Context:
The Union Ministry of Labour and Employment is developing a national law to provide social security benefits to gig workers. This step is very significant as it extends benefits like health insurance, retirement savings, and paid leave to gig workers who contribute significantly to the Indian economy but lack traditional employment benefits.
Relevance: GS1 (Society), GS2 (Governance).
Practice question: Examine the challenges faced by gig workers in India in terms of social security and labour rights. How can the government address these issues to ensure fair treatment and protection for gig and platform workers? (250 words)
Definition :Gig workers are individuals who undertake short-term jobs or freelance work, usually through apps or platforms. Examples include Uber drivers, food delivery riders, or freelance designers.
Key Provisions of the Proposed Law :
- Social security fund aggregators should contribute 1%–2% of their revenue to a social security fund, which supports gig workers by providing essential benefits like health insurance.
- Welfare Board Model: Establishes a board to manage social security for gig workers.
- Mandatory Registration: Requires all gig workers to register on the e-Shram portal
- Termination Safeguards: Aggregators must give workers a 14-day notice before termination.
- Dispute Resolution: Providing opportunities for grievance redressal.
India’s Labour Codes and Gig workers :
The four labour codes in India are:
- Code on Wages, 2019
- Industrial Relations Code, 2020
- Code on Social Security, 2020
- Occupational Safety, Health, and Working Conditions Code, 2020;
These four labour codes rationalised and simplified 29 central labour laws.
NITI Aayog estimates that the gig sector had 7.7 million workers in 2020 and got mention only in the Code on Social Security, 2020. Under the code, gig workers are considered part of the informal sector and miss out on institutional social security benefits. The code emphasised providing social security benefits, but it didn’t address fundamental confusion about gig workers employment status.
The Core Issue:
There is a lot of confusion in the employment relationship between gig workers and aggregators. Gig workers, classified as independent workers, miss out on institutional benefits like minimum wages, maternity leaves, and occupational safety standards as they were placed outside the traditional employer-employee relationship. Critics argue this classification is deliberate by aggregators to avoid compliance with labour laws.
For instance, formal sector employees receive 26 weeks of paid leave under the MaternityBenefit Act, 1961, while gig workers receive only cash benefits, indicating disparity.
The UK Uber Case:
The UK Supreme Court gave a verdict in 2021 regarding the same issue. The court classified Uber drivers as workers rather than independent contractors and Uber as their employer. This made Uber comply with labour laws of the land. This case highlights the need for a clear definition of employers and employees by including aggregators and gig workers, respectively, so that gig workers will enjoy the institutional benefits.
Path Forward
The proposed welfare board model will not yield much result without addressing the root issue, which is employment relationships. Aggregators should be recognised as employers and gig workers as employees. Doing so will reduce unnecessary efforts to duplicate laws.
Conclusion
The anticipated legislation from the labour ministry is a great step towards ensuring welfare of gig workers. However, key moves will remain in defining employment relationships. Addressing this issue will result in inclusive development by not leaving gig workers behind.
