The Challenges of the Gig Economy and Workplace Regulation
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The topic of the changing nature of the workplace currently dominates many conversations and many acres of press and magazine coverage. It is therefore unsurprising that governments around the world have been trying to grapple with the unexpected pace of change and challenges that face all businesses dependent on labour in one form or another. The UK has just published its report; "Good Work: the Taylor Review of Modern Working Practices" which suggests some fundamental ground rules for managing the workplace in these rapidly changing times. Such guidance is clearly needed because, despite the focus on the issues, businesses have been slow to actually embrace the changes and implement the difficult staffing decisions needed. This is supported by research from the Economic Intelligence Unit which noted in August 2015 that:”50% of companies have devised a strategy to address workplace digitisation but fewer than 25% have deployed it”.
It is important for those handling workplace strategies to develop an understanding of what we mean when we talk about the evolving workplace and what lies ahead. This is a complex assessment and needs to occur at many levels. One thing is abundantly clear; traditional staffing arrangements alone are likely to be too inflexible to meets the needs of a dynamic workforce and ever-changing business needs.
Individuals have clearly shown that there are attractions to being able to provide their labour on a flexible basis often through the use of apps with "uberisation" becoming a recognised term in its own right. In addition, the millennials are constantly challenging the need for structures which require them to work in a regimented way in terms of method, time and place. Even within the traditional workplace, roles are being eliminated, existing employees need to learn new skills with job descriptions changing regularly, and many non-core functions are outsourced or delivered in a non-traditional way. Work is increasingly not an identifiable “place” to go, but a virtual environment containing individuals who still need to be connected, engaged and, in some respects, controlled.
All of this sounds exciting and so it is, but trying to manage these developments within a context of corporate risk and responsibility is no easy task. It is also increasingly clear that businesses themselves are being asked to share some of the responsibilities and costs of these changes on behalf of society. The Taylor Review provides a clear indication of this: "the best way to achieve better work is not national regulations but responsible corporate governance, good management and strong employment relations within the company".
It has become ever-increasingly clear that one of the most important assets of any organisation is its reputation and brand both within the organisation itself and also with customers, peers, and society at large. Working out what a particular organisation is going to do to embrace the opportunities in a way that is brand enhancing rather than brand damaging is a key objective.
In the employment law context, the challenges can largely be categorised into: the need to assess the staffing structures that are in place and plan what is likely to be needed in the future; ensuring maximum flexibility to bring people in and out of the workforce as needed; having secure systems which have at their core the protection of the business’s intellectual capital; and assessing and mitigating the risks of claims and actions in respect of individuals and outputs who are, by definition, not heavily or even lightly controlled in terms of their day to day activities.
None of this is easy in the current legal context. Just getting a visa for those who need one to work locally invariably requires a traditional employment contract in many countries in Asia. Many staffing arrangements simply do not retain the flexibility they are intended to provide at the outset. For example, agency workers may become direct employees after a relatively short period of time; in South Korea agency workers may well gain full employment status with the company to which they have been providing services after two years. The intended arrangements with "gig workers" often result in the unintended consequences with a high risk that an undocumented and potentially expensive employment relationship has been established.
Working within the strict confines of workplace law especially with all its complexity in Asia is, of course, going to demand time, focus and a clear view on the appetite for risk. It perhaps brings to mind a quotation from the American-Austrian educator, Peter Drucker: "the greatest danger in times of turbulence is not the turbulence - it is to act with yesterday’s logic".
This article appeared in the Classified Post print edition as "Negotiating the gig economy's legal implications" on Saturday 26 August 2017.
