Background

Many attempts have been made at regulating the engagement of workers in India’s unorganized sector. However, the gig economy remains largely unregulated in India. The rapidly growing Indian gig workforce is estimated to reach 2.35 crore (23.5 million) workers in strength by 2029-30.

The latest NITI Aayog Report on India’s gig and platform economy refers to two types of gig-workers - platform and non-platform workers. Platform workers use online tools to connect with customers and are mostly concentrated in the technology arena. Non-platform workers refer to the traditional temporary workers in non-technology sectors. The Code on Social Security, 2020 (“CoSS”) defines platform workers as a distinctive category of individuals. It is expected that once the new labor codes are made effective, there will be legal certainty to such arrangements.

International Scenario

The ILO Homework Convention 1996 (No. 177) (“ILO Homework Convention”), purports to provide ‘home workers’ equal rights with respect to inter alia workplace health and safety, social security, access to training, remuneration, minimum age of employment and maternity protection. ‘Home work’ includes remote work done by a person for remuneration in a place of his choice, other than the workplace of the employer, which results in a product or service, irrespective of the ownership of the equipment. India has not yet ratified the ILO Homework Convention, which has otherwise been ratified by thirteen (13) countries as of December 2022. 

Globally, there has been much debate on the classification of gig workers as employees.  For example, in the UK, the Supreme Court in the case of Uber B.V. v. Aslam,  has upheld the categorization of platform workers as “workers”. Under the UK law, “workers” mean “an intermediate class of workers who are self-employed but who provide their services as part of a profession or business undertaking carried on by someone else which includes individuals who are neither employees nor independent enough to be considered as self-employed.”. Further, as per UK law, workers and employees are entitled to several employment benefits which are not available to independent contractors. 

Besides, the Supreme Court of California in the judgment Dynamex Operations West, Inc. v. Superior Court upheld the application of the ‘ABC test’ for determining classification of an individual as an independent contractor. The considerations laid down in the ABC test are similar to those considered by the Supreme Court in the Indian case of Silver Jubilee tailoring , which are; (A) whether the worker is principally engaged with the hiring entity, (B) whether the worker performs work outside the usual course of hiring entity’s business and (C) whether the worker is engaged in an independently established trade, occupation or business of the same nature as the work performed for the hiring entity. 

It is interesting to note that in South Africa, the Occupational Health and Safety Act requires businesses to ensure that, any person who may be directly affected by the business’s activities are not exposed to hazards to their health or safety. This also extends to technology platforms. 

In Australia, gig workers have been viewed as independent contractors. In Canada, gig workers have been considered as dependent contractors entitled to more legal protections than independent contractors but lesser protection than employees. In Italy, gig-workers who are economically dependent on an employer are considered as para-subordinate workers being entitled to certain statutory benefits.

CoSS on Gig and Platform workers

Definitions:

As per the CoSS, "gig worker" is defined as “a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship;”. 

The CoSS also defines a "platform worker" as “a person engaged in or undertaking platform work”. Platform work means “work arrangement outside of a traditional employer-employee relationship in which organizations or individuals use an online platform to access other organizations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central government, in exchange for payment”.

In relation to gig and platform workers, the CoSS also defines the term “aggregator” which means a “digital intermediary or a marketplace for a buyer or user of a service to connect with the seller or the service provider”. For B2B platforms, the question often is who the aggregator is. Until there is further legislative clarity on this, this may be answered by merely checking the end-user of the gig agreement. 

The nine (9) types of aggregators identified under the Seventh Schedule of the CoSS are: 

• ride sharing services 

• food and grocery delivery services 

• logistic services

• e-market place (both marketplace and inventory model) for wholesale/retail sale of goods and/or services (B2B/ B2C)

• professional service providers

• healthcare

• travel and hospitality 

• content and media services and 

• any other goods and services provider platform.

Obligations of stakeholders under CoSS 

• Welfare Schemes 

The federal government has been given the responsibility to frame and notify suitable welfare schemes for gig and platform workers in relation to life and disability cover, health and maternity benefits, old age protection, education and other benefits as may be determined by the federal government. In order to achieve this, a social security fund for gig and platform workers has been provisioned for which may be funded from (i) the proceeds of  welfare schemes for gig and platform workers (funded through contributions collected from the beneficiaries of the scheme or employers, other sources including CSR fund under Companies Act, 2013, or by the federal and/or the state government), (ii) social security schemes for gig and platform workers funded wholly or partly by the federal and/or state government or by the contribution of the aggregators or CSR fund (contribution from aggregators not exceeding 2% of their annual turnover or 5% of the amount payable to gig or platform workers), (iii) from composition of offences under the CoSS or (iv) from any other social security fund established under any federal labor law. 

• Social Security Scheme

The CoSS also provides for notification of a social security scheme for gig and platform workers other than the aforesaid welfare schemes which will provide for similar subject matters as above, including creche facilities. The scheme to be framed by the federal government under the CoSS will inter alia provide for role of aggregators covered under the scheme and sources of funding of the scheme. The government has the option to notify a scheme that is wholly or partly funded by the contributions of the aggregators. 

The draft rules to CoSS envisages constitution of a ‘National Social Security Board’ which will have representation from amongst the scheduled aggregators. 

• Registration of gig and platform workers

The CoSS specifies that every gig worker and platform worker will need to be registered as prescribed by the federal government to avail benefits of the social security scheme which will be notified under CoSS. However, the obligation of registration is upon the individual gig or platform worker. As per draft central rules to the CoSS, it is likely that the age of eligibility for availing benefit of social security schemes for gig workers under CoSS will range from sixteen (16) to sixty (60) years of age. Self-registration will be compulsory with the Aadhaar card. The responsibility of ensuring such registration is upon the state governments, unorganized workers’ board, aggregators and contractors.  The federal government has powers to provide for inter alia rate of interest to be paid by aggregators in case of delayed payment. The federal government also has the power to notify additional eligibility criteria for coverage of gig or platform workers in any scheme notified under CoSS, self-assessment contribution of aggregators and conditions for cessation of a gig workers or a platform worker.

• Obligation of aggregators 

Aggregators will need to contribute to the social security fund which may be notified under section 114 of the CoSS. Such contributions shall be in the range of 1 - 2% of the total turnover of every aggregator. The contribution of the aggregators with respect to any scheme notified under the CoSS shall not exceed 5% of the amount payable by the aggregator to the gig and platform workers. The draft central rules to CoSS rules also propose obligations on the aggregators in respect of registering gig and platform workers and submission of periodic data on the gig and platform workers engaged by the aggregators.

Conclusion

Recently, the (Indian) federal minister of labor and employment clarified that there will be comprehensive coverage of gig and platform workers under the Employees’ State Insurance Scheme, a leading social security scheme in India. Owing to the change in traditional working models due to the pandemic, it is expected that number of gig workers who are working remotely will have increased by fifty percent (50%) in 2022.. The escalating opportunities for gig working in India may help reduce unemployment and provide flexibility to both the employer as well as the individual worker. With formalisation of the concepts of gig and platform workers, CoSS is expected to bring legal certainty to such working arrangements and promote the growth of gig working sectors while taking care of social security of such workers. 

Will it lead to reduced earnings for the gig workers- it yet remains to be seen.

FOOTNOTES

1 India’s Booming Gig and Platform Economy, Perspectives and Recommendations on the Future of Work, Policy
Brief, Niti Aayog, June 2022, available at <https://www.niti.gov.in/sites/default/files/2022-
06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf> (last visited 29 December
2022)

2 Id.

3 C177 - Home Work Convention, 1996 (No. 177), International Labour Organization, available at
<https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_INSTRUMENT_ID:312322>
(last visited 29 December 2022)

4 [2021] UKSC 5.

5 A person is generally classed as a ‘worker’ if: they have a contract or other arrangement to do work or services
personally for a reward (a contract can be written or unwritten); their reward is for money or a benefit in kind; for
example the promise of a contract or future work, they only have a limited right to send someone else to do the work (subcontract); their employer has to have work for them to do as long as the contract or arrangement lasts; they are not doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client. Available at <https://www.gov.uk/employment-
status/worker#:~:text=Employment%20rights&text=protection%20against%20unlawful%20deductions%20from,this%20right%20if%20they%20choose> (last visited 29 December 2022)

6 [2021] UKSC 5.

7 (2018) 4 Cal.5th 903, available at <https://cases.justia.com/california/supreme-court/2018-
s222732.pdf?ts=1525107724> (last visited 29 December 2022).

8 (1974) 3 SCC 498.

9 ABC Test, Employment Status, available at < https://edd.ca.gov/Payroll_Taxes/ab-
5.htm#:~:text=Assembly%20Bill%20(AB)%205%20and,Code%20beginning%20January%201%2C%202020> (last visited 29 December 2022).

10 Occupational Health and Safety Act, 1993, available at
<https://www.gov.za/sites/default/files/gcis_document/201409/act85of1993.pdf> (last visited 29 December 2022).

11 Section 114, CoSS, available at < https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf> (last visited 29 December 2022).

12 Section 113, CoSS, available at < https://labour.gov.in/sites/default/files/SS_Code_Gazette.pdf> (last visited 29 December 2022).

13 What is Aadhar Card? Available at <https://www.uidai.gov.in/en/16-english-uk/aapka-aadhaar/14-what-is-
aadhaar.html#:~:text=Aadhaar%20is%20a%2012%20digit%20individual%20identification%20number%20issued%20by,and%20address%2C%20anywhere%20in%20India.> (last visited 29 December 2022)

14 Currently specified as 1% per month, CoSS Rules (draft), available at
<https://labour.gov.in/sites/default/files/DRAFTCOSSRULES2020NOV.pdf> (last visited 29 December 2022).

15 Aggregator to assess contribution payable under Section 114, CoSS and pay provisional contribution annually,
CoSS Rules (draft).

16 Currently specified as attainment of 60 years of age, CoSS Rules (draft).

17 Seventh Schedule includes nine types of aggregators in ride sharing services, food and grocery delivering services, logistic services, e-marketplace, professional services provider, healthcare, travel and hospitality, content and media services, any other goods and services provider platform.

18 Rule 50(2), CoSS Rules (draft).

19 ‘ESIC to cover gig, platform workers’, 14 March 2022, available at <https://theprint.in/india/esic-to-cover-gig-platform-workers-yadav/873271/> (last visited 29 December 2022).

20 ‘Gig economy in India in 2022’, Vaibhav Tomar, 10 September 2022, available at <https://www.cescube.com/vp-gig-economy-in-india-in-2022> (last visited 29 December 2022).