Digital Platforms And Gig Workers - A Modern Approach To Circumvent Employer-Employee Relations
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DIGITAL PLATFORMS AND GIG WORKERS: A MODERN
APPROACH TO CIRCUMVENT EMPLOYER-EMPLOYEE
RELATIONS
Aditya Chawla, B.A.L.LB., Symbiosis Law School, Hyderabad.
ABSTRACT
An impressive rise in Digital Platforms has led to birth of a varied class of Gig Workers1. India is the fifth largest country in terms of Gig workers. Several efforts were made to bring amendments in labour regulations so as to give recognition to this group of workers. The GIG Economy which arose in 2000s focused on the increase of market flexibility. In fact, The panel and even the policymakers have constantly faced difficulties while categorizing these individuals under the active labour regulations with respect to functioning and their position in the industry with which they are actively affiliated. The current status of gig workers has been a cause for the growing economy in India. Moreover, As per the report published by the NITI Aayog titled “India’s Booming Gig and Platform Economy”2 clearly states that around 25 million workers will be actively a part of Gig economy by 2029.
The Gig economy is one of the most unguarded sectors in the market. Unfortunately, the existing laws i. e The Industrial Disputes Act, 1947 failed to recognize Gig Worker. However, the new labour code “The Code on Social Security, 2020” which were introduced by the current Government includes Gig workers within the purview of labour laws and even covers the provisions for the welfare of the workers. This attempt may improve the employer-employee relations within the industries. This paper focuses on the social issues regarding their employment and legislative position in their recognition. Lastly, it emphasizes on the difficulties which the current system will face. Keywords: Gig workers, Digital platforms, Labour Regulations, Gig Economy, Industrial Disputes Act, Employee.
1 Sahaj Mathur, Labour Law and the Gig Economy: Towards a Hybrid Model of Employment, INDIACORPLAW.
https://indiacorplaw.in/2022/12/labour-law-and-the-gig-economy-towards-a-hybrid-model-of-employment.html 2https://www.niti.gov.in/sites/default/files/2022- 06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf
INTRODUCTION
Gig workers which is commonly referred to as freelancers, digital platform workers have been playing an important role in the global workforce. 3 The rise of the economy has brought a massive change in the contemporary world. Gig Economy – a fresh and new form of work which attempts to challenge the traditional relation of employees and employer. 4 Digital Platforms have made huge disruptions in the modern economy by giving more importance to the gig economy as the whole meaning of traditional employer-employee relationship has changed to Temporary workers, Freelancing and independent contracts. As a result, The boundaries between the employer and the respective employees have blurred by creating both the job opportunities and challenges while fulfilling the tasks to be done.
As per the report submitted by SHRM( Society for Human Resource Management),5 The Indian Gig Economy comprises the online platform, their workers, non-permanent and self employed individuals. The common feature is they are not bound permanently to work under any corporation and not barred by the conventional employer-employee relationship. There are few conditions based on which a worker can be categorized as a gig worker which would include- {a} Fixed payment to be made at the time of entering the contract. {b} Time and effort given to the work. {c} The amount of accomplished. {d} Quality needs to be assessed for the work done by the worker. {e} A combination of the above-mentioned factors. 6
3 David Peetz, 6 Flexibility, ‘the Gig Economy’ and the Employment Relationship
https://www.jstor.org/stable/j.ctvq4c16w.11?seq= 4 Here, traditional employer- employee relation means permanent contracts, organizational hierarchies, and set working hours.
5 Neelam Kshtriya & Daisy Kurien “Gig workers in India: Emerging Opportunities in the nEw Economy”
https://scholar.google.com/citations?view_op=view_citation&hl=en&user=ph2V1YIAAAAJ&citation_for_vie w=ph2V1YIAAAAJ:eQOLeE2rZwMC
6 Shreya Thakur, “What is Gig Economy- Understanding the meaning, factors, types and more,
https://unstop.com/blog/what-is-gig-economy
Yet, The question arises- Should the gig workers be entitled to the rights equivalent to employees? Should there be any regulation regarding the digital platforms as to how the gig workers are to be treated? Gig economy in India is based on the efforts of the gig workers which can be interpreted as a non-traditional type of labour working on the basis of on-demand employment. However, up to some extent this has also led to an organized for of working in areas such as travel, delivery and other services. Definition of “Gig Economy” according to Cambridge Dictionary7 is- “ a way of working that is based on people having temporary jobs or doing separate pieces of work, each paid separately, rather than working of an employer.
” Definition of “Gig worker” is mentioned in The Social Security Code, 2020 as “ a person who performs work or participates in a work management and earns from such activities outside of traditional employer- employee relationship”8 Furthermore, the “Platform Worker” is defined as- “ a work arrangement outside of a traditional employer- employee relationship in which organisations or individuals use an online platform to access other organisations or individuals to solve specific services or any such other activities which may be notified by the Central Government, in exchange for payment. ”9 It is appreciated that both gig economy and platform workers have been recognised by the Social Security Code. But still there is an ambiguity in the definitions which does not give any importance to Gig economy.
HYPOTHESIS
The hypothesis has been framed to assess the prospect and scope of whether... “Digital Platforms made modifications in the existing employer-employee relations by providing Gig workers the much needed recognition, various income opportunities, flexibility in the market. Moreover, This opportunity give a rise to various challenges such as Security
7 https://dictionary.cambridge.org/dictionary/english/gig-economy
8 The Code on Social Security, 2020, Section 2(35).
9 The Code on Social Security, 2020, Section 2(60).
for the job, legal protections as they lack the benefits of full-time workers.”
RESEARCH QUESTIONS
The researchers intend to answer the following questions through the research conducted:
1. What are the factors fulfilled by Digital platforms that brought changes in the existing
employer- employee relations?
2. What are the legal challenges in enforcing labour regulations for gig workers
particularly in jurisdictions like India?
3. What are the main challenges for Gig workers with respect to Job security, working
hours and access to legal rights?
4. What improvements can be made by digital platforms to circumvent the challenges of
Gig Workers?
RESEARCH OBJECTIVES
The researcher, through this study, intends to achieve the following objectives:
1. To analyse the impact of Digital Platforms on existing Employer- Employee Relations.
2. To propose legal and regulatory framework for the adoption of Labour regulation for
Gig workers in domestic legal system.
3. To assess the functionality and limitations applied by digital platforms on Gig workers.
4. To recognize the challenges or obstructions faced by gig workers in future.
SCOPE OF THE STUDY & LIMITATIONS.
This study will primarily focus on the impact of Digital Platforms on employer-employee relations within the milieu of Gig Economy. It examines how the digital platforms which is a part of latest technological advancements will affect the traditional employer-employee relationship with the main focus areas such as responsibilities, accountability among platform operators and gig workers. It will also analyse how the work will provide opportunities based
on their skill, passion towards the work and even provide access to variety of sources of income which were not existing in the older forms of employment. The study also assesses the challenges posed by regulatory constraints, technical limitations, and raising the need for recognition. Limitations:
1. Jurisdictional differences such as different region or country may be limitation due to
variations in legal systems.
2. The study will be relying on self-reported data which be produced by gig workers which
may involve biasness.
3. The economy is rising rapidly which may result the findings to be affected by the
changing nature of digital platforms and work.
RESEARCH METHODOLOGY.
This research follows a qualitative methodology, using an extensive review of various books, legal reports, articles and legal precedents to analyse the role of platform workers and status of gig workers in India. The study refers international aspects and relation to Indian Judiciary practice to assess enforceability of new laws, challenges, solutions. Landmark Judgements on market functions and specific legalities have been searched for an efficient understanding. Secondary sources such as various legal databases, survey reports, research publications have been taken in view to ensure a balanced analysis.
LITERATURE REVIEW.
The researcher conducted a comprehensive review of several articles and various literatures to analyse the connection between digital platforms and employer-employer relationship. These sources delve into relation between Judiciary and the Gig economy, discusses the present status and prospects in India. The researcher found the article titled “Employee relations in Gig & Platform Economy:
Emergence of Legal Framework in India”10 insightful as it explores the challenges faced by the gig economy as the digital platforms are unanimously setting the standards of work for gig workers. It highlights concerns around the challenges faced by the gig workers by the negligence of the state for bringing out a fresh and new legislation. It also mentions that the new labour regulations have simplified the provisions to an extent but still there is a long way to go. While the article offers a sharp critique as the policymakers, expert panel and third parties has not been an agenda. The article titled “Determining the Status and Treatment of “Gig-workers” under The Industrial Disputes Act, 1947”11 expresses the concerns with the working of Gig economy and absolute ignorance from the labour industry.
The researchers right away pointed out that gig workers are perceived as ‘second class workers’. These workers are categorized as unorganized labourers and are discriminated as some ignorant group of workers and rights are not provided as of traditional. It also pointed out the non-bearable treatment towards the workers by the digital platforms due to non-availability of the benefits. Societies, Government and Corporations must come together as a whole and address the atrocities faced by gig workers. It also analyses the position at international level which was compared with domestic level so that the additional tests could be adopted in India.
The article titled “Rajasthan’s Gig worker’s Legislation: Paving the way for transformation”12 provides insights on the update over the gig economy as Rajasthan becomes the first state to present a legislation regarding the burgeoning gig economy. “Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023”13 aims to secure the rights of the concerned group and other rights. However, Social Security Codes have also been passed but at the central level. Rajasthan has adopted a broader approach on a state level thereby leaving a landmark precedent for other states in the country. Furthermore, the article also mentions the basic needs of the workers which are necessary to meet so that there are no more
10 Bighnesh Dash Mohapatra & Chandan Kumar Sahoo, Employee relations in Gig and Platform Economy:
Emergence of Legal Framework in India. http://www.publishingindia.com/ijir/22/employee-relations-in-gig-andplatform-economy-emergence-of-legal-framework-in-india/32055/77043/
11 Sarvagya Chitranshi &H A Dhruti, “Determining the Status and Treatment of “Gig-workers” under The
Industrial Disputes Act, 1947”. https://doi.org/10.69974/glslawjournal.v6i2.134 Esha Rathi, Rajasthan’s Gig workers’ Legislation: Paving the way for transformation? https://indiacorplaw.in/2023/09/rajasthans-gig-workers-legislation-paving-the-way-for-transformation.html. “Rajasthan’s Platform Based Gig Workers (Registration and Welfare) Act, 2023, https://prsindia.org/files/bills_acts/acts_states/rajasthan/2023/Act29of2023Rajasthan.pdf
difficulties between the economy and digital platforms. The researcher referred to “A Study on the Impact of Gig Economy Platforms on Employment Opportunities in India’s Urban and Rural Areas”14 as it righteously mentions that access to digital platforms in rural areas is difficult but can be a positive impact on the gig economy and at the same time it also states that challenges will eventually sum up collectively majorly involving connectivity issues, literacy gaps, lack of knowledge in technology. The article provides a nuanced perspective on the automation and adaptability, highlighting the need for developments in the concerned groups and traditional stereotypes being in continuity.
The article titled “The Role of Digital Platforms in shaping the future if the Gig Economy in India”15 explores the pros and cons of the platforms in relation to workers and states that flexibility regarding the timings will allow the workers to fix schedules unlike 9 to 5 which is followed in corporations and autonomy while fixing the daily wages, focus on the work which align with their own interests, work virtually or in hybrid mode from anywhere. Furthermore, the lack of job security was a growing concern as the economy was rising without any regulations or legislations.
ANALYSIS
I. THE NEED FOR GIG WORKER’S INCLUSION IN EMPLOYMENT AND
LABOUR REGULATIONS
The unexpected rise of gig workers facilitated by gig workers has made alterations in the labour markets. Digital Platforms like Uber, Ola, Zomato, Swiggy, TaskRabbit and Up work have engaged sort term labourers so as to maximize the profits but this has over the years change the course of traditional labour market. There have been several issues regarding the involvement of Gig Economy but one of the most pressing issues is “ no legal protection for gig workers. Currently, they come under the purview of Unorganized worker’ Social Security
14 Dr. J Suresh Kumar & Dr. D Shobana, “A Study on the Impact of Gig Economy Platforms on Employment
Opportunities in India’s Urban and Rural Areas” https://www.researchgate.net/publication/383053115_A_Study_on_the_Impact_of_Gig_Economy_Platforms_o n_Employment_Opportunities_in_India's_Urban_and_Rural_Areas 15 Dr. Eknath Mundhe, “The Role of Digital Platforms in shaping the future if the Gig Economy in India. https://www.researchgate.net/publication/387580897_THE_ROLE_OF_DIGITAL_PLATFORMS_IN_SHAPI
NG_THE_FUTURE_OF_THE_GIG_ECONOMY_IN_INDIA
Act, 2008. Section 2(m) of the Act mentions the definition of “unorganized worker” as “ a home based worker, self-employed worker or a wage worker in the unorganized sector and includes a worker in the organized sector who is not covered by any of the acts mentioned in Schedule II of this Act”16. This Act is solely for those who are street vendors and for those who are not covered under any other labour legislations. As a result, the security provided is not equivalent to that of workmen. A. Revisiting the Definition of ‘Workmen’ under The Industrial Disputes Act, 1947
Over the years, Gig workers have not been conferred explicit protection under the Act. However, there has been multiple instances where Supreme Court and various High Courts have shown interest in the protection of such workers and independent contractors. The Industrial Disputes Act, 1947 is one of the oldest legislation in India which confers and protects the rights of workers. 17 For a worker to claim protection. Under the Act, it must fall within the scope of definitions of the particular industry to which he is associated to, workmen and in several disputes in which any worker is involved. Section 2(j) of the Act states the definition of an “Industry” as “ any business, trade, undertaking, manufacture, or calling of employers and includes any calling service, employment, handicraft or industrial, occupation or avocation of workmen18.
Section 2(s) of the Act states the definition of “Workmen” as “ any person (including any apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute19. There are several regulations under which gig workers can claim benefits. Below are the key
16 Unorganized worker’ Social Security act, 2008, Section 2(m)
17 S C Shrivastava, Industrial and Labour Laws (Fifth edition) Vikas Publishing House, 2007).
18 Industrial Disputes Act, 1947, Section 2(j).
19 Industrial Disputes Act, 1947, Section 2(s)
legislative provisions that may offer gig workers access to various benefits and safeguards: • Minimum Wages Act, 194820: Gig workers are qualified to take minimum wages as prescribed by the state governments. However, Setting and implementing minimum wages for gig workers poses multiple challenges due to their irregular nature of their work. • Payment of Wages Act, 193621: The act regulates the payment of wages to employees, including gig workers. It ensures the workers that payment of wages will be made t\on time and clears out the mode of payment in advance. • Employees’ Provident Funds and Miscellaneous Provisions Act, 195222: Gig workers were also made eligible for provident fund benefits if they meet certain thresholds such as minimum wages to be earned which will be formulated by the government.
• Employees’ State Insurance Act, 194823: Several gig workers, depending upon their financial stability and nature of income in the industry may qualified for benefits under the Employees’ State Insurance Scheme (which provides medical facilities and other benefits. B. Indian Judicial Interpretation of ‘workmen’ under The Industrial Disputes Act, 1947
In multiple cases gig workers have been treated as workmen under The Industrial Disputes Act, 1947, but the protection and benefits has not been provided as and when required. However, The courts have shown keen interest towards the protection of the same. The first case that noticed the wrongdoings with the contracted workers was Hussainbai Alath vs Factory Thozilali Union24. It involved the contracted workers who were employed to work in a factory to work owned by Hussainbai Alath by an intermediary, the main issue before the court was whether the definition of ‘workmen’ under the Act include these workers who were not hired
20 Minimum Wages Act, 1948.
21 Payment if Wages Act, 1936.
22 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
23 Employees’ State Insurance Act, 1948,
HussainBai Alath vs Factory Thozilali Union, 1975,
SCR
(3)1073 https://heinonline.org/HOL/Page?collection=journals&handle=hein.journals/injlolw2&id=5247&men_tab=srchr esults
directly by the owner of the factory. Refusing the SLP, the Supreme Court of India upheld the decision of the lower courts by ruling that the contracted workers were indeed ‘workmen’ under the Act. The Court also stated that the true nature of the relationship between the workers and the contractor is nowhere disturbed or jeopardized due to the presence of an intermediary. It reinforced the principle that labour laws and regulations should be interpreted in a structured manner that highlights the rights of workers. Another landmark judgement which focuses on the rights of workers was that of Ram Singh vs Union of Territory, 200425, Ram Singh was a daily wage worker who was hired by Chandigarh Administration and worked there for a very long time.
The core issue behind the dispute was whether Ram Singh will be entitled for the benefits granted to permanent employed workers and whether he will be treated as a permanent employee. The court held and stated in the judgement that if the employer(Chandigarh Administration) performs the function of the contractor, then it can be termed as an employer-employee relationship. The Court has further stated that there lies several factors which examines the employeremployee relationship: • Who is making the appointment of workers? • Who will pay the salary? • What was the duration of the employment of the worker? 26 Taking an inspiration from these judgements, The High Courts across the country have endeavoured to bridge the gap between employer-employee relationship. However, There are few judgements which strongly deny the inclusion of gig workers in the Act.
In the case of Himanshu Kumar Vidyarthi v. State of Bihar, 199727, the petitioner and others were employed under the Drought Relief Program implemented by the State of Bihar. The petitioners challenged the order of termination and wanted to invoke constitutional provisions even after working under the program for several years and still not granted the
25 Ram Singh vs Union of territory, 2004, 2004 (1) BLJR 490 https://indiankanoon.org/doc/1929751/
26 Dr Avtar Singh & Dr Harpreet Kaur, Introduction to Labour and Industrial Laws.
27 Himanshu Kumar Vidyarthi v. State of Bihar, 1997.
https://calcuttahighcourt.gov.in/judgement_pdf/1997/scr_1997_3_368_369_e.pdf
status of permanent workers. When the case was transferred to Patna High Court, it was ruled in favour of the state, stating that the petitioners had no statutory right over against the order of termination. Another case which followed the aforementioned judgement was SAIL & Ors vs National Union Water Front Workers & Ors, 200128 which overruled the judgement Air India Statutory Corporation vs. United Labour Union, 199629 and stated that contracted workers do not have the same status of permanent workers and are not entitled for automatic absorption. Therefore, It is clear from the above precedents that there are various opinion of courts which has given arise to the ambiguity with respect to inclusion of gig workers. As the societ is constantly evolving, it is imperative for the law to change with it.
II. INTERNATIONAL APPROACH TO CLASSIFICATION OF GIG WORKERS
Unlike traditional employees who are actively associated with corporations, gig workers unfortunately operate in a grey area, classified as independent contractors and as stated above excluded from the benefits such as maternity benefits, health insurance. This sparked widespread debates and debates globally, countries like United Kingdom and United Sates of America are taking steps to address these problems. A. International position w.r.t UK, USA
In United Kingdom, Gig workers have been categorised as ‘workers’ and are provided opportunities and safeguards such as insurance, job security and even holiday pays. This categorisation was triggered in the country by a landmark case of Uber BV vs Aslam30. In this case, the court examined that when a person books a ride(any), the software of the company evaluates the fare and there is no discretion for the consumer and for driver to charge additional fares. Furthermore, the court also stated that the software will automatically mention the amount to be paid to the driver which will be based on the work they perform. Therefore, these
28 SAIL & ors vs National Union Water Front Workers & ors,
https://repository.nls.ac.in/cgi/viewcontent.cgi?article=1059&context=nlsblr Air India Statutory Corporation vs. United Labour Union, https://www.aironline.in/legalarticles/‘Deemed+Employment’+under+Contract+Labour+%28Abolition+and+Regulation%29+Act+1970++A +Note+on+Air+India+Statutory+Corporation+v.+United+Labour+Union+and+Others%2C+Air+1997+SC+645 +%3A+1997+Lab+IC+365+%3A+1997+Air+SCW
30 Uber BV vs Aslam https://www.supremecourt.uk/cases/uksc-2019-0029
workers must not be treated as partners or independent contractors but employees of the company. In USA, California has been one of the oldest jurisdictions to even consider labour regulations including gig workers. The Assembly Bill31 during the initial days categorised gig workers as employees with several benefits, but an election changed the status and made a room of flexibility with the benefits. In the landmark case of Dynamex Operations West Inc. v. Superior Court of Los Angeles32, The ‘ABC test’ was coined for the first time which lies on the employer to state the nature of employment with the workers or independent contractors. The ‘ABC Test’ includes the following conditions to consider a person as independent contractor : • Perform the tasks without any direction or control. • The job is different from the one in the office environment.
• Any side business must be carried on for the hiring organization. It is very clear that the Regulations and judicial interpretations in USA and UK have successfully considered the importance of gig workers and this major recognition may make them eligible for the social benefits. This approach can be used in Indian Jurisprudence to extend the protection of Industrial Disputes. It should also be noted that even after such recognition, such jurisdictions face issues regarding the benefits available to workers. B. Additional tests to be proposed in employer-employee relationship
To examine whether a person is an independent contractor or an employee is a difficult task which cannot solve a problem with single test or experiments. In addition to the test mentioned above, following are the additional tests to be proposed, it is suggested to courts to notice these tests: Economic Realities Test: This test evaluates the financial stability of the employer. The California Supreme Court followed the Borello & Sons, Inc. v. Department of Industrial 31 The Assembly Bill (AB 5) https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5 32 Dynamex Operations West Inc. v. Superior Court of Los Angeles, 2018. https://www.jstor.org/stable/26795241
relations33. This case highlighted the problems faced by labours who do not have financial stability. Nature of work: The kind of work performed in the particular industry, such classification may affect the employer-employee relations positively. In the case of Air line Pilots Association v. Federal Express Corporation34, The US Court held that pilots were held employees not independent contractors based on their duration. In the case of inclusion of gig workers, it is proposed that the arrangement between the workers and the employers must be treated as a whole and not in isolation. This will lead to directly claim the protection from the organized sector rather than unorganized sector.
CONCLUSION AND WAY FORWARD
Even after the contributions made to the economy and building up the economy of their own, Gig workers face various challenges that undermine their rights and well- being. These group of workers lack job security, social benefits as platform workers terminate the temporary employment whenever required without providing adequate resource. Moreover, the major population of the economy do not have access to essential benefits such as health care, retirement plans or any other protections, leaving them vulnerable. The legal categorization of gig workers as independent contractors is a vulnerable area where no legal protection is provided. A legal framework must be provided that confer them their rights equally with those of permanent employees. The Gig Economy is perpetual from now and will continue in the long-run.
Subsequently, it’s importance will increase as there is a major shift in the country to the economy. Taking into consideration The International approaches towards the problem where several tests which have been practiced in USA, UK may provide the course of action for application of these laws into Indian Legislations. The Labour and Employment ministry has launched E- Shram Portal35. This initiative will 33 Borello & Sons, Inc. v. Department of Industrial relations, https://law. justia. com/cases/california/supremecourt/3d/48/341. html 34 Air line Pilots Association v. Federal Express Corporation, https://law. justia. com/cases/federal/appellatecourts/F3/67/961/584335/
35 https://eshram.gov.in
start the registration of unorganized workers with their Aadhar Number. The formation of a centralised base will collect the data at the central level which will make the accounting easy. In Conclusion, resolving the issues faced by gig workers needs a holistic approach which involves accountability, awareness and legislative reforms. By doing so, it may form a fair and inclusive economy which may benefit both workers and the society as a whole. Problems such as minimum wage and unfair termination of the gig workers requires urgent policy interventions. However, due to absence of robust legal framework, violations arise and the situation worsens. Immediate action is necessary to safeguard the rights of gig workers.