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UNCTAD 15 Youth Talks: Leveraging the Digital Economy to Create Decent Work

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Continuing with our partnership with UNCTAD15 Youth Talks, Associates Joyanne Njau and Boru Jattani close the year by sharing the crucial legal aspects to be considered by the youth when using the digital economy to create work.

Catch up with the series and earlier editions on the Red Cross Kenya Youth Facebook page.

Leveraging the Digital Gig Economy to create Decent Work: Crucial Legal Issues

Nearly every young Kenyan envisions the trajectory of their lives. Pertinent to their goals is often absorption into the labour force upon successful completion of their core academics. However, for many of Kenya’s youthful citizens, more particularly, for the youth from Kakuma refugee camp, finding a job in the mainstream labour market remains an enormous challenge. Many young workers have been subjected to non-standard informal and less secure forms of employment, and still face high rates of poverty. Remarkably, this is not unique to Kenya but is in actual fact a global issue traversing jurisdiction which is prevalent even in middle- and high-income economies, especially during this COVID-19 pandemic.

To this end, there has been consistent clamor for decent work; opportunities for everyone, especially the youth to get work that is productive, which delivers a fair income, ensures job security and offers social protection for families. This is in line with UN SDG 8 which promotes sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. There has also been increased adoption of disruptive technologies giving rise to the digital economy in the face of the global fourth industrial revolution.

The digital economy

The digital economy involves an economic activity that results from everyday online connections between people, devices, businesses and data through digitally enabled infrastructure and digital media. In Kenya, digital transformation is rapidly changing our economy by creating new jobs and entirely new fields of work. For instance, there are many ecommerce digital platforms such as Jumia which have employed youths in different capacities such as programmers and content creators. Additionally, there has been a warm reception to the digital gig economy which has created an opportunity for economic self-reliance especially for the youth instead of relying only on employment.

What is the digital gig economy?

The gig economy refers to a labor market that is characterized by the prevalence of independent, temporary work that is conducted on a short-term or a task-by-task basis, and payment is received upon the completion of these tasks. This differs from traditional employment which is characterized by eight-to-five working hours and a monthly salary, or contractual employment. It allows youths to work on separate pieces of work for which they are paid separately rather than work for an employer This is done through offering services on websites or selling goods and services on social media apps such as Facebook and Instagram. For instance, many youths now offer services through apps such as taxi ride app Uber.

Through these apps, youths are now able to offer services right from the comfort of their space to clients who are scattered all over Kenya and beyond. Recent research from Mercy Corps shows that this has especially been enabled by Kenya’s high mobile penetration and relatively high internet speed making the digital gig economy suitable for most youths. This goes a long way in showing that digital technologies are a crucial source of economic dynamism and create opportunities for job creation.

Legal issues to consider while working in the digital gig economy

While the digital gig economy is a win in the pursuit of decent work, it attracts its fair share of legal issues and challenges which the youth must not only be aware of but must also effectively steer to mitigate any risks. These are highlighted below:

  1. – The digital economy largely depends on exchange of data which in some cases is personal data protected under The Data Protection Act, 2019. Inadequate understanding of the data protection law as well as little to no compliance exposes the youthful workers to possible breach of the client’s data rights and may eventually have serious financial repercussions on the worker and his business.

To overcome this, the youth need to familiarize themselves with the basic principles of the Data Protection Act. Where possible, a gig worker should seek the professional advice of a lawyer to help them expound on what is required and how to ensure compliance. This will build trust for the worker’s output and business.

  • – With the digital economy, there is no need for physical intrusion or theft rather, the economy can be sabotaged through technology. Cyber threats range from ransomware attacks to critical infrastructure attack.

There is therefore need for cyber resilience to ensure that an organization or individual worker and his business while leveraging on the digital economy for decent work can prepare, respond and recover appropriately should a cyber-attack occur. Consider: –

  • (IP) – Often times, intellectual property owners such as programmers and content creators in the digital economy do not benefit from their work because they are unaware of their IP rights. Consequently, when presenting information digitally, it is necessary to ensure that you are aware of your rights and take the necessary steps to ensure protection for your inventions. Consider fundamental issues such as who is the owner of the end product or who is liable for infringement should it occur. This way, the worker is able to gain financial benefit from the work offered or invented and cushion himself should there be infringement.
  • – Recently, the Digital Services Tax was introduced which is levied on income from services provided through the digital marketplace in Kenya. The tax is 1.5% of the gross transaction value and becomes effective from 1st January 2020. Consider monitoring transactions done online to ensure that you can account for the tax levied and remit this for account keeping as evading the tax will result in penalties. Although specific regulations pertaining to the tax are yet to be put in place, we anticipate that this will be done soon. There is therefore need for a gig worker to ensure compliance with the tax requirements.
  • – The gig economy is redefining work as we know it. For instance, there is no need for physical presence when executing work. Due to the different work landscape presented, it has been argued that gig workers do not enjoy important worker benefits and protections, such as health care, minimum salary guarantees and worker’s compensation. This raises the need for labour conversations around gig workers, especially as a national issue since most gig workers are within the youth bracket. There would be need for a freelancer/ worker in the digital economy to seek adequate compensation for breaches occasioned during working relationships in the digital gig economy.

In conclusion

Clearly, the digital gig economy is emerging as a smart solution to youth unemployment and creates an avenue to them to get decent work. The youths can gain financial independence by upscaling their digital skills and utilizing these skills to reach for decent work within the gig economy.  While they eagerly reach out and seize these opportunities, there is need for them to embrace legally sound solutions to ensure that they mitigate the risks that come with the digital economy.

The upcoming 15th UNCTAD quadrennial conference (UNCTAD15) will present the world with the opportunity to address some of these legal and economic challenges faced by the youth. It is important for the 195 member States present at the conference to resolve to embrace the digital economy as a mode of creating employment for the youth. Kenya in particular, as member state, should resolve to create awareness on the opportunities available in the gig economy as well as create platforms for the youth to be digitally empowered so as to be self-reliant. Ultimately, this will not only be a financial gain for the individual working youths but also an economic gain for the nation as a whole.

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