INTRODUCTION
India, the fifth largest global flexi-staffing nation, is set to achieve a $5 trillion GDP by 2025. The gig economy, a result of technology-driven platforms and the demand for flexible job options, includes online platform workers, self-employed individuals, on-call workers, freelancers, and temporary contractual workers. This sharing economy, agile talent, and alternative employment arrangements provide income beyond traditional employer-employee relationships. Compensation methods vary, benefiting businesses and gig workers, who can choose organizations and tasks. The gig economy is a developing trend in India where individuals conduct work outside typical employer-employee relationships. Platform workers use online platforms to resolve issues or offer services in exchange for money. These individuals are often younger and less educated, working for restricted hours and seeking a flexible schedule. The gig economy has been around since the early 20th century, with personal references and offline networks working to source and meet on-demand services. There are two sorts of gig work: independent contractors and contingent labour. The gig economy thrives on flexibility, but concerns have been raised regarding platform control and the lack of rights and status granted to freelance workers. The gig economy of India is increasing rapidly, with a compounded 17% growth rate yearly, and is anticipated to hit $455 billion by 2024. The gig worker is defined roughly as someone who does out tasks or takes part in work arrangements outside typical employer-employee relationships. However, there is no data from the government on the exact number of workers the business employs, and private organizations like Urban Company and Uber do not reveal their partner numbers. The gig labor is predicted to rise to 23.5 million employees three times the projected 7.7 million in 2020–21 by 2029–30. There is potential in the gig economy. To service up to ninety million jobs, accounting for 30% of India’s non-farm staff, and contributing up to 1.25% to the country’s economic output in the long run.
GIG ECONOMY AND ITS CHALLENGES:
The gig economy, where freelancers and independent contractors fill temporary and part-time jobs, has rapidly expanded in India, offering greater adaptability and a variety of choices. However, it has faced challenges such as income instability, lack of legal protection, unpleasant work conditions, and social isolation. Drivers face physical weariness and increased risk of road traffic incidents due to hard work hours, while e-commerce platforms enforce strict regulations and exacerbate these hazards. Gig workers also face social isolation due to their autonomous nature and lack of a physical workplace. The gig economy is a movement from Conventional, permanent employment to short-term, freelance, or contract-based labour arrangements, generally facilitated through Internet platforms. It indicates a shift towards a flexible, task-based, and on-demand workforce. Workers are independent contractors, freelancers, or temporary workers who do certain tasks for a set cost. Businesses hire gig workers for specific tasks, while internet platforms operate as intermediaries, handling task distribution, payment processing, and communication. Examples include Upwork, Uber, and Swiggy.
CHALLENGES FACED BY GIG WORKERS:
The negatives, meanwhile, are that gig economy workers frequently have higher work hours than normal jobs. This is because no corporate perks or work hours are being put on their contract, leading to a loss of work-life balance and tiredness. Another downside is that the company benefits themselves, with no health insurance, no paid leaves, or job stability. Temporary workers operating in the gig economy lack several things permanent workers regularly get offered. This is also due to government legislation not directly targeting gig economy workers specifically, thus several loopholes can be exploited against them. Several challenges have been faced by gig workers which are mentioned as follows:
- Low wages long hours and income inequality.
- Exceeding expenses
- Misbehaviour by customers
- Lack of Social Security.
- No job security
- No financial stability
- No legal protection.
- Lack of recognition which causes limited access to credit.
- Deduction in income for reasons such as complaints by customers etc.
- Without any warning their ID gets deactivated.
- They have no place in collective bargaining.
LEGAL ACTS RELATED TO GIG WORKERS IN INDIA AND THEIR DRAWBACKS:
To consolidate 29 central laws the government of India introduced four new labour codes which are described as follows:
- The Code of Wages
- Code of Industrial Relations
- The code for Social Security
- The Code of Occupational Safety and Health and Working Conditions
The Code on Social Security, 2020 is a labour code introduced in India to benefit workers in the unorganized sector, including self-employed and platform workers. To suggest workable plans for these workers, it established the National Social Security Board. Employer conditions, termination, layoffs, strikes, lockouts, collective bargaining, trade union registration, and dispute resolution are all governed by the Industrial Relations Code, 2020, a unitary legislation. However, all employees, including platform and gig workers, have different rights and protections. Recent legislative proposals aim to establish safeguards for gig workers, including minimum pay qualifications, accident benefits, and social security benefits. However, these rights are inconsistently enforced due to the freelancing economy’s dynamic nature. The Contract Labour Act, of 1970 and the Employment Compensation Act, of 1923 have provisions for contract workers, but their entire implementation or judicial examination remains elusive, exposing a major portion of the labour force to exploitation and loss of fundamental labour rights. The 2019 Code on Wages Bill consolidates four pay laws, setting a floor wage and requiring revisions every five years. It enforces regulations on working hours, and overtime, and permits wage deductions of up to 50%. Gender wage discrimination is prohibited, with penalties of up to three months incarceration and a Rs. 1 lakh fine. The Industrial Relations Code, of 2020, expands necessary standing orders from 100 to 300 workers, facilitating recruiting and firing. The Code on Occupational Safety, Health and Working Conditions, 2020, redefines factories, removes manpower limitations for hazardous situations, applies to contractors with 50+ individuals, and imposes a daily work hour limit of eight hours. Rajasthan enacted the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act in July 2023. India’s informal sector, comprising 92.5% of the population, primarily consists of gig and platform workers who lack social protection and have no written contracts. Over 50% of ordinary wage/salaried workers in 2020-21 were not entitled to social security payments. The Code on Social Security 2020 aims to strengthen the social protection system by offering schemes, healthcare, and financial security. The Union Budget 2021-22 proposes minimum pay and Employee State Insurance Corporation coverage.
CHALLENGES FACED BY SOCIAL SECURITY CODE 2020: India’s Social Security Code 2020 proposes to combine nine social security legislation, including measures for unorganized sector workers. However, the code confronts issues such as definitional confusion, poor coverage, employment insecurity, lack of legal backing in conflicts with management, and prohibitions on joining registered trade unions. The lack of clarity creates issues regarding the precise applicability of social security programs to each category, potentially leading to implementation challenges. Gig workers, who comprise a large section of the developing workforce, continue to encounter issues such as employment insecurity, lack of legal backing in conflicts with management, and prohibitions on founding registered trade unions. The scant 0.15% of workers polled have access to “accidental insurance,” exposing the gap between the Code’s ideals and reality. Gig workers’ legal recognition and legal rights are also an issue, as they lack legal backing in conflicts with management, suffer barriers in organizing trade unions, and are not recognized as regular labourers under existing labour laws. Critics believe that rules that address the unique difficulties brought by the gig-based economy remain pressing.
CASE LAWS:
The Dhrangadhara Chemical Works v. State of Saurashtra The case established the supervision and control test as the primary standard for establishing an employer-employee relationship in India. The Supreme Court of India, in Balwant Rai Saluja v. Air India Ltd, devised an integrated testing approach to determine the nature of the relationship between the employer and the employee, taking into account elements such as the right to reject, paymaster, dismissal rights, alternative service duration, control and supervision, work nature, and establishment types. This method affects employee status, employer rights, salary, insurance contributions, and other employment-related elements. All India Gig Workers Union v. Uber India Systems Pvt. Ltd, where Uber’s policies have been criticized by gig workers who are protesting the company’s refusal to provide social security benefits and minimum wages. This highlights the continued efforts to alter the employer-employee dynamics inside these digital platforms to achieve fair pay and benefits for gig workers.
CONCLUSION
The gig economy has gained tremendous popularity in India, allowing flexible job opportunities and cost-effective solutions for enterprises. On the other hand, gig workers deal with various roles related to job security, social protection, and legal safeguards. Although new labour rules have been enacted, such as the Social Security Code of 2020; their execution is unsatisfactory. This makes regulating gig work hard because the fact that employment is so dynamic means that those rights are not secured by platforms to workers. Although legislative attempts such as the Rajasthan Platform-Based Gig Workers Act are a good start, what is also required addition to them legal recognition of these rights and decent wages along with social security benefits including collective bargaining rights so that make the gig economy fair trade?
Author(s) Name: Shalini Dhyani (Vasudev College of Law, Kumaun University Nainital)
