INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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Gig Workers, No Guarantees: Industrial Relations and Non-
Traditional Work Contracts
1
Emily Felicia Anak Louis,
1
Noor Shahidatul Mohd Daud,
1
Syazwani Husna Zulkifli,
2
Gurprit Singh
Sarjit Singh,
1
Ashran Idris,
1
Mohd Haris Abdul Rani*
1
Faculty of Law, University Technology MARA, Malaysia
2
Faculty of Business, Accountancy & Law, SEGi University & Colleges
*Corresponding Author
DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000586
Received: 26 October 2025; Accepted: 04 November 2025; Published: 19 November 2025
ABSTRACT
This article examines the evolving status of gig workers within Malaysia’s legal and industrial relations
framework, critically assessing the inadequacy of current laws to meet the principles of industrial justice and
international labour standards. The rapid expansion of digital platforms has led to the emergence of non-
traditional work contracts that offer flexibility but lack fundamental protections typically afforded to formal
employees. While schemes such as the Self Employment Social Security Scheme and voluntary contributions
under i-Saraan exist, their non-mandatory nature limits coverage and fail to address broader concerns of social
protection, job security and collective bargaining. The article explores how lifestyle philosophies such as
minimalism and maximalism intersect with gig work preferences, while also foregrounding the psychological
and emotional toll of precarious labour. Through doctrinal legal analysis and comparative study with
jurisdictions such as the United States and Spain, the study identifies significant gaps in legal recognition and
institutional safeguards. The findings underscore the structural vulnerabilities of gig workers, highlighting
algorithmic control, absence of due process and exclusion from union representation as key deficits. The article
concludes that a comprehensive reform of Malaysia’s labour laws is necessary to introduce a distinct legal
category for gig workers, ensure mandatory contributions to social protection schemes and extend workplace
rights that align with international benchmarks. This reform must also include emotional well-being provisions
to create a more resilient and inclusive future for gig work.
Keywords: Gig workers; Labour law; Social protection; Platform economy; Industrial relations.
INTRODUCTION
The gig economy in Malaysia has grown rapidly in recent years, especially with the rise of digital platforms
like Grab, Foodpanda, and Shopee (Mohd Shakil, 2024). These platforms offer short-term, flexible jobs that
attract many Malaysians looking for income opportunities (MyDIGITAL Corporation, 2024). However, while
gig work provides flexibility and independence, it also exposes workers to legal and social risks (Taylor et al.,
2023). Gig workers, unlike the traditional employees, are not covered by the protection provided by key labour
laws (Makhtar et al., 2022). According to the International Labour Organization, gig workers are considered as
independent contractors after considering the informal and self-reliance characteristics of the work (Harun et
al., 2020). This gap especially in the absence of the legal protection of the gig workers raises the pressing
problems on the way the gig workers are treated under the Malaysian law and what ought to be essential
changes that ought to be taken place to improve the lot of these workers. The main standard in Malaysia for the
gig workers can be seen in the Self-Employment Social Security Act 2017 (Act 789). This particular
legislation led to the establishment of the Self Employment Social Security Scheme (SKSPS) by the Social
Security Organisation (SOCSO), which offers protection for workplace related injuries to self-employed
individuals, which ultimately includes gig workers. However, participation in this scheme is not mandatory
and many of the gig workers are not registered yet due to the irregular earnings or ignorance (Perkeso, 2023).
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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Page 7189
The next existing option is i-Saraan, which is a form of voluntary contribution scheme under the Employees
Provident Fund (EPF) which provides an opportunity for self-employed persons to save up their money for
their future retirement. Despite how this scheme is a method for gig workers to build up their financial security
in the future, it is not mandatory, and oftentimes low contributions are observed pursuant to this scheme
(Bantuan Terkini, 2025). Despite the availability of these schemes, gig workers are still excluded from many
protections given to formal employees under current employment laws like the Employment Act 1955 and the
Employees' Social Security Act 1969. This is due to the fact that gig workers are yet to be considered to fall
within the ambit of persons employed under ‘contract of service’ (Makhtar et al., 2022). The Malaysian
government has acknowledged these issues and announced plans to introduce the Gig Workers Bill, expected
to be tabled in Parliament in 2025. This Bill is said to propose legal recognition for gig workers, clearer rules
for platform companies, and a structure for mandatory contributions to social protection schemes (Bernama,
2025).
At the same time, it is important to consider the various factors which influence individuals to opt for gig
working alongside the pursuit of analysing the legal challenges which arise due to the inadequacy of the legal
framework governing Malaysia’s gig economy. Some might be enticed to gig work not merely due to the
income aspect, but it also reflects an individual’s personal values about how life and work should be balanced
which can be perceived through the viewpoint of minimalism and maximalism.
Despite the differences which divide individuals into these two categories of life philosophies, gig work could
offer a work life which corresponds with both the minimalist and maximalist lifestyle. Gig work is able to
offer individuals who subscribe to the minimalist lifestyle a career life which aligns with the core values of
their philosophy. Minimalists opt for a lifestyle in which they would be able to step away from the unnecessary
things in life and to live an intentional life focusing on what is important (Jain et al., 2023). Gig work offers
individuals an advantage where there is flexibility in their careers which undoubtedly would result in a better
work life balance. Gig working allows individuals to have more autonomy on what they choose in their career
be it the ways to carry out their work, the workload, the type of work they wish to do, the location of their next
project, the pay they expect from their labour as well as the duration they wish to contract with anyone who
seek their services (Warren, 2021).
Gig working does not only bring numerous benefits to the gig workers, but it also presents challenges. Gig
workers oftentimes lack the basic benefits afforded to traditional employees such as paid leave, retirement
plans as well as any health insurance which results in the gig workers having to manage these requirements
independently (Mohd Shakil, 2024). Further, another challenge faced by gig workers is that it leads to the risk
of sudden termination of contract which itself is a concern of career stability particularly since gig workers
obtain their current projects from those who seek their services (Bahu, 2024). However, despite the existing
challenges, the gig economy still persists as there are still individuals who find gig working worthwhile due to
the various benefits especially for those who have specific lifestyle choices such as minimalists and
maximalists.
The inherent benefit of gig work is that it allows individuals to have a better work-life balance as they have the
freedom to schedule their work and to choose the working location of their choice. Hence, this said freedom
offered by gig work aligns with the minimalist lifestyle of prioritizing one’s own well-being as well as to live
an intentional life (Jobya, 2023). On the flipside, gig work might be enticing to maximalists due to the fact that
gig work is able to offer maximalists the opportunity to grow and to have a variety of experiences. As such,
maximalists find gig work to be able to provide them with the dynamic lifestyle filled with constant learning
and development of new skills. This feature of the gig work conforms to the work life that maximalists aim for
that is to not be stuck in a repeating work routine with lack of variation (Bahu, 2024).
This article includes the perspective of Industrial Relations to critically examine the status of gig workers in
Malaysia. This study also uncovers the ongoing issue of inadequacy of Malaysian labour law in meeting the
standard of industrial justice in the purview of gig work. According to the Webbs, they understood the term
‘industrial democracy’ to encompass collective bargaining and democracy within trade unions. To further
understand the meaning of industrial democracy, it is regarded as the participation, association or decision
making within a business or work place (Müller-Jentscht, 2018). This is especially pertinent to the problem of
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
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gig workers due to the fact that these workers have difficulties expressing their problems and concerns due to a
lack of advocacy and representation. Due to the absence of the collective bargaining power, it may cause
detectable inequality in the gig economy (Mohd Shakil, 2024). The problem of the absence of collective
bargaining power can be observed in the case of the gig economy in Malaysia because the gig workers cannot
join in and establish a trade union (Mohamad Amin, 2023).
The existing legal system in Malaysia, covering the gig workers which is critically evaluated in terms of the
international labour standards, has important weaknesses in protection and recognition. The International
Labour Organization (ILO) is significant in the system of industrial relations in Malaysia. The ILO has
established a bright baseline by its campaign on what is described as decent work which entails security of
employment, access to social protection and guarantee of basic labour rights (Ghai, 2003). However, the
current regulatory strategy used in Malaysia does not support all these requirements, especially in the gig
economy. Consequently, most gig workers can frequently receive inconsistent proceeds and not be aware since
they are not included in it (Perkeso, 2023).
This is contradicted with the ILO Recommendation No.198 which stressed the need for the transparent
employment relations in order to access the protective measures and the rights for the worker (International
Labour Organization [ILO], 2006). The ILO is also crucial to foster a good relationship between governments,
employers and workers. The rules and principles of the ILO can aid in ensuring gig workers will obtain fair
treatment similar to that of normal workers (ILO, 2025). This is particularly important when looking into how
the gig economy is expanding in Malaysia, hence, requiring the safeguard of workers’ rights for these
increasing numbers of independent workers.
The legal uncertainty surrounding gig workers in Malaysia stems from the contracts they sign with these
digital platforms. Gig workers classification often creates uncertainty because their actual working
arrangements may not align with the employment status stated in their contracts (Wilson, 2024). The more
essential matter is the substance of the working relationship, which is assessed by evaluating the actual terms
and conditions of the contract and the structure of the working relationship, instead of labels given to these
workers (IRS, 2025). This is particularly seen where, while the contracts claim to offer freedom to gig workers,
the platform still controls how work is done and their wages (ILO, 2018). This is usually seen in microtask
platforms and many gig economy platforms where they classify workers as independent contractors rather than
employees.
For example, Amazon Mechanical Turk (AMT) explicitly states in its terms of use that workers carry out tasks
independently and are not considered employees of either AMT or the task requesters. As a result, they are not
entitled to typical employee benefits such as paid leave, health insurance, retirement plans, or workers'
compensation in instances of injury. This strategy is intended to shift liability away from platforms, allowing
them to avoid providing the legal protections and social benefits typically required under labour laws or
collective agreements (ILO, 2018). ILO Recommendation No. 198 emphasizes that unclear employment
relationships must be resolved to ensure fair competition and protect workers. It highlights that clear
employment status is essential both for worker protection and for better social governance (Stefano et al.,
2021). Thus, a thorough analysis of the terms of the contract signed with companies must be done to examine
whether it is in compliance with international labour standards.
All in all, this article examines Malaysia’s current legal framework available for gig workers, the loopholes in
Malaysian gig worker’s protection and discusses whether proposed reforms are adequate. The terms of the gig
workers' agreements with the digital platforms are so vague and misleading that the workers do not even know
if they are the employees or the independent contractors and due to this they have been subsequently denied
vital workplace protections. The legal recognition, social protection and the minimum labour rights are vital to
the reconstruction of Malaysia's labour law to better reflect the changing world of the gig economy. It is
crucial therefore that the gig contracts are properly reviewed to the extent that they are compliant with the
international labour standards with the fair rights for the gig workers. By critically reviewing legal documents,
academic literature as well as comparisons with other countries such as the United States and Spain, this article
aims to assess the gaps in legal protection of gig workers in relation with the industrial relations concept.
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
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LITERATURE REVIEW
Malaysia
The gig economy has transformed the global labour market, unfortunately in Malaysia, it is insufficiently
regulated (Makhtar et al., 2023). Scholars have widely observed that gig workers are often excluded from the
conventional labour protections, which has raised critical legal and socio-economic concerns (Makhtar et al.,
2023; Amin, 2023). The lack of legal recognition of gig workers as employees under the existing frameworks
like the Employment Act 1955 in Malaysia lead to significant protection gaps, particularly concerning social
security, collective bargaining, and dispute resolution mechanisms (Amin, 2023; Journal of Malaysian Legal
Studies, 2021). Recent data indicate that gig workers constitute approximately 26% of Malaysia’s workers and
are disproportionately located in metropolitan areas and in sectors such as e‑hailing, food delivery, and
freelance digital services. Young adults between the ages of 18–34 makeup over 60% of this group, and there
is almost an equal number of women as there are men although women dominate the home‑based digital
freelancing (Department of Statistics Malaysia, 2024).
Furthermore, the empirical studies in Peninsular Malaysia show that gig workers often experience income
instability, absence of social insurance, and a lack of occupational safety standards (Abdullah et al., 2024).
Although these workers contribute substantially to Malaysia's digital economy, their precarious status is
uncertain and leaves them vulnerable to exploitation (Makhtar et al., 2023). Furthermore, the traditional
industrial relations models are not well adapted for the non-standard work arrangements such as freelancing,
platform-based delivery, and ride-hailing services (Samad et al., 2023). On Malaysian platforms like Grab and
Foodpanda, the algorithmic management determines work allocation, pay rates, and performance evaluations,
often without transparency for workers. These opaque algorithms contribute to unpredictable earnings and
unilateral deactivations, exacerbating worker precarity (Muldoon & Raekstad, 2022; Duggan et al., 2023).
Efforts to extend protection are being made little by little. For instance, the gig workers have been encouraged
to register under the Societies Act 1966 to form associations (Journal of Malaysian Legal Studies, 2021).
However, these associations lack the bargaining power typically afforded to trade unions, raising questions
about their effectiveness in promoting and protecting workers’ interests (Amin, 2023). This state of affairs is
also made worse by the fact that the Industrial Relations Act 1967 does not cover independent contractors like
gig workers and eligible to join a union although this representation is what has helped millions of Malaysia’s
formal sector workers from being marginalized under the former government (Amin, 2023). Similarly, there is
also increasing discussion on whether the installation of a universal basic income or compulsory insurance
schemes as safety nets (Uchiyama, Furuoka, & Md. Akhir, 2022). Apart from the Self-Employment Social
Security Scheme (SESSS), which is administered by SOCSO, Malaysia also offers the i‑Saraan which is a
voluntary savings programme under the Employees Provident Fund to help self‑employed persons build
retirement savings. Nonetheless, the labour force participation remains low, less than 15% participation due to
irregular salary and limited awareness of the scheme among the gig workers (Employees Provident Fund,
2023; Perkeso, 2023.).
In contrast, Japan has now begun to introduce developing guidelines at the international level leading to fair
contract and platform accountability (JILPT, 2024). In comparison, Malaysia still lacks statutory definitions
and guidelines that can differentiate between an employee, an independent contractor, and a gig worker (Amin,
2023). Some platforms voluntarily decide to provide insurance or welfare contributions, this is not compulsory
and non-binding (Oxford Department of Social Sciences, 2024). Singapore’s Advisory Committee on Platform
Workers suggested mandatory Central Provident Fund contributions, work‑injury compensation, and a waged
“living allowance” for platform workers to balance the trade off between flexibility and protection (Ministry of
Manpower Singapore, 2022). These steps also provide a practical model for Malaysia to consider. The
International
Labour Organization (ILO) has also emphasized the freedom to associate and the right to
collective bargaining should be granted to all workers, irrespective of their forms or arrangements of
employment (ILO, 2025).
The scholars suggest that the gig work in Malaysia might be regulated on a human rights basis (Makhtar et al.,
2023). The decent work principles enunciated by the International Labour Organization must be incorporated
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into the national labour laws to facilitate fair wages, safe working environments and collective rights (Makhtar
et al., 2023). The recent studies also highlighted the psychological and emotional cost of gig work and the
necessity for a stronger welfare system (Anuar et al., 2024). The research suggests that the high stress and
burnout and feelings of isolation among the gig workers are connected to the aspects of algorithmic control,
income volatility and lack of social support. This situation is exacerbated by the fact that there are no employer
provider benefits, either in the form of counselling services or paid time off sick leaves (Lang et al., 2023).
This is also an area for criticism in Malaysia where the researchers have looked at how the platform of
capitalism actually works (Journal of Industrial Relations, 2024). The food delivery riders recently showed the
growing dissatisfaction as a result of unfair algorithms about the wage deductions that are impossible to
unravel and the employment contracts with no transparency whatsoever about the terms and conditions thereof
(Journal of Industrial Relations, 2024). Such resistance highlights the needs for legal reform that will benefit
both parties in order to address this imbalance of power (Makhtar et al., 2023). The informal unions and the
gig workers associations have urged the government to provide clearer rules and regulations including the
minimum payment guidelines. Their organizing raises issues of legal recognition and collective bargaining
rights to address the dispute over pay and working conditions (Uchiyama, 2023).
While the Malaysian government has established programmes such as SOCSO’s Self-Employment Social
Security Scheme (SESSS), participation remains voluntary and the compliance is not enforced, which in turn
contributes to exacerbating inequality (Uchiyama, Furuoka, & Md. Akhir, 2022). Consequently, the literature
overwhelmingly recommends for either amending existing laws or enacting a new Gig Workers Act that is
relevant to current digital labour conditions (Amin, 2023; Makhtar et al., 2023).
United States
The gig economy in the United States has grown rapidly in recent years, with millions of workers participating
in various freelance, digital platform based and contract-based jobs with a surge particularly in online apps
such as Doordash, Lyft and Uber. Gig work gained popularity during the Covid pandemic especially due to the
fact that people were instructed to stay indoors and hence, had to utilise online delivery services such as
Doordash and Uber Eats which ultimately resulted in the increase of gig workers (Delouya, 2023).
In a study by the University of Chicago, it was discovered that there is an increase in the number of individuals
who reported their income to originate from online platform gig-based careers to the Internal Revenue Service
where the number rose up from approximately one million close to five million workers. This major increase is
an obvious indication that the number of people utilizing online platforms for gig working as their source of
income is gradually increasing (Garin et al., 2023).
Flex, a trade group that includes companies like Uber, DoorDash, Grubhub, HopSkipDrive, Instacart and Lyft
had reported that over 23 million individuals had earned money via these online platforms within the last year
(Delouya, 2023). Nevertheless, similar with gig working in Malaysia, in the United States, gig workers opt for
online platform-based gig working due to its numerous benefits despite the fact that the gig economy does not
include these workers the access to employee benefits typically afforded to traditional employees.
According to Erica Groshen, the former commissioner of the Bureau of Labor Statistics, gig working opens an
opportunity for individuals to save themselves from unemployment in instances where they are dismissed from
their workplace (Delouya, 2023). This statement is further supported by Jordan Nickerson, a visiting professor
at MIT Sloan who concurred that gig work can function as a temporary safeguard for individuals to still have
means to earn money while waiting for their regular careers to return to the way it was (Walsh, 2020).
However, in recent years, the rise of the gig economy has sparked intense debate about the rights and
protections of gig workers who are dependent on these app-based jobs. These jobs offer flexibility, but they
often lack the benefits and protections typically provided to employees. In America, if you are a gig worker
which equates to an independent contractor, you are deemed self-employed (Internal Revenue Service, 2025).
This means that those who are self-employed are limited from the protection and rights afforded to traditional
employees.
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Those self-employed are excluded from the basic rights offered to normal employees such as leaves for when
the worker is ill, healthcare insurance, minimum wages or social protection (Katiyatiya, 2024). This lack of
social and legal framework for the protection of gig workers raises concerns as to whether the welfare of gig
workers are going to persist in this direction in the future or otherwise. According to Lane (2020), digital
platform companies should not only have autonomy over the technicalities of the gig economy but also must
bear responsibility for the welfare of the workers who are dependent on these platforms as their source of
income. This contention is further supported by (Johnston et al., 2019), where they argue that gig workers are
not provided with the necessary employment protections and if we are to place accountability on the
companies running the online platforms in the gig economy, we are undoubtedly creating a better protection
and stability economically for the gig workers.
In response to growing concerns, California passed Assembly Bill 5 (AB5) in 2019, signed by Governor Gavin
Newsom and came into effect in January 2020, with the objective to ensure better treatment for gig workers by
viewing gig workers as permanent workers instead of independent contractors (Rhinehart et al., 2016). Under
the AB5, it aims to alter the current situation where gig workers are lacking social protections under the law by
introducing the “ABC test” to ascertain whether a worker should be categorized as a traditional worker or
independent worker (O’Brien, 2020). Pursuant to the ABC test, a worker is assumed as an employee and it
imposes a burden on part of the employer to prove that the person is not a worker, instead is an independent
contractor.
The three test under the ABC test are as follows; first, the worker has autonomy in their career with no direct
and close control of the company, second, the job performed by the worker falls out of the company’s central
business and third, the worker does not only offer their services to the company but is also contracted to other
customers or businesses. The introduction of the AB5 resulted in significant impact in the changes of status for
gig workers, ultimately providing them with employment benefits such as overtime pay, insurance, minimum
wage and sick leaves (Hyman, 2024). Through the codification of AB5, digital platform companies which run
the gig economy can no longer exclude gig workers from their entitled employment rights and protections
(O’Brien, 2020).
Nevertheless, with the enactment of the Assembly Bill 5 (AB5), it has faced opposition from online platform
companies like Uber and Lyft which argued that the set of requirements under the AB5 law imposes a higher
standard than previously applied. Despite a Superior Court Judge's mandate to these companies to categorize
their drivers contracted under them as employees which would provide them similar advantages to that of
traditional employees, these companies have decided to resist compliance and do not intend to do so; sticking
with their usual business activities (Ghaffary, 2019).
According to Uber’s chief legal officer, Tony West, he contended that the Uber drivers should not be
categorized as employees as their job scope falls outside of Uber’s core business which he explains their
business as a tech platform for many types of digital marketplaces. In a criticized stance by Uber, it has stated
that Uber is a mere app which connects riders with the drivers instead of a transportation company (Rosenblatt,
2019). This opposition to the AB5 law was made not just by Uber but also other digital platform companies
essential in the gig economy such as Lyft and Doordash to which these companies had all contributed $30
million each in the funding intended for a new California ballot proposal with the hopes to overturn the AB5
(McCarthy, 2019). In 2024 however, these big gig economy companies celebrated their victory in their efforts
to not comply by AB5 where the the Supreme Court of California decided to approve the voter-approved law;
Proposition 22, which gives a green light to these companies to remain classifying their drivers and delivery
workers as independent contractors and not employees.
Under this newly passed law, these gig workers are regarded as independent contractors and at the same time
are afforded certain benefits however, not encompassing thorough protection like those provided to traditional
employees (Sumagaysay, 2024). The introduction of Proposition 22 indirectly jeopardises gig workers’
protection as they are now ineligible to obtain employment benefits and hence, is unjust to them. Law lecturer
at UC Irvine, Veena Dubal whose main study is in labour inequality opined that the decision made by the
Supreme Court of California was a disappointing one.
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Further, professor emeritus at Stanford Law School and the previous chairman of the National Labor Relations
Board emphasized that Proposition 22 is a major blow to workers who are already disadvantaged
(Sumagaysay, 2024). In short, this shows how in a developed country like the United States, gig workers and
those advocating for these workers are still in constant effort in the pursuit of laws which would ultimately aid
the gig workers in ensuring they are afforded the same basic employment rights and protections provided to
traditional workers.
Spain
Spain is regarded as one of the most active countries in the sphere of labour reform in the platform economy,
especially regarding app-based workers. delivery riders. In 2021, Royal Decree-Law 9/2021, sometimes
referred to as the Riders was passed in Spain. The law, which requires mandatory food delivery gig workers
employed by online services such as Glovo, Deliveroo, etc. and Uber Eats need to be considered as employees,
not as independent contractors (Ministerio de Trabajo y Economia social, 2021). This legal trend established
Spain as the pioneering European Union(EU)member state to codify clearly and successfully the rights of gig
workers with regard to amplified worker mobilisation and legislation problems.
The 2020 decision of the Spanish Supreme Court had a heavy influence on the passage of the Riders Law
Tribunal Supremo, (2020), where it was decided that the riders of Glovo started to work under the control of
the company. supervision and was therefore entitled to the same rights and protection as to formal
employment. The court made it clear that the algorithmic style of control of the platform was quite successful
in managing the allocation of tasks, wages, and performance evaluation, diminishing the independence of
workers and emphasizing their dependence on the platform, financially. These results correlate with criticisms
internationally regarding the lack of transparency in digital governance of gig work as indicated in Malaysia
and the United States (Duggan et al., 2021).
It is among the significant parts of the Riders Law which is to allow algorithmic transparency. Under this legal
obligation, the platform companies are obligated to provide information with the input of their algorithms on
the primary working conditions. As an example, it may include the distribution of orders, scoring of
performance, and the calculation of pay. This is a massive move away towards eliminating the black box
systems that the gig economy has revolved around. Through these transparency practices, legal experts denote
the following conditions, Spain hopes to restore the balance of power between hi-tech giants and employees.
additional oversight over artificial decision making by people (European Commission, 2021).
Such aggressive regulatory strategy was strongly opposed by platform firms. Most stakeholders argued that the
new law erodes the flexibility of workers and increases the cost of operation. Deliveroo withdrew fully to the
Spanish market on the basis that it found the regulatory framework unworkable. Subcontracting agreements
invested in by such platform companies like Glovo and others have been done to make sure that they do not
assume direct employer duties, which brings about suspicion about the issue of compliance and enforceability
(De Stefano & Aloisi, 2022). The effect of administrative reforms has not been successful since platform
avoidance techniques remain to be the significant difficulties in enforcement.
The reforms that Spain took in the legislation process encouraged other territories to execute the same kind of
change. The European Commission came up with its Proposal of a Directive on Platform Work in 2021 due to
the innovative way that employment presumption and algorithmic responsibility are approached in Spain
(European Commission, 2021). The Spanish system of labour protection fails to promote its benefits to the ride
hailing and freelance digital workers, who are unprotected (Pesole et al., 2018).
The Spanish model is a judicial benchmark that was created to maintain the people who work within the gig
economy with the available laws of the labour market without transitioning the fully flexible character of the
gig. The Spanish legal system shows the way to create statutory recognition and collective representation and
inclusive protection in the case of Malaysia where the protection is dispersed and done on a voluntary basis.
The statutory rights have been strengthened as well as the validity of the claims made by workers has been
licensed through the law showing their importance to the society.
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METHODOLOGY
This paper is undertaken as a juridical normative study using the doctrinal analysis of the law to determine
how well the labour law in Malaysia governs gig work in the light of principles of industrial justice, social
security, and international labour. It studies the current legal framework and court interpretations of the
situation and protection of the gig workers. A comparative study is conducted with references to some
international examples, whereas global labour instruments offer normative comparisons. The article refers to
primary legal sources, as well as assortment of academic and policy source materials to critically assess
adequacy of Malaysian legal response to the gig economy.
FINDINGS AND DISCUSSION
The aspiration that the gig economy workers have flexibility, freedom and control over their work is generally
an illusion. Although they are officially defined as an independent contractor, such classification confines them
outside of Malaysia’s main labour legislations which for example means that they get no guarantee of
minimum wages, no annual leave, no social security assurance and there is no right to collective bargaining
too. This can be seen clearly by Malaysia’s having the Employment Act 1955 that covers only legal workers
and not gig workers. Although the Self-Employment Social Security Act 2017 provided watered-down
coverage, it only offers very limited coverage for work related injuries, as the participation in the scheme is
voluntary and many gig workers work unregistered as it makes them an easy target. This distinction is
frequently cemented by contracts which are careful to avoid the traditional terms as if this will somehow make
it look like the worker is independent. But in fact, the platform companies exert significant control through
algorithmic management systems that allocate the work, evaluate the performance and determine how much
the workers earn. These are the systems that watch and shape the workers' behaviour with little transparency
and accountability and leave the workers with no clear or just form of appeal. In the meantime the flexible job
that is promised is often not a matter of being your own boss or choosing your hours, but the digital
straightjacket of you have got to be available all the time and do as you are told with none of the job security or
institutional support that the old system provided. Nowhere is this inequity more apparent than in the complete
lack of any due process proceeding, forcing employees to resolve case disputes without due process and
without any right to counsel. This disconnection between the legal status and the real working situations
reveals an underlying weakness that leaves the gig workers at a significant downside in the job market. As the
gig work keeps growing all over Malaysia, it is getting progressively pressing to rework on the present laws
and embrace the lawful classifications that mirror the hybrid and reliant nature of the platform-based work. So,
without such alterations the gig workers will stay stuck in a routine of duty with no security, adaptability
without steadiness and work without lawful acknowledgement. Additionally, the vulnerability and irregularity
in many gig works can negatively influence a gig worker's capacity to arrange the long-haul plans or save up
assets. Although the flexibility of this kind of work allows some workers to adjust their times as required, the
variability in the work easy and earnings stream is also likely to entail pressure. For the business to develop
sustainably, new approaches are expected to create trust and ensure sensible treatment of all contributors to the
gig work economy.
The structural inconsistencies within the gig economy create the systemic vulnerabilities for the gig workers.
All that includes jobs securities, unpredictable ebbs and flows of income and no institutional support.
Comparing the gig work to the traditional employment, it can be seen that there is no stability and
transparency. The gig workers are struggling to hold down work in which labour is precarious and largely
unregulated. The changes in the employment relationships as well as the workplaces posed by the usage of the
computerized systems have been accompanied by a shift to work allocation, performance standard and the
payment structures being determined more and more algorithmically. Here, the gig workers experience terms
of engagement which can be unilaterally changed without warning on the potential one sided change and
cannot bargain. There are no strong legal protections that means many gig workers can do nothing about the
unilateral changes to the contracts, reduced their wages or deleted accounts without explanation. This is the
modern precarity which is managed digitally but at the same time systematically unaccountable. The disparity
between the legal description on the one hand and the actual reality on the other becomes greater as the gig
company expands and mature. All this throws the races more wide open and adds to the feeling of tenuous job
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security. The urgent action is required to fill this gap in the law and that can only come through law reform that
recognizes the nature of platform-based work and affords equal protection to all gig workers, regardless of the
particular type of the gig work they do.
The framework of social protection in Malaysia for the gig workers is currently fragmented, voluntary and
ineffective in providing meaningful security. Never realizing consistent participation from the start, it has
developed a rough ride and never gained real traction. There are two main reasons for this which are because
many gig workers have unpredictable income streams and making voluntary contributions is difficult to them
and that many gig workers are still suspicious about the prospects of a long-term government program without
monthly contributions. Not being compelled to participate, there is no shield for such plans. This is very
worrying especially in the time of sickness, injury or unexpected disturbances where the absence of the
company policy will also leave the gig economy workers financially vulnerable. The economic fragility of that
gap is not simply about the personal struggle but also symptomatic of a much wider systemic failure to include
the gig workers into the national security system. From the experience of other countries that have introduced
mandatory and comprehensive protective arrangements, effective laws which can be enforced. This is essential
to deliver fair labour protection. Hence, Malaysia must rethink its ground and reorient towards a right based,
compulsory model that ensures our gig workers are given core protections regardless of whether they are an
employee or not.
Gig work is an economic decision for many people, but it is also based on the values and lifestyle. For others,
especially those who believe in minimalist ideals usually will choose gig work because gig work provides
autonomy, a flexible schedule, a chance to organize their lives around their priorities rather than around the
structures of a corporation. This appeals to the ability to pick and choose your own jobs, have your own set of
hours and in a way to be independent outside the corporate ladder. Some are attracted to the hustle and bustle
of the gig work which offers constant simulation in the form of different jobs and new opportunities to
diversify one’s income or follow new interests. This lifestyle insight underlines the fact that the gig work is not
a second resort so much as a value driven and calculated choice. However, it is that the freedom it delivers so
often masks the fragility of the work, its lack of a guaranteed wage or health insurance or union representation,
all of which make many gig workers financially vulnerable. As highlighted by Khazanah Research Institute
(2022), almost two-thirds of the gig and informal workers in Malaysia earn less than RM2,000 per month and
majority of these groups of workers are not covered under SOCSO or EPF, and this has significantly reduced
their capacity to attain long term security valuation. Although Government implemented schemes like i-Saraan
or the Self-Employment Social Security Scheme (SKSPS) have been launched, the take up is optional and
fragmented leaving the onus on the individual and not the platform to protect his own. What this shows is that
autonomy around gig work can be illusory in the absence, or unavailability, of structural safety nets. What
makes this look like a gig is that without rights that can be enforced or institutions that can be relied on, what
might be interpreted as flexibility in a job can just easily be understood as an economically desperate search
for survival. In the other words, while the gig work may have an appeal to some ways of life, that appeal
should be critically evaluated against the structural vulnerabilities that mediate and limit the lived experiences
of those within the gig economy.
The psychological impact of the gig work requires particular scrutiny because such jobs often present serious
threats to the mental health of gig workers. The emotional and institutional support structures we need to keep
us psychologically healthy are far from guaranteed to gig workers as compared with traditional employment.
Algorithmic management can be a pressurized environment due to the performance constantly monitored and
evaluated. The gig workers must remain perpetually on call, assessed graded and sometimes being
automatically dismissed. This coldly efficient data driven model of the computerized operations cuts human
interaction out of the working process and breeds feelings of loneliness and estrangement. The lack of
fellowship, managerial backing, constructive feedback and meaningful supervision gives rise to a working
atmosphere where the individual feels disoriented, expendable and invincible. The unstable incomes, irregular
working hours and the ceaseless pressure to keep active on the platform in account of maintaining the raw
minimum of earnings make this matter worse. A 2022 report by the International Labour Organization found
that gig workers throughout Asia suffer significantly more psychological strain as a result of long hours, social
isolation and rating systems employed by platform operators. Likewise, Khazanah Research Institute (2024)
argues that Malaysian gig workers express heightened anxiety about unpredictable income and a sense of
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estrangement from sources of assistance, the lack of collectivity as a result of individual oriented platform
work. Gig workers have to deal with their own psychological difficulties when they lack sick pay, guaranteed
breaks or access to employers provided the psychiatric benefits. Over the time, this incessant emotional
pressure often leads to greatly heightened levels of stress, burnout and eventually for some individuals even
chronic mental illness. Any future regulatory status must be serious about these issues of mental health and
also should incorporate them within the framework of law and economics. We must understand that the gig
workers' well-being includes more than just economic and legal stability. It also means emotional resilience,
access to a healthy workplace. Constructing this new future of work means we need to think about ways to
bring both together.
The gig workers in Malaysia are virtually falling outside of its industrial relations system. In Malaysia, only
employees under the contracts are allowed to join the trade unions or participate in collective bargaining
according to the labour laws but the gig workers who are legally independent contractors are disqualified from
these institutional mechanisms. As a result they cannot bargain for higher wages as an effective group, they
cannot even bargain for greater job safety and protection, they also cannot promote better industrial relations as
a whole. The gig worker is being cut off from the other workers and has limited opportunities for governing
the terms of its work particularly when it comes into conflict with large platform companies. Although some
attempts have been made to organize informal community-based grouping among the gig workers, these
organizations are not legally recognized and are unable to claim any formal authority to represent their
members in disputes of an industrial nature. They only exist as a sort of moral shield, yet they have no real
protection under the Malaysian's statutory labour law. Such a denial of collective voice conflicts with the
central ideals or industrial democracy which presume that all workers irrespective of contractual form, have
the right to participate in the joint decision making and workplace control. This power imbalance between the
high growth digital platforms and the gig workers is drafted into the law which means that it makes the gig
workers structurally vulnerable and means that they face strong digital platforms alone without the collective
bargaining power.
Malaysia’s upcoming laws for the gig economy are not ideal and need to be revamped to cater to the realities
of modern-day employment. The rise of the platform economy has fundamentally transformed the nature of the
relationship between the work and the labour, but the Malaysian regulatory landscape still depends on the
outmoded categorisation and long-established concept related to employment. Although the Gig Worker Bill is
a welcome signal of the legislative intent, it is likely to have little impact if it does not address the gig worker’s
overdetermination of vulnerability. The reformation cannot stop at the employment status reclassification, but
it must establish mandatory social protection, extend labour standards to platform work and intervene to secure
fairness and responsibility in the operation of algorithms. The law should also be changed so that there are
ways to resolve the disputes that are open, transparent and sensitive to what it is about gig work that makes it
distinctive. The enforcement of the rules by technical classifications or contractual loopholes that allow the
platform companies to evade the labour responsibilities should be the understanding that's all gig workers,
whether they work through the apps or more in the traditional places of work are entitled to the economy
dignity, legal protection and the sweep of benefits that flows from it. It is only with such sweeping
restructuring that Malaysia can guarantee that its labour laws are accessible and future-proofed ready to
capture the new challenges emerging with the digital economy.
RECOMMENDATION
To overcome the structural weakness of gig workers in Malaysia, a change of paradigm is required, a shift that
does not alienate gig workers in a strict dual distinction between an employee and independent contractor
enshrined in the Employment Act 1955. Even the existing legal framework does not address this fact because
the flexibility of the gig version of contractual independence masks the facts of control and dependence. A
special act like the Gig Workers Protection Act needs to be enacted because current legislation ignores the
reality of gig work and needs to give access to the minimum labour standards. Based on the Royal Decree-Law
9/2021 in Spain and ILO Recommendation No. 198, this Act should introduce the third legal framework that
would support the flexible working patterns and provide the gig workers with the necessary protections such as
the minimum wage provisions, social protection access, and the right to resolve disputes. Although there is a
positive development towards that in the proposed Gig Workers Bill 2025, stronger promises are required in
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order to guarantee that the legislation seeks to deal with the underlying structural imbalance and to provide
affirmative protection to gig workers, beyond the lip service. This recognition at the legislative level would
serve not only as a de-obfuscation of the legal category but also as the source of a restoration of honour and
safeness of platform-based labour.
Along with the necessity to change the legal status, social protection is also considered another urgent problem
because
the
voluntary
schemes
proved
to
be
ineffective
and
inefficient
in
Malaysia.
Even
though
the Self-
Employment Social Security Scheme (SESSS) and i-Saraan are in place to carry out this safety net, they have
been poorly enrolled and their voluntary nature has led to very low coverage. To address the same, the Self-
Employment Social Security Act 2017 should be revised, and a statutory duty should be imposed on platform
firms to contribute to respect of the workers. By doing so, the law must also consider making such
contributions paid entirely by the companies like the SOCSO system towards formal employees so that the gig
workers are not saddled with the burden of making contributions. This would ease participation levels and
workers would experience better insurance covers at reduced rates. An alternative model would be the Central
Provident Fund in Singapore where the contribution by the businesses entails retirement, medical, as well as
accidental benefits to all types of workers. The institutionalisation of the co-payment system will enable
Malaysia to enhance social insurance mechanisms without exposing platform firms to externalisation in the
name of gig independence.
Lastly, any new law concerning the protection of gig workers should address not only physical but also mental
health and emotional wellbeing. There is overwhelming evidence linking algorithmic management, precarity in
income and social isolation to psychological damage to gig workers within the academic literature. The scope
of the legal regimes such as Occupational Safety and Health Act 1994 should be made more extensive so that
platform companies could be legally bound to provide essential well-being provisions, such as access to
counselling services, paid sick leaves and other forms of support. The results of such reforms include
recognition that economic security needs to be balanced with emotional strength and the validation of the fact
that any form of work, however it is classified, should be afforded lawful protection with dignity.
CONCLUSION
The gig economy has exposed eye-opening shortcomings in Malaysia’s labour edifice tagging not the least, the
abject lack of protection of the nonstandard worker. While the gig work is welcomed by many people due to
the ability to set their own working hours, it often hides a reality of economic instability, lack of legal
protections and no real voice in collective decisions. The current voluntary schemes and out of date categories
of work do not capture the complexity inherent in platform work as it is lived and experienced by workers
trying to rationalise algorithmic control and emotional strain. This paper has demonstrated how the existing
system is unpleasant and how it fails even to pass the test of industrial democracy and of collective
participation. Reforms are possible that the other countries like Spain and the United States illustrate is that
change is possible and can be effective. Malaysia should not stop at rhetoric and put into place a rights based
and enforceable model that provides the gig workers legal certainty, social protection and also industrial
recognition. If the nation is to have any hope of seeing its digital economy end up in line with principles of
fairness, dignity and sustainable work, we must not wait that long.
ACKNOWLEDGEMENT
This publication results from a group project by students on Industrial Relations Law in the Faculty of Law at
University Technology MARA (UiTM). We acknowledge the collective efforts, research and dedication of the
group who contributed to this work.
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