Karnataka has recently introduced a new bill, the draft Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024, with the aim of providing social security and welfare measures for platform-based gig workers within the state. This follows a similar law enacted by Rajasthan, the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. Both bills share a common characteristic: they are based on a welfare board model, a model that, while aiming to provide welfare, fails to address the crucial aspect of employment relations. This oversight is particularly concerning in the context of gig work, where the nature of the employment relationship is central to ensuring worker rights and protections.
The rise of the gig economy has brought with it a significant increase in the number of gig and platform workers, particularly in the last decade, fueled by the growth of app-based services like ride-hailing and delivery platforms. NITI Aayog, in its working policy paper on the gig economy, projects that the gig workforce will expand to 23.5 million workers by 2030. This trend highlights the importance of addressing the challenges and complexities of the gig economy, particularly when it comes to employment relations.
The existing legal framework, designed for traditional employer-employee relationships, struggles to adequately address the unique dynamics of the gig economy. Platform companies, often preferring to be labeled as aggregators, classify gig workers as independent contractors, emphasizing their role in providing technology and connecting workers with consumers. However, workers themselves often view these platforms as their employers, as they are subject to terms and conditions set by the platforms, influencing their working hours, payment structure, and overall working conditions. This is particularly evident in ride-hailing services, where the platform dictates pricing and other terms of service, leaving little room for individual negotiation.
The recent U.K. Supreme Court ruling recognizing Uber as an employer in relation to its drivers underscores the complexities and inconsistencies in the legal landscape concerning gig work. While India’s Code on Social Security, 2020 includes gig and platform workers as informal self-employed workers, the other three new labor codes – Code on Wages, Industrial Relations Code, and Occupational Safety, Health, and Working Conditions Code – remain silent on this category of workers.
The Rajasthan and Karnataka legislation, while offering some welfare schemes, fail to address the core issue of employment relations in gig work. They shy away from defining employment relations, instead focusing on the term ‘aggregator’ for app companies. This lack of clear definition prevents the application of protective labor laws that safeguard workers’ rights to minimum wages, occupational safety, working hours, leave entitlements, and the right to collective bargaining. The absence of legal recognition of the employment relationship in gig work also poses significant challenges for ensuring adequate protection and security for workers.
The welfare board model, while offering some benefits, faces inherent limitations. Past examples, such as the Construction Workers Welfare Act of 1996 and the Unorganized Workers Social Security Act, demonstrate the challenges associated with the implementation of welfare boards, with funds often being underutilized. The Karnataka Bill, like its Rajasthan counterpart, falls short of addressing crucial aspects like minimum wages and working hours for gig workers. Although it includes provisions on income security, it fails to guarantee a minimum income, wage entitlements, or fair revenue sharing between aggregators and gig workers.
The lack of a clear framework for employment relations in the gig economy creates a significant oversight, blurring the lines between employer and employee and undermining the protection of worker rights. It allows employers to evade legal obligations, making it difficult to ensure adequate safeguards for workers in the gig economy. It is imperative to move beyond the simplistic approach of welfare boards and prioritize the recognition of employment relations, establishing a robust legal framework that ensures fair treatment, safe working conditions, and access to social security for all gig workers.
