INTRODUCTION
The labour landscape in India has undergone a rapid transformation with the rise of the gig and platform economy. The rapid expansion of platforms such as Uber, Swiggy, Zomato, and Ola has created a large section of the workforce which finds employment outside the traditional employer-employee model.
According to NITI Aayog, over 7.7 million workers were engaged in the gig economy in 2020, and this number is expected to rise to 23.5 million by 2030.[1] Regardless of their growing importance, it has become clear that our labour laws haven’t kept pace as these gig workers in India continue to operate in a legal grey area, where they neither get the protections of formal employees nor do they get the freedom of an independent entrepreneur.
While this employment model is flexible, it raises concerns about job security, fair wages, social protection, and access to a dispute resolution mechanism. The existing legal framework recognises gig workers but lacks adequate provisions to enforce and protect their rights.
THE LEGAL STATUS OF GIG AND PLATFORM WORKERS
Gig and platform workers often find themselves excluded from the traditional employment framework. Instead of hiring them as employees, companies often hire gig workers as “independent contractors”, which allows the companies to bypass statutory obligations under Indian labour laws.[2] This categorisation protects the platform companies from liabilities like providing social security, minimum wages, or workplace injury compensation.
In simple words, “gig workers” refer to someone employed on a temporary or short-term basis, often through a digital platform which connects them with consumers.
Unlike traditional employees, gig workers do not have long-term contracts and are not entitled to the usual benefits provided to regular staff.
The Code of Social Security 2020 marks a step forward, as it defines “gig workers” and “platform workers” separately from traditional employees:
“Gig worker” means a person who performs work outside the traditional employer-employee relationship.[3]
“Platform worker” means someone engaged through an online platform to deliver specific services or solve problems.[4]
No matter how promising this sounds, despite the recognition, the Code lacks in providing any enforceable rights to these workers, such as fixed working hours, job security or maternity benefits to the gig and platform workers, relying heavily on welfare schemes. So, while acknowledging their existence, the law only provides them protection on paper.
THE CLASSIFICATION CONUNDRUM
One of the core issue is how the gig workers are classified. Most of the platforms hire them as “independent contractors” instead of classifying them as traditional employees. Companies exclude them from the protection of key labour laws. As a result, companies are not bound to offer them paid leave, health insurance or social security. This categorisation helps the companies to escape statutory obligations and leaves the workers with minimal or no basic safeguards.
Indian courts have not yet established a definitive stance on this issue. Despite the ongoing debates on this issue, there is no uniform judicial position on whether gig workers are to be recognised as employees or not. This lack of legal clarity allows the platforms to avoid accountability.
GAPS IN SOCIAL PROTECTION AND LEGAL RIGHTS
- Social Security
Section 114 of the Social Security Code provides for the formulation of welfare schemes for gig and platform workers, including health insurance, disability cover, maternity benefits, and old-age protection.[5]While this is a positive step, The law, however, remains largely unimplemented, with limited practical impact on the ground. In the absence of concrete rules and guidelines, most workers remain unregistered and unaware of their entitlements.[6] The actual enforcement of these schemes has made little progress at both the state and central levels.
- Employment Benefits
Gig workers are excluded from essential protections available under the Minimum Wages Act, 1948, the Employees’ State Insurance Act, 1948, or the Industrial Disputes Act, 1947.[7] Since they are not officially recognised as an employee, they aren’t entitled to benefits given under these acts, such as fixed working hours, minimum wages, health insurance, or a dispute resolution mechanism. As a result, they are left exposed to unfair treatments like sudden termination without warning, overtime, or unclear payments.
- Collective Bargaining and Representation
The right to form a union and collectively bargain is fundamental to protecting workers’ interests. However, gig workers are not recognised under the Trade Unions Act, 1926, and thus lack formal representation.[8] Due to the digital nature of gig work, linked with algorithmic control and data surveillance, which restricts their ability to organise and negotiate collectively.[9]
- Grievance Redressal
Contracts drafted by platforms usually include clauses mandating arbitration or restricting jurisdiction, making it difficult for gig workers to seek redress.[10] The absence of clear legal channels makes it hard for them to even enjoy the rights they are granted under the Social Security Code.
JUDICIAL AND LEGISLATIVE DEVELOPMENTS
While Indian courts have not yet made any clear determination on the employment status of gig workers, recent developments in other countries offer valuable insight. In Uber BV v Aslam, the UK Supreme Court held that Uber drivers were “workers” entitled to minimum wage and paid leave under UK labour law.[11] The court rejected Uber’s claim of drivers being independent contractors, considering the significant control exercised by the platform.
Domestically, the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023, is India’s first state-level law specifically aimed at gig workers.[12] It requires the establishment of a welfare board, contributions from platforms, and a registration process for gig workers. This is an exemplary model that could be adopted by other states and the central government.
The Code on Wages, 2019, along with other recent labour laws, presents an opportunity to expand wage protections to include a wider range of non-traditional workers.
RECOMMENDATIONS
To fill the existing legal gap and guarantee fundamental protections for gig and platform workers in India, the following reforms are crucial:
- Establish a Third Employment Category: Recognise “dependent contractors” or “semi-employees” who enjoy rights like social security, fair wages, and protection against unfair dismissal.
- Implement Welfare Schemes Promptly: Enforce provisions under the Social Security Code with clear guidelines for aggregator contributions, worker registration, and scheme delivery.
- Standardise Platform Contracts: Implement fair contract standards with clear terms, ensuring workers fully understand and agree to conditions related to payment, termination, and dispute resolution.
- Support Collective Bargaining: Revise labour laws to permit gig workers to form unions and participate in collective bargaining.
- Create Dispute Resolution Bodies: Establish dedicated tribunals or ombudsman agencies to address gig worker complaints efficiently and accessibly.
CONCLUSION
The gig economy is here to stay, but not at the expense of workers’ rights. As this sector becomes a key part of India’s labour market, it should ensure that the workers who are part of it are not left behind. The Code of Social Security, 2020, is a step forward, which is the starting point. A more thoughtful legal approach is needed by India that truly reflects the reality of the gig and platform workers. We can build a fairer and inclusive digital economy by legally recognising gig workers and their rights.
If we want a future where convenience doesn’t lead to exploitation, our law needs to evolve and catch up quickly.
Author(s) Name: Priyanshu Chaudhary (Babu Banarasi Das University)
References:
[1] NITI Aayog, India’s Booming Gig and Platform Economy (2022) https://www.niti.gov.in
[2] Yamini Aiyar and Ajay Shankar, ‘Gig Work and Labour Market Regulation in India’ (Centre for Policy Research, 2021).
[3] Code on Social Security 2020, No 36 of 2020, s 2(35).
[4] ibid s 2(61).
[5] Ibid s 114.
[6]Sangeeta Das, ‘Delayed Implementation of Labour Codes and Its Impact on Gig Workers’ The Leaflet (10 January 2023)
[7] Gaurav Bhatia, ‘Are Labour Laws Equipped to Handle India’s Gig Economy?’ LiveLaw (20 July 2022)
[8] Trade Unions Act 1926, No 16 of 1926.
[9] ILO, Digital Labour Platforms and the Future of Work (2018)
[10] Natasha Chugh, ‘Platform Worker Contracts: Legal Minefield’ Bar and Bench (15 September 2023)
[11] Uber BV v Aslam [2021] UKSC 5.
[12] Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023.
