Knowledge Highlights 4 November 2025
Key features of Malaysia’s Gig Workers Bill 2025
On 9 September 2025, Parliament passed the Gig Workers Bill 2025 (“Bill”). This represents a milestone for Malaysia as the Bill is among the first legislative measures of its kind internationally, introducing provisions governing the engagement of gig workers. The Bill will come into force on a date to be appointed by notification in the Government Gazette.
This article sets out the key features introduced by the Bill.
Background
Since the 1990s, terms such as “atypical workers”, “non-regular employees” and other similar expressions have gained prominence globally, reflecting the increasing prevalence of short-term contracts or freelance work. The legal classification of such workers was unclear, often occupying a grey area between traditional employment and self-employment. The uncertainty surrounding such classifications has prompted judicial interpretation. For instance, the Court of Appeal in Loh Guet Ching lwn Menteri Sumber Manusia dan lain-lain (Civil Appeal No. W-01(A)-447-08/2021), had decided that a Grab driver engaged under a contract for services, did not qualify as a “workman” under the Industrial Relations Act 1967 (“IRA 1967”).
The Bill has now defined a gig worker as a citizen or permanent resident in Malaysia entering into a service agreement with a contracting entity (“gig worker”). A contracting entity is an individual or a corporation, including platform providers that enter into a service agreement with a gig worker in exchange for earnings (“contracting entity”). Some examples of a gig worker include actors, film production crew, other workers in the entertainment industry, beauty stylists, caregivers, and photographers. Additionally, services that connect users or facilitate transactions over the internet are referred to as “digital intermediary systems” and providers of such systems that enable gig workers to offer services to users are defined in the Bill as “platform providers”.
The Bill seeks to address challenges faced by gig workers such as ambiguous work arrangements, arbitrary conduct by employers or platform providers, limited access to dispute resolution mechanisms, and the absence of social security contributions.
Key obligations for contracting entities
The Bill introduces minimum contractual, operational, and procedural standards that contracting entities must comply with when engaging gig workers.
Introduction of compulsory terms to be included in contracts with gig workers
All service agreements between gig workers and contracting entities must include mandatory terms as specified in the Bill to ensure parties are aligned on key conditions before services begin:
|
· Parties to the agreement |
· Period of the agreement |
|
· Services provided by the gig worker |
· Obligations of parties |
|
· Rate and details of earnings of gig worker |
· Method of payment of earnings |
|
· Any relevant benefits a gig worker is entitled to |
|
Prohibition to terminate without just cause or excuse
Gig workers cannot be terminated from their service without just cause or excuse. While the phrase “just cause or excuse” is attributed to those defined as “workman” under section 20 of the IRA 1967 this prohibition may now be extended to gig workers.
Freedom to participate in activities organised by gig workers’ associations
Any agreement that purports to restrict a gig worker from taking part in activities organised by a gig workers’ associations will be void.
Gig workers across all freelance industries may form associations without interference from contracting entities. However, the Trade Union Act 1959 and the IRA 1967 have yet to be amended to allow gig workers to organise into trade unions.
Right to earnings
In the absence of a formal service agreement between gig workers and the contracting entity concerning payment for services rendered, the contracting entity will be required to remit payment within seven days of completion of the service. Non-compliance would constitute an offence.
Right to be heard
Deactivation from a digital intermediary system may only be carried out in accordance with the terms and conditions of the service agreement or in cases involving misconduct. Any deactivation may not exceed 14 days without an inquiry being conducted. Although the Bill does not define the term “inquiry”, it prescribes a minimum standard requiring gig workers be given adequate notice and an opportunity to be heard.
Where the deactivation is effected in line with the terms and conditions of the service agreement, the gig worker’s access to the digital intermediary system will be terminated within seven days.
Social security contributions
Registration under the Self-Employment Social Security Scheme will be compulsory for gig workers engaged through platform providers. Contracting entities must deduct social security contributions from the gig workers’ earnings and pay to the Social Security Organisation (SOCSO) on their behalf.
Introduction of dispute resolution framework
The Bill introduces a structured pathway for resolving disputes between gig workers and contracting entities, moving from internal resolution to assisted settlement via conciliation, culminating in referral to the new Gig Workers Tribunal where necessary.
The Bill does not address limitation periods for the filing of various employment-related complaints. Contracting entities should therefore be aware that disputes may still arise even after time limits applicable to conventional employment claims have lapsed.
Internal dispute resolution mechanism
Contracting entities will be required to put in place an internal grievance mechanism through which gig workers may lodge complaints and resolve disputes. Complaints must be heard within 30 days of being lodged. However, the grievance mechanism will not apply to contracting entities that are individuals or sole proprietors or to cases involving potential deactivation from digital intermediary platforms.
Conciliation
Where disputes remain unresolved after internal processes, the matter may be referred for conciliation - a facilitated settlement process under Part IV of the Bill. The Director General and/or Deputy Director General for Industrial Relations, or any officers appointed under subsection 2A(2) of the IRA, may act as the Conciliator.
Gig workers may refer a dispute for conciliation in the following instances:
- Complaint is against a contracting entity that is an individual or a sole proprietor;
- Gig worker is dissatisfied with being deactivated from the digital intermediary system;
- Contracting entity does not have an internal grievance mechanism;
- Gig worker is dissatisfied with the outcome of the internal grievance mechanism; and
- Dispute was not resolved within 30 days of being lodged.
Where a Conciliator is satisfied that there is no likelihood of the dispute being resolved, the Conciliator shall refer the matter to the Gig Workers Tribunal.
Gig Workers Tribunal
Part V of the Bill addresses the establishment of the Gig Workers Tribunal (“Tribunal”). The Tribunal will be empowered to hear and determine all matters referred to it by the Conciliator and may grant any award it deems just and appropriate. The Bill does not provide guidance on monetary awards that may be awarded by the Tribunal, which may increase the financial exposure for contracting entities. It should also be noted that contracting entities are unable to appoint legal counsel to act on their behalf in proceedings before the Tribunal. The Tribunal’s decision will be binding on the parties to the proceedings and appealable to the High Court.
Conclusion
The Bill introduces a new regulatory landscape that contracting entities engaging gig workers will need to navigate with care. While the framework represents a modest yet meaningful shift towards recognising and safeguarding gig workers’ rights, it also imposes concrete operational and compliance obligations on contracting entities. The implementation of these requirements may evolve over time, particularly as further regulations and guidance are issued.
Contracting entities should therefore take steps now to ensure readiness, including:
- reviewing and updating service agreements to ensure compliance with the Bill; and
- establishing or strengthening internal dispute resolution mechanisms to effectively address disputes with gig workers.
Further information
This article has been prepared with the assistance of Associate Carmel Grace Phillip.
