A gig worker is a person who earns income by completing short-term tasks or “gigs”, usually through digital platforms or independent arrangements, rather than working under a permanent contract of employment. The legal framework of gig workers is now governed by the Gig Workers Act 2025 (“The Act”) as the gig economy continues to expand.

Traditionally, employment protection in Malaysia is tied to the classification of an individual as an “employee” under the Employment Act 1955. However, gig workers are typically engaged under contracts for service and therefore fall outside the scope of statutory protections such as minimum wage, paid leave, and protection against unfair dismissal.

At the heart of the issue, the legal question lies in whether gig workers should properly be classified as independent contractors or as employees in substance. Malaysian courts have traditionally applied tests such as the control test, integration test, economic reality test, and mutuality of obligation to determine employment status. Nevertheless, while gig workers are contractually labelled as independent, platform operators often exercise considerable control over key aspects of their work such as job allocation, performance evaluation and pricing.

This raise concerns that the current classification framework is depriving gig workers of protection. The issue was illustrated in the case of Loh Guet Ching v Menteri Sumber Manusia & Ors [2022] MLJU 2503, which involved an e-hailing driver whose account was terminated. The applicant sought to challenge the Minister’s refusal to refer her unfair dismissal claim to the Industrial Court. However, the application was dismissed, and it was held that she was an independent contractor rather than an employee and therefore not entitled to pursue an unfair dismissal claim.

In response, the Gig Workers Act 2025 was introduced, which became effective on 31 March 2026. The Act aims to address loopholes concerning gig workers. For instance, Section 3 of the Act states that every service agreement must specify essential terms such as the parties involved, nature of services, rate of earnings, and payment method, thus ensuring contractual clarity and transparency. Furthermore, Section 8 of the Act sets out the rights of gig workers, where they are entitled to be informed of the terms and conditions of their engagement, rate and details of earnings, receiving payment within the agreed period, to be consulted on any variation of contractual terms, and, importantly, not to be terminated without just cause or excuse. Other than that, Section 12 of the Act restricts unlawful deductions from earnings, while Section 13 of the Act allows gig workers to request an earnings slip, thereby enhancing transparency and accountability in payments.

While the introduction of the Act marks a significant improvement, gig workers are not classified as employees and therefore remain outside the full range of traditional labour protections.

In conclusion, the Gig Workers Act 2025 represents a progressive step to regulate the gig economy by providing essential safeguards. Ultimately, its effectiveness depends on how well it balances the need for flexibility within the gig economy with the provision of adequate worker protection. As the gig economy continues to evolve, the Act provides a foundation upon which future legal and policy developments can build to ensure a fair and sustainable working environment.