Covid-19: Reimagining laws to provide adequate protection to gig workers

Some experts for bringing gig workers under the ambit of the contract labour Act; others want a new rulebook

The Covid-19 pandemic may force policymakers to revisit the draft Social Security Code, 2019, to provide adequate protection to gig workers from inherent frailties of the model, and in times of crisis, say experts.

The government last week unveiled an Rs 50,000-crore employment scheme to boost livelihood opportunities in rural areas for pandemic-hit migrant workers. However, no such income booster is in the offing for thousands of platform-based gig economy workers, working largely outside the ambit of the country’s labour law regulations.   

In the pandemic induced lockdown, most such workers experienced a drastic loss of income security. Many were forced to return to their home states. At the same time, mobility-based workers, such as drivers and delivery persons, bounced back quickly to meet the essential needs of people sheltered in their homes. The pandemic exposed the frailties of the sharing-economy business model on the workforce. This should force policymakers to take a fresh look at the regulatory framework governing the gig workforce, say experts.  

In September last year, the draft Code on Social Security, 2019, recognised ‘gig workers’ and ‘platform workers’ -- for the first time in the country’s labour laws. The draft Bill proposed to give life and disability cover, health and maternity benefits, old-age protection, and "other benefits"  as determined by the central government. However, the Code is yet to become a law.

Labour law and policy experts agree that gig-economy workers deserve a much better deal than what they are currently getting. Some have argued bringing them under the ambit of the Contract Labour (Regulation and Abolition) Act, 1970. Vidhya Soundararajan, assistant professor, IIM Bangalore, argues most gig work arrangements are similar to contract work. As in any contract work, in platform-based gig economy apps, there is a three-way relationship between the platform, the service seeker, and the service provider. Soundararajan is of the view that the clauses of the Contract Labor Act can be generalised and gig work can be subsumed.

However, that is easier said than done, feel many experts. That would mean an overhaul of the Contract Labour Act, as just amendments to the law may not satisfy the needs of either workers or employers.

“I don't think changes to the existing Contract Labour Act would help regularise gig workers, since the fundamental model of employment would be unsuited to the kind of work that gig-economy workers undertake,” says Alok Prasanna Kumar, senior resident fellow, Vidhi Centre for Legal Policy. He advocates a new labour law that would take into account the different model of work, but at the same time provide for health and safety protections, social security, and collective bargaining, among others.

The regulatory framework for gig workforce will be bit complex.

Certain protections that are already in the legal framework can be made available to the platform workforce by considering them as workers/employees of the platform under the law. “This especially applies to aspects, such as unionisation and collective bargaining,” says Sarayu Natarajan, founder, Aapti Institute. Natarajan points out the applicability of contractor responsibilities and liabilities as envisaged under the Contract Labour Act is not clear in the case of platform work.

However, any legislative framework has to take into account certain specificities of platform-enabled work, say experts. This includes re-defining the concept of the place of work as most labour laws are written in the backdrop of an office or factory set up. There is also need to understand the power of algorithms and technology in collecting bargaining and role of unions, or maintain the flexibilityy in work hours that platforms provide, while framing the rule book for the gig workforce.

Another way forward could be to have an interplay of the Codes addressing the needs of the gig workforce.  Some experts feel in a situation where the government is in the process of consolidating labour laws to bring in uniformity, ease of compliance and reduce complexity, this may suit the needs of gig-economy stakeholders better.

“A balanced approach is required so that not only gig workers are protected but also the growing gig economy is not impacted by a reduced demand on account of flexibility in the existing arrangement being taking away,” says Pooja Ramchandani, partner, Shardul Amarchand Mangaldas.

The definition

The draft Code on Social Security, 2019, defines a 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”

A platform worker is defined as person who is part of an organisation that “uses an online platform to access other organisations or individuals to solve specific problems or to provide specific services in exchange for payment”.

How others treat them

In California, from January 1, 2020, the California Assembly Bill 5 (popularly called AB5) extends employee classification status to gig workers, giving them several workplace benefits, including unemployment and disability insurance. Many gig drivers became eligible for unemployment benefits during the pandemic.

The pandemic has fuelled debate around protection for gig workers in Europe. Already, there has been spate of litigation in European courts around claims of reclassification by gig workers. Such litigation is expected to increase in the coming months, say lawyers.