Regulatory Framework and the Protection of Basic Rights of Gig Workers

The article provides a detailed look into the present scenario of Gig Economy in India.
Naveen Kumar
Naveen Kumar

Introduction

The Joy built upon successful slaughter is not the right kind of joy, it will not do, it is fearful and it is trivial.

Ursula K. Le Guin

The gig economy, a burgeoning sector, represents a paradigm shift in traditional employment models, offering flexibility and autonomy to workers across various industries. Despite its benefits, the sector's rapid growth, particularly in urban India, has highlighted significant regulatory gaps, especially concerning the protection of gig workers' basic rights. The informal nature of gig work, mediated through digital platforms, poses unique challenges in ensuring fair labour practices and safeguarding workers' rights. Thus, there is a rising concern for the gig workers’ right to basic amenities as they move from one job to another quickly and don't have any substantive legal protection, and several times it can be extremely tough for them.

It is a free market system in which individuals or businesses employ an independent worker for a limited time for specific purposes. The term 'gig' originally came from artists describing short-term jobs. Gig workers often find work through online platforms that connect them with those who need their services. These platforms act as middlemen, managing the connections between workers and those hiring them.

Who is a Gig worker?

A gig worker is an individual who engages in temporary or short-term work arrangements, often as an independent contractor, outside the bounds of traditional employer-employee relationships. According to the Code on Social Security, 2020 [Section 2(35)], a gig worker is defined as someone who performs tasks or participates in work arrangements and earns from such activities independently. This definition encompasses various roles, including ridesharing drivers, food delivery couriers, freelance writers, graphic designers, and other service providers who offer their expertise on a project-by-project basis.

Present scenario of Gig Economy in India

  • India has become one of the world's top places for gig workers, ranking fifth - the USA, China, and Brazil, being the top three.

  • Approximately 15 million skilled individuals engaged in freelance work, representing nearly 40 per cent of freelancers worldwide.

  • Experts are predicting a growth rate of 17 per cent each year and reaching an estimated value of $455 billion by 2024. This growth might be twice as fast as experts thought before the pandemic. By 2025, it's predicted that there could be 350 million gig jobs in India.

  • Although India’s gig economy is booming, those employed at the bottom of the pyramid are subject to extremely difficult conditions. A recent multi-city survey, which covered over 10,000 cab drivers and delivery persons in cities, highlights several facts about the persisting issues in this particular sector which include long working hours, earnings that fall short of meeting household expenses, arbitrary deactivation and blocking of identity (ID) by platforms, and high physical and mental stress etc.

  • The report noted that 41 per cent of cab drivers and 48 per cent of delivery persons reported an inability to take even a single day off in a week. 86 per cent of delivery personnel also said that the 10-minute instant delivery was completely unacceptable to them. The lack of time off has been leading to burnout and negatively impacts the mental and physical well-being of these workers, as 99.3 per cent drivers reported one or more forms of physical health issues like body pain, and working in harsh weather etc. Similarly, 98.5 per cent of respondents reported one or more mental health issues as a result of this work, including anxiety, stress, panic, irritability, short-temperedness and panic attacks etc.

  • Nearly 83 per cent cab drivers reported working for more than 10 hours in a day, while 78 per cent delivery personnel worked for the same duration, showed the report titled “Prisoners on Wheels” based on a survey by the University of Pennsylvania and the IFAT.

  • The monthly earnings of the cab drivers and the delivery persons are below the basic pay scale leading to difficulty in managing household expenses, as experienced by over 70 per cent of them.

Charts detailing earnings of Cab Drivers and Delivery Persons
Charts detailing earnings of Cab Drivers and Delivery Persons

Legal Perspective

Four labour codes were passed to provide benefits to the workers working in unorganized sector. The Code on Social Security, 2020 [hereinafter referred to as the code] is one of the four labour codes introduced on the recommendation of the Second National Labour Commission and it amalgamated the nine enactments.

The Code also defines an “Unorganized Worker” under Section 2(86)12 , “self-employed worker” under Section 2(75), and “platform worker” under Section 2(61). Under Section 6 [mainly, Section 6(7)(a) and Section 6(7)(c)] of this code, a National Social Security Board is formed by the Central government which shall recommend the Central Government on framing suitable schemes for the for unorganised workers to exercise the conferred powers, and to perform the assigned functions etc. The board’s composition varies in different cases to make recommendations about the unorganized workers and Gig and Platform workers.

The Industrial Relations Code, 2020 a further codification that has been streamlined and unified the law, replaces three of India’s current labour regulations. By regulating terms of employment, dismissal, layoffs, strikes, lockouts, collective bargaining, trade union registration and recognition, and the resolution of labour disputes, the code intends to simplify and harmonize India’s industrial relations system. All employees - including platform and gig workers who are defined as individuals who carry out work or take part in a work arrangement outside of a conventional employer-employee relationship or contractual relationship - are subject to some of the provisions of the code. They do not, however, have the same rights and protections as ordinary employees because the code does not identify gig workers and platform workers as either labourers or employees.

Recent legislative initiatives, including the Code on Wages, 2019, and the Code on Social Security 2020, indicate a forward-thinking stride in the direction of acknowledging and attending to the distinct requirements of freelance workers. The purpose of these protocols is to provide safeguards to individuals working in the gig economy. These protections will include minimum wage requirements, social security benefits, and accident compensation. Despite these developments, such protections continue to be inconsistently enforced, primarily due to the ever-changing nature of the freelance economy.

Moreover, while not explicitly crafted for the digital age, the Contract Labour Act, 1970 and the Employment Compensation Act, 1923 contain provisions that may potentially apply to contract workers. Nevertheless, the complete implementation or judicial scrutiny of their applicability to the contract economy remains elusive, thereby exposing a substantial segment of the labour force to exploitation and deprivation of fundamental labour rights.

Loopholes in the Law

The principal flaw in the current legal structure pertains to its insufficient delineation and classification of contract work, resulting in an absence of preciseness concerning the obligations of digital platforms in relation to their employees. This ambiguity facilitates the continuation of gender inequalities, as women are frequently relegated to lower-paying sectors of the freelance economy and remain underutilized. Furthermore, due to the lack of legislation specifically designed for the contract economy, employees lack knowledge regarding their rights and the procedures necessary to pursue resolution for complaints.

Also, the overlap in definitions and the layout of the Code makes it complex, particularly when it comes to which specific schemes apply to specific categories of workers. While the entire Chapter IX of the Code is dedicated to unorganized workers, gig workers and platform workers, only Sections 112, 113 and 114 contain provisions relating to gig and platform workers.

Furthermore, the code fails to address the issues regarding fluctuation in income. For example, provisions related to provident funds are only beneficial in the long run but how are workers expected to pay for these from the already dwindling income from these sources? There is a section of gig workers that do not want social security if the workers themselves have to pay for it from their income. Although there is a provision in the code penalizing any deductions by employers from workers' income, the costs that gig worker employers are expected to pay for the benefits talked about in the Code, 2020, shall eventually impact the hiring of gig workers (as happened in the case of increased maternity benefit leave which instead led employers to hire fewer women employees) and the employers would not show on record the employment of gig workers.

In 2020 a draft labour code sought to define the status of gig workers who are outside the employer- employee status and suggested that they would be entitled to accident, health, retirement benefits which will be funded through contribution by the State and Central government as well as the platforms in a welfare fund. Unfortunately, the rules have not been framed at the all India level.

Safety and sexual harassment concerns serve to emphasize the deficiencies of existing legislation. Although the POSH Act provides a comprehensive definition of the workplace, its applicability to transient and digital environments utilized by gig workers is still uncertain. The Rajasthan Platform Based Gig Workers Act, 2023 establishes a precedent for comprehensive gig worker protection by being an innovative endeavour to address these gaps at the state level. However, a comprehensive nationwide framework that ensures consistent protection for gig labourers in every State remains absent.

Relevant Case Laws

The gig economy's legal landscape in India is gradually evolving, marked by pivotal litigation that sets precedents for the protection and recognition of gig workers' rights. Gig workers, represented by the IFAT, have filed a PIL before the Supreme Court, questioning the "Right to Social Security" for all working individuals, including those in the gig economy. The petition states that gig workers, employed by platforms such as Zomato, Swiggy, Ola, and Uber, should be considered as "unorganized workers" entitled to social security benefits under existing laws. It highlights the exploitation faced by gig workers due to long working hours, inadequate earnings, and lack of social security. The petition seeks specific schemes for health insurance, maternity benefits, pension, and other forms of assistance. The gig workers have challenged the notion of their relationship with platform owners being a partnership, asserting it as a de facto employer-employee relationship.

Another notable example is the case of All India Gig Workers Union v. Uber India Systems Pvt. Ltd., where gig workers have taken a stand against Uber's practices, challenging the company's refusal to provide minimum wages and social security benefits. This underscores the ongoing struggle for fair compensation and benefits in the gig sector, aiming to redefine the employer-employee dynamics within these digital platforms.

Conclusion

The recent studies conducted by many reputed organizations underscore the fact that while on one hand the entities which are enjoying the services of the gig-workers are commanding very high premiums and doling out very high packages to their top executives along with stock options whereas at the same time, the other lot (the gig-workers) are suffering abjectly due to complete neglect and miserable working conditions. Does it not raise a question as to whether we are enjoying the prosperity at the cost of those who are present at the bottom of the pyramid?

The necessity for a comprehensive regulatory framework that safeguards the fundamental rights of gig workers becomes progressively more evident as the gig economy progresses. By strategically addressing the existing legal vulnerabilities and consulting pertinent case laws, India has the potential to establish a digital labour market that is both more secure and equitable. The complete realization of the gig economy's potential to foster economic expansion and improve social welfare necessitates the collaboration of legislators, digital platforms, and gig workers universally.

About the author: Naveen Kumar is an Advocate-on Record at the Supreme Court of India and has appeared in several mining related cases before courts/ tribunals across India.

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