A new report from the International Bar Association's Global Employment Institute (GEI) urges policymakers to create bespoke legislation for the de facto 'third category' of workers engaged in the on-demand economy (ODE) to provide them with greater protection and to boost innovation. Many ODE workers face a lack of legal protection or insecurity about their rights and obligations, which may lead to exploitation of workers by ODE companies, the report states. Titled 'The On-Demand Economy,' the report recommends ODE workers receive holiday pay while retaining flexible working hours, minimum entitlements to employment protection and access to collective bargaining. Another recommendation is that discrimination laws cover ODE workers. The report states that legal uncertainty facing ODE organizations and workers causes inefficiencies in the labor market and may prove counterproductive to innovation. By necessity, governments and legal and human resources practitioners can expect that they will become increasingly engaged on these issues.

"The On-Demand economy or the 'gig economy' as it is commonly known, is certainly getting bigger in India and could possibly become the future of work. I am hoping that the report will help address some critical legal issues and considerations given its potential impact in a highly populated and labor-intensive country like India," said Vikram Shroff, Leader - HR Law at Nishith Desai Associates."

SYNOPSIS

Most jurisdictions currently only recognize two main categories of worker: the employee and the self-employed or independent contractor. With prominent examples of ODE companies having disrupted traditional markets, structures and forms of work, and subsequently affected the ways in which businesses provide services, their ODE workers do not fall into either category. In their operations, these ODE companies usually do not see a place for the traditional restrictions or mandatory requirements of employment law, with many refusing to qualify themselves as employers and their workers as employees. Consequently, ODE workers do not have the same rights as workers classified as employed or self-employed.

Also known as the ‘gig economy’, the ‘platform economy’ or the ‘sharing economy’, the report defines the ODE as ‘economic activity created by technology or other companies or providers that fulfil consumer demand via the immediate and flexible provisioning of goods and services’. It is a topic that continues to be the subject of important legal debate that is tied to the future of work and how employment law can or should deal with new and hybrid forms of work. By claiming that they only make it possible for independent service providers and customers to connect with each other on their online platforms, ODE organizations often try to escape or minimize any legal responsibility. However, this approach does not perfectly fit in the legal systems of many countries.

GEI’s On-Demand Economy report has contributions from national legal experts in 16 jurisdictions across the world, who provide insight into the current treatment of ODE workers in Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, India, Ireland, Italy, Mexico, the Netherlands, Spain, the United Kingdom and the United States. Comparative analysis across the jurisdictions includes legal frameworks, discrimination and termination claims, health and safety problems, liability issues, social security and taxes.

Key Points

The situation of the ODE from different perspectives of employment law includes:

  • How does a jurisdiction classify or characterise the relationship between the ODE organisation and the ODE worker?

  • What is the most important applicable legislation and case law on the issue of ODE workers?

  • Are ODE workers protected against discrimination?

  • What happens if the relationship or contract between the ODE company and the ODE worker is terminated by the ODE company?

  • Is health and safety legislation applicable to ODE workers?

  • How should ODE companies deal with the protection of intellectual property and confidentiality?

  • Should ODE companies pay social security contributions and taxes on the services of ODE workers?

  • What are the market trends and emerging issues in relation with the ODE?

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