Gig/Platform Workers: India’s Biggest Growth Opportunity

 

Animay Singh
Simpliance COE

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Gig Workers

The scope of freelance work in India has rapidly changed from being an alternate career option to an integral part of its labour market. Prior to the onset of the COVID-19 crisis, the freelance industry was expected to grow to an estimated value of $20-30 billion by 2025, according to reports from a leading newspaper.

With companies being cash strapped and unwilling to take on full-time employees, freelance work also known as a gig/platform work might play an important role in providing India Inc. with a cost-effective solution to assist the economic recovery. This is supported by the government’s inclusion of gig and platform workers respectively under the Labour Code. In this article, we shall examine the difference between gig workers and platform workers as well as the legislative support for both.

What is Gig Work?

The Code on Social Security, 2019 defines this term, although not notified yet, ‘Gig Worker’ under Section-2(35) as follows:-

“A person who performs work or participates in a work arrangement and earns from such work activities outside of a traditional employer-employee relationship.”

Currently, the legal status of gig/platform workers in India is that of independent contractors. The above provision reinforces the same by specifically referring to the absence of a traditional employer-employee relationship. A key difference between ordinary employees and independent contractors is the degree of control an employer has over the manner in which the work is done.

In the case of an ordinary employer-employee relationship, the employer dictates when, where, and how the work is carried out. Whereas independent contractors have complete control over those aspects subject to the terms of the contract. They are only responsible for ensuring that the expected result is met. However, in the case of an employee, the manner of work, as well as the expected result, are in the employer’s control.

What Is Platform Work?

The term ‘platform work’ is defined under Section-2(55) of the Code on Social Security, 2019 as follows:-

“A form of employment in which organisations or individuals use an online platform to access other organisations or individuals to solve specific problems or to provide specific services in exchange for payment”.

E-Commerce business models have taken over the market, with companies like Uber, Ola, Zomato and Swiggy at the forefront of this shift. India’s workforce has embraced these opportunities offered, however, the same has brought its own set of issues relating to liability. While organisations have taken steps to ensure that platform workers are provided with benefits, it had never crystallised in law until the Code on Social Security, 2019.

Legal Framework

Under Section-45 of the above, the Central Government is empowered to frame schemes for gig/platform workers in consultation with the ESIC. Similarly, under Section-109 (4) the Central Government may by notification establish a social security scheme for gig/platform workers. Section-114 is an enabling provision which allows the Central Government to formulate and notify schemes relating to life and disability cover, health and maternity benefits as well as old age protection. The government has a broad scope to include any other subject matter it deems fit to be the basis for a scheme under this provision.

Conclusion

From the above, it is clear that the government intends to recognise as well as facilitate the operation of the gig/platform economy in India. It has provided the foundation for extensive social security and health coverage for such workers under the Code on Social Security, 2019. Although it remains to be brought into force the legislative intent behind it is positive. It is set to be tabled for discussion during the monsoon session of Parliament on August ‘20, meaning a significant change is just around the corner.

The introduction of social security schemes and other related benefits for such workers brings with it the added challenge of ensuring compliance. Therefore it is imperative that employers and employees remain vigilant with regards to the legislative developments on this front.

Do you believe the gig/platform economy represents an opportunity that has not yet been fully capitalised by India Inc.? Drop your thoughts in the comments below.

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4 thoughts on “Gig/Platform Workers: India’s Biggest Growth Opportunity”

  1. Will be a big relief for many gig workers as they are not covered under Social Security, i.e PF or ESIC. But we will have to wait and watch what laws will get passed eventually

  2. I think the Gig Working culture is here to stay whether we regulate it or not. A large number of e-commerce and home delivery apps are already leveraging this model by calling the arrangement independent contractor model. In fact the whole purpose of not having a employer-employee contract is to reduce the burden and cost of compliance. However like you rightly pointed out, if there is no regulations there will be exploitation and the code is surely a welcome sign to secure some of the rights these gig workers should have even if they are not the typical “employee”

  3. If the culture of Gig Working comes in force below could be the consequenses:
    Advantages:
    1) Employment will rotate and people will not be bound to stuck in same place for a long time and wait for growth, increment etc. but thing is that standard pay per hours should be defined with transparency.

    2) Standard of living will increase if the standard pay against work will be same for all.

    Disadvantages:
    1) A sense of responsibility as an employee will reduce as one is not bound to wait for growth , incentives, increments etc.

    2) Might be required skills is not available at a point of time and will have to wait till some gig workers joins the organisation.

    Finally I favour Gif Working if it is implemented in a better way as countries like USA etc is following.

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