South African law is failing gig workers

In South African law, gig workers, such as Checkers Sixty60 drivers, are classified as “independent contractors” with limited labour protections or benefits. Photo: Tariro Washinyira

Gig work using digital platforms has exploded over the past decade. South Africa has been fertile ground for Uber, Checkers 60Sixty and Takealot. Sustained unemployment alongside high levels of urbanisation and wealth inequality has created a large population of people desperate for work. They have access to phones and the internet and they can provide middle- and upper-class households with cheap labour. But legislation falls short in protecting these workers.

The number of workers in the gig economy is uncertain. A 2020 estimate puts it at 30,000 full-time workers, but growing about 10% a year. Most gig workers in the country are in e-hailing services, such as Uber and Bolt. These have a combined 60,000 drivers on their system but not all the registered drivers are actually working for these companies at present and many drivers would be registered on both systems.

These services promote themselves as opportunities for independence, allowing drivers to set their own hours or earn additional income as a “side hustle”. But it also leaves them vulnerable to exploitation and with little recourse to legal remedies.

In South African law, gig workers are classified as “independent contractors”. Operating companies, such as Uber, Bolt and Pingo (responsible for administering 60Sixty drivers), benefit by keeping workers in a permanent state of uncertainty. There is little downside for these companies to onboard as many drivers as possible, and leaving the drivers to compete for limited work.

Gig workers are responsible for their own expenses. For drivers, this means covering the cost of fuel, maintenance and insurance. This eats into their already meagre monthly earnings, resulting in many gig workers earning well below the minimum monthly wage.

Platform work drives down wages. Globally, in comparison to their employed counterparts, independent gig workers earn 64% less for doing the same job, according to the International Labour Organisation.

Under current legislation, gig workers are also not entitled to paid leave or sick leave; they receive no medical aid or retirement fund contributions; and they can be dismissed arbitrarily without recourse to the Commission for Conciliation, Mediation and Arbitration (CCMA) or labour courts. Most digital platforms reserve the right to deactivate a user’s account for reasons that would not qualify as fair dismissal under South African labour law.

Uber SA v NUPSAW and Others

In 2016, seven Uber drivers approached the CCMA to argue they were unfairly dismissed when Uber deactivated their accounts. Although the drivers were categorised as independent contractors, union NUPSAW argued that the nature of the agreement between them and Uber SA was more like that of full-time employees.

Applying the “realities of relationship” test, the CCMA found in the drivers’ favour. It held that the relationship between Uber SA and the drivers was closer to a full-time employment relationship than to an independent contractor one.

Had the decision remained, this would have fundamentally changed the way platform services operated in South Africa.

However, the decision was appealed to the Labour Court, which found fundamental issues with the CCMA’s decision. The biggest of which was the CCMA’s refusal to attach Uber BV (Uber SA’s parent company) to the proceedings.

In its argument, Uber SA held that if there was any contractual relationship, it existed between the drivers and Uber BV, not Uber SA. Uber SA was simply responsible for onboarding and driver training, whereas Uber BV managed drivers on the Uber app and issued payments.

As they were not party to the proceedings in the Labour Court, it refrained from answering whether there was an employment relationship between Uber BV and the drivers.

For their legal status to change, another matter would need to be brought to court, which would likely result in a years-long fight ending at the Constitutional Court.

Lessons from abroad

While local attempts to address the challenges faced by gig workers have been unsuccessful, movements in other countries have changed the legal status of gig workers for the better.

Unlike South Africa, the UK recognises three distinct categories of workers: employees, independent contractors, and dependent contractors. In Uber BV and Others v Aslam and Others, Uber drivers in London won a substantial victory. The courts ruled that drivers are classified as dependent contractors any time they are logged on the app. The Supreme Court found that Uber falsely misrepresented the employment relationship to shield itself from responsibility for its drivers. As a result, drivers are entitled to paid leave as well as protection from arbitrary dismissals.

France has taken steps to strengthen the rights of gig workers. In 2021, the French Parliament passed a bill forcing employment platforms to cover the insurance for accidents at work. It also entitled gig workers to form unions and engage in collective bargaining.

Short of determined, legislative intervention to address these challenges, the task will fall on the drivers themselves to fight in court. Workers, who are already exploited, will face a legal battle against billion-dollar multinational corporations. While they may have the moral and legal standing for such a fight, they are unlikely to have the resources.

Nick Fabré is a writer at the People’s Legal Centre.

Views expressed are not necessarily those of GroundUp.

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