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Labor issues of gig economy workers

Last year and in the succeeding months, as majority of Filipinos stayed indoors in compliance with quarantine measures imposed by the government to arrest the spread of COVID-19, online sales and delivery businesses boomed.

Through text messages, apps and other internet-based means of communication, residents of urban areas were able to have perishable and nonperishable products brought to their homes by motorcycle riders.

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These delivery riders provided families a link to food outlets and shops whose operations were substantially restricted, but were allowed to accept online orders.

The employment conditions of these riders, including those of motorcycle taxi drivers and Grab car drivers, are the subject of a resolution of Sen. Risa Hontiveros for the Senate to look into reports of unstable working conditions of these so-called gig economy workers so Congress can enact the proper legislation for their protection.

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The resolution defines gig economy as “new technology enabled forms of work, often temporary and flexible, utilized by companies that rely primarily on independent contractors and freelancers.”

These workers are treated and paid as independent contractors, not employees, by the businesses that engage their services. Based on that employment status, they do not enjoy standard employment benefits, such as 13th month pay, vacation and sick leaves and retirement pay.

A cursory review of the terms and conditions of the riders’ services shows these workers do not fall squarely within the employment categories cited in the Labor Code that justify the grant of those employment benefits.

They are in between regular employment and employment for a piece of work or a fixed period.

If a rider performs his or her services exclusively for the benefit of a business establishment and is required to maintain fixed hours of work, he or she is considered a regular employee and therefore entitled to all benefits that accrue to that status.

But that is not the case for all businesses that provide delivery services to their customers.

To minimize operating expenses, especially now when COVID-19 continues to put a damper on business activities in the country, those businesses prefer to enter into “on-call” or part-time working relationship with delivery riders.

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In an “on-call” arrangement, the riders are asked to make deliveries only when needed and they are available at the time the request is made. In “part-time” arrangements, the riders indicate the particular hours of the day or night they can do deliveries for a particular business establishment.

Since there is no assurance the delivery requests from one or two business outlets would generate a fair wage for the day, riders sign up with other businesses in a business area to provide delivery services to them, too, when they are not on call or their scheduled delivery hours are over.

This way, the riders are able to maximize their earnings within their chosen working hours or, if the opportunity presents itself make several deliveries from different businesses in one trip and save on gasoline.

In this situation, if the “control” and “payment of wages” criteria set by the Labor Code as determinative of the existence of an employment relationship are applied, all the businesses that engage the services of a rider shall be considered his or her employer.

As employers, all of them would have to pay the employer’s premium contribution and deduct from the riders’ pay their contribution to the Social Security System, Pag-Ibig and Philippine Health Insurance Corp.

In case the riders get sick, they have to pay them sick leave benefits. Come the holiday season, they have to pay a 13th month pay computed on the basis of the wages they received.

There is no question the government has to review the existing employment conditions of gig economy workers to prevent their exploitation.

But that should be done without minimizing the value of the technological advances that have given rise to that economic order and putting additional burden on businesses that have yet to recover from the pandemic’s adverse effects. INQFor comments, please send your email to [email protected]

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TAGS: Business, economy workers, Labor
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