Gig workers are people who work for a variety of clients or platforms on a temporary or short-term basis without being formally employed. They are also referred to as platform workers, on-demand employees, independent contractors, and freelancers. To interact with consumers and sell their services, gig workers frequently use digital platforms or applications. These services include food delivery, ride-hailing, online tutoring, graphic design, content writing, and more.

The market in which gig workers compete is known as the “gig economy.” Flexibility, autonomy, and a variety of employment options for gig workers, as well as cost effectiveness, convenience, and innovation for clients and platforms, are its defining traits. Technological improvements, shifting customer tastes, and changing socioeconomic situations all have an impact on the gig economy.

The gig economy also saves businesses funds on resources like office space, training, and benefits while giving workers advantages like greater work-life balance and the ability to choose the profiles or tasks they’re interested in.

Although this flexibility is desirable, gig workers typically exchange it for low income, minimal or no health or retirement benefits, complicated tax laws, and out-of-pocket equipment costs.

The distinction between people who freely work as contractors and those who are exploited by an employer who may categorize someone as a contractor to avoid having to pay fair salaries and benefits is blurry.^[1]

Growth Drivers of the Gig Economy in India?

• Rise of Internet and Mobile Technology: Due to the increasing use of smartphones and the accessibility of high-speed internet, it is now simpler for businesses and employees to connect online, which has aided in the expansion of the gig economy.

• Economic Liberalization: The Indian government’s economic liberalization measures have boosted competition and made the market more open, which has aided in the gig economy’s expansion.

• Increasing Demand for Flexible Work: For Indian workers seeking flexible work schedules that enable them to manage their home and professional life, the gig economy is particularly alluring.

• Demographic factors: A big and growing number of young, educated, and ambitious Indians are driving forces behind the gig economy as they look to supplement their incomes.

• E-commerce Growth: The booming e-commerce industry in India has significantly increased demand for logistics and delivery services, which has fueled the expansion of the gig economy in these fields.^[2]

FUTURE PROSPECTS

In recent years, the gig economy has expanded quickly, especially during the COVID-19 pandemic, which The estimated 7.7 million gig workers in India in 2020–21 are projected to grow to 23.5 million by 2029–30, making up 6.7% of the non–agricultural workforce or 4.1% of all livelihoods in the country. From 2011–12 to 2019–20, the employment elasticity to GDP growth for gig workers was consistently over one, showing increased demand for gig employees. The aforementioned elasticity was consistently higher than the overall employment elasticity, which further indicated a stagnating demand growth rate for non-gig workers as well as the transition from non-gig to gig employment. ^[3]

890 million people are of working age (66.8%), and 461 million of them are actively participating in the labor force (51.8%). The percentage of people who are working age who are either employed or actively looking for work is known as the labor force participation rate.

Only the urban labor force has been taken into account in this analysis of the addressable market for the gig economy in India because very few people in rural areas of the country are currently comfortable using digital platforms to find employment opportunities. There are 138 million people living in urban areas in the nation (30%). Given that the gig economy makes it possible to trade services, the services sector accounts for 25% of the labor force in urban areas and employs a total of 35 million people.

There are 6.9 million of these, or 20%, who are considered to be contingent workers.  Now, when splitting the contingent workforce into three income tiers—low, middle, and high—and accounting for various compensation levels annually, the gross market value may be roughly calculated at $34 billion. To determine the portion of this market which can be considered as the gig market size, we capture the gross value based on the e-commerce readiness index (10%) . This considers income levels and the adoption of digital technology. The addressable market as a whole is therefore worth $3.4 B.^[4]

STATUTES

In India four labor codes were passed to provide benefits to the workers working in unorganized sector. The new codes are stated below:

The Social Security Code in 2020 amalgamated the nine enactments which includes, the Employees’ Provident Fund Act, 1952, the Maternity Benefit Act, 1961, and the Unorganized Workers’ Social Security Act, 2008 to include informal or gig workers into this scheme. The gig workers will get protection under the new code such as minimum wages, maternity benefits, EPF funds, insurance benefits provided by state run employee’s states insurance corporation etc.

The Industrial Relations Code, 2020 a further codification that has been streamlined and unified, replaces three of India’s current labor regulations. By regulating terms of employment, dismissal, layoffs, strikes, lockouts, collective bargaining, trade union registration and recognition, and the resolution of labor disputes, the code intends to simplify and harmonize India’s industrial relations system. All employees, including platform and gig workers, who are defined as individuals who carry out work or take part in a work arrangement outside of a conventional employer-employee relationship or contractual relationship, are subject to the code. They do not, however, have the same rights and protections as ordinary employees because the code does not identify gig workers and platform workers as either laborers or employees. ^[5]

The Code On Wages, 2019

This regulation governs compensation and bonus payments made to employees during the course of their employment and is applicable to both organized and unorganized sector workers. Equal pay is also given to workers doing similar jobs across all professions, businesses, and industrial facilities.

The Code On Occupational Safety, Health & Working Conditions, 2020

This code contains requirements that govern the working conditions for employees in places like mines and dockyards that employ 10 or more people.

These are some of the proposed statutes for gig workers in India. However, these statutes are not yet enacted or implemented fully, and they may face various challenges and issues in their interpretation and application. Therefore, there is still a need for more clarity and consistency in the legal framework for gig workers in India.^[6]

JUDGEMENTS

The legal framework for the gig economy in India is largely based on the distinction between employees and independent contractors. Various labor laws protect the employees and give them rights and advantages including minimum salaries, social security, health and safety, maternity leave, gratuities, provident fund, etc. These rules do not apply to independent contractors, who are instead subject to the terms of the agreements they have in place with their platforms or clients.

This distinction, though, is not always obvious and may be influenced by a number of variables, including the level of control, supervision, integration, economic dependency, etc. In a few instances, the courts have determined that individuals who were given the label of independent contractors were actually employees in disguise and qualified for the protections of labor laws.

For instance in Dharangadhara Chemical Works Ltd vs State Of Saurashtra, This is an appeal case in the Supreme Court of India regarding the classification of agarias as workmen or independent contractors. The agarias are skilled workers who use rainfall to produce salt in a seasonal process. The agarias, according to the appellants, should be regarded as independent contractors rather than workmen, as determined by the Industrial Tribunal and the High Court. According to the court, the agarias are workmen as defined by the Industrial Disputes Act and are thus entitled to certain rights and safeguards. The appeal is denied, and the agarias’ status as workers is upheld.^[7]

Similar to this, the employees in Ram Singh and Others vs. Union Territory, Chandigarh & Ors are requesting regularization of their services under the Engineering Department of Chandigarh Administration, saying that they are in fact employees of the department and not just contractors.The contract’s terms and conditions imply that the Engineering Department has entire control over the contract workers, proving that they are in fact department employees.^[8]

However in Indian Federation of App-Based Transport Workers (IFAT) vs. Union of India and Others, (IFAT) , along with two individual drivers, has filed a petition before the Supreme Court of India. They argue that the agreements between service aggregator companies (such as Ola and Uber) and gig workers violate several articles of the Constitution of India. The petitioners seek various reliefs, including the recognition of gig workers as “workers” under social security laws, registration of gig workers on a government portal, extension of benefits to gig workers, and compliance with motor vehicle aggregator guidelines. The petitioners argue that not recognizing gig workers as employees violates their right to equality, right to life, and right against forced labor. They claim that gig workers are subject to control and supervision by service aggregators, making them eligible for social security benefits. The denial of social security to gig workers is seen as exploitation through forced labour.^[9]

CHALLENGES

However, the gig economy also poses several challenges and risks for the workers involved, such as lack of legal recognition and protection, collective bargaining and Representation, skill development and career advancement, social security and welfare. The gig workers are often classified as independent contractors or self-employed persons, rather than employees, which excludes them from the benefits and protections of labour laws and regulations. Moreover, the gig workers face issues such as low wages, delayed payments, unfair ratings, discrimination, harassment, and occupational hazards.

• Lack of legal recognition and protection: As was already said, there is no distinct or uniform legal structure in India that recognizes and governs employees in the gig economy. They are frequently left out of the coverage and advantages of social security and labor regulations. Additionally, they are open to exploitation and abuse by platforms or clients, who may stop using their services without warning or explanation, withhold or postpone payments, impose unjust terms and conditions, etc.

• Lack of collective bargaining and representation: Workers in India’s gig economy have little to no opportunity for collective bargaining or representation. They are frequently scattered, separated, and fractured across many industries, regions, and platforms. Their ambiguous position as employees or independent contractors makes it difficult for them to establish or join trade unions or groups. They have no voice or say in determining their wages, working conditions, or grievance redressal mechanisms.

• Lack of skill development and career advancement: There are few or no chances for skill development and career advancement available to gig economy workers in India. They frequently work in repetitious, low-skilled jobs that don’t require a lot of education or training. They are also up against fierce competition from other gig economy workers, who can provide higher quality or lower pricing. They lack access to formal education or training opportunities that could aid them in expanding their knowledge or learning new skills.

• Lack of social security and welfare: In India, gig economy workers have little to no access to social security and welfare benefits like maternity leave, pensions, and health insurance. They are responsible for assuming the risks and expenses associated with disease, injury, disability, old age, etc. Additionally, they are not protected from potential workplace risks including aggression, accidents, stress, etc.

OPPORTUNITIES

• Flexibility and autonomy: Workers in the gig economy in India have the freedom and flexibility to choose their own work schedules, locations, clients, platforms, and other factors. They are able to strike a balance between job and personal or family obligations. They can pursue a variety of interests or various streams of income.

• Income generation and entrepreneurship: Workers in India’s gig economy have access to income-generating opportunities that they might not otherwise have. By starting or growing their own enterprises or services, they can also exercise their entrepreneurial potential.

• Skill utilisation and innovation: Workers in India’s gig economy can make use of their current skills or abilities that might otherwise go unused or underutilized in regular occupations. They can also invent new ways of delivering their services or products that may boost their efficiency or quality.

CONCLUSION

As we’ve seen, while some existing and planned legislative measures in India are pertinent to gig workers, they are insufficient or inconsistent in addressing their unique problems and requirements. Additionally, we’ve discovered that there are a number of gaps and restrictions in how these legal rules are understood and applied, as well as disagreements and inconsistencies between various sources and countries. Additionally, as we have shown, there are a number of opportunities and problems for law and policy makers in India to control and regulate the gig economy, which is a complicated and dynamic phenomenon involving numerous and diverse parties.

Therefore, we conclude that there is a need for a comprehensive and coherent legal framework that can protect and empower gig workers in India, and ensure their dignity, welfare, and empowerment. Such a legal framework should be based on the following principles:

• Recognition: Gig workers should not be classed as either employees or independent contractors, but rather as a separate category of workers under the law, with their own rights and obligations.

• Representation: Gig workers should have the opportunity to establish or join unions or associations that can speak on their behalf, advocate their interests, and engage in collective bargaining or other dispute resolution procedures with platforms or clients.

• Regulation: Platforms should be subject to legal regulation to ensure their accountability and transparency and to stop unfair or abusive practices like harassment of gig workers or customers or discrimination.

• Redistribution: Gig workers should have access to social security benefits, including a guaranteed minimum wage, health insurance, accident insurance, maternity benefits, and pensions. These benefits should be paid for by payments from the federal government, state governments, and platforms.

• Resilience: The legislation should assist gig workers in developing their skills and competencies and in finding alternative work arrangements, including cooperatives or social enterprises, as well as in accessing additional employment prospects.

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^[1]  “Laws in India for GIG or Temporary Workers”, Indian Law Offices LLP, Available at: https://www.indialawoffices.com/legal-articles/india-laws-and-gig-workers

^[2] “Rise of the Gig Economy in India”, Drishti IAS 2023, Available at: https://www.drishtiias.com/daily-updates/daily-news-editorials/rise-of-the-gig-economy-in-india

^[3] Cherishi Maheshwar and Ishita Sirsikar, “Future of GIG Economy: Transforming Unorganised Sector in India”, Invest India 2022, Available at: https://www.investindia.gov.in/team-india-blogs/future-gig-economy-transforming-unorganized-sector-india

^[4] Pooja Monga, “Gig Economy – Shaping the Future of Work” Invest India Outlook 2020, Available at: https://www.investindia.gov.in/team-india-blogs/gig-economy-shaping-future-work

^[5] “How new Labour Codes in India protect right of gig workers in Indian economy”, Tax Guru 2023, Available at: https://taxguru.in/corporate-law/labour-codes-india-protect-rights-gig-workers-indian-economy.html

^[6] “Laws in India for GIG or Temporary Workers”, Indian Law Offices LLP, Available at: https://www.indialawoffices.com/legal-articles/india-laws-and-gig-workers

^[7] Dharangadhara Chemical Works Ltd vs State Of Saurashtra1957 AIR 264, 1957 SCR 152, Available at: https://indiankanoon.org/doc/1996477/

^[8] Ram Singh And Others vs Union Territory, Chandigarh & Ors on 7 November, 2003, Available at: https://indiankanoon.org/doc/1929751/

^[9] Gauri Kashyap, “Gig Workers’ Access to Social Security: Writ Petition Summary (The Indian Federation of App-based Transport Workers)”, Available at: https://www.scobserver.in/reports/gig-workers-access-to-social-security-the-indian-federation-of-app-based-transport-workers-ifat-v-union-of-india-writ-petition-summary/

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Author: Yuvraj Anand

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