New research from researchers at Erasmus University Rotterdam and Oxford Internet Institute highlights how marketplace structure influences the impartiality of dispute handling by labour market intermediaries.  Lead author Dr Gretta Corporaal, Assistant Professor in Organisation and Digitization, Rotterdam School of Management, Erasmus University Rotterdam, explains more.

Introduction

Imagine putting in hours of hard work, only to be denied payment due to a misunderstanding or technical error. For many gig workers, this is a common issue. As the gig economy evolves, so do the mechanisms for resolving conflicts between gig workers and their clients. A study by Gretta Corporaal and Vili Lehdonvirta, “Resolving Disputes in mediated Gig Work, is the first to examine the role of labour market intermediaries — companies that connect gig workers with clients — in handling work disputes. It reveals how the fairness of their dispute resolution is influenced by the social structure of their marketplaces. This blog breaks down the key findings and their implications for gig workers, intermediaries, and policymakers.

Understanding Common Disputes in the Gig Economy

Gig work disputes involve issues such as payment delays, premature contract terminations, skill mismatches, performance disagreements, or even harassment. Gig workers, typically classified as independent contractors, lack many protections full-time employees have. Labor market intermediaries, such as digital platforms and staffing agencies, can potentially take on a valuable role in managing disputes, through offering alternative dispute resolution (ADR). Yet, the challenge is ensuring their marketplace ADR processes treat both workers and clients fairly.

Through interviews, field observations, and internal documentation, the researchers analyzed how two types of labor market intermediaries — a digital labor platform and a temporary staffing agency — handle disputes. The researchers focused on what influences the impartiality of their dispute resolution processes. The key question: What factors make some ADR processes fairer than others?

The Role of Marketplace Structure

The study found that the social structure of intermediaries’ marketplaces — whether relational or transactional in nature — plays a crucial role in the impartiality of dispute resolution by intermediaries.

• Relational marketplaces, such as those of certain staffing agencies, rely on long-standing client relationships, making it harder to ensure neutral outcomes. Intermediary dispute handlers may prioritize client satisfaction, often to the detriment of gig workers. When combined with commission-based pay, this leads them to side with clients in disputes to secure future business.
• Transactional marketplaces, such as those of digital labor platforms, provide more neutral dispute resolution processes. Labor platforms use technology to match clients and contractors, and dispute handlers do not have prior relationships with either party. This results in more formalized, impartial dispute handling, as the platform benefits from retaining both clients and contractors.

Implications for Workers, Intermediaries, and Policymakers

This research underscores the importance of fair and transparent dispute resolution in maintaining trust in the gig economy. For gig workers, having their grievances addressed impartially is essential for fostering a sense of fairness and encouraging ongoing participation in gig work. Many workers are vulnerable due to their independent contractor status, making robust, unbiased ADR systems crucial.

For intermediaries, establishing clear and structured dispute resolution processes is equally important. Providing information on the types of conflicts that can arise in mediated gig work, the process for filing a dispute, along with clarity on how intermediaries act to resolve them, can also aid intermediaries in educating users about acceptable and unacceptable behavior in their marketplaces. Digital platforms, in particular, seem to benefit from leveraging technology and maintaining neutrality through formalized procedures in delivering fairer outcomes compared to traditional intermediaries.

The study identifies several opportunities to improve dispute resolution in the gig economy. A key insight is the significant role policymakers, especially in regions like the European Union, can play in making ADR provision mandatory for all labor market intermediaries. Existing laws frequently overlook independent contractors, leaving them with limited legal recourse. Policymakers should mandate that all labor market intermediaries, including gig platforms and staffing agencies, have an ADR process. The study also highlights the need for oversight to prevent biased practices. Regulation should specify certain procedural standards to ensure the impartiality of ADR and both clients and workers receive equitable treatment. Finally, policymakers must address the legal rights of contractors. Empowering workers to appeal to their legal rights in disputes, rather than solely interests, would greatly enhance the efficacy of ADR in ensuring fair working conditions across the gig economy. By implementing these measures, we can create a more balanced and just environment for all participants in the gig economy.

Conclusion

As the gig economy continues to evolve, the need for fair dispute resolution is more crucial than ever. This study shows that the market context of gig work shapes the impartiality of ADR by labor market intermediaries. Intermediaries with neutral, formalized systems tend to provide fairer outcomes, whereas those that rely on long-standing client relationships may favor clients. Unbiased dispute handling is key to worker income security while intermediaries benefit from improved relationships and continued marketplace participation of workers and clients. Policymakers must prioritize regulations that ensure transparent and fair ADR processes across all platforms and labor market intermediaries.

About the study

‘Resolving disputes in mediated “gig” work: How marketplace structure influences the impartiality of dispute handling by labour market intermediaries’, Greetje F. Corporaal, Vili Lehdonvirta is published open access in the journal New Technology, Work and Employment. 

About the authors

Greetje (Gretta) Corporaal is Assistant Professor in Organisation and Digitization, Rotterdam School of Management, Erasmus University Rotterdam.  Corporaal is a former Postdoctoral Researcher at the Oxford Internet Institute. Find out more about her work.

Vili Lehdonvirta is Professor of Economic Sociology and Digital Social Research at the Oxford Internet Institute, University of Oxford. Lehdonvirta is also a Senior Research Fellow of Jesus College, Oxford, an associate member of the Department of Sociology, Oxford, and a former Turing Fellow of the Alan Turing Institute, London.  Find out more about his work.