Symbiosis Law School, Nagpur Multidisciplinary Law Review

Volume II Issue II (2023), ISSN: 2583-1984 (Online), Pg. Nos. 203-213

GIG WORKERS: BESTOWING INDIA’S ECONOMY

Manav Agrawal*

ABSTRACT

India is one of the biggest democratic countries, which houses a generous

amount of population and therefore requires the consistent generation of a huge
chunk of employment opportunities to cater to the needs of the people. India’s
economy is 5th largest in the world after the U.S.A., China, Japan, and Germany.
There is a situation where world economies are facing recession; India has still
tackled this recession very well and has emerged as one of the fastest-growing
economies in the world. The government had set up to reach a target of a $5
trillion economy, but who are the major contributors who ensure that India’s
economy keeps on track with consistent progress? Gig Workers are the
significant contributors whose growth has made India’s economy grow much
faster than anticipated. However, their contribution has not been recognized as
much as it should be, due to which there have been a lot of instances where we
witnessed how specific disruptions made in their working through strikes or
other kinds of movements affect India’s economy adversely. Thus, we will see in
this article the role and importance of Gig Workers in the Indian Economy and
how we could protect their interests.

Keywords: Workers, Economy, Employment, Population, Contributors.

*
Student, BA LLB A, Christ (Deemed to be University), Email: manav.agrawal@law.christuniversity.in.

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GIG WORKERS: BESTOWING INDIA’S ECONOMY

Introduction

Today in India, there are a lot of people who are working to their total capacity to meet their
financial, social and other kinds of requirements. We know there are different types of workers
in India, mainly categorized into Regular Salaried, Casual Wage and Self-Employed workers.
Regular salaried employees have a formal contract with their employer and thus get covered
under all kinds of social security measures guaranteed under different Labour laws, including
the Maternity Benefit Act of 19611, Payment of Gratuity Act of 19722 etc.

If we talk about self-employed workers, then they mainly comprise people who run their
respective businesses and thus get themselves adequately protected because they are the ones
who take all the significant decisions regarding their work. In the case of Casual Wage Workers,
they are the ones who work for a very short time, i.e., till the objective of their job is completed
and therefore still get some protection under the Labour laws, mainly the Employees State
Insurance Act 19483, Minimum Wages Act 19484 etc.

Apart from all these three categories of employees, we have a fourth category of workers
recently recognized in India but still need to receive much traction regarding the various
security and benefits associated with their work. These workers are known as Gig Workers.

Gig Workers can be referred to as those workers who work outside the usual employee-
employer contractual relationship and includes independent contractors, platform workers,
freelancers etc. The Gig Workers work part-time at their convenience. These workers can be
described as a power booster factor for the Indian Economy because of their contribution. 5

All central platform workers-based applications, such as Swiggy, Zomato, Uber, Porter, Ola,
Urban Company etc., have successfully built their platform wholly depending upon the Gig
Workers. These new start-ups are coming because they can make their platform without hiring
actual employees and providing various safeguards specified under the Labour Laws of India.

1
The Maternity Benefit Act,1961.
2
The Payment of Gratuity Act,1972.
3
The Employees State Insurance Act,1948.
4
The Minimum Wages Act,1948.
5
EVALUATING – THE SOCIAL SECURITY CODE, LEGAL ADVICE GURU
(https://legaladviceguru.com/social-security-code-code-of-social-security/).

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Yes, Gig Workers are recently recognized in India, and still, they don’t have any social security
safeguards or benefits concerning their employment.

The true irony is that these workers are required to follow the instructions of their employer,
like wearing uniforms, maintaining specific attitudes and following the procedures. Still, they
are not treated as regular employees. It has been seen that if any gig worker suffers from any
disease, accident etc., they would not be given any type of support by the company for which
they are working, which goes against the fundamental human rights of an individual. The
requirement of social security benefits for these workers should be on priority, considering the
Central Government formulated The Code of Social Security in 20206. Still, it has not been
implemented or enforced to date and is just enacted.

History

In Early India, there were no legislation that would have governed the relations between the
employee and employer or Labour. In the British era, it was seen that the demand for Indian
goods was in huge demand due to their novelty and excellent quality, which cost the British
Government huge losses.

To overcome this, the Britishers first imposed many restrictions on the manufacturing of the
goods made indigenously by the local artisans by setting heavy duties and taxes, ultimately
making indigenously made goods expensive, opening room and market for cheap British
manufactured goods. Back in the 18th Century, the Industrial Revolution came into the picture,
creating tremendous employment opportunities for the people. Still, at the same time, in some
industries, many people lost their jobs due to the mechanization of the process. Since there was
a boom in the manufacturing industries, the workers employed there were exploited to a large
extent, including non-payment of wages, making them work overtime, using children in
hazardous factories, no safety equipment being provided etc.

All these factors made employees' lives miserable, and there it calls for legislation to protect
their interests. Then various laws such as the Factories Act 19487, Minimum Wages Act 19488,

6
The Code of Social Security,2020.
7
The Factories Act,1948.
8
The Minimum Wages Act,1948.

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Payment of Wages Act 19369 etc. After bringing in these laws, efforts were made to have a
harmonious relationship between employee and employer were successful to an extent.

Similarly, in the case of Gig Workers, their interests are not being protected even after
contributing so much to the Indian Economy, and thus, their employers are exploiting them. It
is also extinguishing the incentive for any worker to work more efficiently and productively.

Therefore, their status or position is now similar to those of the industrial workers during the
Industrial Revolution, where they were subjected to highly unfavourable conditions affecting
their employment and personal well-being. So, it is high time that the legislators should bring
in more concrete laws so that the interests of a segment of employees who contribute to the
Indian Economy are protected and avoid unnecessary strikes and protests undermining the
economy's growth.

Role of Gig Workers

The gig economy needs certain people for its continuous run, and these people are called Gig
Workers. These people are employed for a very short time or as per the demand and supply of
the market. These workers enjoy flexibility concerning their working time. They can also have
part-time employment, and along with that time, it addresses one of the significant issues we
have with female employees, i.e., their night shift. In this way, they can work from home at
their convenience.

The benefits of this type of work are that it allows a person to work as per their wish and have
the privilege of having decision-making power and earning some extra income with their
regular job or consider this their primary work. Now everything that has certain benefits also
has some disadvantages, such as the gig workers don't enjoy or can avail of any social security
such as Health Insurance, PPF etc., from their employer; along with that, they don't get the
opportunity of their career growth because they can't step up their organizational hierarchy, and
one of the major drawbacks for this kind of workers is that they can be easily replaced as they
don't need any specific skill which ultimately affects the job stability of these workers.

The contribution of the gig workers has been immense in stepping closer to the target of a $5
trillion economy. There are various instances where we can see the exact importance of the gig
workers; during Covid, when all the logistics systems were poorly affected, it was due to the

9
The Payment of Wages Act,1936.

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working of gig workers in organizations/set-ups such as Swiggy, Amazon, and Zomato, Big
Basket, 1mg, Pharmeasy etc. where the workers were still working to deliver the essential
goods to the public despite of the fact that they were risking their lives to earn some money to
run their livelihood.

While many organizations such as big basket and 1mg gave some relief to them by helping
them out with safety gear such as masks, sanitizer etc., to protect themselves from the virus,
on the other hand, many set-ups such as Swiggy and Zomato reduced the earning amount per
delivery of the rider from Rs 35 to Rs 10 in some cases, which negatively affected the workers.
Those were the people who were taking risks to do their job. Still, instead of supporting them
in any manner, the companies/organizations reduced the incentive of these workers, which
ultimately affected their fundamental human rights. Even after all this, no support was given
by the government in this case because, at that time, they did not recognize the efforts of these
workers and their contribution to the economy. During covid, they realized their role and
formulated The Code of Social Security,202010 to frame some policies and guidelines for these
workers, but it has yet to be brought into force.

We need to understand that because of these workers, our life has become more accessible so
that we can get our groceries and other personal goods at our doorstep without inconvenience.
Now can you imagine the complications in your life, where if the OLA drivers or Swiggy
delivery workers go on strike, the price would be increased for these services provided by the
other platforms because it depends upon the supply and demand game? With that, the
contribution to the economy would also be affected, and ultimately, it would be a big blow to
the entire working ecosystem. Therefore, it is imperative to consider and respect the interests
of these workers and implement as soon as possible the laws and regulations which give some
benefits to these workers, such as Insurance etc.

Significant set-ups, such as OLA, Uber, Swiggy, Zomato, Big Basket, etc., are based on gig
workers. If these workers' interest is not protected, it would be detrimental for these types of
companies and would affect their functioning, bringing in tension for other permanent
employees also working in these companies; because of these developments, specific processes
such as layoffs, termination of the employees would take place, as the company would lower
its financial burden to tackle that issue.

10
The Code of Social Security,2020.

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However, still, they can tackle to a certain extent; after that, they would touch a stage where
they would have to go for Insolvency proceedings to take off again. Still, that path would be
challenging and affect the financial and operational creditors of those companies, including
many large banking/financial institutions. If these institutions suffer losses, the ordinary public
will suffer. So, you see, there is an ultimate and comprehensive connection between all these
workers and their system.

So, if the Gig workers system collapses, it would affect the entire Labour and financial
ecosystem, which we don't want. Thus, it is essential to step up and consider the efforts of these
workers in a comprehensive manner.

The primary benefit of this kind of work is that female employees can manage their household
work and work as per their flexibility, ensuring their financial freedom and stability. Still, with
that, the major problem is basic literacy and knowledge of digital gadgets, which is very crucial
for the working of the gig workers, so this is a possible roadblock in more involvement of the
female workers, which can be addressed by organizing various workshops and seminars where
they can be taught as in how they can further proceed and benefits to them.

Thus, this type of employment has professionalized the piece-work type of job, which was
highly prevalent in the economy's informal sector.

Legislations

If we see there is no exclusive or comprehensive legal provision that applies to the Gig Workers,
even though we have provisions such as the Contract Labour (Regulation and Abolition) Act
of 197011, then also Gig Workers do not come under the purview of the contract labours and
therefore cannot avail any social security measures under this Labour law. Since no law was
governing these workers, these workers were exposed to different kinds of harassment and
unfair practices which their employers practiced.

It was not sooner than the period of Coronavirus that people started to become aware of the
role of gig workers and what kind of hardships they had to endure. To address these issues, the
Government of India recognized these workers and their contribution and included them in the
Code of Social Security,202012, which we will see further in detail.

11
The Contract Labour (Regulation and Abolition) Act,1970.
12
The Code of Social Secuirty,2020.

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Many companies whose complete set-up was based on these workers, such as Big Basket,
Flipkart and Urban Company, announced in 2021 that they would ensure that each of the
workers under their platform would earn local minimum wage hourly after considering the
operational costs. Although many appreciate this move, it is still just like a piece of grain in the
entire bowl.

The Government of India has taken a step further and launched a portal named e-SHRAM to
create an index or database which would nationwide to estimate the number of employees that
work in the non-organized sector to provide workers such as a platform, gig, migrant etc., with
several social security measures, which would facilitate to make their lives better and more
comprehensive.

The National Commission of Labour has put forward to combine and consolidate the National
Labour Laws. Concerning this, the Ministry of Labour and Employment introduced The Code
of Social Security,2020. The benefit of bringing this code is that it would recognize all the
workers, whether they work in organized, unorganized or any other sector and also includes
platform workers. However, the key thing to note is that this code still needs to be implemented
because many states in India are still processing it to finalize these rules for implementation.

The Code of Social Security 2020 has included nine types of Labour laws such as The
Employees State Insurance Act 194813, The Employees Compensation Act 192314, The
Employees Provident Fund and Miscellaneous Provisions Act 195215, The Maternity Benefit
Act 196116, The Cine Workers Welfare Fund Act 198117, The Unorganized Workers Social
Security Act 200818, The Building and Other Construction Workers Cess Act 199619, The
Employees Exchange (Compulsory Notification of Vacancies) Act 195920 and The Payment of
Gratuity Act 1972.21

Now the proposed Code of Social Security 202022 provides various benefits such as maternity
benefits, medical and life insurance, old age protection, and creche facilities for female workers

13
The Employees State Insurance Act,1948.
14
The Employees Compensation Act,1923.
15
The Employees Provident Fund and Miscellaneous Provisions Act,1952.
16
The Maternity Benefit Act,1961.
17
The Cine Workers Welfare Fund Act,1981.
18
The Unorganized Workers Social Security Act,2008.
19
The Building and Other Construction Workers Cess Act,1996.
20
The Employees Exchange (Compulsory Notification of Vacancies) Act,1959.
21
The Payment of Gratuity Act,1972.
22
The Code of Social Security,2020.

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and apart from these, there would be the creation of a fund called Social Security Funds, and
in that the funds would be accumulated from the contribution of several aggregators. The data
has been digitalised to be compiled efficiently and then shared with the required authorities or
establishments to facilitate gig workers' lives. With that, many fixed-contract workers benefit
from the gratuity, which is an excellent move, as it would create more financial security for
these workers. 23

Still, the code that is lacking or losing steam on so many fronts; the first one is that the size of
the particular establishment would be an essential factor in providing certain benefits such as
pension and medical insurance if this leaves out any employees. They would be covered under
discretionary schemes of the government. Not just this, even the income level also influences
the coverage under these schemes.

Apart from these, the implementation of the present Code of Social Security,202024 would
increase the cost of the companies by approximately 15-20 %, which would, in most cases, be
forwarded to the employees and would hurt the margins of these companies who are still not
even close to profit making and apart from this, they are facing high attrition rates, so overall
to counter these things companies might start to hire them as an employee because anyways
they have to give these social security benefits, but if that happens the major positive factor of
these jobs that was flexibility with related to their work and their own decision making would
come to an end, ultimately hampering the gig workers economy.

Now there comes the problem of overlapping the various concepts, which would make these
schemes more confusing and cumbersome. For example, Suppose Ramesh works as a driver in
one cab-based aggregator. In that case, there is also a possibility that he might work for its
competitor, which would make him covered under the definition of the gig worker. Still, since
he works through an online platform, he would also be considered a platform worker. He could
be regarded as a part of the unorganized worker because he is self-employed. This creates a lot
of confusion as there is an overlapping of the definitions taking place.

Thus, it is imperative that the framing of definitions under this code be proper. Now in this,
one major problem that arises is that hardly there are any prosecution measures for the

23
THE CODE ON SOCIAL SECURITY 2020, ADDRESSING THE KEY CHANGES AND THEIR IMPACT,
SHEENA OGRA, ANIRUDH AGARWAL, ( https://www.ahlawatassociates.com/blog/code-on-social-security/)
24
The Code of Social Security,2020.

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employer, and there needs to be a stringent check regarding the implementation, which is
currently required as the utmost priority.

Along with this, the low literacy levels and digital exposure, it is tough to expect that all these
workers would be able to register on the portal. Thus, it requires the need for a massive amount
of awareness.

So overall, there is a need to have provisions for managing the gig workers. Still, at the same
time, half-baked provisions with such a considerable amount of ambiguity would be useless
and further create contention between these workers and employers. Thus, it is crucial to have
comprehensive and more refined legislation governing these kinds of workers.

Recommendations

There is a need to have some amendments, and as per my knowledge and expertise, I would
like to propose some of them:
1. There should be a definite change in the limitation period; as of now, there is no
limitation for initiating the proceedings concerning any dispute with the employer
regarding any dues or EPF etc., but the code has proposed five years as the limitation
period. This should be struck down, or it should be at least increased to 15 years.
2. Instead of mandating the workers to register compulsorily on the portal to avail of the
benefits, the government should procure their data directly from the companies or
organizations they are working for. Apart from those who are not a part of these
organizations, their information should be taken by the camps in each district.
3. The critical role here would be to create and spread awareness as much as possible.
Thus, it is essential to include various leaders of these unorganized workers to spread
awareness to a large extent.
4. There should be one authority who would overlook the implementation of this code.
Otherwise, it would make it too cumbersome to implement it as there would be
continuous struggles between the state and centre regarding various points, and this
would hamper the benefits that were supposed to be passed to these kinds of workers.
5. Instead of keeping a minimum number of employees or income level as the deciding
factor for the inclusion of the workers under the benefits of these schemes, it should be
open wide to all these kinds of workers.

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6. The next important thing that needs to be addressed is that the word 'may' is used
everywhere in the code, which makes it obligatory for the government to roll out a
scheme; it's not mandatory for them, which makes no sense. Therefore, the word 'may'
should be omitted.
7. It is seen that aggregators are not showing sufficient interest in implementing this code,
which is a significant factor because, without proper implementation, it won't be
possible to make any provision successful for these workers. So, to counter the same,
aggregators should be roped in to hear their concerns and make provisions amicably.
8. They could make an addition that because of the implementation of these schemes,
there is a noticeable increase in the company's spending; thus, to counter it, a reduction
in the CSR contribution would make it compensated.
9. Inclusion of the Anganwadi and Accredited Social Health Activists (ASHA) Workers
under this code is vital.
10. Clarity should come regarding the dealing of the proceeds paid to the workers based on
priority if the company goes into insolvency proceedings.

Conclusion

We saw how a new type of employment had been generated over the years, which is known as
Gig Workers, which includes freelancers, platform workers, etc. To date, it has not been given
much recognition and importance, but after Covid, it is gaining some amount of traction
concerning this; many companies whose primary source of work is based upon the gig workers
have come up with some incentives or basic guarantee that still gives some recognition to the
efforts of these workers and the government has brought out the Code of Social Security,2020,
which recognizes gig workers but all the benefits that they have mentioned in the code has not
been of mandatory. It is subject to the discretion of the Central Government. This discretionary
power of the government undermines the purpose for which they were brought within the act's
purview. So, it is to be noted that on an immediate basis, multiple reforms should be made in
the code to include the interests of the workers comprehensively after having thoughtful
discussions with the companies, this is because the implementation of the code would be
through these companies only and if they were not convinced enough, there would be a sheer
lack in the performance of the same. Thus, it would serve a vague purpose and be a wasted
attempt at such discussions and deliberations. Though there are some manifestations on behalf

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of the government and the companies that employ these workers, there is a need to create as
much awareness as possible so that these schemes are preserved and preserved.

Along with that, there is some responsibility on the part of the gig workers as well, that they
should make efforts to put some pressure on the government and companies by highlighting
the need for social security benefits for them through some street plays or approaching various
NGO's, who in turn would chase these authorities. This would make sure that their issue gets
sufficient attention at regular intervals, and apart from that, they need to put some extra effort
into learning new skills for free on various platforms available online so that they would be
able to understand the schemes very well and thus could not be misled by these authorities. So
overall, the gig workers issue has come into the picture, but it's just the beginning; there is a
crucial need to take adequate measures for these workers to support them so that the benefit
can reach them. In this way, we would be strengthening one part of the Labour which has been
contributing to a great extent towards the Indian Economy.

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