Companies nowadays resort to employing independent contractors rather than employees while still exercising control over the activities of the independent contractors over the work they do for the Organization. This is to reduce the cost of running an organization and also reduce employment-related liabilities. Workers who are employed under this model are referred to as gig workers.
Although a gig worker is usually engaged under a contract for service and therefore referred to as an independent contractor which is a prominent attractive feature in the gig economy for employers, they are not entitled to benefits provided for typical employees. The traditional workspace has been impacted by the rise of the gig economy post-COVID-19, characterized by short-term, or freelance employment.
Definition of Key Terms
The gig economy refers to the use of temporary or freelance workers to perform jobs typically in the service sector. It is characterized by flexibility, zero-hour contracts, self-employment, workers paid for limited contracts, and people engaging in more than one job.[i] The Gig economy can be used to describe the advent of companies that do not offer any direct services of their own but act as intermediaries between workers and customers.
A freelancer is an individual who earns money on a per-job or per-task basis, usually for short-term work as an independent contractor. A freelancer is not an employee of a firm and may therefore be at liberty to complete different jobs concurrently by various individuals or firms unless contractually committed to working exclusively until a particular project is completed.[ii] They do not enjoy statutory benefits and protections which an employee ordinarily enjoys.
What is the Gig Economy? Right of Freelancers in Nigeria
The gig economy is gradually growing in Nigeria as a result of the unemployment or underemployment rate in the country. At this point, there is a need for a judicial pronouncement or legislative intervention on the subject matter.
In Nigeria, the gig economy is growing but there is no classification of the categories that freelancers fall under. The classification of gig workers in Nigeria remains stagnant. The case of Oladapo Olatunji & Anor (Representing themselves and other Uber and Taxify Drivers in Nigeria in a Class Action) v. Uber Technologies System Nigeria Limited & 2 Ors[iii] would have been an opportunity for the National Industrial Court to address the issue of the status of Uber drivers under the Labour Act. In this case, the claimants brought an action against Uber imploring the court to declare them employees of Uber under section 91 of the Nigerian Labour Act due to the control exercised by Uber in terms of training, mode of transportation, and weekly wages earned. The claimants hinged their argument on the control test and sought an order that Uber remit their pensions to the pensions fund administrator. However, the case was dismissed for lack of evidence by the claimants to prove their case. The disposition of the courts in the United Kingdom on the subject matter however differs. In the case of Uber BV & Ors v Aslam & Ors[iv] have held that Uber drivers are employees and should be accorded the rights of an employee. While foreign case laws have persuasive authority, the National Industrial Court can borrow cues from the United Kingdom’s position to put to rest the subject matter in Nigeria. Also, it is hoped that further cases will be tested before the National Industrial Court to get its definite position on the subject.
Section 91 of the Nigerian Labour Act, is silent on the definition of an employee which then raises questions on the legal status of gig workers. However, the Act defines ‘workers’ to mean any person who has entered or works under a contract with an employer for manual or clerical labor whether written or impliedly expressed.[v]
Challenges of the Gig Economy
Although the gig economy seems to be the new norm among certain organizations, it is not without its own shortcomings. Some of them are:
- Lack of Legal Protection
Unlike traditional employees that are covered by the Nigerian Labour Act, freelancers are not covered by the Act and this makes them vulnerable to exploitation and makes it difficult for them to advocate for their rights.[vi]
- Financial Instability
These freelancers are not entitled to the same benefits as traditional employees. They are also vulnerable to layoffs, and job losses due to economic fluctuations, which can lead to financial instability
There is a need to strike a balance between traditional employees and freelancers. This is to safeguard the interest of the freelancers just like the traditional employees. This will create fair labor laws that give freelancers legal protection and benefits. Some recommendations that can help to foster the growth of the gig economy in Nigeria include:
The Labour Act should be reviewed to include the rights of freelancers and should be recognized as employees so they can get the benefits associated with being an employee under the Act.
Just like The National Bar Association or any other profession in Nigeria that belongs to one Association or the other, freelancers should be allowed to create their own Association in order to enable fair representation with platforms.
Freelancers should be aware of their freedom to exercise their rights and overcome potential obstacles.[vii] They should also be aware of their rights and obligations and how they can seek redress.
The gig economy is basically freelancing and short-term work enabled by internet networks. However, it is important to emphasize the need for cooperation between governments, businesses, and workers to build a proper legal framework to include freelancers. If this is not done, the gig economy may be infeasible to work in Nigeria.
Gig workers can be recognized under a separate category named the independent employee different from the traditional employee and independent contractor under the law. This is because the new class will capture the shift in workplace operations caused by technology and the dependence of gig platforms on revenue from gig workers to ensure decent working conditions. The Nigerian courts should take a cue from jurisdictions with different positions on the subject with a view to judicially determining the issue in line with global standard practice.
[ii] https://www.investopedia.com/terms/f/freelancer.asp accessed on 19/09/2023
[iv]  UKSC 5
[v] Labour Act 2004, S. 91
[vi] https://blog.lenco.ng/the-gig-economy-the-rise-of-freelancers-and-workers/ accessed on 18/09/2023
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