ABSTRACT
The world is changing and how? Technology is expanding and is influencing each and every aspect of our lives. One such major technological advancement is the development of online platforms, such as Amazon, Zomato, Swiggy, etc. These platforms provide us with the services of online shopping, food delivery, medicines and other necessities delivered to the doorstep, and whatnot. But the ease of these services is not only because of the AI development but also because of the people who deliver these services to us, in the comfort of our homes. These people are known as the GIG Workers.
This research paper aims to analyze the importance and contribution of GIG workers to the Indian Economy, especially after the Covid-19 pandemic. It seeks to describe the advantages of Gig Work as well as problems faced by the people indulged in such work. The author discusses the labour laws in India and questions if these include or are beneficial to Gig workers. The author also tries to analyze the laws governing gig workers in other countries and compares them with Indian laws. The paper, in the end, suggests a few reforms that can be made in the current labour laws, to protect the gig workers and give a boost to the gig economy in India.
KEYWORDS
Gig Workers, Economy, Employer-Employee, Labour Laws, Social Security
INTRODUCTION
The word ‘Gig’ literally means an event where a musician is paid to perform. It is often used as a slang to describe a temporary job. Thus, the phrase ‘Gig workers’, refers to the people who are not employed in a permanent job and work outside the traditional employer-employee relationship.
A traditional employer-employee relationship includes explicitly stated elements such as the place of work, duration of work, and the method of doing work. However, these elements are missing in the gig works. The Gig workers are employed on a contractual, freelance, or project–work basis.[1] The works range from photography to artistry, food delivery to driving, accountancy to content writing.
Gig workers can be classified into two broad types: Platform workers, and Non-Platform workers. Platform workers are the ones who use online algorithmic matching platforms or apps to connect with customers. For example, the drivers of Uber and Ola, the delivery agents of Amazon and Flipkart. On the other hand, the Non-Platform workers are the ones who work outside of these platforms, work from home, or are self-employed. These include construction workers and non-technology-based temporary workers. [2]
Benefits of Gig Work
Gig work is much easier to seek than a permanent job for a variety of reasons. It can be done from any location, thus minimizing the geographical constraints. A person of any age, sex, or residential address can seek this type of work. On top of it, no extraordinary educational qualification or skill is required to pursue the job. Gig work gives the people liberty to choose the time and duration of work as well as the preferred work settings.
In addition to the comfort perks, gig work offers economic perks as well. It can act as an additional source of income in a country with a high unemployment rate and low income.
But just like a coin has two faces, every phenomenon has two aspects to it; Gig work has its advantages and disadvantages. The problems faced by the Gig workers will be discussed later in this article.
RESEARCH METHODOLOGY
This paper is descriptive and analytical. The research has been based on several secondary sources such as newspapers, online journals and blogs, books, articles, and other online publications. Various statutes have been referred to understand the law provisions related to Labour and the Economy in India as well as other countries. After gathering the factual information, it has been analyzed and presented in the form of the author’s opinion.
REVIEW OF LITERATURE
Indian start-ups are on a multifold rise. From investing billions of dollars as capital to becoming unicorn companies with their innovative strategies, start-ups are climbing the ladder of success. But startups also have another claim to fame – the creation of a new kind of gig economy. The rise in the likes of quick-commerce firms has given employment opportunities to the strong but largely unskilled workforce of India.[3]
According to NITI Aayog’s Report[4] on ‘India’s Booming Gig and Platform Economy’, it is estimated that in 2020-21, 7.7 million workers were engaged in the Gig Economy. It is expected to expand to 23.5 million workers by 2029-30. With such a huge number of people engaged in a particular sector, it is imperative to understand their concerns and make laws to protect their rights.
Concerns of Gig Workers
There has been a heated debate on whether gig workers should be categorized as ‘employees’ or ‘independent contractors’. Given the unique nature of their work, they do not squarely fit into any rigid categorization. As a result, gig workers have limited recognition under the current employment laws and thus fall outside the ambit of statutory benefits. Moreover, there is no workplace safety and the workers have to work in the absence of a dispute settlement mechanism.
The employers take advantage of this limitation and can alter the payments and working conditions of the workers, to increase their benefits. Recently, in April, Zomato – owned Blinkit rolled out its new payout structure for delivery executives, under which the minimum payment was reduced from Rs. 25 to Rs. 15 per delivery. As a result, the delivery agents went on a strike as they would now earn about Rs. 600 per day as opposed to Rs. 1200 before. However, the protestors soon returned to work because of a lack of alternatives and lack of legal support. Moreover, they agreed to the fact that in the gig economy, lesser pay is better than no pay.[5]
The question now arises why is there a lack of legal support? Why do the workers have to compromise with low income?
What are the Current Labour Laws in India?
Labour laws arose due to the demands of workers for better work conditions, fixed working hours, regular income with incentives, the right to organize, job security and other benefits.
Industrial Law is the umbrella term for all the laws relating to labour and employment in India. It regulates various aspects of work such as the number of hours of work, wages, social security and facilities provided. Labour laws fall under the Concurrent list, because of which both the Centre and the State Governments can legislate on the topic.
The major legislations governing the employer-employee relationship are listed as follows:
- MINIMUM WAGES ACT, 1948 [6]
The act enables the fixing of the minimum salary payable to an employee and revises this amount every five years. The provision ensures that the workers can lead a minimum standard of living. It also fixes the number of working hours for the employees, along with penalizing the employers who do not comply with the act.
- THE TRADE UNIONS ACT,1926 [7]
The act promotes democracy among workers and implements their right to form unions. The act enables the employees to register their union, which is their link to interaction with the employer and gives the workers the strength to voice their opinions. It protects the labour from any sort of injustice by the employer.
- THE FACTORIES ACT, 1948 [8]
The main provisions under this act deal with the health and safety measures for people employed in factory settings. For the welfare of the workers, it provides for adequate sanitation facilities and safety measures in the workplace. It also regulates the working hours to be not more than 48 hours per week.
- THE WORKMEN’S COMPENSATION ACT, 1923 [9]
The act seeks to give the workers and their dependents financial compensation in case of an accident during the course of employment. It also applies in the case of a disability or occupational disease. The family of the worker receives the compensation in case of death during the work.
- THE EMPLOYEE PROVIDENT FUNDS, 1952 [10]
This legislation has been enacted keeping in mind the security of the future for the employees. Under this provision, the employees get financial benefits after retirement or their dependents get the funds in case of the death of the employee during employment.
Apart from these laws, there are several laws whose responsibility is borne solely by the Central Government. Other Acts such as The Contract Labour Act, The Industrial Disputes Act, The Maternity Benefit Act, etc. are enforced by both the Union and the State Governments. In addition to these, many industrial laws are enacted and enforced by the State Governments that are applicable in their respective states. Despite this large number of laws in place, they fail to include gig workers in their ambit.
However, in 2020, the Government consolidated central labour laws, on the recommendation of the National Commission on Labour, and introduced 4 labour codes. The four Labour Codes are the Code of Wages 2019, the Industrial Relations Code 2020, the Code on Social Security 2020, and the Occupational Safety, Health and Working Conditions Code, 2020. They envisage strengthening the protection available to workers, including unorganized workers in terms of statutory minimum wage, social security and healthcare of workers.
- The Code of Wages 2019
It envisions the unvarying applicability of timely payment of minimum wages and bonus provisions to all employees.
- Code on Industrial Relations 2020
This labour code amalgamates three existing laws and expands the definition of worker to include persons employed in a skilled or unskilled, manual, technical, operational and clerical capacity. It also foresees the setting up of a fund for re-skilling and training the workers.
- OHC Code 2020
As per the provisions of this code, the employers must ensure workplace safety, to avoid injuries or death; they must enable annual health examinations for free for the employees. The Code also aims at providing inter-state migrant workers with portability benefits and a journey allowance.
- Code on Social Security 2020
The definition of employees has been widened to include inter-state migrant workers, construction workers, film industry workers and gig workers. It also empowers the Centre to frame any other schemes for the self-employed, unorganized workers, gig workers and the members of their families.
Out of the four new labour codes, only the Code on Social Security refers to gig work. As a result, gig workers remain excluded from vital benefits and protections offered by the other codes. They cannot create legally recognized unions and cannot access the specialized redressal mechanism, thus denying them an effective remedy for grievances against their employers.
The new labour codes have other concerns as well, as they are still awaiting implementation three years on, despite receiving the assent of the President. There has been a delay in the framing of rules by the States.
This is the miserable condition of gig workers in India. Let’s look at the provisions in other countries and analyze what India can learn from them to bring a reform in the Gig economy sector.
Laws governing the gig economy in foreign countries
As per Payoneer’s Global Gig Economy Index[11], the USA has hit the first spot in the rising incomes of freelancers. There was a 78% spike in earnings from Q2 2018, the highest in the world. There were over 57 million gig workers (36% of the American workforce) in the USA in 2021.[12] All these facts prove that the USA is the most remunerative country for gig workers. To protect this large workforce from exploitation, the US government, in October 2022, proposed a rule change that classifies the gig workers as ‘employees’, and not independent contractors. This makes them eligible to avail benefits such as minimum wages, overtime pay, social security, and security of job, etc. Since the change would make the workers economically dependent on the companies, they would be able to access legal protections.
However, this rule is still pending to be applied. If it is accepted, it would be a massive win for the gig workers in the fight for their rights to be equal to regular employees.
Before this, the European Parliament, in 2021, took a step forward in recognizing the rights of gig workers and providing them with some benefits. The European Commission had proposed five criteria for a company to qualify as an ‘employer’. If a platform fulfils any two or more of these criteria, it is legally considered an ‘employer’ and the people working for it are given the status of ‘workers’. Thus, any platform such as Uber and Amazon would be considered an employer and its delivery agents would be given the rights and protections of an employee. Spain became the first country in the European Union to enact this law in 2021. Apart from this, the gig workers in the Netherlands and France have also qualified as salaried staff, entitled to job benefits.
Though the United Kingdom exited the European Union in 2016, it also enacted a law that treated gig workers as a separate category and gave them basic wage rights and paid holidays. However, the workers are not entitled to all the benefits of an employee.
SUGGESTIONS
Even though there are no proper laws in any country giving the gig workers all that they require, there are some things that India can learn from other countries to boost its gig economy.
The first is the rigid classification of gig workers, either as employees or as independent contractors. India is still confused about the status of these workers, then how would it move ahead in protecting them? That’s where some of the European countries are a step ahead. In most European countries, gig workers have been designated as ‘employees’ and further legislation has begun. Even if the employee status has not been given in some countries, like Canada and Australia, they have been distinguished as ‘contractors’ with some benefits. Following their path, India should decide on the status of its platform workers. Further, the world’s largest democracy can also introduce a separate category to include platform workers, and make laws and legislations accordingly, as Britain did.
Secondly, the government should try to upskill the platform workers, to enhance their portfolio and increase the prospects of career growth. The companies should be mandated to carry out free skill workshops and certificate courses. These would instill a sense of confidence in the workers and would bring out their best potential. Moreover, upskilled workers would be in a better position to demand better wages and working conditions, than the less-skilled people.
Next, the new labour codes should be made more inclusive and the provisions of Occupational Health and Safety should apply to gig workers as well. Working conditions should be made better and in case of any accident or death, compensation should be given to the victim or his dependents.
An enormous task for the government in this direction would be designing a system to register all the platform and non-platform workers, freelancers and self-employed people. After registering them officially, they should be given the right to form associations or unions. The workers’ group should also be registered with the government, along with the details of the leader and the members. Coming up of these unions would strengthen the democracy in the country as well as become the voice of the currently helpless workforce.
At last, the government should adopt the RAISE approach[13] to ensure the realisation of full access to social security for all gig workers.
Recognize the varied nature of platform work to design equitable schemes.
Allow augmentation of social security through innovative financing mechanisms.
Incorporate, while designing schemes, the specific interests of platforms, factoring the impact on job creation, platform businesses and workers.
Support workers to subscribe to government schemes and welfare programmes through widespread awareness campaigns
Ensure that benefits are readily accessible to workers
What lies in the future of the Gig economy?
With new technologies being launched in the market every day, one can easily expect the gig economy to expand in the near future. And with its expansion would come some new dynamics in this new economic sector. The working of platforms would not only be limited to metropolitans but is expected to reach smaller cities and towns. The interiors of the country would contribute in a large way to the development of the economy. Another dimension that can be added to Gig work is the inclusion of women. Ladies who want to become self-reliant may do freelancing and can also work from home. The contribution of the majorly hidden other half of society would surely lead to the expansion of the work.
Further, the Gig economy is expected to accord the development of platforms in India, contribute better to India’s GDP and hence, help in making India a huge, self-reliant economy.
CONCLUSION
Development of the gig work is inevitable in the future. But to help it prosper, the age-old rules and legislations must be amended to widen their scope. Just like Gig works are based on innovation, the policymakers must innovate to design policies to protect the interests of the budding sector. A perfect balance must be struck between the duties of development and the rights of reality.
India is developing; the source of its development is the new-age start-ups. And what lies behind these expanding start-ups is the hard work of the gig workers. To reach new heights, it is essential that we first support the people who are the basis of our success. When the workers are empowered, the companies bloom, and when the companies profit, the country’s GDP improves. The workers would be empowered when they are given social security, benefits of minimum wages, fixed working hours, occupational safety, and compensations. And most importantly is the recognition for their work, and support by those in power! It’s the eleventh hour that we work towards extending the scope of labour laws to include future contributors to the Indian Economy. Even if including the gig workers in the ‘employee’ arena is not possible, there is a dire need for them to be regulated and given legal support. Government must take a step urgently in this direction.
New laws and legislations are awaited!
Author’s Name: Archita Garg
College: School of Law, Christ (Deemed to be) University
[1] IPLEADERS, https://blog.ipleaders.in/what-is-the-law-for-new-age-gig-workers-in-india-an-overview/ (last visited June 9, 2023).
[2] Aaratrika Bhaumik, Why are Blinkit workers protesting?, THE HINDU, May 03, 2023.
[3] Vidya S, How India’s Gig Economy is Shaping up, thanks to startups, BUSINESS TODAY (Feb 11, 2023, 10:14 A.M. IST), https://www.businesstoday.in/latest/economy/story/how-indias-gig-economy-is-shaping-up-thanks-to-startups-369840-2023-02-11.
[4] NITI Aayog. (2022). India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work. June, 2022. (https://www.niti.gov.in/sites/default/files/2022-06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf).
[5] Alisha Dutta, In Gig Economy, Lesser pay is better than no pay, THE HINDU, May 03, 2023.
[6] The Minimum Wages Act, 1948, Acts of Parliament, 1948 (India).
[7] The Trade Unions Act, 1926, Acts of Parliament, 1926 (India).
[8] The Factories Act, 1948, Acts of Parliament, 1948 (India).
[9] The Workmen’s Compensation Act, 1923, Acts of Parliament, 1923 (India).
[10] The Employees Provident Fund and Miscellaneous Provisions Act, 1952, Acts of Parliament, 1952 (India).
[11] Payoneer, The Global Gig Economy Index, 2019, https://pubs.payoneer.com/images/q2_global_freelancing_index.pdf.
[12] Prasanna Mohanty, U.S., Europe lessons for Gig Economy Law, FORTUNE INDIA (December 08, 2022), https://www.fortuneindia.com/long-reads/us-europe-lessons-for-gigeconomy-law/110665.
[13] NITI Aayog. (2022). India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work. June, 2022. (https://www.niti.gov.in/sites/default/files/2022-06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf).