Protecting gig workers from exploitation: Govt needs a balanced approach

Union Minister for Labour and Employment Mansukh Mandaviya recently reiterated the government’s commitment to extending social-security benefits to gig and platform workers. He underscored the government’s active exploration of various approaches to ensure that these workers were brought under social-security schemes, akin to those available to traditional employees. In this regard, companies and aggregators employing gig and platform workers would be encouraged to lead the registration process of their workers on the eShram portal, which serves as a national database for unorganised workers. This initiative will be in line with the four new Labour Codes, introduced by the Union government in 2020 that are still awaiting implementation. Among these, the Code on Social Security, 2020, is particularly significant because it consolidates nine labour laws related to social security into a single, integrated code, aiming to extend coverage to workers across both the organised and unorganised sectors. While the Code sets out mandatory benefits for traditional employees, it only provides the central government with guidelines to formulate and announce welfare and social-security schemes specifically for gig and platform workers.

The absence of a comprehensive legal framework to address the specific needs of gig workers is a pressing issue that requires immediate attention. As this workforce segment is rapidly expanding, it is becoming increasingly vital to implement protective measures. According to estimates of the NITI Aayog, gig workers are projected to constitute 6.7 per cent of the non-farm workforce by 2029-30, a notable increase from  2.4 per cent in 2019-20. Some state governments introduced legislation in the recent past to protect this burgeoning workforce. More recently, the Karnataka government proposed a Bill designed to protect the rights of gig workers. This Bill specifically placed obligations on aggregators for social security, ensuring transparency in automated systems, mandating clear contract terms, and a robust dispute resolution mechanism. However, the Bill received objections from businesses, which argued it introduced a stringent inspection regime that could hinder operational efficiency and compromise the ease of doing business.

Thus, developing a balanced approach to protect gig workers from exploitation without disrupting business operations is crucial. Policymakers must consider several factors while formulating any regulations in this space. Many businesses employing platform-based gig workers are relatively young, in the early stages of development, and not making any profits. These businesses rely heavily on the flexibility of the gig market, which allows them to adapt swiftly to market demands and financial pressures. Stringent regulations could impose substantial operational and financial burdens, potentially disrupting their business models or forcing them to cease operations. Further, having aggregators lead the registration process or mandating written contractual agreements could introduce significant challenges. These workers often register with multiple platforms to sustain their income, rotating between them based on demand. Requiring written contracts could restrict them to a single platform, limiting their ability to diversify their income sources. Given the market condition, the government is actively collaborating with all stakeholders to develop a comprehensive framework that addresses the evolving nature of work while ensuring adequate protection for gig and platform workers. Thus, achieving a careful balance is essential to safeguard these workers’ rights and welfare while maintaining the operational viability of the businesses that depend on them.