Theme: The Internet Gig Economy and the Transformation of Labor Relations 

Presenter: Luo Huanxin

      The theme of today’s presentation is The Internet Gig Economy and the Transformation of Labor Relations. This transformation can be understood from three dimensions. First, the internet gig economy itself constitutes a transformative new form of economic development. Second, against the backdrop of the flourishing sharing economy, it delivers a revolution in the application of labor laws. Third, given the current predicament of labor relationship identification brought by the above two factors, if we can work out a feasible solution to this problem, such solution will become the most far-reaching transformation of all.

      This presentation centers on two key academic works: Professor Arun Sundararajan’s monograph The Sharing Economy——The end of employment and the rise of crowd-based capitalism, and a co-authored paper by Professor Seth D. Harris and Professor Alan B. Krueger titled A proposal for modernizing labour laws for twenty-first-century work: The “Independent Worker”.

      This presentation will proceed along three lines of analysis: why transformation is needed, how transformation can be implemented, and how to assess such transformation.

Free Discussion:

Wang Tianyu, Associate Research Fellow, Institute of Law, Chinese Academy of Social Sciences:

      Regarding the issues concerning online platforms and labor law, two solutions have been mentioned just now: the third-path approach and the functionalist approach adopted in the United States. Both approaches challenge the existing legislative framework of labor law, or more precisely, the statutory framework governing service performance relationships.

      What exactly constitutes platform labor? Why do we examine the transformation of the legislative framework of labor law from the perspective of platform employment? First, platforms involving service provision obligations fall into two categories: self-governing platforms and organizational platforms. For platforms that act as organizers, their organizational models can be further divided into three forms. First, the platform directly hires workers under an asset-heavy model. Second, the platform engages workers through agents, which is currently the predominant model. Third, service providers recruited via app-based crowdsourcing. Based on an analysis of the characteristics of platform employment and the dilemmas encountered by courts in judicial practice, how should we regulate labor law issues arising from platform work? We must first classify different types of platform employment, and then determine whether a labor relationship exists and whether labor laws are applicable. A functionalist approach combined with the idea of portable benefits can be adopted as concrete solutions.

Zhang Jiyu:

      When we conduct research on emerging legal issues, the key point to bear in mind is that all legal concepts carry inherent value judgments and are rarely mere factual descriptions. I believe the paper advances several guiding principles and then proceeds by matching practical demands with corresponding institutional arrangements, selecting the most viable options from those principles and institutions — this forms its core line of reasoning. The first two principles it puts forward function to define the scope of discussion from two respective dimensions. The first principle aims to include a specific group of workers within the scope of our research subject, whereas the second serves to exclude certain platforms or identify which platforms should be covered in our analysis. The third principle is seemingly the only one connected with statutory legislative concepts, focusing on efficiency. From the author’s research perspective, sorting out efficiency-related issues thoroughly can resolve practical dilemmas, such as determining which party shall purchase insurance and bear tort liability.

Ding Xiaodong, Associate Professor, Renmin University of China Law School:

      I would also like to put forward an underdeveloped idea: to restructure labor law drawing on the doctrines of trust rules and fiduciary duties. This framework may first be piloted for labor law matters arising from online platforms, before being extended to other types of employment platforms. At its core, this approach transcends the confines of contractual rules and assesses enterprises’ employment liabilities based on standards and principles such as the duty of care and the obligation to act in the other party’s best interests. Admittedly, rules have their merits: they are more definite compared with standards and principles. However, many issues in labor law are inherently interconnected. For example, disputes over working hours are to a large extent rooted in wage-related problems. From a jurisprudential perspective, rigid rules are often ill-suited for issues that cannot be judged in a formalized and static manner. By way of illustration, resolving disputes within family relationships through mechanical rules frequently leads to unsatisfactory outcomes; evaluating the conduct of family members generally relies on standards and principles instead. That said, this does not mean standards and principles can readily resolve family disputes; it merely means rules are even less suitable for such cases. Labor law historically evolved out of domestic service law and factory legislation. While labor law does not have to adopt the exact evaluative standards and principles from these two legal domains, re-examining the framework of trust obligations and fiduciary duties in terms of legal structures and institutional design allows us to explore alternatives for a more rational labor law system.

Xiong Bingwan, Research Fellow, Renmin Law and Technology Institute, Renmin University of China:

      Empirical research on the types of relationships between platforms and users. Mr. Wang Tianyu mentioned the three current forms of organizational platforms. The two forms with larger numbers of personnel are direct employment by platforms and employment by platforms through agents, both of which can be identified as labor relations, while the third form, app-based crowdsourcing, employs fewer workers than the first two. Specific employment conditions definitely vary across different platforms, yet we may select certain platforms to conduct empirical research through surveys to figure out whether gig workers or full-time workers account for the majority.

      Judicial adjudicative methodologies for emerging platform-related legal issues. This bears certain connections to my recent research on judicial behavioral science in professional claim-chasing cases. In professional claim-chasing litigation, some judges hold inherent aversion to professional claim filers and possess multiple means to dismiss their claims. For instance, a judge may rule that labeling a fabric as cotton containing 96% cotton content does not constitute fraud, whereas in a comparable case involving fabric marked as cotton with merely 69% cotton content, the judge may characterize the claimant as a professional claim filer rather than an ordinary consumer on the ground that the claimant has filed an extensive number of lawsuits in prior proceedings.

      The Inclusiveness Dilemma of Classical Legal Concepts. Historically, the criteria distinguishing labor from non-labor status did not exist from the outset. Such criteria emerged alongside the formation of labor relations, were continuously reinforced, and eventually evolved into a widely accepted binary classification. When confronted with shifting social contexts and novel legal issues, most legal actors instinctively resort to this established framework for interpretive analysis.

Shen Chen, Postdoctoral Research Fellow, Renmin University of China:

      Beneath today’s core theme lies an important subsidiary question: whether a platform shall bear compensation liability once damage occurs. To my understanding, resolving this issue through the analytical lens of labor relations constitutes a constructive approach. By affirming the existence of a labor relationship between the platform and its personnel, we arrive at the conclusion that the platform shall bear liability for work-related injuries, or that the employer shall assume tort compensation liability for losses inflicted upon third parties. However, as Mr. Wang pointed out earlier, the very existence of a labor relationship is questionable in itself. In fact, this issue presents an entirely different resolution approach when analyzed from the perspective of tort law. Under modern tort law theory, there are two possible jurisprudential grounds for imposing tort liability on enterprises. The first is the "profit plus deep pocket" theory. To elaborate: where an enterprise gains profits from a given activity and possesses substantial assets to pay damages, such risk losses may be allocated to the enterprise from the standpoint of result-oriented risk allocation rules. Admittedly, an implicit prerequisite is omitted here—the probability of such risk losses materializing must be minimal; otherwise, the allocation would be inequitable. This jurisprudential rationale is applicable to online platform services. The second theory is the "control theory", which holds that an enterprise bears the obligation to compensate for risk losses if it exercises corresponding control over the occurrence of risks. For example, among the three classifications mentioned by Mr. Wang, the normative justification for imposing liability on the platform is highly compelling where a relationship of subordination exists between the worker and the platform; as such subordination fades, the legitimacy of holding the platform liable diminishes correspondingly. In addition, there exists another market-based rationale for platform liability: where a platform transaction may give rise to substantial losses, consumers tend to expect the platform to assume guarantee liability; absent such liability, consumers would likely decline to enter into the transaction altogether. Under such circumstances, platforms are willing to expand their potential market scope by accepting liability—naturally, they may further transfer such risks by purchasing insurance policies. In conclusion, my general view is that all dimensions of worker welfare arising under labor relations can be analyzed item by item within the online context. At the very least, issues concerning liability for work injuries and compensation to third parties do not necessarily need to be examined through the framework of labor relations.

Editor:Xu Liuya

Reviewer: Zhu Peiwen