India is the fifth largest gig economy in the world and is bound to be the third by 2030. Moreover, the Gig economy is going to lead economic growth and reduce unemployment. With the rise of platform-based employment, gig workers have become an essential part of India’s labour market. However, they continue to face issues such as job insecurity, lack of social protection, and inadequate legal safeguards. This paper examines the current status and gaps in India’s existing labour laws, highlighting the absence of comprehensive legislation. It also examines the court interpretation on various issues related to gig workers and the difficulty of classifying gig workers as employees through direction and control test. Moreover, a nuanced and balanced approach has been taken keeping the aggregator platforms in mind, to devise a solution.
Additionally, the paper draws comparisons with international legal frameworks governing gig work in other countries, examining how nations such as the United States, and the United Kingdom, and developing countries like Brazil have approached the regulation of the gig economy, looking into the classification of employees, workers and independent contractors. By analyzing global trends and best practices, the paper identifies potential policy reforms that could be implemented in India to ensure a balance between aggregator platforms and gig workers, ensuring workers are afforded better social security, fair wages, and access to essential benefits, while platforms remain sustainable. By addressing these challenges, the paper proposes a more balanced and sustainable gig economy that benefits workers as well as the companies and in turn the nation’s overall economic growth.
Keywords: The Code on Social Security, 2020, Gig economy, Gig worker, Platform worker, Aggregator platforms, Social Security
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Introduction
Since time the landscape of work and employment has been changing from the primitive society to an industrial era which requires workers to engage in hazardous working environment and to tackle these, various industrial laws has been created to resolve those issues but with the introduction of technology the way of working has also changed and the laws are becoming obsolete day by day, failing to tackle modern-day issues. This introduction of modern tech has enabled people to no longer engage in traditional ways of employment, instead aggregator platforms like Uber and Zomato has enabled people to work for different platforms at the same time. These people are generally regarded as gig workers.
The European Commission defines the gig economy as an economy in which digital technologies enable teams to be assembled around a given project – and often across borders – while platforms seamlessly connect buyers with sellers.[1] In India, section 2(35) of The Code on Social Security, 2020 (“CSS”) defines “gig worker” as “a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship”.[2] These gig workers participate through different online platforms like Uber, Zomato, Zepto etc. Section 60 defines “platform work” 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 problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment,”[3] and section 61 “platform worker” means “a person engaged in or undertaking platform work.”[4]
The gig economy market is expected to grow at a compounded annual growth rate (CAGR) of 17% to reach a gross volume of $455 billion by 2024, according to a white paper by the Forum for Progressive Gig Workers.[5] As per NITI Aayog number of gig workers could increase to 23.5 million by 2029–30.[6] With this huge growing thing, it has become more imperative to look into the rights of workers associated with the gig economy and safeguard them.
The paper looks at the current framework of regulating gig workers in India, issues with various proposed legislations, courts interpretation regarding status and lack of coherence, comparative view of various countries, critical analysis of the issue and solutions which can be incorporated.
[1] ‘Gig Economy | European Foundation for the Improvement of Living and Working Conditions’ <https://www.eurofound.europa.eu/en/european-industrial-relations-dictionary/gig-economy> accessed 3 January 2025
[2] The Code on Social Security 2020 (36 of 2020).
[3] The Code on Social Security 2020 (36 of 2020) s 60.
[4] The Code on Social Security 2020 (36 of 2020) s 61.
[5] Peerzada Abrar, ‘India's gig economy may add 90 million jobs, contribute 1.25% to GDP’ (Business Standard, 28 Nov 2024) <https://www.business-standard.com/economy/news/india-s-gig-economy-could-add-90-mn-jobs-enabled-by-large-multinationals-124112800721_1.html> accessed 2 January 2025.
[6] ‘India’s Booming Gig and Platform Economy Perspectives and Recommendations on the Future of Work’ <https://www.niti.gov.in/sites/default/files/2023-02/25th_June_Final_Report_27062022.pdf>
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