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By Aman Chain
I. What is the gig economy and who are gig workers?
The gig economy has become a prominent global trend in recent years, transforming the traditional employment landscape. India, with its growing population and technological advancements, has witnessed a substantial rise in gig work platforms and freelancing opportunities. Although there isn’t a universally agreed-upon definition, the gig economy generally refers to a labour market characterised by short-term contracts or freelance work, where individuals offer their skills and services on a flexible basis, known as ‘gig workers.’ According to a report by Ernst and Young on the “Future of Jobs in India,” it was observed that 24% of the world’s gig workers are based in India.
II. What are the concerns?
Gig workers in India often fall into a legal grey area, with ambiguous regulations and classifications. Platforms frequently categorise these workers as independent contractors avoiding traditional employer-employee relationships, which allows them to circumvent providing benefits and adhering to labour laws. This lack of legal protections makes it challenging for gig workers to assert their rights and seek remedies for workplace grievances. Furthermore, the absence of robust labour unions specifically representing gig workers exacerbates their vulnerability. By not defining who a worker is in today’s day and age, is that the government gets a free pass from not providing the social security that the government or the state is obliged to provide in the first place.
III. What has the state done?
The central government in 2019 introduced the new Labour codes. These codes specifically define gig workers and offer some protection by establishing a fixed “minimum wage.” Once these codes become law, gig workers are expected to benefit from schemes notified by both state and central governments, which may include life and stability cover. Recent developments in labour movements, akin to cases like Amazon in the United States, have also influenced India. The People Democratic Union has been actively advocating for the recognition of gig workers. While gig work has become essential for both workers and the platforms hiring them, what is crucial at present is legislative intent and political will to ensure that these movements lead to substantial outcomes.
IV. Plausible solutions
A. Proposing legislative tool
The Contract Labour (Regulation and Abolition) Act, of 1970, governs the engagement of contract labour in India, encompassing work done through third-party contractors. There is potential for gig workers engaged with platforms to be considered “contractors” under this law. This imposes obligations on employers to adhere to the requirements, including providing welfare and health benefits to employees.
B. Proposing judicial tool
Given the generally slow pace of legislative work in India, another avenue for hope lies in judicial precedence. Courts have historically examined the employee-employer relationship using the “control test” (Dhrangadhra Chemical Works Ltd. case). However, there have been instances where other tests, like the organisation test, have been applied. This test assesses whether the nature of the work performed by the employee is integral to the organisation's functioning. When applied to gig workers, it becomes apparent that these platforms are ineffective without their workers, potentially fitting into the definition of an employee-employer relationship.
The expanding gig workforce is likely to lead to a substantial increase in labour disputes. It is imperative for both the state and the judiciary to collaborate effectively to ensure the protection of the rights of gig workers.
Aman Chain is a third-year law student at Jindal Global Law School. His areas of interest are Constitutional law, queer studies and intersections of religion and law.
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