Gig Workers and their challenges – Explained, pointwise

Introduction

The Indian government announced a “Code on Social Security, 2020” to deal with “Social Security for Unorganized Workers, Gig Workers and Platform Workers. But the Code is yet to be given effect. At present, gig workers are not being provided with the benefit of social security under any of the labour legislations.

Recently, a petition has been filed seeking the intervention of the Supreme Court in helping secure social security benefits for gig workers engaged by Uber, Ola Cabs, Swiggy, Zomato and other app-based service providers.

What are the demands under the gig workers petition?

Firstly, they argued that gig workers and platform workers are in an employment relationship with the aggregators and hence covered by the definition of ‘workman’ within the meaning of all the applicable social security legislations. These include the following legislations,

The Workmen’s Compensation Act, 1923; The Industrial Disputes Act, 1947; The Employee’s State Insurance Act, 1948; Employee’s Provident Funds and Miscellaneous Provisions Act, 1952; The Maternity Benefit Act, 1961; The Payment of Gratuity Act, 1972.

The petition also mentions that these legislations have been enacted pursuant to the Directive Principles of State Policy with a view to ensuring basic human dignity to the workers.

Secondly, the petitioners have sought for declaring “gig workers” and “app-based workers” as “unorganized workers” and/or “wageworkers” within the meaning of Section 2(m) and 2(n) of the Unorganised Workers Social Welfare Security Act, 2008.

Thirdly, Further, the petition mentions that the failure of the State to register them as “unorganized workers” or to provide social security under the existing law is a violation of their rights under Article 21 of the Constitution. These include the right to work, the right to livelihood; the right to decent and fair conditions of work.

Fourthly, The petition mentions that gig workers are similarly situated with all other workers under the applicable social security laws, so the non-recognition is also in violation of Article 14 and Article 23 of the Constitution.

Lastly, The app-based service providers on the other hand contend that there is no contract of employment between them and the petitioners. Instead, the relationship between them is in the nature of a partnership.

To counter that argument, the petition mentions that the lack of employment contracts between gig workers and new age platforms does not mean there is no employer-employee relationship.

What is the gig economy and platform work economy? 

The Gig Economy is characterized by short-term contracts or freelance work as opposed to permanent jobs. It often involves connecting with customers through an online platform. For example, delivery boys of app-based food, consultants, bloggers.

The platform work economy is sometimes referred to as the gig worker economy, but Gig economy is a broader term that includes platforms like Uber, Ola Cabs, Swiggy, etc.

According to the World Bank, around 6% of the world’s labour force is part of the gig economy. Globally, more than half of gig jobs are driven by demand for low-skilled, low-wage work. Only around 30% of them require specialized skills and expertise.

How big is the gig economy in India?

An estimated 56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce. Global Gig Economy Index report has ranked India among the top 10 countries. India constitutes about 40% of freelance jobs offered globally.

According to the FICCI, EY, and NASSCOM joint report on the future of jobs in India, with a 24% share, India is leading in terms of the online labour market globally.

What are the challenges faced by gig-workers in India?

No clear employment relationship: This is the main issue with the gig economy workers in India. Most of the time, it is the ambiguity around the rights of workers and the responsibilities of platforms that allows businesses to treat their gig workers as employees in terms of the control they exert upon them, but without any employee entitlements like insurance, medical benefits, employees’ provident fund, bonus or gratuity, etc.

The gig employers in India treat gig workers as partners. If that is the case, then gig workers should have equal say on the remuneration and terms and conditions. Apart from that, gig workers should also have the flexibility to accept and reject offers without any ramifications. But that is not the case actually.

No employment stability and heavy workload: The gig economy in the fundamental sense offers a work arrangement that works for everyone involved, but it is when the power dynamics come into the equation that the delicate balance is thrown off.

When the labour supply is high and more disposable, as, in the case of blue-collar workers in India, the gig workers have no power to influence payment offerings, work conditions, etc. This makes them remain financially vulnerable without a predictable salary, navigating an uncertain career path, etc.

For instance, Swiggy workers faced a continuous dip in pay, where base pay was reduced from ₹35 to ₹10 per delivery order, despite their brave deliveries during the pandemic.

According to gig workers in India, the low payment often pushes them to work longer than 8 hours and work on all days of the week.

Lack of Grievance Redressal Mechanism (GRM): There is no proper GRM available to gig workers to solve their genuine problems.

For instance, when Ola and Uber started cutting back incentives, the drivers in Mumbai decided to go on ‘strike’. But there was no clarity against whom they were striking. When the strikers agitated at a local transport commissioner’s office, he had to tell them that he did not regulate the hail-a-taxi business.

Not easy to be labelled as employees by the government: The meagre pay and poor working conditions often lead to protests to recognise them as employees. But according to the gig platforms, if recognised as employees, then it cannot be called as a gig economy at all.

What steps need to be taken to protect the gig workers?

Giving due effect to the Code on Social Security: For the 1st time, the Code on Social Security bill, 2020 acknowledges platform workers and gig workers as new occupational categories. With that, the platform workers are eligible for benefits like life and disability cover, old age protection, maternity benefits, provident fund, employment injury benefits, etc.

The government has to give due effect to the Code immediately and provide them with basic human dignity to the gig workers.

Take examples from global best practices: Amendments to labour laws in Ontario and California have shown a move towards granting employee status to platform workers, thus guaranteeing minimum wage and welfare benefits. This is the view propagated by international agencies in the EU, including the European Trade Union.

So, the government of India should also consider granting the gig workers the status of employees of the aggregators. That would automatically provide them all the labor benefits like PF and ESI.

Provide chances to gig workers to become independent entrepreneurs: The government should consider providing a loan scheme to the platform workers, to end their dependency on the platform aggregator companies.

Conclusion

With a population of over 1.3 billion, and a majority of them below the age of 35, India need the growth of a “gig economy” to create large scale employment for a semi-skilled and unskilled workforce.

So, the government has to hand-hold this sector and help it to grow by solving the problems of gig workers. The need of the hour is to create comprehensive policies and processes that give clarity to the way the gig economy should function.