The platform-based gig economy has been consistently growing in size over the years with an increasing number of companies operating in the digital space. The gig workforce is expected to expand to 23.5 million workers by 2030 as per a NITI Aayog projection. While the gig economy has transformed the world of work in many ways, it has opened up new challenges as well.
A major concern is the ambiguity regarding the employment status of gig workers. The Social Security Code (SSC) 2020 defines a gig worker as “a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship”.
This raises questions as to whether gig workers are partners of aggregator companies such as Swiggy, Ola, Uber etc. or to be considered as their employees. The debate becomes salient when lack of social protection, long working hours, and precarity and instability in employment characterises the work lives of most platform- based gig workers.
While the SSC 2020 explicitly mentions that welfare schemes by the Central and the State governments will be notified from time to time for gig and platform workers, it does not place any obligations on part of the aggregators. As Prof. Babu Mathew explains to the Supreme Court Observer, these welfare schemes depend on the whims of the central and the state governments and are arbitrary in nature.
They cannot be compared to the social security measures that is afforded to formal sector employees in the form of provident fund, employees state insurance, workmen’s compensation, sickness and disability benefits etc.
Karnataka Platform Based Gig Workers Bill 2024
With an aim to protect the rights of gig workers, the Karnataka government recently presented the draft of the Karnataka platform- based gig workers (Social security bill and welfare) Bill 2024. The bill has come at a time when there are growing protests and agitations by gig workers across major cities in India.
They have expressed concerns over arbitrary dismissals by aggregator companies on grounds of poor rating by clients and inability to maintain a certain response rate when placed with service requests. The Bill includes major reforms such as protection against arbitrary dismissals by insisting on 14-days’ notice by the aggregator establishing the reasons for dismissal; establishment of a welfare board with contributions from the aggregator company, the state and the central government; and access to social security schemes as notified by the state government from time to time.
However, the Bill falls short of clarifying the employment status of a gig worker. The Bill identifies a gig worker as “a person who performs work or participates in a work arrangement that results in a given rate of payment, based on terms and conditions laid down in such contract..”
There is ambiguity in the term ‘work arrangement’ as it does not specify the exact nature of employment relations between the aggregator and the gig worker, thus, leaving it to subjective interpretation. It is also not clear as to who decides the ‘terms and conditions of the contract’ which by far has been determined by the aggregator companies.
Although, the Bill imposes obligation on the aggregator to notify the gig worker of any changes in the terms of the contract not less than 14 days of the proposed change, it does not guarantee that the original terms of contract are fair to the workers. It is, thus, not clear from the Bill as to how the government will ensure ‘fair contracts’, as it claims.
The legal angle
Gig workers lose much of the standard social protection and regulated working conditions when categorised as independent partners/contractors rather than as employees. In recognition of the struggles of gig workers, the Supreme Court allowed a public interest petition filed by trade unions in December 2021 arguing that gig workers are not independent contractors; rather they are workers as per the Unorganised Workers’ Social Security Act and hence, must be considered under various labour legislations.
Earlier, in 2019, the Indian Federation of App-based Transport Workers (IFAT), a union that includes gig workers working for companies like Ola, UBER, Zomato and Swiggy had also filed a petition with the Supreme Court that the current contractual arrangements between gig workers and aggregator companies does not recognise gig workers as ‘workmen’ or ‘employee’ and therefore, is a violation of their right to constitutional equality.
Thus, the plea was to recognise gig workers as ‘unorganised workers’ so that they could be included in the social security laws. Unfortunately, these cases are still pending and no ruling has come from the Supreme Court addressing the employment status of gig workers in India.
However, there is hope that collectivisation through gig worker groups, trade unions and NGOs, will necessitate policy responses that would recognise gig workers as ‘workmen’ or ‘employees.’ It is encouraging to note that some countries have passed favourable legislations in this regard. For instance, in the UK, the Supreme Court ruled out the classification of Uber drivers as self-employed contractors given the complete control Uber has over their income shares, the work process and the services provided.
Spain passed a regulatory initiative known as the Riders’ Law in 2021 which provided employee status for riders of app based platforms. Contrary to expectations, the legislation did not result in the collapse of online food delivery system but rather doubled the number of full-time dependent workers.
In India, with the publication of the Karnataka Draft Bill for Gig Workers, there is fear of the tables turning. The industry body Nasscom has already expressed concerns about how the bill might affect the ease of doing business in India due to the obligations imposed on aggregators to provide disclosures on algorithmic monitoring and reasons for termination of gig workers.
But it is important to note that algorithmic monitoring of gig workers resulted in uncertainties and irregular work scheduling and sometimes even dismissals for the workers. For instance, drivers and delivery persons could never understand how they are matched to certain service orders, or why sometimes they were charged hefty ‘miscellaneous’ fee by companies. The requirement of mandatory disclosures on monitoring will hopefully tilt the balance in favour of gig workers.
The Karnataka Gig Workers’ Bill might not have resolved the obscurities around the employment status of gig workers but surely is a right step in the ongoing quest to improve the rights and social protection of gig workers. The Bill is likely to be tabled in the Karnataka assembly next week and if passed, will go a significant distance in addressing the long-standing concerns of gig workers.
Divya Pradeep is faculty of Economics at Christ University, Bengaluru.
