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Refocus on gig workers

  • Published
    3rd May, 2023

The recent strike by Zomato-owned Blinkit delivery agents has once again brought to the forefront the issues plaguing the gig economy in the country and the reforms required to stop the exploitation of such workers.

Who is a ‘gig worker’?

  • Gig workers refer to workers outside of the traditional employer-employee relationship.
  • There are two groups of gig workers—
    • Platform workers: When gig workers use online algorithmic matching platforms or apps to connect with customers, they are called platform workers
    • Non-platform workers: Those who work outside of these platforms are non-platform workers, including construction workers and non-technology-based temporary workers.

2022 report by NITI Aayog estimates that nearly 23.5 million workers will be engaged in the gig economy by 2029. 

Are gig workers ‘employees’ or ‘independent contractors’?

  • Whether gig workers should be categorised as ‘employees’ or as ‘independent contractors’ has been a frequent debate. 
  • However, given the unique nature of gig work, gig workers display characteristics of both employees and independent contractors and thus do not squarely fit into any rigid categorisation.
  • As a result, gig workers have limited recognition under current employment laws and thus fall outside the ambit of statutory benefits.

Benefits available to Employees and Contract Labourers

  • Employees are entitled to a host of benefits under statutes such as the
    • Minimum Wages Act, 1948
    • Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (EPFA)
    • Payment of Bonus Act, 1965
  • Contract labourers are governed under the
    • Contract Labour (Regulation and Abolition) Act, 1970
    • They are also entitled to benefits such as provident funds in accordance with the EPFA

What is the proposed law for gig workers?

  • In keeping with the National Commission on Labour’s recommendation to consolidate central labour laws, the Ministry of Labour and Employment introduced the Code on Social Security, 2020 which brings gig workers within the ­ambit of labour laws for the first time.
  • Definition: Under Section 2(35) of the Code, a ‘gig worker’ is defined as a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship’.
  • Benefits: Although the Code recognises ‘gig workers’ including platform workers, it distinguishes between such workers and employees.
    • While employees have benefits such as gratuity, employee compensation, insurance, provident fund, and maternity benefits, the Code only stipulates that Central and State Governments must frame suitable social security schemes for gig workers on matters relating to health and maternity benefits, old age security, education, provident funds, accident benefits, life insurance, disability insurance among others.
  • Compulsory registration: The Code also mandates the compulsory registration of all gig workers to avail of benefits under the social security fund for gig workers.
    • National Social Security Board: The Code also envisages the constitution of a National Social Security Board by the Central government to monitor the implementation of such schemes.

What are the major concerns?

  • Exclusion from major security codes: Out of the four new labour codes proposed, gig work finds reference only in the Code on Social Security. As a result, gig workers remain excluded from vital benefits and protections offered by other Codes such as minimum wages, occupational safety and health benefits, and overtime pay.
  • Limited rights: They cannot create legally recognised unions and access a national minimum wage that applies to all forms of employment.
  • No guarantee on minimum wages: The proposed law does not guarantee minimum wages for gig workers.
  • No remedy for grievances: Gig workers also remain excluded from accessing the specialised redressal mechanism under the Industrial Disputes Act, of 1947, thus denying them an effective remedy for grievances against their employers. 

Global Examples:

  • UK Supreme Court: In 2021, in a landmark judgment, the UK Supreme Court classified Uber drivers as ‘workers’ under the UK Employment Rights Act 1996, thus entitling them to various benefits like paid holidays and minimum wages.
  • Dutch High Court also handed down a similar ruling, stating that the legal relationship between Uber and the drivers meets all the characteristics of an employment contract, making them entitled to workers’ rights under local labour laws.
  • The Superior Court of California struck down a 2020 ballot measure known as Proposition 22 that excluded gig workers from labour laws by declaring them ‘independent contractors’.
  • Germany’s Temporary Employment Act provides for equal pay and equal treatment of gig workers.
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