Introduction
Legal relationships between flexible labourers and enterprises in gig economy
Fair employment, pay, rest and leave
Work safety, social insurance and protection for occupational injury
Rules and algorithm of platform enterprises and establishment of trade unions
On 4 January 2022, the Human Resources and Social Security Bureau, together with other local Shanghai authorities, published the Implementing Opinions on Protection of Labour Security Rights and Interests of Labourers in Gig Economy (the Implementing Opinions). The document further interprets and implements the Guiding Opinions on Protection of Labour Security Rights and Interests of Labourers in Gig Economy (the Guiding Opinions), which eight national authorities, including the Ministry of Human Resources and Social Security, published on 16 July 2021.
This article provides an overview of how the Implementing Opinions intend to achieve the provisions of the Guiding Opinions in Shanghai.
Legal relationships between flexible labourers and enterprises in gig economy
The Implementing Opinions follow the Guiding Opinions as regards the identification of legal relationships and rights and obligations between flexible labourers and enterprises in the gig economy. Such legal relationships are divided into the following three categories.
Employment relationship
For this category, the Implementing Opinions provide that enterprises may conclude employment contracts with labourers and abide by employment laws and regulations where the following conditions are met:
- the company is eligible to offer employment and the labourer is eligible to work for such company; and
- employment management systems exist within the company.
Companies should also abide by the relevant laws and regulations when engaging part-time employees and distributing labourers.
Quasi-employment relationship
For this category, the Implementing Opinions provide that, where employment management systems exist and labourers comply with the algorithms that platform enterprises use for work distribution, companies should enter into written agreements with labourers on rights and obligations, including:
- remuneration;
- working hours; and
- occupational protection.
Currently, most platform enterprises in the market apply algorithms to manage labourers; therefore, such employment shall be regulated within this category.
Civil relationship
The Implementing Opinions are consistent with the Guiding Opinions with regard to this category – they provide that labourers who rely on platforms to carry out business independently or engage in freelance work should be deemed as establishing civil relationships with enterprises. Therefore, they should abide by civil laws rather than the restrictions listed in the other two categories.
Fair employment, pay, rest and leave
The Implementing Opinions provide that enterprises shall not restrict labourers from entering into service relationships with multiple platforms. Trade unions are encouraged to negotiate with industrial associations and leading enterprises on collective contracts and industrial labour quota and piece rate for labourers. The hourly wage paid by enterprises to labourers for normal work shall not be lower than the local minimum wage standard. Finally, enterprises should formulate reasonable rules on rest and leave, and pay remuneration should be higher than normal remuneration standards for labour that is provided on statutory holidays.
Work safety, social insurance and protection for occupational injury
The Implementing Opinions provide that enterprises are urged to strictly abide by the laws and regulations related to safety in production for all labourers. Enterprises should instruct and help labourers in quasi-employment relationships take out social insurance policies that are relevant to the nature of their work. Further, platform enterprises are encouraged to purchase personal accident insurance, employer liability insurance and other commercial insurance for labourers.
Rules and algorithm of platform enterprises and establishment of trade unions
The Implementing Opinions provide that platform enterprises should formulate and revise the rules and algorithms that directly affect the rights and interests of labourers as regards:
- platform engagement (onboarding and offboarding);
- order distribution;
- piece work;
- commission ratio;
- remuneration structure and payment;
- working hours; and
- rewards and punishments.
Companies shall not strictly apply algorithms as a means of assessing labourers or handing out punishments.
Trade unions should expand their coverage of labourers in the gig economy and encourage leading platform enterprises and their affiliates to establish trade unions in accordance with the relevant laws. Trade unions should also actively negotiate with industrial associations, leading enterprises or their representatives to establish collective agreements and formulate industrial labour standards on:
- labour quotas;
- rest;
- piece work; and
- commission ratio.
More details on the implementation of the Guiding Opinions are expected as they move beyond the current policy level.
For further information on this topic please contact Haifan Zhao or Libo Zhao at JunHe by email ([email protected] or [email protected]). The JunHe website can be accessed at www.junhe.com.