Untangling Labour Disputes in China’s Platform Economy: A Growing Challenge

The International Labour Organization's (ILO) 2024 report, "Resolution of Labour Disputes Involving New Forms of Employment in China," highlights the complexities of resolving labour disputes in the growing platform economy. As new forms of employment continue to rise, disputes involving delivery workers, ride-hailing drivers, and internet marketers have become increasingly common. The study addresses the challenges in identifying employers due to complex outsourcing chains, the need for updated legal frameworks to recognize “incomplete employment relationships,” and the necessity of adapting labour regulations to the digital management systems used by platforms. With a growing demand for clearer regulations, the report calls for more defined rules and protections for workers in these new employment structures.

A New Frontier in Labour Disputes

With the rapid growth of the platform economy in China, a new type of employment landscape is taking shape. Millions of workers are now engaged in gig work, from food delivery to ride-hailing services, relying heavily on digital platforms to connect with jobs. However, this modern form of employment is bringing unique challenges to labour rights and dispute resolution. The International Labour Organization’s (ILO) 2024 report, "Resolution of Labour Disputes Involving New Forms of Employment in China," sheds light on the rising complexities of labour disputes and the evolving nature of employment relations in China.

The report primarily focuses on the legal status of these workers and the obstacles they face in securing fair compensation and recognition of their employment status. While the platform economy has provided new employment opportunities, it has also led to disputes centered around identifying the true employer and understanding the obligations and responsibilities in these non-traditional work arrangements. As the platform economy continues to grow, so does the need for updated regulations and legal clarity.

Identifying the Real Employer: An Elusive Task

One of the key findings of the report is the difficulty in determining the true employer in disputes involving gig workers. Unlike traditional jobs where the employer-employee relationship is clearly defined, the platform economy often involves multiple layers of subcontracting and intermediaries. This complex web of relationships makes it challenging for workers to establish who their legal employer is when disputes arise.

In many cases, platforms intentionally distance themselves from the employer role, utilizing third-party contractors or service agreements that mask the true nature of the employment relationship. As a result, workers find themselves in a legal gray area, unsure of whom to hold accountable for workplace issues such as wage disputes, work-related injuries, or wrongful termination. The ILO report emphasizes that this ambiguity not only complicates dispute resolution but also weakens workers’ ability to assert their rights.

Algorithmic Control: A New Form of Management

Another major challenge highlighted in the report is the role of algorithmic management in the platform economy. Companies like Meituan and Didi use sophisticated digital tools and algorithms to control everything from worker assignments to performance evaluations. These systems, while efficient, are not covered under traditional labour regulations, which were designed for workplaces managed by human supervisors.

The report points out that most of the evidence related to employment disputes is now stored digitally, whether it be app logs, location data, or messaging records. This digitalization of work relationships makes it difficult for workers to present clear evidence in disputes and for legal bodies to assess the legitimacy of claims. Traditional labour regulations do not account for the nuances of algorithmic management, creating a gap in the protection of workers’ rights. The ILO urges the introduction of new legal standards that can better address these realities.

Addressing the Gap: A Call for Legal Reform

The ILO report calls for urgent reforms to China’s labour dispute resolution framework, suggesting that the existing legal basis—Document No. 12—is not sufficient to address the complexities of modern employment arrangements. The report also discusses the Guiding Opinion on Protecting Labour Rights and Interests of Workers in New Forms of Employment, issued by the Chinese government in 2021, which aimed to bridge some of these gaps. However, the lack of clear enforcement mechanisms and specific definitions has limited its effectiveness.

A notable recommendation is the need to recognize “incomplete employment relationships,” a new category introduced in the Guiding Opinion. This term refers to workers who, while not fully employed by the platform, are still subject to its control and management. Without proper recognition, these workers fall outside the protection of traditional employment laws, leaving them vulnerable to exploitation.

The report proposes reforms that include clearer criteria for determining employment status, better definitions of digital evidence, and a stronger regulatory framework to oversee platform companies. By establishing new rules for algorithmic management and redefining the boundaries of employment relationships, the report envisions a future where workers in new forms of employment are better protected.

A New Era of Employment Relations

As China’s platform economy continues to expand, so do the complexities of labour relations within it. The ILO’s report underscores the urgent need for updated legal frameworks that can keep pace with the rapidly changing nature of work. Without clear regulations and stronger protections, millions of workers in new forms of employment will remain in a precarious position, unable to assert their basic rights.

The ILO’s recommendations offer a pathway to a more equitable labour market, but the question remains: Will the legal system evolve quickly enough to meet the needs of this modern workforce? As the platform economy continues to redefine what it means to work in China, the answers to these questions will shape the future of employment for years to come.