Employers in APAC face increasing potential dispute risks and legal repercussions over the evolving regulation in APAC to enhance protection for gig economy workers.
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The rise of online platforms providing services like ride-hailing and food delivery is reshaping the workforce in the Asia-Pacific (APAC) region, with an increasing number of people adopting gig work as a full-time occupation. Visa’s Green Shoot Radar 2024 report shows close to half of respondents in APAC rely on gig work as their only income source, with leading countries like Korea (66%), Japan (65%) and India (57%).
The gig economy has revealed gaps in traditional labour market and social security frameworks, as these platforms predominantly classify workers as independent or contractors rather than long-term employees. Such classification has led to strikes in multiple countries recently, with workers protesting opaque fee calculations, pay uncertainty, and inadequate compensation. For instance, thousands of ride-hailing drivers went on strike in several Indonesian cities in August 2024, while more than 500 delivery riders in Hong Kong staged a lunchtime walkout in March 2024.
In September 2022, UK-based food delivery app Deliveroo exited Australia, citing tough economic conditions and increasing pressure to treat its 15,000 riders as employees. Regulators in APAC are increasingly responding to these growing calls for better worker protections in the gig economy
Lexology PRO explores how jurisdictions in APAC are approaching gig workers’ protection and provides key takeaways for employers.
How are jurisdictions in APAC approaching gig workers’ protection?
Lawmakers across APAC are increasingly responding to these growing calls for better worker protections in the gig economy. Several court cases have also set important precedents, recognising gig workers as employees in certain instances. The rulings reflect the legislative changes for clearer regulation to ensure fair treatment and benefits for gig workers.
Rules to protect gig workers
Jurisdictions across APAC are taking diverse approaches to extend labour protections to the emerging gig economy workforce. Several countries have implemented new legislation to safeguard gig workers’ rights and welfare. For example, Australia’s amendment to the Fair Work Act 2009, which went into effect on 26 August 2024, extends labour protections to “employee-like” gig economy workers. The act grants gig workers minimum standard orders, raises disputes over unfair termination, and accesses collective agreements with unions.
Similarly, Singapore passed the Platform Workers Act 2024 on 10 September 2024, designating platform workers as a new distinct category separate from employees and self-employed. The new law provides platform workers benefits such as Central Provident Fund (CPF) contributions, work injury compensation, and collective representation.
Meanwhile, Japan has taken a different strategy by extending similar protections to its existing Subcontract Act 1956 to cover a broader range of freelance and contractor arrangements. The country’s Freelance Act 2023, which went into effect on 1 November 2024, aims to address inequality in business relationships rather than explicitly addressing gig workers’ employment status.
Other jurisdictions are also introducing rules governing laws. India’s Karnataka state released a draft “right-based bill”, which would impose obligations on aggregators for social security, occupational health and safety, and improved working conditions. Elsewhere in the country, Rajasthan was an early mover, passing the gig workers law on 24 July 2023, which regulates platform-based work and provides social benefits.
Malaysia’s government is preparing to table new legislation to safeguard the gig workers’ welfare, local media Bernama reported on 28 October 2024. The proposed law aims to provide labour protection for gig workers, including employees’ provident fund, social security, and medical treatment costs.
Judicial developments in gig worker classification
Alongside legislative efforts, courts have played a role in addressing gig workers’ employment status. On 28 August 2024, New Zealand’s Court of Appeal upheld the Employment Court’s ruling that four Uber drivers were employees, not contractors. The court found that the “level of control exercised while a driver is logged in is consistent with an employment relationship during those periods”. Following the judgment on 15 September 2024, the Kiwi government announced plans to amend the Employment Relations Act 2000 in 2025. The bill would introduce a gateway test to determine whether a worker is a contractor or an employee.
Similarly, South Korea’s Supreme Court recognised a ride-hailing platform gig driver as an employee of the app operator. The court concluded that the platform’s significant control over the driver’s work through the app’s features and algorithms was sufficient to establish an employment relationship, entitling the driver to the protections under the Labour Standards Act 1997.
Key takeaways for employers
Reassess the type of workforce and contractor agreements
Businesses should evaluate their genuine need for gig workers and whether existing policies address this distinct workforce category. Such contract agreements should withstand increased scrutiny over worker classification. For example, New Zealand’s proposed gateway test mandates written agreements to explicitly classify whether a worker is an independent contractor or an employee. Employers should avoid overly restrictive terms, like forbidding the worker from taking additional work, while maintaining flexibility.
Update policies for employment practices
Companies engaging gig workers should conduct a thorough review of existing arrangements, including control mechanisms and platform processes. Following South Korea’s case, employers should examine how their operational structures and incentive systems could indicate employment relationships. This includes evaluating platform features like monitoring, performance metrics, and reward systems.
Determine the legal status and rights of the gig workforce
The evolving landscape of gig workers’ laws may increase labour negotiations and potential disputes between platform operators and platform workers. Businesses should proactively prepare to engage collectively with gig workers on issues like wage structures, working conditions, and dispute resolution processes.