Self-employed persons in the Future Economy: Tripartite workgroup initiates public consultation

This article is produced by CMS Holborn Asia, a formal law alliance between CMS Singapore and Holborn Law LLC.

In November 2017, the tripartite workgroup on self-employed persons (“SEPs”) – comprising members from the Ministry of Manpower (“MOM”), the National Trades Union Congress (“NTUC”) and the Singapore National Employers Federation (“SNEF”) – invited the public to provide feedback on SEPs’ top concerns in Singapore’s future economy.
A subset of the future economy, the “gig economy” envisages a labour market increasingly characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. Whilst the Employment Act covers employees earning a monthly income of less than SGD 4,500/month, the basic protections afforded to these employees – such as annual leave, sick leave and work injury compensation – are not available to SEPs.
Primary SEPs (i.e. those who perform self-employed work as their main occupation) form approximately 8–10% of Singapore’s resident workforce over the past 10 years. With the rise of the gig economy, this figure is likely to increase. The tripartite workgroup was therefore formed to look into SEPs’ primary concerns to find practical solutions to ensure their wellbeing in Singapore’s future economy.
Who are Singapore’s SEPs?
Singapore’s SEPs comprise a diverse group, which includes:

• primary SEPs, who are usually older and work in “traditional” self-employed occupations such as taxi drivers and real estate agents; and
• secondary SEPs, who tend to be younger and do self-employed work on the side while being employed or studying full-time. They usually work as private hire car drivers, private tutors, graphic designers and/or food delivery riders for new-fangled digital companies and/or start-ups.

It is important to note the distinction between SEPs and casual, temporary or term-contract employees – the latter are usually hired under employment contracts with fixed durations.
What are SEPs’ top concerns?

(i) Late payment, partial payment and/or non-payment

• Surveyed SEPs raised concerns over late or non-payment for work completed. In particular, SEPs in the media, design and arts sectors shared that disputes over payment often arose because: (i) agreed terms were not recorded and/or (ii) contract terms were unclear on requirements and/or payment issues.

(ii) Ineligibility for employment benefits

• Currently, SEPs do not receive any statutory employment benefits. SEPs in the sports sector and/or sectors involving some form of physical labour raised concerns over the lack of work injury benefits. Self-employed dancers and/or sports coaches were of the view that some protection in the event of injuries at work was important, as serious injuries could put them out of work for a substantial period of time.

(iii) Uncertainty in finding sufficient work resulting in fluctuating income

• The uncertainty of finding sufficient work is a concern for SEPs as it affects their ability to save and make long-term financial plans. Older SEPs in particular have found this challenging in view of their retirement and healthcare needs.

Comment

• As Singapore’s future economy continues to evolve, the percentage of SEPs in the workforce looks set to rise in the years to come. The tripartite workgroup’s public consultation to tackle concerns faced by SEPs is therefore timely and essential.
• There is at present a lacuna in the law on issues involving SEPs and “own account workers” / freelancers. This public consultation is likely to streamline Parliament’s introduction of new laws and/or legislation (if any) dealing directly with SEPs’ major concerns and the protection of their rights as global trends suggest that SEPs may soon become a key component of the workforce.

• Some recently introduced employment reforms – such as the keeping of mandatory written records of key employment terms – can be easily replicated for SEPs engaged to provide services on a project basis. This would help in addressing the problem of late and/or no payment faced by these SEPs.
• On the other hand, other benefits currently enjoyed by employees (e.g. on issues such as work injury benefits, regulated work hours and/or rest days) may be harder to monitor and/or implement.

• As an interesting counterpoint, it has been reported in The Guardian that gig economy workers in the UK who are wrongly classified as “self-employed” stand to lose up to GBP 22,000 in pension benefits. In November 2017, the UK Employment Appeal Tribunal upheld a lower body’s determination that Uber drivers are employees, not self-employed persons - for more information, see Uber B.V. v Aslam.

• The classification of gig economy workers is by no means uniform across the world. For example, some states in the US consider Uber drivers to be self-employed persons.
• In Singapore, gig economy workers may be employees or SEPs depending on, among other things, whether they are doing business on their own account, their contract terms, the degree of control they exercise over their work and/or the flexibility of their work hours. 

• The Singapore Government has traditionally taken a pro-active stance in ensuring that the basic healthcare, accommodation and retirement needs of residents are well taken care of. In light of the financial uncertainty highlighted by some older SEPs, it would be interesting to see what solutions would emerge from the consultation exercise to overcome the concerns faced by SEPs in the future economy.