South Africa’s Gig Economy Workers Set to Get More Protection Under Planned Labour Law Reforms

South Africa’s minister of employment and labour has published a sweeping set of proposed amendments to the Basic Conditions of Employment Act, the Employment Equity Act and the National Minimum Wage Act.

The aim is to

modernise key labour laws and introduce practical measures aimed at improving job security, promoting fairness, and extending fundamental rights to vulnerable and previously excluded categories of workers.

For workers on digital labour platforms, who access task-based work opportunities through an app, one amendment is particularly significant. Amendment 50A introduces expanded definitions of employer and employee that could extend labour and social protections to platform workers. These include minimum wages, paid leave, social security, occupational health and safety coverage, and the right to collectively bargain.

Until now, platform companies have largely avoided national regulations by presenting themselves as intermediaries rather than geographically tethered service providers. But the tide is turning as governments and international standard-setting institutions move to regulate the platform economy.

South Africa’s labour law amendment is a part of this broader global effort. Propelled by platform worker organising, several countries, including Kenya, Egypt and Nigeria, have introduced regulations for ride-hailing services. At the international level, member states of the International Labour Organization are expected to adopt new standards for platform work later this year. However, as one of the South African negotiators recently remarked, “the discussion about the platform economy … {is} like a battlefield”.

For the last five years the Future of Work(ers) research group at the Southern Centre for Inequality Studies has studied how digital labour platforms are restructuring the world of work and emerging efforts to regulate platform companies across Africa. Kenya has taken a sectoral route targeting e-hailing. South Africa’s approach is broader, but has the potential to exclude those who are in fact self-employed.

Our latest paper, Who counts as a worker?, explores the tensions inherent in regulating a sector defined by diverse and shifting work arrangements.

Why definitions matter

How workers are classified determines what rights they can claim, who they can claim them from and what kinds of benefits they can access.

South African labour law establishes minimum standards for employees.

These include:

• minimum wages and deductions
• working hours and overtime pay
• paid leave and parental benefits
• health and social protections
• disciplinary procedures
• collective bargaining.

But platform companies have got around minimum standards by classifying workers as independent contractors rather than employees. The result is that working conditions are precarious. Platform workers work long hours, for low and unpredictable pay, with no health and social protections. And they bear the brunt of operational costs and risks. All while paying commissions to the company.

Platform companies insist that workers are self-employed. Yet the companies exercise high levels of control over the labour process through task-based work allocation and algorithmic management. Through a punitive system of ratings, suspensions and deactivations, platforms unilaterally shape the terms of work. In a recent survey conducted by the International Labour Organization, platforms argued that although workers were self-employed, they should not be allowed to refuse tasks or disconnect from the app.

The battlefield of definitions

It is likely that platform companies will challenge attempts to reclassify workers as employees. After all, calling workers self-employed has been integral to their business model. In Kenya, for instance, platform companies launched multiple legal challenges against new regulations. They have argued their cases on the grounds that:

• the government lacked jurisdiction over their operations
• labour minimum standards infringed on competition law
• the regulations discriminated against migrant workers.

These challenges were shot down by the courts.

How will this amendment affect workers’ lives?

The proposed amendment to South Africa’s law does not regulate platform companies directly. Instead, it says that unless proven otherwise, a person who provides services to another is an employee, regardless of the employment contract. This is in accordance with the National Minimum Wage Act.

The employer has to prove that workers are genuinely self-employed. To qualify as self-employed, a worker must be able to exercise autonomy over the labour process and operate independently from the organisation of the employer.

Labour protections can be extended to platform workers in at least two ways.

The first is through sectoral determinations, made by the labour minister. These are useful in sectors where unionisation and collective bargaining is weak. They can be tailored to the specific dynamics of a sector, so that regulations improve conditions for vulnerable workers.

However, the existing sectoral determinations are not well suited to the reality of platform work. For example, workers may earn rates that appear to exceed the national minimum wage. Yet, their take-home pay may fall well below minimum levels, once investment and operational costs are factored in.

Similarly, conventional conceptions of ordinary hours of work may not reflect how the work is organised on a platform. And existing sectoral determinations don’t address questions like:

• the term of algorithmic management
• the ownership, governance and use of the vast amounts of data generated by workers
• the integration of third parties, such as fintechs, on the platforms
• the regulation of deductions, including commissions and service charges.

A second way to regulate platform work is to establish a bargaining council for the platform economy. This model would give greater voice to workers and employers in shaping the conditions of work in this emerging sector.

Given that governments are still trying to catch up to digitalisation, collective bargaining may offer more innovative and appropriate regulatory responses. Governments can then extend bargaining council agreements to all firms in the sector.

Workers’ voices

Regulations must be designed carefully to ensure that they strengthen rather than undermine platform workers’ power and agency. As our latest working paper notes, the platform economy encompasses diverse forms of work and varying degrees of subordination. As we recently discussed in a webinar, it is critical that platform workers’ organisations be included at the negotiating table. As our working paper argues, these definitional questions are more political than technical.

Ruth Castel-Branco receives funding from the International Development Research Group, FutureWORKS Collective: ESA.

Brenda Mwale receives funding from the Department of Science, Technology and Innovation.

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