Contract 'of' or 'for' Service? Or a New Legal Creature? The Singapore Platform Worker’s Bill 

The Singapore Platform Worker’s Bill was passed on 10 September 2024, though, as at the time of the writing of this article, it has not yet come into force. 

It is heartening to know that efforts have been made to ensure that our gig economy is catered for especially individuals who operate on a platform basis. 

Although the official statistics indicate that this is a relatively small segment of the working population, the Singapore government has turned its attention to key issues faced by this workforce to ensure their rights are protected as they continue to provide services to the masses.  

There have been many discussions around the impact of having such legislation, and this has also led to corresponding changes made to the other laws, in support of, or to harmonise with, the new law. The longest discussion was in fact eight hours long – one of the longer parliamentary debates in recent times.  

Most of the discussions centre around potential rising costs that may come with the implementation of the new legislative requirements. There may indeed be additional considerations that may require fuller discussions, which we will take the opportunity to raise below.  

Potential curtailment of the autonomy to contract English common law lawyers, and that includes Singapore lawyers, easily recognises that one of the central theories that separate employees from contractors is that employees work under a contract of service, whilst contractors operate under a contract for services. 

A contractor has, in theory, a higher autonomy to negotiate his / her terms and perform his / her services with more independence. This independence is meant to manifest in differences in the way the law navigates issues ranging from termination rights, and costs to charge and contract out of non-compete provisions.  

Schedule 2 of the proposed Platform Workers Bill, however, is interesting in this regard. 

The Bill proposes that there are clauses, which will need to be included in the contract between the platform operator and the platform worker. These include restrictions on the platform workers to solicit for their own clients in the course of their operations and restrictions on the fees that can be charged to the clients.  

Before the passing of the law, it was not uncommon for private hire drivers to agree to certain arrangements with their regular customers so that in consideration of a more consistent driving schedule, they could charge a lower rate for such services. 

They even provide their alternative contact details to allow such customers to contact them should there be referrals. One query then is whether such an arrangement is prohibited by such provisions stated in Schedule 2.  

Further, under the newly introduced Section 77B in the Industrial Relations Act, even though the Industrial Relations Court is not to consider a dispute relating to the termination of a platform work agreement or make an award relating to the resumption of a platform worker’s provision of a platform service for a platform operator except in limited circumstances, the Minister of Manpower can decide on whether termination is rightful as the platform workers can make written representations to the Minister to request for resumption of provision of platform services. 

The decision of the Minister is final with no right to appeal. This newly introduced right could be said to circumvent the parties’ autonomy to enter into contracts for services given that in a typical civil claim dispute involving the termination of the contract of service, the courts have the right to hear such claims.  

Section 77B(8) of the Industrial Relations Act 1960 further provides that any direction of the Minister of Manpower under section 77B(5) of the Industrial Relations Act 1960 operates as a bar to any action for damages by the platform worker in any court in respect of the wrongful termination of the platform work agreement. This is rather unusual as it strengthens the earlier view that the Minister’s direction supersedes any potential civil action that may be pending.  

But what if the court in the civil action raised by the platform worker arrives at a decision before the direction of the Minister?  

In such a situation, does the Minister’s direction still supersede the court’s decision in the event that the decision is not consistent?  We await clarity over these questions since the issues do not seem to have been addressed in the changes introduced.  

Vicarious liabilities of the platform operator 

Another key difference between a contract of service and a contract for service lies in the liabilities of the employer as compared to that of a service recipient. 

In the former, there will be vicarious liability imposed on the employer for the acts of its employees and in the latter, it will depend on the contractual relationship between the service recipient and the service provider.  

Whilst the Bill has made platform operators liable to the platform workers for injuries they suffer in the course of their duties, akin to an employer-employee relationship, it is not clear if the platform operators will be liable to third parties who suffer injuries as a result of an incident in which the platform workers have been involved in. 

For certain categories of platform workers such as delivery drivers and ride-hailing workers, this may not be a substantial gap in that where such platform workers operate vehicles, there is already mandatory third-party liability insurance as part of operating the vehicle that is in place and the relevant insurance policies should then apply.  

However, what if the injury suffered is not a result of the usage of the vehicle? One example would be if due to the mishandling of food delivery by the platform worker, the food gets contaminated.  

In such a situation, should the platform operator be liable to a third party who suffered food poisoning as a result? Or what if a food delivery platform worker spills the food, and it is no longer edible as a result? In this case, can the platform operator be liable?

Facts may be further complicated if the platform operator, with the intent to ensure that the platform worker operates more safely when delivering food, mandates that all platform workers will have to use certain types of containers or delivery methods which were subsequently found to have contributed to more frequent food wastage or food contamination. 

Who should be liable to the consumers in this case? Will it be the platform operator or the platform worker?  

There may not be a simple answer to that question but as the platform operator increases the restrictions on the platform worker to operate, essentially requiring the platform worker to comply with more stringent controls to ensure that the platform operator minimises its exposure to work injury claims and/or work injury compensation, it can become increasingly unclear whether the platform worker is not truly an employee of the platform operator. 

After all, the independence of the contractor and his / her ability to execute his / her tasks in the manner he/she sees fit is a key distinguishing factor between an employee and a contractor. 

This brings us to the third potential area that we need to consider below. 

Will there be situations under which the relationship between the platform operator and platform worker becomes that of a contract of service rather than a contract for service? 

Section 5(1)(a) of the Platform Workers Bill defines a platform worker to mean inter alia an individual who “has an agreement (whether written or oral and whether express or implied) with a platform operator to provide a platform service in Singapore to service users for the platform operator. Section 5(2) of the Platform Workers Bill further clarifies that in section 5(1) of the Platform Workers Bill, “agreement” does not include a contract of service within the meaning given by section 2(1) of the Employment Act 1968.  

This raises the question of whether the relationship between a platform operator and a platform worker will ever be characterised as an employer-employee relationship or a contract of service.  

As mentioned in the earlier paragraphs, the initial intent of the Platform Workers Bill may not have been to create such a relationship or to re-characterise the relationship. However, the corresponding and resulting changes to the other legislations may make it increasingly difficult to make a distinction between a contract of service and a contract for service in the context of the platform workers.  

All in all, the platform operators should be increasingly more vigilant to understand if the measures that they are putting in place to either comply with their obligations under the corresponding legislations that have been revised as a result of the introduction of the Platform Workers Bill or to avoid incurring additional liabilities under those legislations can potentially change their relationship vis-à-vis the platform workers.  

Conclusion

This article raises more questions than answers about the relationship between the platform operators and the platform workers. It may also over time result in more questions to be raised between the characterisation of contract of service and contract for service which is currently a question that is still decided by the courts only, which in turn, is based on the facts of each case. 

Will the Platform Workers Bill change the way the courts will characterise a contract of service such that it may be increasingly more difficult to find a contract of service? If so, will this have further implications on how businesses operate going forward?  

Perhaps the questions might be clarified with subsidiary legislation or guidelines, and if so, maybe a good start is to move away from the use of the reference to “workers” but change it to a term that connotes more of a contract for service relationship. Perhaps platform “contractor”? 

Please note that the contents of this article do not constitute legal advice. Please reach out to the author(s) of this article if you wish to consult on the contents of this article.