Laws governing Gig Economy in India

2nd March, 2023 - 5:44 am Categories: GIg Economy labour Law 0 Comments

Introduction

The phrase “gig worker” describes a person who accepts a temporary job that must be finished in a specific amount of time under unusual working conditions. On the other hand, “platform workers” generally refers to employees who work for companies that offer services to customers directly through web-based platforms. Temporary workers’ share of the workforce has increased significantly as a result of their benefits, which include the ability to choose their workdays, holidays, shifts, and preferred organisations. Employees here have the flexibility to pick their organisation for as long they like, rather than being forced into a job. The gig economy has now made vulnerable employment possible. The new guiding principle is to replace full-time employees with independent contractors and freelancers.

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While working as a freelancer gives you some independence, it has a significant cost. The employment connection is among the gig economy’s main concerns. The ambiguity surrounding gig workers’ employment relationships frequently exposes them to risks like poor pay, excessive hours, unpaid sick days, a lack of workplace safety, and a lack of dispute resolution procedures. With the aid of this article, the author seeks to draw attention to topics like the concept of “employee,” the identity of gig workers, the need for legal protection for them, and if the recently proposed Social Security Code is adequate to improve the situation of these employees.

India has overtaken the United States, China, Brazil, and Japan as the fifth-largest gig economy in the world. With 15 million qualified workers, India provides about 40% of the freelance labour accessible globally, hence sustaining the growing need for contract-based employment or the freelancing industry. The gig economy in India is expected to expand at a CAGR of 17% to US$455 billion by 2024, with the potential to expand at least twice as quickly as pre-pandemic predictions. Another forecast states that 350 million gig jobs will exist in India by 2025, offering a significant opportunity for job seekers to prosper and adjust to changing workplace dynamics.

According to this idealised depiction of the gig economy, businesses may “enjoy various benefits from working with freelancers, such as a flexible workforce responsive to change, increased access to hyper-specialized expertise, cost savings, and an increase in productivity.” Gig workers enjoy a great deal of freedom in their professions, including the ability to work from any location at any time, their own schedules, and the ability to decide how many and how long they want to work each day. The optimistic view of gig work is that it might be liberating for workers who desire to escape the restrictions of corporate hierarchy and bureaucracy.

In nations like India, where casual working conditions control the economy, many blue-collar workers already experience unstable income and job security. On the other hand, the gig economy is a better choice. It differs from informal employment arrangements by being easier to enter and having a more equitable structure. There are no unofficial networks in the gig economy that may create entry obstacles for outsiders. Gig work has also served as a source of additional money for people in need, allowing them to get by until they can find employment.

Employees who are employed by an industry unit are the only ones who must abide by the Industrial Relations Code (2020). The exclusion of gig workers, who might not have a consistent location of employment, applies. As a result, gig workers are not covered by any legislation pertaining to the freedom to form unions, collective bargaining, or fair hiring and firing.

Gig workers are not covered by the Occupational Health, Safety, and Working Conditions Code (2020). This is concerning, especially in light of the fact that many gig workers put their lives in danger by continuing to work while the epidemic is active.

The Wage Code (2019) does not apply to gig workers, so they are not even eligible for minimum wages.

The Code on Social Security (2020), which is the only code to include provisions for gig workers, platform workers, and unorganised workers, is the last one. The Code includes provisions for health and maternity benefits, old age security, education, provident funds, accident benefits, and other items. It also covers life insurance and disability insurance. A “individual executing a work or participating in a work arrangement and earning from such activities outside of traditional employer-employee relationships” is referred to as a “gig worker” under the Code’s section 2(35). According to the agreement, the work is mainly transitory and is finished within a predetermined time frame.

Social security benefits are a good place to start, but they won’t be enough to fully safeguard the interests of gig workers. The capacity to create legally recognised unions, a national minimum wage that applies to all employment, and job stability are all requirements for gig workers. It’s strange that the government recognises the need of providing life insurance and tips to gig workers but not the worth of workplace safety or minimum wage. Additionally, gig workers must establish officially recognised unions so that their remuneration is decided through collective bargaining rather than only based on the demands of the service aggregators.

Conclusion

The gig economy appears to have a significant need for reform and room for improvement. To do this, a variety of methods might be applied. The government should initially begin validating and upholding current labour laws to include gig workers. The second strategy, now in use in the US, entails creating a qualification test in order to enlarge the definition of employee to include gig workers. Worker security and benefits will be on par with those of official, regular employees as a result. Similar to this, the definition of an employer should be widened to include who is accountable for these workers’ social security. These people will suffer greatly if such a big section of the economy is allowed to continue operating unregulated. In many ways, there is a dire need for a legal structure that treats gig workers on par with traditional employees. If the aggregators continue to categorise them as non-employees, they ought to be treated as such and provided with advantages including the chance to organise unions, a universal minimum salary, and workplace protections more appropriate for the gig economy.

Author: Tanya Saraswat, Coauthor: Meenakshi Ogra Mukherjee, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

References

• Rajeev Rambhatla, Rules governing the gig economy in India King Stubb & Kasiva (2022), https://ksandk.com/labour/the-gig-economy-in-india/ (last visited Jan 26, 2023).
• Souvik Ganguly, Rules Governing India’s gig economy International Bar Association (2022), https://www.ibanet.org/rules-governing-india-gig-economy#:~:text=These%20include%3A%20(1)%20control,%3B%20and%20(7)%20the%20mutual (last visited Jan 26, 2023).