India is home to the second-largest gig economy globally, with approximately 56% of all the gig workers in the Asia-Pacific region operating within the country, according to the International Labour Organisation (ILO). TeamLease Services reports that the gig economy is driving job growth in India, accounting for approximately 56% of new employment opportunities across both blue and white-collar industries. Similarly, Ernst & Young highlights that nearly one in four gig workers worldwide are in India. A January 2020 projection by ASSOCHAM anticipated a compound annual growth rate (CAGR) of 17% for India’s gig economy, reaching $455 billion by 2023, a figure corroborated by Nasscom.
The NITI Aayog’s 2022 report on the gig economy estimates that there are 77 lakh gig workers in India, comprising about 1.3% of the total workforce. However, sources in the industry believe the actual number to be about thrice that figure. One estimate based on data from the Centre for Monitoring Indian Economy (CMIE) says that platform workers form only 2.4% of the total urban workforce (Arya, 2023).
Despite this significant growth, regulation in India’s gig economy remains limited. Platforms often categorise workers as ‘contract workers,’ denying them access to employee benefits such as minimum wages, overtime compensation, annual leave, severance pay, pension pay, employee provident fund (EPF) accounts, and anti-discrimination laws. The design and structure of these platforms also isolate workers, making collaboration and unionisation challenging. Legislative efforts like the Code on Social Security introduced in 2020 aimed to protect gig workers by extending social security protections, but critics argue that it falls short of expectations. The Code mandates companies to allocate a percentage of their gross annual turnover to social security for gig workers, but concerns persist about its implementation, potential income reductions, and the lack of a clear accountability mechanism.
Given these challenges, it is imperative to establish comprehensive legal frameworks to ensure the fair treatment and protection of gig workers. The proposed Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, seeks to address these issues by providing structured social security benefits and welfare measures for gig workers.
Also read: India’s Gig Workers Remain Undocumented, Unprotected
The Karnataka draft Bill is aimed at mandating app-based delivery and ride-hailing platforms to provide social security benefits to gig workers while also proposing various welfare measures. This Bill, now open for public feedback, seeks to protect workers’ rights and ensure basic social security by imposing fees on transactions and penalties for non-compliance. Drawing inspiration from Rajasthan’s legislation, the Bill includes provisions for a grievance redressal mechanism and safeguards against illegal termination.
The strength of the Bill lies in the establishment of a welfare board and a dedicated fund for gig workers. Discussions with major platforms and the International Labour Organisation (ILO) have shaped this comprehensive approach as per reports.
Strengths of the Bill
The formation of the Karnataka Platform-based Gig Workers Welfare Board ensures a structured approach to addressing gig workers’ issues, providing a platform for their representation and advocacy. The Bill also ensures compulsory registration of gig workers and aggregators that aids in creating a comprehensive database, facilitating better policy implementation and worker benefits.
The proposed draft Bill takes a crucial step towards ensuring the financial well-being and social protection of gig workers by establishing a welfare fund, subsidised by welfare fees and government grants. Moreover, the Bill’s emphasis on transparency in automated monitoring systems and fair contract provisions is a positive development, promoting accountability and equity in the gig economy.
Interestingly, this Bill introduces penalties for non-compliance by aggregators, ensuring they adhere to the provisions and obligations set forth. This includes penalties for failing to register gig workers, not contributing to the welfare fund, or violating contract terms of the draft Bill. However, the penalties are designed to enforce compliance rather than being excessively punitive. The goal seems to be to encourage aggregators to cooperate and comply with the regulations rather than to punish them harshly.
The Bill also mandates that any agreement between an aggregator and a gig worker must include an exhaustive list of grounds for termination. Aggregators cannot terminate a gig worker’s contract without valid reasons and must provide a prior notice of 14 days, ensuring job security and fair treatment.
Aggregators are required to inform the welfare board about any deductions in payments to gig workers and provide valid reasons for these deductions. This ensures transparency and accountability in financial transactions, protecting workers from unjust deductions.
Grievance redressal system
The grievance redressal system in the Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, provides gig workers with a structured and accessible mechanism to address their complaints and disputes. Gig workers can file a grievance in person before a grievance redressal officer appointed by the state government or through a dedicated web portal.
The grievance redressal officer will be responsible for conducting inquiries and resolving complaints. Specific procedures for handling and disposing of grievances are prescribed by the state government to ensure consistency and fairness. Gig workers can appeal decisions within ninety days to an appellate authority. Additionally, aggregators with over fifty registered workers must establish an Internal Dispute Resolution Committee (IDRC) to resolve specific disputes within thirty days. Each worker is also provided with a human point of contact (POC) for clarifications, available in multiple languages.
The grievance redressal system requires for internal dispute resolution mechanisms and publicly available POC details contributes to greater transparency in handling grievances. The presence of an appeal mechanism and a structured committee for dispute resolution holds aggregators accountable for their actions and decisions.
Key areas for improvement
While the Bill has several strengths, here are a few considerations where it could be further strengthened.
Both Paigam (People’s Association in Grassroots Action and Movements) and a survey report by Janpahal, a Delhi-based non-profit highlight the need for mechanisms to enforce minimum wages to ensure a baseline income for gig workers and conduct regular assessments and adjustments to keep pace with inflation and the cost of living.
The survey conducted by Janpahal, covering over 5,000 gig and platform workers across 32 cities, reveals alarming statistics. A staggering 85% of drivers and riders work exceeding eight hours daily, with 21% putting in grueling shifts of over 12 hours. Moreover, these workers are denied fundamental financial benefits like health insurance and retirement plans. To combat burnout and ensure fair treatment, the Bill should mandate maximum daily working hours, compulsory rest periods, and at least one day off per week. By explicitly addressing these concerns, the legislation can secure fair compensation and job security for gig workers.
The section 35, subsection (iii) of the Bill provides for safeguarding the data of all platform gig workers to prevent misuse by platforms. Strengthening data privacy provisions will protect gig workers’ personal information and prevent exploitation.
Moreover, ensuring regular health and safety checks, providing necessary safety equipment, and training for gig workers are essential. The welfare board should oversee these aspects to improve working conditions. The Bill should also mandate aggregators to extend health insurance coverage for all gig workers, covering illness, injury, and maternity benefits.
The reports indicate that senior citizens over the age of 60 years significantly contribute to the gig economy. However, they are left out of the purview of section 6, subsection (ix). Including provisions for senior gig workers will ensure comprehensive coverage and support for all age groups.
The PAIGAM report and other sources have reported instances of workplace violence. The Bill should outline the role of aggregators within the IDRC between customers and gig workers to address and mitigate such incidents. According to the PAIGAM report, 64.3% respondents reported that they do not get support from companies when faced with violence at work.
The grievance redressal mechanism is an important aspect where the bill seeks to balance the interests of both the parties. By setting up a formal process for addressing grievances, it ensures that gig workers have a clear path to seek redress while providing aggregators with a structured process to handle complaints. Simplifying this process and ensuring its accessibility is crucial for it to be effective. The Bill’s focus on appointing a POC is a step in the right direction, but further measures could enhance its efficacy.
Without a well-defined process that safeguards the most vulnerable, any form of dispute resolution body, regardless of its intent to be congenial, voluntary, and non-oppressive, will not effectively serve these parties. Vulnerable workers are at risk of exploitation due to systemic disadvantages that extend from the unequal working relationship into the grievance redressal systems as well. If unchecked, redressal systems tend to replicate the existing power imbalances in the name of quick resolution. Therefore, the Bill should include detailed and systematic safeguards to protect their rights, ensuring that the grievance redressal process is truly equitable and accessible.
Gig workers may face significant challenges in navigating the grievance redressal system due to the demanding nature of their work and financial pressures. The PAIGAM report highlights that 40% of gig workers spend up to Rs 15,000 per month, with 66% spending up to Rs 20,000. Additionally, 36.8% report household expenditures between Rs 10,000-15,000 per month, and 68% say their expenses exceed earnings, leading to debt-like conditions. Difficulty in managing expenses is common, with 72.2% finding it hard to meet household costs, 80.3% of respondents are dissatisfied with their current fare, with high discontent in cities like Jaipur and Bengaluru. Despite these constraints, gig workers must navigate the grievance system efficiently by identifying issues, filing grievances either in person or through a web portal, utilising the POC for clarifications, tracking grievance status via SMS or email updates, appealing unsatisfactory resolutions within ninety days, and leveraging IDRCs for faster dispute resolution.
To enhance the accessibility and efficiency of the grievance redressal system for gig workers, several improvements are recommended: extending office hours for grievance redressal officers to better fit gig workers’ schedules; ensuring the web portal is mobile-friendly and easy to navigate; implementing automated status updates via SMS or email to keep workers informed; conducting awareness campaigns to educate gig workers about their rights and the grievance process; and providing support services such as legal aid or counseling to assist workers in navigating the grievance process effectively.
The proposed Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, does not address a significant area of concern for gig workers, that is, fuel costs for logistics. The PAIGAM report highlights that a substantial portion of gig workers’ daily expenditures is on fuel, with 57.75% spending between Rs 201-400 daily. This issue is particularly pronounced in major cities, with 39.8% of respondents in Delhi, 20.07% in Jaipur, and 17.01% in Hyderabad reporting high fuel expenses. Given the high cost of fuel, which significantly impacts gig workers’ earnings and financial stability, it is crucial for the Bill to incorporate measures that alleviate this burden. Potential solutions could include subsidies, fuel allowances, or partnerships with fuel providers to offer discounted rates for gig workers. Addressing fuel costs would ensure more comprehensive financial support and improve the overall economic well-being of gig workers.
Karnataka’s draft Bill for gig workers is a laudable initiative towards safeguarding their social security and welfare. However, to enhance its impact, the Bill can be refined by addressing key concerns highlighted in various reports. By incorporating provisions for minimum wages, regulated working hours, job security, data privacy, effective grievance redressal, ensuring workplace safety, and inclusive measures for vulnerable segments, the Bill can provide more robust protection and support, ultimately promoting the holistic well-being of gig workers.
Abhilasha Chattopadhyay is a freelance researcher with a PhD in Sociology.
