

3.3 Hence, platform workers tend to have limited resources in their CPF. If left unaddressed, many platform workers may struggle to meet their housing and retirement needs. For example, among taxi drivers who turned 55 in 2020, only 29% met their Basic Retirement Sum. 

3.4 We recognise that any broad-based moves to boost housing and retirement savings of platform workers may result in higher costs for platform companies, workers and/or users (both businesses and consumers). We will also be mindful of any unintended impact on the relative attractiveness of platform work compared to being an employee or engaging in other self-employed work.

4 Financial Protection in case of Work Injury

4.1 Platform workers spend a disproportionate amount of time on the roads compared to many other professions, putting them at higher risk of accidents and injury. Some platform companies have taken steps to extend personal accident insurance to platform workers, but the terms and coverage may be uneven across platforms. Work injuries may leave platform workers in a precarious financial position if they are unable to work as a result of the injury. This loss of income during the duration of recovery makes covering medical bills extremely difficult. Serious injuries resulting in permanent disability could lead to a loss of future earning power, for which platform workers may not be compensated.

4.2 In comparison, coverage under the Work Injury Compensation Act (WICA) is a basic right for employees. WICA provides employees with a low-cost and quicker pathway to claiming compensation for work injuries, without having to file a civil suit under common law. Compensation under WICA includes medical leave wages, medical expenses and lump-sum compensation for permanent incapacity or death. Currently, platform workers are not covered under WICA as they do not have a contract of service with platform companies.

4.3 Nonetheless, there are unique characteristics of platform workers that distinguish them from employees. Unlike employees, many platform workers multi-home (i.e., work with more than one platform). In the event of an injury, it is not immediately clear which platform is responsible to compensate, and how compensation should be determined. In addition, as the nature of platform work is interspersed with breaks, it may not be clear whether an injury is related to work.

4.4 We recognise that strengthening platform workers’ financial protection against work injury may lead to increased operating costs. This could in turn translate to lower take-home earnings for platform workers and higher prices for platform users. Platform workers’ work flexibility could also be impacted if platform companies seek to exert tighter controls to reduce their work injury liabilities. 

5 Enhancing Representation of Platform Workers

5.1 As platform workers are considered self-employed, they do not enjoy statutory employment protections and may face difficulties in seeking redress for work and pay related grievances. They are also not allowed to unionise, like other self-employed persons.

5.2 Today, the National Taxi Association (NTA), National Private Hire Vehicles Association (NPHVA) and National Delivery Champions Association (NDCA) serve as a collective voice for their respective groups of platform workers. They also promote the interest and well-being of platform workers. For example, they provide support and services such as training resources and guidance on workplace issues.

5.3 However, unlike unions, the associations do not have the legal right to negotiate contractual terms for their members. This may limit the extent to which the associations can effectively protect the interests of platform workers. 

5.4 Based on engagements with platform workers, some areas which could benefit from stronger representation are:

a. resolution of disputes between platform workers and platforms (e.g., cases where the platform worker is logged out of the platform, disputes over payment of earnings),
b. Adequacy of commissions/fares for each trip/delivery,
c. how responsibility for fulfilling service standards is apportioned amongst parties involved (e.g., quality of food on delivery),
d. training support to enable platform workers to explore other regular forms of employment, and
e. medical benefits. 

5.5 In determining the right degree of representation for platform workers in any of these areas, including the option of unionisation, the Committee will consider trade-offs between the interests of platform companies, workers, and users (both businesses and consumers).